ASSET BACKED FUNDING CORPORATION, Depositor CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, Seller LITTON LOAN SERVICING LP, Servicer and LASALLE BANK NATIONAL ASSOCIATION, Trustee POOLING AND SERVICING AGREEMENT Dated as of May 1, 2007 2007-CB5...
Execution
Copy
ASSET
BACKED FUNDING CORPORATION,
Depositor
CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC,
Seller
XXXXXX
LOAN SERVICING LP,
Servicer
and
LASALLE
BANK NATIONAL ASSOCIATION,
Trustee
Dated
as
of May 1, 2007
2007-CB5
Trust
C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2007-CB5
TABLE
OF
CONTENTS
Page
|
ARTICLE
I DEFINITIONS
|
11
|
|
|
Section
1.01.
|
Defined
Terms.
|
11
|
|
Section
1.02.
|
Accounting.
|
62
|
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
|
62
|
|
|
Section
2.01.
|
Conveyance
of Mortgage Loans.
|
62
|
|
Section
2.02.
|
Acceptance
by Trustee.
|
65
|
|
Section
2.03.
|
Repurchase
or Substitution of Mortgage Loans by the Seller.
|
66
|
|
Section
2.04.
|
Representations
and Warranties of the Seller with Respect to the Mortgage
Loans.
|
69
|
|
Section
2.05.
|
Representations,
Warranties and Covenants of the Servicer.
|
70
|
|
Section
2.06.
|
Representations
and Warranties of the Depositor.
|
72
|
|
Section
2.07.
|
Issuance
of Certificates and the Uncertificated Regular Interests.
|
73
|
|
Section
2.08.
|
Representations
and Warranties of the Seller.
|
74
|
|
Section
2.09.
|
Covenants
of the Seller.
|
76
|
|
ARTICLE
III ADMINISTRATION AND SERVICING OF
THE TRUST FUND
|
76
|
|
|
Section
3.01.
|
Servicer
to Act as Servicer.
|
76
|
|
Section
3.02.
|
Collection
of Mortgage Loan Payments.
|
79
|
|
Section
3.03.
|
Realization
Upon Defaulted Mortgage Loans.
|
79
|
|
Section
3.04.
|
Collection
Account, Distribution Account and Cap Carryover Reserve
Account.
|
80
|
|
Section
3.05.
|
Permitted
Withdrawals From the Collection Account.
|
83
|
|
Section
3.06.
|
Establishment
of Escrow Account; Deposits in Escrow Account.
|
84
|
|
Section
3.07.
|
Permitted
Withdrawals From Escrow Account.
|
85
|
|
Section
3.08.
|
Payment
of Taxes, Insurance and Other Charges; Collections
Thereunder.
|
85
|
|
Section
3.09.
|
Transfer
of Accounts.
|
86
|
|
Section
3.10.
|
Maintenance
of Hazard Insurance.
|
86
|
|
Section
3.11.
|
Maintenance
of Mortgage Impairment Insurance Policy.
|
87
|
|
Section
3.12.
|
Fidelity
Bond, Errors and Omissions Insurance.
|
88
|
|
Section
3.13.
|
Title,
Management and Disposition of REO Property and Certain Delinquent
Mortgage
Loans.
|
88
|
|
Section
3.14.
|
Due-on-Sale
Clauses; Assumption and Substitution Agreements.
|
90
|
|
Section
3.15.
|
Notification
of Adjustments.
|
91
|
|
Section
3.16.
|
Optional
Purchases and Sales of Mortgage Loans by Servicer.
|
91
|
|
Section
3.17.
|
Trustee
to Cooperate; Release of Files.
|
92
|
|
Section
3.18.
|
Servicing
Compensation.
|
93
|
|
Section
3.19.
|
Annual
Statement as to Compliance.
|
93
|
|
Section
3.20.
|
Assessment
of Compliance with Servicing Criteria; Independent Public Accountants’
Attestation.
|
94
|
i
|
Section
3.21.
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
96
|
|
Section
3.22.
|
Reserved.
|
96
|
|
Section
3.23.
|
Obligations
of the Servicer in Respect of Compensating Interest.
|
96
|
|
Section
3.24.
|
Obligations
of the Servicer in Respect of Mortgage Interest Rates and Monthly
Payments.
|
96
|
|
Section
3.25.
|
Investment
of Funds in the Collection Account and the Distribution
Account.
|
96
|
|
Section
3.26.
|
Liability
of Servicer; Indemnification.
|
98
|
|
Section
3.27.
|
Reports
of Foreclosure and Abandonment of Mortgaged Properties.
|
99
|
|
Section
3.28.
|
Protection
of Assets.
|
99
|
|
Section
3.29.
|
Periodic
Filings.
|
99
|
|
Section
3.30.
|
Subservicing
Agreements between the Servicer and Subservicers.
|
105
|
|
Section
3.31.
|
Successor
Subservicers.
|
108
|
|
Section
3.32.
|
No
Contractual Relationship between Subservicers and the
Trustee.
|
108
|
|
Section
3.33.
|
Assumption
or Termination of Subservicing Agreements by Trustee.
|
108
|
|
Section
3.34.
|
Subservicing
Accounts.
|
109
|
|
ARTICLE
IV FLOW OF FUNDS
|
109
|
|
|
Section
4.01.
|
Interest
Distributions.
|
109
|
|
Section
4.02.
|
Distributions
of Principal and Monthly Excess Cashflow Amounts.
|
111
|
|
Section
4.03.
|
Allocation
of Losses.
|
116
|
|
Section
4.04.
|
Method
of Distribution.
|
117
|
|
Section
4.05.
|
Distributions
on Book-Entry Certificates.
|
117
|
|
Section
4.06.
|
Statements.
|
117
|
|
Section
4.07.
|
Remittance
Reports; Advances.
|
121
|
|
Section
4.08.
|
REMIC
Distributions.
|
122
|
|
Section
4.09.
|
Supplemental
Interest Trust.
|
127
|
|
ARTICLE
V THE CERTIFICATES
|
131
|
|
|
Section
5.01.
|
The
Certificates.
|
131
|
|
Section
5.02.
|
Registration
of Transfer and Exchange of Certificates.
|
132
|
|
Section
5.03.
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
137
|
|
Section
5.04.
|
Persons
Deemed Owners.
|
138
|
|
Section
5.05.
|
Appointment
of Paying Agent.
|
138
|
|
ARTICLE
VI THE SELLER, THE SERVICER AND THE DEPOSITOR
|
138
|
|
|
Section
6.01.
|
Liability
of the Seller, the Servicer and the Depositor.
|
138
|
|
Section
6.02.
|
Merger
or Consolidation of, or Assumption of the Obligations of, the Seller,
the
Servicer or the Depositor.
|
138
|
|
Section
6.03.
|
Limitation
on Liability of the Servicer and Others.
|
139
|
|
Section
6.04.
|
Servicer
Not to Resign.
|
140
|
|
Section
6.05.
|
Advance
Facility.
|
141
|
|
ARTICLE
VII DEFAULT
|
143
|
|
|
Section
7.01.
|
Servicer
Events of Termination.
|
143
|
ii
|
Section
7.02.
|
Trustee
to Act; Appointment of Successor.
|
145
|
|
Section
7.03.
|
Waiver
of Defaults.
|
146
|
|
Section
7.04.
|
Notification
to Certificateholders.
|
147
|
|
Section
7.05.
|
Survivability
of Servicer Liabilities.
|
147
|
|
ARTICLE
VIII THE TRUSTEE
|
147
|
|
|
Section
8.01.
|
Duties
of Trustee.
|
147
|
|
Section
8.02.
|
Certain
Matters Affecting the Trustee.
|
149
|
|
Section
8.03.
|
Trustee
Not Liable for Certificates or Mortgage Loans.
|
150
|
|
Section
8.04.
|
Trustee
May Own Certificates.
|
151
|
|
Section
8.05.
|
Seller
to Pay Trustee Fees and Expenses.
|
151
|
|
Section
8.06.
|
Eligibility
Requirements for Trustee.
|
152
|
|
Section
8.07.
|
Resignation
or Removal of Trustee.
|
152
|
|
Section
8.08.
|
Successor
Trustee.
|
153
|
|
Section
8.09.
|
Merger
or Consolidation of Trustee.
|
153
|
|
Section
8.10.
|
Appointment
of Co-Trustee or Separate Trustee.
|
153
|
|
Section
8.11.
|
Limitation
of Liability.
|
155
|
|
Section
8.12.
|
Trustee
May Enforce Claims Without Possession of Certificates.
|
155
|
|
Section
8.13.
|
Suits
for Enforcement.
|
155
|
|
Section
8.14.
|
Waiver
of Bond Requirement.
|
156
|
|
Section
8.15.
|
Waiver
of Inventory, Accounting and Appraisal Requirement.
|
156
|
|
ARTICLE
IX REMIC ADMINISTRATION
|
156
|
|
|
Section
9.01.
|
REMIC
Administration.
|
156
|
|
Section
9.02.
|
Prohibited
Transactions and Activities.
|
158
|
|
Section
9.03.
|
Indemnification
with Respect to Certain Taxes and Loss of REMIC Status.
|
159
|
|
Section
9.04.
|
REO
Property.
|
159
|
|
ARTICLE
X TERMINATION
|
160
|
|
|
Section
10.01.
|
Termination.
|
160
|
|
Section
10.02.
|
Additional
Termination Requirements.
|
162
|
|
ARTICLE
XI MISCELLANEOUS PROVISIONS
|
162
|
|
|
Section
11.01.
|
Amendment.
|
162
|
|
Section
11.02.
|
Recordation
of Agreement; Counterparts.
|
164
|
|
Section
11.03.
|
Limitation
on Rights of Certificateholders.
|
164
|
|
Section
11.04.
|
Governing
Law; Jurisdiction.
|
165
|
|
Section
11.05.
|
Notices.
|
165
|
|
Section
11.06.
|
Severability of Provisions.
|
166
|
|
Section
11.07.
|
Article
and Section References.
|
166
|
|
Section
11.08.
|
Notice
to the Rating Agencies.
|
166
|
|
Section
11.09.
|
Further
Assurances.
|
167
|
|
Section
11.10.
|
Benefits
of Agreement.
|
167
|
|
Section
11.11.
|
Acts
of Certificateholders.
|
167
|
|
Section
11.12.
|
Regulation
AB Compliance; Intent of the Parties; Reasonableness.
|
168
|
iii
EXHIBITS:
|
Exhibit
A-1
|
Form
of Class A-1 Certificates
|
|
Exhibit
A-2
|
Form
of Class A-2 Certificates
|
|
Exhibit
A-3
|
Form
of Class A-3 Certificates
|
|
Exhibit
B-1
|
Form
of Class M-1 Certificates
|
|
Exhibit
B-2
|
Form
of Class M-2 Certificates
|
|
Exhibit
B-3
|
Form
of Class M-3 Certificates
|
|
Exhibit
B-4
|
Form
of Class M-4 Certificates
|
|
Exhibit
B-5
|
Form
of Class M-5 Certificates
|
|
Exhibit
B-6
|
Form
of Class M-6 Certificates
|
|
Exhibit
B-7
|
Form
of Class M-7 Certificates
|
|
Exhibit
B-8
|
Form
of Class M-8 Certificates
|
|
Exhibit
B-9
|
Form
of Class M-9 Certificates
|
|
Exhibit
B-10
|
Form
of Class B-1 Certificates
|
|
Exhibit
C-1
|
Form
of Class CE-1 Certificates
|
|
Exhibit
C-2
|
Form
of Class CE-2 Certificates
|
|
Exhibit
C-3
|
Form
of Class P Certificates
|
|
Exhibit
C-4
|
Form
of Class R Certificate
|
|
Exhibit
C-5
|
Form
of Class R-X Certificate
|
|
Exhibit
D
|
Mortgage
Loan Schedule
|
|
Exhibit
E
|
Form
of Request for Release of Documents
|
|
Exhibit
F-1
|
Form
of Initial Certification
|
|
Exhibit
F-2
|
Form
of Final Certification
|
|
Exhibit
F-3
|
Form
of Receipt of Mortgage Note
|
|
Exhibit
G
|
Mortgage
Loan Purchase Agreement
|
|
Exhibit
H
|
Form
of Lost Note Affidavit
|
|
Exhibit
I
|
Form
of ERISA Representation
|
|
Exhibit
J-1
|
Form
of Investment Letter [Non-Rule
144A]
|
|
Exhibit
J-2
|
Form
of Rule 144A Investment Letter
|
|
Exhibit
K
|
Form
of Residual Certificate Transfer
Affidavit
|
|
Exhibit
L
|
Form
of Transferor Certificate
|
|
Exhibit
M
|
Form
of Officer’s Certificate with Respect to
Prepayments
|
|
Exhibit
N
|
[RESERVED]
|
|
Exhibit
O-1
|
Cap
Agreement
|
|
Exhibit
O-2
|
Swap
Agreement
|
|
Exhibit
P-1
|
Form
of Sarbanes Certification
|
|
Exhibit
P-2
|
Form
of Certification to be Provided by
Trustee
|
|
Exhibit
Q
|
Schedule
of Mortgage Loans without Title
Policies
|
|
Exhibit
R
|
Form
of Power of Attorney
|
|
Exhibit
S
|
Servicing
Criteria
|
|
Exhibit
T-1
|
Form
8-K Disclosure Information
|
|
Exhibit
T-2
|
Additional
Form 10-D Disclosure
|
|
Exhibit
T-3
|
Additional
Form 10-K Disclosure
|
|
Exhibit
U
|
Additional
Disclosure Notification
|
iv
This
Pooling and Servicing Agreement is dated as of May 1, 2007 (the “Agreement”),
among
ASSET BACKED FUNDING CORPORATION, as depositor (the “Depositor”),
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, as seller (the
“Seller”),
XXXXXX LOAN SERVICING LP, as servicer (the “Servicer”),
and
LASALLE BANK NATIONAL ASSOCIATION, as trustee (the “Trustee”).
PRELIMINARY
STATEMENT
The
Depositor intends to sell pass-through certificates (collectively, the
“Certificates”),
to be
issued hereunder in multiple Classes, which in the aggregate will evidence
the
entire beneficial ownership interest in the Trust Fund created hereunder. The
Certificates will consist of eighteen Classes of Certificates, designated as
(i) the Class A-1, Class A-2 and Class A-3 Certificates, (ii) the
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8 and Class M-9 Certificates, (iii) the Class B-1
Certificates, (iv) the Class P Certificates, (v) the Class CE-1 and Class
CE-2 Certificates and (vi) the Class R and Class R-X
Certificates.
The
descriptions of each REMIC that follow are part of the Preliminary Statement.
Any inconsistencies or ambiguities in this Agreement or in the administration
of
this Agreement shall be resolved pursuant to the terms of Section 11.01 hereof
in a manner that preserves the validity of such REMIC elections described
below.
REMIC
1
As
provided herein, the Trustee will make an election to treat the segregated
pool
of assets consisting of the Mortgage Loans and certain other related assets
subject to this Agreement (but exclusive of the Swap Agreement, the Cap
Agreement, the Swap Account, the Cap Carryover Reserve Account, the Cap Account,
the Supplemental Interest Trust and any amounts paid by the Servicer in respect
of improperly waived prepayment Penalties) as a real estate investment conduit
(a “REMIC”)
for
federal income tax purposes, and such segregated pool of assets will be
designated as “REMIC 1.” The Class R-1 Interest will represent the sole
class of “residual interests” in REMIC 1 for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably sets
forth the designation, the Uncertificated REMIC 1 Pass-Through Rate, the
initial Uncertificated Principal Balance, and solely for purposes of satisfying
Treasury Regulations Section 1.860G-1(a)(4)(iii), the “latest possible maturity
date” for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.
|
Designation
|
Initial
Uncertificated
Principal
or Notional
Balance
|
Uncertificated
REMIC 1
Pass-Through
Rate
|
Latest
Possible
Maturity
Date(1)
|
|
I
|
$13,154,811.88
|
Variable(2)
|
April
25, 2047
|
|
I-1-A
|
$3,296,832.50
|
Variable(2)
|
April
25, 2047
|
|
I-1-B
|
$3,296,832.50
|
Variable(2)
|
April
25, 2047
|
|
I-2-A
|
$3,908,508.50
|
Variable(2)
|
April
25, 2047
|
|
I-2-B
|
$3,908,508.50
|
Variable(2)
|
April
25, 2047
|
|
Designation
|
Initial
Uncertificated
Principal
or Notional
Balance
|
Uncertificated
REMIC 1
Pass-Through
Rate
|
Latest
Possible
Maturity
Date(1)
|
|
I-3-A
|
$4,486,497.00
|
Variable(2)
|
April
25, 2047
|
|
I-3-B
|
$4,486,497.00
|
Variable(2)
|
April
25, 2047
|
|
I-4-A
|
$5,040,772.50
|
Variable(2)
|
April
25, 2047
|
|
I-4-B
|
$5,040,772.50
|
Variable(2)
|
April
25, 2047
|
|
I-5-A
|
$5,585,050.00
|
Variable(2)
|
April
25, 2047
|
|
I-5-B
|
$5,585,050.00
|
Variable(2)
|
April
25, 2047
|
|
I-6-A
|
$6,022,742.50
|
Variable(2)
|
April
25, 2047
|
|
I-6-B
|
$6,022,742.50
|
Variable(2)
|
April
25, 2047
|
|
I-7-A
|
$6,350,009.00
|
Variable(2)
|
April
25, 2047
|
|
I-7-B
|
$6,350,009.00
|
Variable(2)
|
April
25, 2047
|
|
I-8-A
|
$6,311,928.00
|
Variable(2)
|
April
25, 2047
|
|
I-8-B
|
$6,311,928.00
|
Variable(2)
|
April
25, 2047
|
|
I-9-A
|
$6,113,950.50
|
Variable(2)
|
April
25, 2047
|
|
I-9-B
|
$6,113,950.50
|
Variable(2)
|
April
25, 2047
|
|
I-10-A
|
$5,859,696.00
|
Variable(2)
|
April
25, 2047
|
|
I-10-B
|
$5,859,696.00
|
Variable(2)
|
April
25, 2047
|
|
I-11-A
|
$5,591,517.00
|
Variable(2)
|
April
25, 2047
|
|
I-11-B
|
$5,591,517.00
|
Variable(2)
|
April
25, 2047
|
|
I-12-A
|
$5,341,629.50
|
Variable(2)
|
April
25, 2047
|
|
I-12-B
|
$5,341,629.50
|
Variable(2)
|
April
25, 2047
|
|
I-13-A
|
$5,102,104.00
|
Variable(2)
|
April
25, 2047
|
|
I-13-B
|
$5,102,104.00
|
Variable(2)
|
April
25, 2047
|
|
I-14-A
|
$4,866,455.50
|
Variable(2)
|
April
25, 2047
|
|
I-14-B
|
$4,866,455.50
|
Variable(2)
|
April
25, 2047
|
|
I-15-A
|
$4,668,616.50
|
Variable(2)
|
April
25, 2047
|
|
I-15-B
|
$4,668,616.50
|
Variable(2)
|
April
25, 2047
|
|
I-16-A
|
$4,655,763.00
|
Variable(2)
|
April
25, 2047
|
|
I-16-B
|
$4,655,763.00
|
Variable(2)
|
April
25, 2047
|
|
I-17-A
|
$4,579,802.00
|
Variable(2)
|
April
25, 2047
|
|
I-17-B
|
$4,579,802.00
|
Variable(2)
|
April
25, 2047
|
|
I-18-A
|
$6,269,337.00
|
Variable(2)
|
April
25, 2047
|
|
I-18-B
|
$6,269,337.00
|
Variable(2)
|
April
25, 2047
|
|
I-19-A
|
$22,455,550.00
|
Variable(2)
|
April
25, 2047
|
|
I-19-B
|
$22,455,550.00
|
Variable(2)
|
April
25, 2047
|
|
I-20-A
|
$11,798,160.50
|
Variable(2)
|
April
25, 2047
|
|
I-20-B
|
$11,798,160.50
|
Variable(2)
|
April
25, 2047
|
2
|
Designation
|
Initial
Uncertificated
Principal
or Notional
Balance
|
Uncertificated
REMIC 1
Pass-Through
Rate
|
Latest
Possible
Maturity
Date(1)
|
|
I-21-A
|
$5,888,908.00
|
Variable(2)
|
April
25, 2047
|
|
I-21-B
|
$5,888,908.00
|
Variable(2)
|
April
25, 2047
|
|
I-22-A
|
$3,449,633.00
|
Variable(2)
|
April
25, 2047
|
|
I-22-B
|
$3,449,633.00
|
Variable(2)
|
April
25, 2047
|
|
I-23-A
|
$1,595,739.50
|
Variable(2)
|
April
25, 2047
|
|
I-23-B
|
$1,595,739.50
|
Variable(2)
|
April
25, 2047
|
|
I-24-A
|
$1,439,665.00
|
Variable(2)
|
April
25, 2047
|
|
I-24-B
|
$1,439,665.00
|
Variable(2)
|
April
25, 2047
|
|
I-25-A
|
$1,323,537.00
|
Variable(2)
|
April
25, 2047
|
|
I-25-B
|
$1,323,537.00
|
Variable(2)
|
April
25, 2047
|
|
I-26-A
|
$1,208,943.00
|
Variable(2)
|
April
25, 2047
|
|
I-26-B
|
$1,208,943.00
|
Variable(2)
|
April
25, 2047
|
|
I-27-A
|
$1,155,175.00
|
Variable(2)
|
April
25, 2047
|
|
I-27-B
|
$1,155,175.00
|
Variable(2)
|
April
25, 2047
|
|
I-28-A
|
$1,103,974.00
|
Variable(2)
|
April
25, 2047
|
|
I-28-B
|
$1,103,974.00
|
Variable(2)
|
April
25, 2047
|
|
I-29-A
|
$1,147,583.50
|
Variable(2)
|
April
25, 2047
|
|
I-29-B
|
$1,147,583.50
|
Variable(2)
|
April
25, 2047
|
|
I-30-A
|
$1,146,693.50
|
Variable(2)
|
April
25, 2047
|
|
I-30-B
|
$1,146,693.50
|
Variable(2)
|
April
25, 2047
|
|
I-31-A
|
$2,478,728.00
|
Variable(2)
|
April
25, 2047
|
|
I-31-B
|
$2,478,728.00
|
Variable(2)
|
April
25, 2047
|
|
I-32-A
|
$1,471,955.50
|
Variable(2)
|
April
25, 2047
|
|
I-32-B
|
$1,471,955.50
|
Variable(2)
|
April
25, 2047
|
|
I-33-A
|
$1,189,698.00
|
Variable(2)
|
April
25, 2047
|
|
I-33-B
|
$1,189,698.00
|
Variable(2)
|
April
25, 2047
|
|
I-34-A
|
$1,163,161.50
|
Variable(2)
|
April
25, 2047
|
|
I-34-B
|
$1,163,161.50
|
Variable(2)
|
April
25, 2047
|
|
I-35-A
|
$630,274.50
|
Variable(2)
|
April
25, 2047
|
|
I-35-B
|
$630,274.50
|
Variable(2)
|
April
25, 2047
|
|
I-36-A
|
$606,158.50
|
Variable(2)
|
April
25, 2047
|
|
I-36-B
|
$606,158.50
|
Variable(2)
|
April
25, 2047
|
|
I-37-A
|
$583,006.00
|
Variable(2)
|
April
25, 2047
|
|
I-37-B
|
$583,006.00
|
Variable(2)
|
April
25, 2047
|
|
I-38-A
|
$560,775.00
|
Variable(2)
|
April
25, 2047
|
|
I-38-B
|
$560,775.00
|
Variable(2)
|
April
25, 2047
|
3
|
Designation
|
Initial
Uncertificated
Principal
or Notional
Balance
|
Uncertificated
REMIC 1
Pass-Through
Rate
|
Latest
Possible
Maturity
Date(1)
|
|
I-39-A
|
$539,428.00
|
Variable(2)
|
April
25, 2047
|
|
I-39-B
|
$539,428.00
|
Variable(2)
|
April
25, 2047
|
|
I-40-A
|
$518,927.00
|
Variable(2)
|
April
25, 2047
|
|
I-40-B
|
$518,927.00
|
Variable(2)
|
April
25, 2047
|
|
I-41-A
|
$499,236.50
|
Variable(2)
|
April
25, 2047
|
|
I-41-B
|
$499,236.50
|
Variable(2)
|
April
25, 2047
|
|
I-42-A
|
$480,323.00
|
Variable(2)
|
April
25, 2047
|
|
I-42-B
|
$480,323.00
|
Variable(2)
|
April
25, 2047
|
|
I-43-A
|
$462,153.50
|
Variable(2)
|
April
25, 2047
|
|
I-43-A
|
$462,153.50
|
Variable(2)
|
April
25, 2047
|
|
I-44-A
|
$444,698.00
|
Variable(2)
|
April
25, 2047
|
|
I-44-B
|
$444,698.00
|
Variable(2)
|
April
25, 2047
|
|
I-45-A
|
$427,926.50
|
Variable(2)
|
April
25, 2047
|
|
I-45-B
|
$427,926.50
|
Variable(2)
|
April
25, 2047
|
|
I-46-A
|
$411,810.00
|
Variable(2)
|
April
25, 2047
|
|
I-46-B
|
$411,810.00
|
Variable(2)
|
April
25, 2047
|
|
I-47-A
|
$10,766,967.50
|
Variable(2)
|
April
25, 2047
|
|
I-47-B
|
$10,766,967.50
|
Variable(2)
|
April
25, 2047
|
|
I-CE-2
|
(3)
|
Variable(2)
|
April
25, 2047
|
________________
|
(1)
|
Solely
for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each REMIC 1 Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC 1 Pass-Through
Rate” herein.
|
|
(3)
|
The
Class I-CE-2 Interest will accrue interest on its Uncertificated
Notional
Amount.
|
4
REMIC
2
As
provided herein, the Trustee shall make an election to treat the segregated
pool
of assets consisting of the REMIC 1 Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as “REMIC 2.” The Class R-2 Interest will represent the sole
class of “residual interests” in REMIC 2 for purposes of the REMIC
Provisions. The following table irrevocably sets forth the designation, the
Uncertificated REMIC 2 Pass-Through Rate, the initial Uncertificated Balance,
and solely for purposes of satisfying Treasury Regulations
Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each
of the Uncertificated REMIC 2 Regular Interests. None of the Uncertificated
REMIC 2 Interests will be certificated.
|
Designation
|
Initial
Uncertificated
Principal
or Notional
Balance
|
Uncertificated
REMIC
2
Pass-Through Rate(1)
|
Latest
Possible
Maturity
Date(1)
|
|
LT2AA
|
$348,051,617.64
|
Variable(2)
|
April
25, 2047
|
|
LT2A1
|
$164,951.00
|
Variable(2)
|
April
25, 2047
|
|
LT2A2
|
$91,350.00
|
Variable(2)
|
April
25, 2047
|
|
LT2A3
|
$22,851.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M1
|
$12,963.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M2
|
$12,253.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M3
|
$6,926.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M4
|
$6,215.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M5
|
$5,860.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M6
|
$5,505.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M7
|
$5,327.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M8
|
$3,729.00
|
Variable(2)
|
April
25, 2047
|
|
LT2M9
|
$4,084.00
|
Variable(2)
|
April
25, 2047
|
|
LT2B1
|
$3,552.00
|
Variable(2)
|
April
25, 2047
|
|
LT2ZZ
|
$3,647,433.24
|
Variable(2)
|
April
25, 2047
|
|
LT2P
|
$100.00
|
Variable(2)
|
April
25, 2047
|
|
LT2IO
|
(3)
|
Variable(2)
|
April
25, 2047
|
|
LT2CE2
|
(4)
|
Variable(2)
|
April
25, 2047
|
________________
|
(1)
|
Solely
for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each REMIC 2 Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC 2 Pass-Through
Rate” herein.
|
|
(3)
|
The
Class LT2IO Interest will not have a principal balance but will instead
accrue interest on the basis of its Uncertificated Notional
Balance.
|
|
(4)
|
The
Class LT2CE2 Interest will be entitled to 100% of the amounts received
in
respect of the REMIC 1 Regular Interest
I-CE-2.
|
5
REMIC
3
As
provided herein, the Trustee shall make an election to treat the segregated
pool
of assets consisting of the REMIC 2 Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated
as
“REMIC 3.” The Class R-3 Interest represents the sole class of “residual
interests” in REMIC 3 for purposes of the REMIC Provisions.
The
following table sets forth (or describes) the Class designation, Uncertificated
REMIC 3 Pass-Through Rate and initial uncertified Balance for each Class of
REMIC 3 Regular Interests comprising the “regular interests” in REMIC 3 for
purposes of the REMIC Provisions:
|
REMIC
3 Regular Interest
|
Initial
Uncertificated Balance
|
Pass-Through
Rate
|
Latest
Possible
Maturity
Date(1)
|
|
A-1
|
$164,951,000.00
|
(2)
|
April
25, 2047
|
|
A-2
|
$91,350,000.00
|
(2)
|
April
25, 2047
|
|
A-3
|
$22,851,000.00
|
(2)
|
April
25, 2047
|
|
M-1
|
$12,963,000.00
|
(2)
|
April
25, 2047
|
|
M-2
|
$12,253,000.00
|
(2)
|
April
25, 2047
|
|
M-3
|
$6,926,000.00
|
(2)
|
April
25, 2047
|
|
M-4
|
$6,215,000.00
|
(2)
|
April
25, 2047
|
|
M-5
|
$5,860,000.00
|
(2)
|
April
25, 2047
|
|
M-6
|
$5,505,000.00
|
(2)
|
April
25, 2047
|
|
M-7
|
$5,327,000.00
|
(2)
|
April
25, 2047
|
|
M-8
|
$3,729,000.00
|
(2)
|
April
25, 2047
|
|
M-9
|
$4,084,000.00
|
(2)
|
April
25, 2047
|
|
B-1
|
$3,552,000.00
|
(2)
|
April
25, 2047
|
|
CE-1
|
(3)
|
(3)
|
April
25, 2047
|
|
CE-2
|
(4)
|
(4)
|
April
25, 2047
|
|
P(5)
|
$100.00
|
N/A
|
April
25, 2047
|
|
SWAP-IO
|
(6)
|
(6)
|
April
25, 2047
|
________________
|
(1)
|
Solely
for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each Class of REMIC 3 Regular
Interests.
|
|
(2)
|
Interest
will accrue on these REMIC 3 Regular Interests at a per annum rate
equal
to the lesser of (i) the related Pass-Through Rate of the Corresponding
Class of Certificates and (ii) the REMIC 3
Cap.
|
|
On
any Distribution Date on which the Certificate Interest Rate for
the
Corresponding Class of Certificates exceeds the REMIC 3 Cap, interest
accruals based on such excess shall be treated as having been paid
from
Cap Carryover Reserve Account or the Supplemental Interest Trust,
as
applicable. On any Distribution Date on which the Certificate Interest
Rate on a Class of Certificates is based on the Rate Cap, the excess
of
the amount of interest that would have accrued on such Class of
Certificates if the REMIC 3 Cap were substituted for the Rate Cap
over the
interest accruals based on the Rate Cap shall be treated as having
been
paid by the related Class of Certificates to the Supplemental Interest
Trust, all pursuant to and as further provided in Section
4.09
herein.
|
|
(3)
|
Solely
for federal income tax purposes, the Class CE-1 Regular Interest
will have
an Original Class Certificate Principal Balance equal to the Initial
Overcollateralization Amount. The Class CE-1 Regular Interest will
bear
interest at its Pass-Through Rate based on its Notional
Amount.
|
6
|
(4)
|
The
Class CE-2 Regular Interests will be entitled to 100% of the amounts
received with respect to the REMIC 2 Regular Interest
LT2CE2.
|
|
(5)
|
The
Class P REMIC 3 Regular Interests will not bear
interest.
|
|
(6)
|
The
Class SWAP-IO Interest will not have a principal balance but will
accrue
interest on the basis of its Uncertificated Notional
Balance.
|
REMIC
A
As
provided herein, the Trustee shall make an election to treat the segregated
pool
of assets consisting of the REMIC 3 Class CE-1 Interest as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated
as
“REMIC A.” The REMIC A Class CE-1 Interest represents the sole class of regular
interests and the Class R-A Interest represents the sole class of “residual
interests” in REMIC A for purposes of the REMIC Provisions. The REMIC A Class
CE-1 Interest shall have a principal balance equal to the REMIC 3 Class CE-1
Interest and shall bear interest at the same rate as the REMIC 3 Class CE-1
Interest.
REMIC
B
As
provided herein, the Trustee shall make an election to treat the segregated
pool
of assets consisting of the REMIC 3 Class P Interest as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated
as
“REMIC B.” The REMIC B Class P Interest represents the sole class of regular
interests and the Class R-B Interest represents the sole class of “residual
interests” in REMIC B for purposes of the REMIC Provisions. The REMIC B Class P
Interest shall have a principal balance equal to the REMIC 3 Class P Interest
and shall bear interest at the same rate as the REMIC 3 Class P
Interest.
REMIC
C
As
provided herein, the Trustee shall make an election to treat the segregated
pool
of assets consisting of the REMIC 3 Class B-1 Interest as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated
as
“REMIC C.” The Class B-1 Certificates (exclusive of the right to Cap Carryover
Amounts) represent the sole class of “regular interests” and the Class R-C
Interest represents the sole class of “residual interests” in REMIC C for
purposes of the REMIC Provisions. The Class B-1 Certificates shall have a
principal balance equal to the REMIC 3 Class B-1 Interest and shall bear
interest at the same rate as the REMIC 3 Class B-1 Interest.
REMIC
D
As
provided herein, the Trustee shall make an election to treat the segregated
pool
of assets consisting of the REMIC 3 Class CE-2 Interest as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated
as
“REMIC D.” The Class CE-2 Certificates represent the sole class of “regular
interests” and the Class R-D Interest represents the sole class of “residual
interests” in REMIC D for purposes of the REMIC Provisions. The REMIC D Class
CE-2 Interest shall have a notional balance equal to the REMIC 3 Class CE-2
Interest and shall bear interest at the same rate as the REMIC 3 Class CE-2
Interest.
7
Solely
for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii), the
Distribution Date following the maturity date for the Mortgage Loan with the
latest maturity date has been designated as the “latest possible maturity date”
for each Class of Certificates that represents one or more of the “regular
interests” in REMIC 3, REMIC A, REMIC B, REMIC C or REMIC D.
8
SUMMARY
OF CERTIFICATES
The
following table sets forth (or describes) the Class designation, Certificate
Interest Rate and the Original Class Certificate Principal Balance for each
Class of Certificates comprising the interests in the Trust Fund created
hereunder:
|
Class
|
Issuing
REMIC
|
Original
Class Certificate
Principal
Balance or Notional Amount
|
Certificate
Interest
Rate
|
Assumed
Final
Maturity
Dates
|
|
A-1
|
3
|
$164,951,000.00
|
(1)
|
April
25, 2037
|
|
A-2
|
3
|
$91,350,000.00
|
(2)
|
April
25, 2037
|
|
A-3
|
3
|
$22,851,000.00
|
(3)
|
April
25, 2037
|
|
M-1
|
3
|
$12,963,000.00
|
(4)
|
April
25, 2037
|
|
M-2
|
3
|
$12,253,000.00
|
(5)
|
April
25, 2037
|
|
M-3
|
3
|
$6,926,000.00
|
(6)
|
April
25, 2037
|
|
M-4
|
3
|
$6,215,000.00
|
(7)
|
April
25, 2037
|
|
M-5
|
3
|
$5,860,000.00
|
(8)
|
April
25, 2037
|
|
M-6
|
3
|
$5,505,000.00
|
(9)
|
April
25, 2037
|
|
M-7
|
3
|
$5,327,000.00
|
(10)
|
April
25, 2037
|
|
M-8
|
3
|
$3,729,000.00
|
(11)
|
April
25, 2037
|
|
M-9
|
3
|
$4,084,000.00
|
(12)
|
April
25, 2037
|
|
B-1
|
C
|
$3,552,000.00
|
(13)
|
April
25, 2037
|
|
CE-1(14)
|
A
|
(15)
|
(14)
|
N/A
|
|
CE-2
|
D
|
(16)
|
(16)
|
N/A
|
|
P(17)
|
B
|
$100.00(17)
|
X/X
|
X/X
|
|
X
|
0,
0, 0(00)
|
X/X
|
X/X
|
X/X
|
|
R-X
|
A,
B, C, D(19)
|
N/A
|
N/A
|
N/A
|
|
Total
|
$345,566,100(20)
|
|||
________________
|
(1)
|
Interest
will accrue on the Class A-1 Certificates at a rate equal to the
lesser of: (i) the Class A-1 Pass-Through Rate and (ii) the Rate
Cap for such Distribution Date.
|
|
(2)
|
Interest
will accrue on the Class A-2 Certificates at a rate equal to the
lesser
of: (i) the Class A-2 Pass-Through Rate and (ii) the Rate Cap
for such Distribution Date.
|
|
(3)
|
Interest
will accrue on the Class A-3 Certificates at a rate equal to the
lesser
of: (i) the Class A-3 Pass-Through Rate and (ii) the Rate Cap
for such Distribution Date.
|
|
(4)
|
Interest
will accrue on the Class M-1 Certificates at a rate equal to the
lesser of: (i) the Class M-1 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(5)
|
Interest
will accrue on the Class M-2 Certificates at a rate equal to the
lesser of: (i) the Class M-2 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(6)
|
Interest
will accrue on the Class M-3 Certificates at a rate equal to the
lesser of: (i) the Class M-3 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(7)
|
Interest
will accrue on the Class M-4 Certificates at a rate equal to the
lesser of: (i) the Class M-4 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(8)
|
Interest
will accrue on the Class M-5 Certificates at a rate equal to the
lesser of: (i) the Class M-5 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(9)
|
Interest
will accrue on the Class M-6 Certificates at a rate equal to the
lesser of: (i) the Class M-6 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(10)
|
Interest
will accrue on the Class M-7 Certificates at a rate equal to the
lesser of: (i) the Class M-7 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(11)
|
Interest
will accrue on the Class M-8 Certificates at a rate equal to the
lesser of: (i) the Class M-8 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
9
|
(12)
|
Interest
will accrue on the Class M-9 Certificates at a rate equal to the
lesser of: (i) the Class M-9 Pass-Through Rate and (ii) the
Rate Cap for such Distribution
Date.
|
|
(13)
|
Interest
will accrue on the Class B-1 Certificates at a rate equal to the
lesser
of: (i) the Class B-1 Pass-Through Rate and (ii) the Rate
Cap for such Distribution Date.
|
|
(14)
|
The
Class CE-1 Certificates represent the beneficial ownership of the
Class
CE-1 Interest. REMIC 3 will issue the REMIC 3 Class CE-1 Interest,
which
will be an asset of REMIC A. REMIC A will issue the REMIC A Class
CE
Interest. The REMIC 3 Class CE-1 Interest and the REMIC A Class CE-1
Interest will have a principal balance equal to the Class CE-1
Uncertificated Principal Balance but will not bear interest on that
balance. The REMIC 3 Class CE-1 Interest and the REMIC A Class CE-1
Interest will bear interest on the Notional Amount therefor at the
Pass
Through Rate therefor. The Class CE-1 Certificates will represent
the
rights as indicated herein.
|
|
(15)
|
Solely
for federal income tax purposes, the Class CE-1 Certificates will
have an
Original Class Certificate Principal Balance equal to the Initial
Overcollateralization Amount. The Class CE-1 Certificates will bear
interest on their Notional Amount.
|
|
(16)
|
The
Class CE-2 Certificates represent the beneficial ownership of the
Class
CE-2 Interest. REMIC 3 will issue the REMIC 3 Class CE-2 Interest,
which
will be an asset of REMIC D. REMIC D will issue the REMIC D Class
CE-2
Interest.
|
|
(17)
|
The
Class P Certificates represent the beneficial ownership of the Class
P
Interest. REMIC 3 will issue the REMIC 3 Class P Interest, which
will be
an asset of REMIC B. REMIC B will issue the Class P Interest. The
Class P
Certificates are also entitled to any amounts paid by the Servicer
in
respect of improperly waived Prepayment Penalties pursuant to Section
3.01.
|
|
(18)
|
The
Class R Certificate will represent beneficial ownership of the Class
R-1
Interest, the Class R-2 Interest and the Class R-3
Interest.
|
|
(19)
|
The
Class R-X Certificate will represent beneficial ownership of the
Class R-A
Interest, the Class R-B Interest, the Class R-C Interest and the
Class R-D
Interest.
|
|
(20)
|
Exclusive
of the Class CE Notional
Amount.
|
10
ARTICLE
I
DEFINITIONS
Section
1.01. Defined
Terms.
Whenever
used in this Agreement or in the Preliminary Statement, the following words
and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, interest on the Floating
Rate Certificates will be calculated on the basis of the actual number of days
in the related Interest Accrual Period and a 360-day year. Interest on the
Fixed-Rate Certificates will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
1933
Act:
The
Securities Act of 1933, as amended.
40-Year
Trigger Event:
With
respect to any Distribution Date beginning with the 241st
Distribution Date or any Distribution Date thereafter, if (i) the aggregate
Principal Balance of the Mortgage Loans with 40-year original terms to maturity
as of the last day of the related Collection Period after giving effect to
principal prepayments in the related Prepayment Period, exceeds (ii) the
Overcollateralization Amount for such Distribution Date (after giving effect
to
all principal distributions on such Distribution Date other than principal
distributions resulting from this event).
60+
Day Delinquent Loan:
Each
Mortgage Loan with respect to which any portion of a Monthly Payment is, as
of
the last day of the prior Collection Period, two months or more past due, each
Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for which
the Mortgagor has filed for bankruptcy after the Closing Date.
Account:
Any of
the Collection Account, the Distribution Account, the Escrow Account, the Swap
Account, the Cap Account and the Cap Carryover Reserve Account.
Accrued
Certificate Interest:
With
respect to each Distribution Date and Class of Certificates, an amount equal
to
the interest accrued at the applicable rate set forth or described for such
Class in the table in the Preliminary Statement during the related Interest
Accrual Period on the Certificate Principal Balance of such Class of
Certificates, reduced by such Class’s Interest Percentage of Relief Act Interest
Shortfalls for such Distribution Date.
Additional
Form 10-D Disclosure:
As
defined in Section 3.29(b) hereof.
Additional
Form 10-K Disclosure:
As
defined in Section 3.29(b) hereof.
Adjustable-Rate
Mortgage Loan:
A
Mortgage Loan which has a rate at which interest accrues that adjusts based
on
the applicable Index plus a related Gross Margin, as set forth and subject
to
the limitations in the related Mortgage Note.
11
Adjustment
Date:
With
respect to each Adjustable-Rate Mortgage Loan, each adjustment date, on which
the Mortgage Interest Rate of an Adjustable-Rate Mortgage Loan changes pursuant
to the related Mortgage Note. The first Adjustment Date following the Cut-off
Date as to each Adjustable-Rate Mortgage Loan is set forth in the Mortgage
Loan
Schedule.
Administrative
Fee:
The sum
of (i) the Trustee Fee (ii) the Servicing Fee and (ii) the Excess
Servicing Fee.
Administrative
Fee Rate:
The sum
of (i) the Trustee Fee Rate, (ii) the Servicing Fee Rate and (iii) the
Excess Servicing Fee Rate.
Advance:
As to
any Mortgage Loan or REO Property, any advance made by the Servicer in respect
of any Distribution Date pursuant to Section 4.07.
Advance
Facility:
As
defined in Section 6.05(a) hereof.
Advance
Facility Notice:
As
defined in Section 6.05(b) hereof.
Advance
Financing Person:
As
defined in Section 6.05(a) hereof.
Advance
Reimbursement Amounts:
As
defined in Section 6.05(b) hereof.
Adverse
REMIC Event:
As
defined in Section 9.01(f) hereof.
Affiliate:
With
respect to any Person, any other Person controlling, controlled by or under
common control with such Person. For purposes of this definition, “control”
means the power to direct the management and policies of a Person, directly
or
indirectly, whether through ownership of voting securities, by contract or
otherwise and “controlling” and “controlled” shall have meanings correlative to
the foregoing.
Aggregate
Overcollateralization Release Amount:
With
respect to any Distribution Date, the lesser of (i) the Principal Remittance
Amount and (ii) the Overcollateralization Release Amount.
Agreement:
This
Pooling and Servicing Agreement and all amendments and supplements
hereto.
Applicable
Regulations:
As to
any Mortgage Loan, all federal, state and local laws, statutes, rules and
regulations applicable thereto.
Applied
Realized Loss Amount:
With
respect to each Distribution Date, the excess, if any, of (a) the aggregate
of the Certificate Principal Balances of the Certificates (after giving effect
to the distribution of the Principal Distribution Amount on such Distribution
Date and any increase of any Certificate Principal Balance as a result of
Subsequent Recoveries) over (b) the Pool Balance as of the end of the
related Collection Period, after giving effect to principal prepayments in
the
related Prepayment Period.
12
Assignment:
An
assignment of Mortgage, notice of transfer or equivalent instrument, in
recordable form, which is sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect or record the sale of
the
Mortgage.
Assumed
Final Maturity Date:
As to
each Class of Certificates, the date set forth as such in the Preliminary
Statement.
Balloon
Mortgage Loan:
A
Mortgage Loan that provides for the payment of the unamortized principal balance
of such Mortgage Loan in a single payment at the maturity of such Mortgage
Loan
that is substantially greater than the preceding Monthly Payment.
Balloon
Payment:
A
payment of the unamortized principal balance of a Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater
than
the preceding Monthly Payment.
Bankruptcy
Code:
Title 11 of the United States Code, as amended.
Book-Entry
Certificates:
Any of
the Certificates that shall be registered in the name of the Depository or
its
nominee, the ownership of which is reflected on the books of the Depository
or
on the books of a Person maintaining an account with the Depository (directly,
as a “Depository Participant,” or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in
Section 5.02 hereof). On the Closing Date, the Offered Certificates and the
Class B-1 Certificates shall be Book-Entry Certificates.
Business
Day:
Any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of Delaware, the State of New York, the State of Texas, the State of
Illinois or in the city in which the Corporate Trust Office of the Trustee
is
located are authorized or obligated by law or executive order to be
closed.
Cap
Account:
As
defined in Section 4.09.
Cap
Agreement:
The
interest rate cap agreement, dated May 31, 2007, between the Cap Provider and
the Supplemental Interest Trust Trustee, a copy of which is attached hereto
as
Exhibit
O-1.
Cap
Carryover Amount:
If on
any Distribution Date the Accrued Certificate Interest for any Certificate
is
based on the Rate Cap, the excess of (i) the amount of interest such Certificate
would have been entitled to receive on such Distribution Date if the related
Certificate Interest Rate had not been limited by the Rate Cap, up to but not
exceeding the related Maximum Rate Cap, over (ii) the amount of interest such
Certificate received on such Distribution Date based on the Rate Cap, together
with the unpaid portion of any such excess from prior Distribution Dates (and
interest accrued thereon at the then-applicable Certificate Interest Rate on
such Certificate without regard to the Rate Cap but subject to the Maximum
Rate
Cap).
Cap
Carryover Reserve Account:
The
trust account created and maintained by the Trustee pursuant to Section 3.04(f)
which shall be entitled “Cap Carryover Reserve Account, LaSalle Bank National
Association, as Trustee, in trust for registered Holders of C-BASS Mortgage
Loan
Asset-Backed Certificates, Series 2007-CB5” and which must be an Eligible
Account. Amounts on deposit in the Cap Carryover Reserve Account shall not
be
invested. The Cap Carryover Reserve Account shall not be an asset of any REMIC
formed under this Agreement.
13
Cap
Payment:
With
respect to the Cap Agreement and for any Distribution Date, the amount, if
any,
required to be paid by the Cap Provider one Business Day prior to such
Distribution Date under the Cap Agreement.
Cap
Provider:
JPMorgan Chase Bank, N.A.
Certificate:
Any
Offered Certificate, Class B-1 Certificate, Class CE-1 Certificate, Class CE-2
Certificate, Class P Certificate or Residual Certificate.
Certificate
Custodian:
Initially, LaSalle Bank National Association; thereafter any other Certificate
Custodian acceptable to the Depository and selected by the Trustee.
Certificate
Interest Rate:
As to
any Class of Certificates other than the Class CE-1, Class CE-2, Class P, Class
R and Class R-X Certificates or the Class Swap-IO Interest and any Distribution
Date, the lesser of (i) the Pass-Through Rate for such Class and (ii) the Rate
Cap. With respect to the Class CE-1 Certificates, Class CE-2 Certificates and
Class SWAP-IO Interest and each Distribution Date, the related Pass-Through
Rate. The Class P, Class R and Class R-X Certificates do not have a Certificate
Interest Rate.
Certificate
Owner:
With
respect to each Book-Entry Certificate, any beneficial owner
thereof.
Certificate
Principal Balance:
With
respect to any Class of Certificates (other than the Class CE or Residual
Certificates or the Class Swap-IO Interest) and any Distribution Date, the
Original Class Certificate Principal Balance (a) reduced by the sum of
(i) all amounts actually distributed in respect of principal of such Class
on all prior Distribution Dates and (ii) Applied Realized Loss Amounts
allocated thereto for previous Distribution Dates and (b) increased by any
Subsequent Recoveries allocated to such Class for previous Distribution Dates.
Other than as described below, the Class CE and Residual Certificates do not
have a Certificate Principal Balance. With respect to any Certificate (other
than a Class CE or Residual Certificate or the Class Swap-IO Interest) of a
Class and any Distribution Date, the portion of the Certificate Principal
Balance of such Class represented by such Certificate equal to the product
of
the Percentage Interest evidenced by such Certificate and the Certificate
Principal Balance of such Class. With respect to any Class of REMIC 3 Regular
Interests (other than the Class SWAP-IO Interest) and any Distribution Date,
the
Certificate Principal Balances of the corresponding Class of
Certificates.
Certificate
Register
and
Certificate
Registrar:
The
register maintained and registrar appointed pursuant to Section 5.02
hereof.
Certificateholder
or
Holder:
The
Person in whose name a Certificate is registered in the Certificate Register,
except that a Disqualified Organization or Disqualified Non-U.S. Person shall
not be a Holder of a Residual Certificate for any purpose hereof.
14
Class:
Collectively, Certificates or REMIC Regular Interests which have the same
priority of payment and bear the same class designation and the form of which
is
identical except for variation in the Percentage Interest evidenced
thereby.
Class A-1
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.060% per annum, and (ii) following the Optional Termination Date, 0.120%
per annum.
Class A-1
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class A-1 Certificate Margin.
Class A-2
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.170% per annum, and (ii) following the Optional Termination Date, 0.340%
per annum.
Class A-2
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class A-2 Certificate Margin.
Class A-3
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.250% per annum, and (ii) following the Optional Termination Date, 0.500%
per annum.
Class A-3
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class A-3 Certificate Margin.
Class A
Certificate:
Any one
of the Certificates with an “A” designated on the face thereof substantially in
the form annexed hereto as Exhibits X-0,
X-0 and A-3
executed
by the Trustee on behalf of the Trust and authenticated and delivered by the
Certificate Registrar, representing the right to distributions as set forth
herein and therein. Each Class A Certificate will represent (i) the
corresponding REMIC 3 Regular Interest for purposes of the REMIC Provisions,
(ii) the right to receive the Cap Carryover Amounts and (iii) the obligation
to
pay the Class SWAP-IO Distribution Amount.
Class A
Certificateholders:
Collectively, the Holders of the Class A Certificates.
Class B-1
Certificate:
The
Certificates with a “B-1” designated on the face thereof substantially in the
form annexed hereto as Exhibit B-10,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein. Each Class B-1 Certificate will represent (i) the
corresponding REMIC C Regular Interest for purposes of the REMIC Provisions,
(ii) the right to receive the Cap Carryover Amounts and (iii) the obligation
to
pay the Class SWAP-IO Distribution Amount.
Class B-1
Certificateholders:
Collectively, the Holders of the Class B-1 Certificates.
Class B-1
Pass-Through Rate:
For
each Distribution Date, (i) on or prior to the Optional Termination Date, 7.000%
per annum, and (ii) following the Optional Termination Date, 7.500% per
annum.
15
Class B-1
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M
Certificates (after taking into account the payment of the Senior Principal
Distribution Amount and the Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Principal Distribution
Amounts on such Distribution Date) and (ii) the Certificate Principal Balance
of
the Class B-1 Certificates immediately prior to such Distribution Date over
(y)
the lesser of (a) the product of (i) 94.60% and (ii) the Pool Balance as of
the
last day of the related Collection Period after giving effect to principal
prepayments in the related Prepayment Period and (b) the amount by which the
Pool Balance as of the last day of the related Collection Period after giving
effect to principal prepayments in the related Prepayment Period exceeds the
Overcollateralization Floor.
Class B-1
Realized Loss Amortization Amount:
As to
the Class B-1 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class B-1 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in Section
4.02(b)(i) through (xxxi) hereof, in each case for such Distribution
Date.
Class
CE Certificate:
Any one
of the Certificates with a “CE” designated on the face thereof substantially in
the form annexed hereto as Exhibit C-1
and Exhibit C-2,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein. (A) The Class CE-1 Certificates represent (i) the
corresponding REMIC A Regular Interest for purposes of the REMIC Provisions,
(ii) the obligation to pay Cap Carryover Amounts, Swap Termination Payments
and
Class SWAP-IO Distribution Amounts and (iii) the right to receive the Class
SWAP-IO Distribution Amount and amounts from the Cap Carryover Reserve Account,
the Swap Account and the Cap Account and (B) the Class CE-2 Certificates
represent the corresponding REMIC D Regular Interest.
Class
CE-1 Distributable Amount:
With
respect to any Distribution Date, the sum of (i) the interest accrued on such
Class CE-1 Certificate at its Pass-Through Rate calculated on its Notional
Amount less the amount (without duplication) of Cap Carryover Amounts paid
pursuant to Section 4.02(b)(xxxiii), any Defaulted Swap Termination Payments
paid pursuant to Section 4.02(b)(xxxiv), and any amounts paid pursuant to
Section 4.02(b)(xxxv), (ii) any remaining Aggregate Overcollateralization
Release Amounts and (iii) the amounts remaining in the Cap Carryover Reserve
Account after the distributions in Section
3.04(f),
and the
Supplemental Interest Trust in respect of the Swap Account and Cap Account
after
distributions in Section
4.09(i) through (viii).
Class
CE Uncertificated Principal Balance:
As of
any date of determination, the Initial Overcollateralization Amount minus the
sum of (i) any Realized Losses allocated thereto and (ii) any amounts
distributed (or deemed distributed) to the Class CE-1 Certificates with respect
thereto.
Class M
Certificate:
Any one
of the Certificates with a “M” designated on the face thereof substantially in
the form annexed hereto as Exhibits X-0,
X-0, X-0, X-0, X-0, X-0, X-0, B-8 and B-9,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein. Each Class M Certificate will represent (i) the
corresponding REMIC 3 Regular Interest for purposes of the REMIC Provisions,
(ii) the right to receive the Cap Carryover Amounts and (iii) the obligation
to
pay the Class SWAP-IO Distribution Amount.
16
Class M
Certificateholders:
Collectively, the Holders of the Class M Certificates.
Class M-1
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.240% per annum, and (ii) following the Optional Termination Date, 0.360%
per annum.
Class M-1
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-1 Certificate Margin.
Class
M-1 Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates (after taking into
account the payment of the Senior Principal Distribution Amount on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class
M-1
Certificates immediately prior to such Distribution Date over (y) the lesser
of
(a) the product of (i) 64.50% and (ii) the Pool Balance as of the last day
of
the related Collection Period after giving effect to principal prepayments
in
the related Prepayment Period and (b) the amount by which the Pool Balance
as of
the last day of the related Collection Period after giving effect to principal
prepayments in the related Prepayment Period exceeds the Overcollateralization
Floor.
Class M-1
Realized Loss Amortization Amount:
As to
the Class M-1 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-1 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (iv) hereof, in each case for such Distribution
Date.
Class M-2
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.250% per annum, and (ii) following the Optional Termination Date, 0.375%
per annum.
Class M-2
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-2 Certificate Margin.
Class M-2
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1
Certificates (after taking into account the payment of the Senior Principal
Distribution Amount and the Class M-1 Principal Distribution Amount on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class
M-2
Certificates immediately prior to such Distribution Date over (y) the lesser
of
(a) the product of (i) 71.40% and (ii) the Pool Balance as of the last day
of
the related Collection Period after giving effect to principal prepayments
in
the related Prepayment Period and (b) the amount by which the Pool Balance
as of
the last day of the related Collection Period after giving effect to principal
prepayments in the related Prepayment Period exceeds the Overcollateralization
Floor.
17
Class M-2
Realized Loss Amortization Amount:
As to
the Class M-2 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-2 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (vii) hereof, in each case for such Distribution
Date.
Class M-3
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.280% per annum, and (ii) following the Optional Termination Date, 0.420%
per annum.
Class M-3
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-3 Certificate Margin.
Class M-3
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and Class M-1 and
Class M-2 Certificates (after taking into account the payment of the Senior
Principal Distribution Amount and the Class M-1 and Class M-2 Principal
Distribution Amounts on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (a) the product of (i) 75.30% and
(ii)
the Pool Balance as of the last day of the related Collection Period after
giving effect to principal prepayments in the related Prepayment Period and
(b)
the amount by which the Pool Balance as of the last day of the related
Collection Period after giving effect to principal prepayments in the related
Prepayment Period exceeds the Overcollateralization Floor.
Class M-3
Realized Loss Amortization Amount:
As to
the Class M-3 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-3 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (x) hereof, in each case for such Distribution
Date.
Class M-4
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.400% per annum, and (ii) following the Optional Termination Date, 0.600%
per annum.
Class M-4
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-4 Certificate Margin.
Class M-4
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1,
Class M-2 and Class M-3 Certificates (after taking into account the payment
of
the Senior Principal Distribution Amount and the Class M-1, Class M-2 and Class
M-3 Principal Distribution Amounts on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior
to
such Distribution Date over (y) the lesser of (a) the product of (i) 78.80%
and
(ii) the Pool Balance as of the last day of the related Collection Period after
giving effect to principal prepayments in the related Prepayment Period and
(b)
the amount by which the Pool Balance as of the last day of the related
Collection Period after giving effect to principal prepayments in the related
Prepayment Period exceeds the Overcollateralization Floor.
18
Class M-4
Realized Loss Amortization Amount:
As to
the Class M-4 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-4 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (xiii) hereof, in each case for such
Distribution Date.
Class M-5
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.450% per annum, and (ii) following the Optional Termination Date, 0.675%
per annum.
Class M-5
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-5 Certificate Margin.
Class M-5
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1,
Class M-2, Class M-3 and Class M-4 Certificates (after taking into account
the
payment of the Senior Principal Distribution Amount and the Class M-1, Class
M-2, Class M-3 and Class M-4 Principal Distribution Amounts on such Distribution
Date) and (ii) the Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (y) the lesser of (a) the
product of (i) 82.10% and (ii) the Pool Balance as of the last day of the
related Collection Period after giving effect to principal prepayments in the
related Prepayment Period and (b) the amount by which the Pool Balance as of
the
last day of the related Collection Period after giving effect to principal
prepayments in the related Prepayment Period exceeds the Overcollateralization
Floor.
Class M-5
Realized Loss Amortization Amount:
As to
the Class M-5 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-5 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (xvi) hereof, in each case for such Distribution
Date.
Class M-6
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
0.670% per annum, and (ii) following the Optional Termination Date, 1.005%
per annum.
Class M-6
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-6 Certificate Margin.
Class M-6
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1,
Class M-2, Class M-3, Class M-4 and Class M-5 Certificates (after taking into
account the payment of the Senior Principal Distribution Amount and the Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Principal Distribution
Amounts on such Distribution Date) and (ii) the Certificate Principal Balance
of
the Class M-6 Certificates immediately prior to such Distribution Date over
(y)
the lesser of (a) the product of (i) 85.20% and (ii) the Pool Balance as of
the
last day of the related Collection Period after giving effect to principal
prepayments in the related Prepayment Period and (b) the amount by which the
Pool Balance as of the last day of the related Collection Period after giving
effect to principal prepayments in the related Prepayment Period exceeds the
Overcollateralization Floor.
19
Class M-6
Realized Loss Amortization Amount:
As to
the Class M-6 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-6 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (xix) hereof, in each case for such Distribution
Date.
Class M-7
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
1.150% per annum, and (ii) following the Optional Termination Date, 1.725%
per annum.
Class M-7
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-7 Certificate Margin.
Class M-7
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates (after
taking into account the payment of the Senior Principal Distribution Amount
and
the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
Principal Distribution Amounts on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-7 Certificates immediately prior
to
such Distribution Date over (y) the lesser of (a) the product of (i) 88.20%
and
(ii) the Pool Balance as of the last day of the related Collection Period after
giving effect to principal prepayments in the related Prepayment Period and
(b)
the amount by which the Pool Balance as of the last day of the related
Collection Period after giving effect to principal prepayments in the related
Prepayment Period exceeds the Overcollateralization Floor.
Class M-7
Realized Loss Amortization Amount:
As to
the Class M-7 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-7 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (xxii) hereof, in each case for such
Distribution Date.
Class M-8
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
1.700% per annum, and (ii) following the Optional Termination Date, 2.550%
per annum.
Class M-8
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-8 Certificate Margin.
20
Class M-8
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates
(after taking into account the payment of the Senior Principal Distribution
Amount and the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6
and Class M-7 Principal Distribution Amounts on such Distribution Date) and
(ii)
the Certificate Principal Balance of the Class M-8 Certificates immediately
prior to such Distribution Date over (y) the lesser of (a) the product of (i)
90.30% and (ii) the Pool Balance as of the last day of the related Collection
Period after giving effect to principal prepayments in the related Prepayment
Period and (b) the amount by which the Pool Balance as of the last day of the
related Collection Period after giving effect to principal prepayments in the
related Prepayment Period exceeds the Overcollateralization Floor.
Class M-8
Realized Loss Amortization Amount:
As to
the Class M-8 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-8 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (xxv) hereof, in each case for such Distribution
Date.
Class M-9
Certificate Margin:
For
each Distribution Date (i) on or prior to the Optional Termination Date,
2.000% per annum, and (ii) following the Optional Termination Date, 3.500%
per annum.
Class M-9
Pass-Through Rate:
For
each Distribution Date, LIBOR as of the related LIBOR Determination Date plus
the Class M-9 Certificate Margin.
Class M-9
Principal Distribution Amount:
As of
any Distribution Date on or after the Stepdown Date and as long as a Trigger
Event is not in effect, the excess of (x) the sum of (i) the sum of the
Certificate Principal Balances of the Class A Certificates and the Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class
M-8
Certificates (after taking into account the payment of the Senior Principal
Distribution Amount and the Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7 and Class M-8 Principal Distribution Amounts on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class
M-9
Certificates immediately prior to such Distribution Date over (y) the lesser
of
(a) the product of (i) 92.60% and (ii) the Pool Balance as of the last day
of
the related Collection Period after giving effect to principal prepayments
in
the related Prepayment Period and (b) the amount by which the Pool Balance
as of
the last day of the related Collection Period after giving effect to principal
prepayments in the related Prepayment Period exceeds the Overcollateralization
Floor.
Class M-9
Realized Loss Amortization Amount:
As to
the Class M-9 Certificates and as of any Distribution Date, the lesser of
(x) the Unpaid Realized Loss Amount for the Class M-9 Certificates as
of such Distribution Date and (y) the excess of (i) the Monthly Excess
Cashflow Amount over (ii) the sum of the amounts described in
Section 4.02(b)(i) through (xxviii) hereof, in each case for such
Distribution Date.
Class
P Certificate:
Any one
of the Certificates with a “P” designated on the face thereof substantially in
the form annexed hereto as Exhibit C-3,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein. The Class P Certificate represents (i) the
corresponding REMIC B regular interest for purposes of the REMIC Provisions
and
(ii) the right to receive amounts paid by the servicer in respect of improperly
waived Prepayment Penalties pursuant to Section 3.01.
21
Class R
Certificate:
The
Class R Certificate executed by the Trustee on behalf of the Trust, and
authenticated and delivered by the Certificate Registrar, substantially in
the
form annexed hereto as Exhibit C-4
and
evidencing the ownership of the Residual Interest in each of REMIC 1, REMIC
2
and REMIC 3. The Class R Certificate represents the ownership of the Class
R-1 Interest, Class R-2 Interest and Class R-3 Interest.
Class
R-1 Interest:
The
uncertificated residual interest in REMIC 1 for purpose of the REMIC
Provisions.
Class
R-2 Interest:
The
uncertificated residual interest in REMIC 2 for purpose of the REMIC
Provisions.
Class
R-3 Interest:
The
uncertificated residual interest in REMIC 3 for purposes of the REMIC
Provisions.
Class
R-A Interest:
The
uncertificated residual interest in REMIC A for purpose of the REMIC
Provisions.
Class
R-B Interest:
The
uncertificated residual interest in REMIC B for purpose of the REMIC
Provisions.
Class
R-C Interest:
The
uncertificated residual interest in REMIC C for purpose of the REMIC
Provisions.
Class
R-D Interest:
The
uncertificated residual interest in REMIC D for purpose of the REMIC
Provisions.
Class
R-X Certificate:
The
Class R-X Certificate executed by the Trustee on behalf of the Trust, and
authenticated and delivered by the Certificate Registrar, substantially in
the
form annexed hereto as Exhibit C-5
and
evidencing the ownership of the Residual Interest in each of REMIC A, REMIC
B,
REMIC C and REMIC D. The Class R-X Certificate represents the ownership of
the
Class R-A Interest, Class R-B Interest, Class R-C Interest and Class R-D
Interest.
Class
SWAP-IO Distribution Amount:
As
defined in Section 4.09 hereof. For purposes of clarity, the Class SWAP-IO
Distribution Amount for any Distribution Date shall equal the amount payable
to
the Supplemental Interest Trust on such Distribution Date in excess of the
amount payable on the Class SWAP-IO Interest on such Distribution Date, all
as
further provided in Section 4.09 hereof.
Class
SWAP-IO Interest:
An
uncertificated interest evidencing a REMIC 3 Regular Interest for purposes
of
the REMIC Provisions.
22
Closing
Date:
May 31,
2007.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to
time.
Collection
Account:
The
account or accounts created and maintained by the Servicer pursuant to
Section 3.04, which shall be entitled “Collection Account, Xxxxxx Loan
Servicing LP, as Servicer in trust for registered Holders of C-BASS 2007-CB5
Trust, C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB5,” and
which must be an Eligible Account.
Collection
Period:
With
respect to any Distribution Date, the period from the second day of the calendar
month preceding the month in which such Distribution Date occurs through the
first day of the month in which such Distribution Date occurs.
Combined
Loan-to-Value Ratio:
As of
any date and Mortgage Loan, the fraction, expressed as a percentage, the
numerator of which is the Principal Balance of the Mortgage Loan as of such
date
of determination plus the principal balance of any related senior mortgage
loan,
if any, at origination of the Mortgage Loan and the denominator of which is
the
Value of the related Mortgaged Property.
Commission:
The
United States Securities and Exchange Commission.
Compensating
Interest:
As
defined in Section 3.23 hereof.
Condemnation
Proceeds:
All
awards or settlements in respect of a taking of a Mortgaged Property by exercise
of the power of eminent domain or condemnation.
Corporate
Trust Office:
With
respect to the Trustee, the principal corporate trust office of the Trustee
at
which at any particular time its corporate trust business in connection with
this Agreement shall be administered and Certificates may be presented for
transfer and exchange and for purpose of surrender for the final distribution
thereon, which office at the date of the execution of this instrument is located
at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Global
Securities and Trust Services — C-BASS 2007-CB5,
or at
such other address as the Trustee may designate from time to time by notice
to
the Certificateholders, the Depositor, the Servicer and the Seller.
Corresponding
Classes:
With
respect to REMIC 2 and REMIC 3, the following Classes shall be Corresponding
Classes:
|
Corresponding
REMIC 2 Classes
|
Corresponding
REMIC 3 Regular Interests
|
|
LT2A1
|
Class
A-1 Regular Interest
|
|
LT2A2
|
Class
A-2 Regular Interest
|
|
LT2A3
|
Class
A-3 Regular Interest
|
|
LT2M1
|
Class
M-1 Regular Interest
|
23
|
LT2M2
|
Class
M-2 Regular Interest
|
|
LT2M3
|
Class
M-3 Regular Interest
|
|
LT2M4
|
Class
M-4 Regular Interest
|
|
LT2M5
|
Class
M-5 Regular Interest
|
|
LT2M6
|
Class
M-6 Regular Interest
|
|
LT2M7
|
Class
M-7 Regular Interest
|
|
LT2M8
|
Class
M-8 Regular Interest
|
|
LT2M9
|
Class
M-9 Regular Interest
|
|
LT2B1
|
REMIC
3 Class B-1 Interest
|
Custodial
Agreement:
The
Custodial Agreement, dated as of May 1, 2007, among the Trustee, the Servicer
and the Custodian, as the same may be amended or supplemented pursuant to the
terms thereof.
Custodian:
The
Bank of New York, a New York banking corporation, or any successor custodian
appointed pursuant to the terms of the Custodial Agreement.
Cut-off
Date:
May 1,
2007.
Cut-off
Date Principal Balance:
With
respect to any Mortgage Loan, the unpaid principal balance thereof as of the
Cut-off Date after application of funds received or advanced on or before such
date (or as of the applicable date of substitution with respect to an Eligible
Substitute Mortgage Loan).
Cut-off
Date Pool Balance:
$355,154,811.88.
DBRS:
DBRS
and its successors, and if such company shall for any reason no longer perform
the functions of a securities rating agency, “DBRS” shall be deemed to refer to
any other “nationally recognized statistical rating organization” as set forth
on the most current list of such organizations released by the Securities and
Exchange Commission.
Debt
Service Reduction:
With
respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment
for
such Mortgage Loan by a court of competent jurisdiction in a proceeding under
the Bankruptcy Code, except such a reduction resulting from a Deficient
Valuation.
Defaulted
Swap Termination Payment:
Any
Swap Termination Payment required to be paid by the Supplemental Interest Trust
to the Swap Provider pursuant to the Swap Agreement as a result of an Event
of
Default (as defined in the Swap Agreement) with respect to which the Swap
Provider is the defaulting party or a Termination Event under the Swap Agreement
with respect to which the Swap Provider is the sole Affected Party (as defined
in the Swap Agreement).
24
Defective
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced by one or more Eligible Substitute
Mortgage Loans.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation of the related Mortgaged Property
by a
court of competent jurisdiction in an amount less than the then outstanding
principal balance of the Mortgage Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code.
Definitive
Certificates:
As
defined in Section 5.02(c) hereof.
Delinquent:
Any
Mortgage Loan with respect to which the Monthly Payment and/or any Escrow
Payment due on a Due Date is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
Depositor:
Asset
Backed Funding Corporation, a Delaware corporation, or any successor in
interest.
Depository:
The
initial depository shall be The Depository Trust Company, whose nominee is
Cede
& Co., or any other organization registered as a “clearing agency” pursuant
to Section 17A of the Exchange Act. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a “clearing corporation” as defined in Section 8-102(3) of the
Uniform Commercial Code of the State of New York.
Depository
Participant:
A
broker, dealer, bank or other financial institution or other person for whom
from time to time a Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Determination
Date:
With
respect to any Distribution Date, the 16th day of the calendar month in which
such Distribution Date occurs or, if such 16th day is not a Business Day, the
Business Day immediately succeeding such 16th day.
Directly
Operate:
With
respect to any REO Property, the furnishing or rendering of services to the
tenants thereof, the management or operation of such REO Property, the holding
of such REO Property primarily for sale to customers, the performance of any
construction work thereon or any use of such REO Property in a trade or business
conducted by the Trust other than through an Independent Contractor;
provided,
however,
that
the Trustee (or the Servicer under this Agreement) shall not be considered
to
Directly Operate an REO Property solely because the Trustee (or the
Servicer under this Agreement) establishes rental terms, chooses tenants, enters
into or renews leases, deals with taxes and insurance, or makes decisions as
to
repairs or capital expenditures with respect to such REO Property.
Disqualified
Non-U.S. Person:
With
respect to a Residual Certificate, any (A) non-U.S. Person or agent thereof
or
(B) U.S. Person with respect to whom income from a Residual Certificate is
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person.
25
Disqualified
Organization:
A
“disqualified organization” under Section 860E of the Code, which as of the
Closing Date is any of: (i) the United States, any state or political
subdivision thereof, any possession of the United States, any foreign
government, any international organization, or any agency or instrumentality
of
any of the foregoing, (ii) any organization (other than a cooperative
described in Section 521 of the Code) which is exempt from the tax imposed
by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described
in Section 1381(a)(2)(C) of the Code, or (iv) any other Person so designated
by
the Trustee based upon an Opinion of Counsel provided by nationally recognized
counsel to the Trustee that the holding of an ownership interest in a Residual
Certificate by such Person may cause the Trust Fund or any Person having an
ownership interest in any Class of Certificates (other than such Person) to
incur liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. A corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and a majority of its board
of directors is not selected by a governmental unit. The term “United States,”
“state” and “international organization” shall have the meanings set forth in
Section 7701 of the Code.
Distribution
Account:
The
trust account or accounts created and maintained by the Trustee pursuant to
Section 3.04(b) which shall be entitled “Distribution Account, LaSalle Bank
National Association, as Trustee, in trust for the registered Holders of C-BASS
2007-CB5 Trust, C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB5”
and which must be an Eligible Account.
Distribution
Date:
The
25th day of any calendar month, or if such 25th day is not a Business Day,
the
Business Day immediately following such 25th day, commencing in June
2007.
Distribution
Information:
The items calculated and reported by the Trustee pursuant to Section
4.06(a)(iii), (iv), (v) and (xvi) through (xxvi) and any other information
included in the Monthly Statement to certificateholders set forth in Section
4.06 hereof aggregated and/or calculated by the Trustee from (a) information
contained in the Remittance Report or (b) other information furnished to the
Trustee by the Servicer pursuant to Section 4.07.
Downgrade
Termination Event:
An event whereby (x) the Swap Provider (or its guarantor) ceases to have short
term unsecured and/or long term debt ratings at least equal to the levels
specified in the Swap Agreement, and (y) at least one of the following events
has not occurred (except to the extent otherwise approved by the Rating
Agencies): (i) within the time period specified in the Swap Agreement with
respect to such downgrade, the Swap Provider shall transfer the Swap Agreement,
in whole, but not in part, to a substitute swap provider that satisfied the
requirements set forth in the Swap Agreement, subject to the satisfaction of
the
rating agency condition or (ii) within the time period specified in the Swap
Agreement with respect to such downgrade, the Swap Provider shall collateralize
its exposure to the Issuing Entity pursuant to an ISDA Credit Support Annex,
subject to the satisfaction of the rating agency condition; provided that such
ISDA Credit Support Annex shall be made a credit support document for the Swap
Provider pursuant to an amendment to the Swap Agreement.
26
Due
Date:
With
respect to each Mortgage Loan and any Distribution Date, the day of the calendar
month in which such Distribution Date occurs on which the Monthly Payment for
such Mortgage Loan was due, exclusive of any grace period.
Eligible
Account:
Any of
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term
unsecured debt obligations of such holding company) are rated “A-2” (or the
equivalent) by each of the Rating Agencies at the time any amounts are held
on
deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC (to the limits established by such corporation),
the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating
Agency, the Certificateholders will have a claim with respect to the funds
in
such account or a perfected first priority security interest against such
collateral (which shall be limited to Permitted Investments) securing such
funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to
each Rating Agency without reduction or withdrawal of their then current ratings
of the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
Eligible
Substitute Mortgage Loan:
A
mortgage loan substituted for a Defective Mortgage Loan pursuant to the terms
of
this Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance, after application of all scheduled payments
of
principal and interest due during or prior to the month of substitution, not
in
excess of, and not more than 5% less than, the outstanding principal balance
of
the Defective Mortgage Loan as of the Due Date in the calendar month during
which the substitution occurs, (ii) have a Mortgage Interest Rate, with respect
to a Fixed-Rate Mortgage Loan, not less than the Mortgage Interest Rate of
the
Defective Mortgage Loan and not more than 1% in excess of the Mortgage Interest
Rate of such Defective Mortgage Loan, (iii) if an Adjustable-Rate Mortgage
Loan,
have a Maximum Mortgage Interest Rate not less than the Maximum Mortgage
Interest Rate for the Defective Mortgage Loan, (iv) if an Adjustable-Rate
Mortgage Loan, have a Minimum Mortgage Interest Rate not less than the Minimum
Mortgage Interest Rate of the Defective Mortgage Loan, (v) if an Adjustable-Rate
Mortgage Loan, have the same Index as the Defective Mortgage Loan, (vi) if
an
Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than
the
Gross Margin of the Defective Mortgage Loan, (vii) if an Adjustable-Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Defective Mortgage Loan, (viii) have a remaining
term to maturity not greater than (and not more than one year less than) that
of
the Defective Mortgage Loan, (ix) be current as of the date of substitution,
(x) have a Combined Loan-to-Value Ratio as of the date of substitution
equal to or lower than the Combined Loan-to-Value Ratio of the Defective
Mortgage Loan as of such date, (xi) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Defective Mortgage Loan,
(xii) have been reunderwritten by the Seller in accordance with the same
underwriting criteria and guidelines as the Defective Mortgage Loan, (xiii)
have
the same Due Date as the Defective Mortgage Loan and (xiv) conform to each
representation and warranty set forth in Section 3.01 of the Mortgage Loan
Purchase Agreement applicable to the Defective Mortgage Loan. In the event
that
one or more mortgage loans are substituted for one or more Defective Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate principal balances, the Mortgage Interest Rates described
in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Interest Rates, the risk gradings described in clause (xi) hereof shall be
satisfied as to each such mortgage loan, the terms described in clause (viii)
hereof shall be determined on the basis of weighted average remaining term
to
maturity, the Combined Loan-to-Value Ratios described in clause (x) hereof
shall
be satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (xiv) hereof must be satisfied as to each Eligible Substitute Mortgage
Loan or in the aggregate, as the case may be.
27
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Restricted
Certificates:
Any of
the Class B-1, Class CE-1, Class CE-2, Class P, Class R and Class R-X
Certificates or any of the Offered Certificates that no longer has the
applicable credit rating required by the Underwriter’s Exemption.
Escrow
Account:
The
account or accounts created and maintained pursuant to
Section 3.06.
Escrow
Payments:
The
amounts constituting taxes, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
Estate
in Real Property:
A fee
simple estate in a parcel of real property.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Excess
Servicing Fee:
With
respect to each Mortgage Loan (including each REO Property) and for any calendar
month, an amount equal to one month’s interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered
by
such payment of interest) at the Excess Servicing Fee Rate on the same principal
amount on which interest on such Mortgage Loan accrues for such calendar month.
The Excess Servicing Fee shall only be payable for so long as Xxxxxx Loan
Servicing LP is the Servicer of the Mortgage Loans.
Excess
Servicing Fee Rate:
So long
as Xxxxxx Loan Servicing LP is the Servicer, with respect to each Mortgage
Loan,
0.35% per annum. At any time Xxxxxx Loan Servicing LP is not the servicer,
with
respect to each Mortgage Loan, 0.00% per annum.
Extended
Period:
As
defined in Section 9.04(b).
Extra
Principal Distribution Amount:
As of
any Distribution Date, the lesser of (x) the Monthly Excess Interest Amount
for such Distribution Date and (y) the Overcollateralization Deficiency for
such Distribution Date.
28
FDIC:
Federal
Deposit Insurance Corporation or any successor thereto.
Fidelity
Bond:
Shall
have the meaning assigned thereto in Section 3.12.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased by the Seller or the Servicer pursuant
to or as contemplated by Section 2.03 or 10.01), a determination made by
the Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.
First
Lien Mortgage Loan:
Any of
the Mortgage Loans which are secured by a first mortgage lien that is senior
to
a junior lien, if any, on the related Mortgaged Property.
Fixed
Payer Rate:
The
fixed rate payable with respect to each of the first 47 Distribution Dates,
which is 5.20%.
Fixed-Rate
Certificates:
The
Class B-1 Certificates.
Fixed-Rate
Mortgage Loan:
A
Mortgage Loan which has a constant annual rate at which interest accrues in
accordance with the provisions of the related Mortgage Note.
Floating
Rate Certificates:
Any of
the Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class
M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates.
Foreclosure
Price:
The
amount reasonably expected to be received from the sale of the related Mortgaged
Property net of any expenses associated with foreclosure
proceedings.
Form
8-K Disclosure Information:
As
defined in Section 3.29(c) hereof.
Gross
Margin:
With
respect to each Adjustable-Rate Mortgage Loan, the fixed percentage, if any,
set
forth in the related Mortgage Note that is added to the Index on each Adjustment
Date in accordance with the terms of the related Mortgage Note used to determine
the Mortgage Interest Rate for such Mortgage Loan.
HUD:
The
United States Department of Housing and Urban Development, or any successor
thereto, including the Federal Housing Commissioner and the Secretary of Housing
and Urban Development where appropriate under the FHA Regulations.
Independent:
When
used with respect to any specified Person, any such Person who (i) is in
fact independent of the Depositor, the Servicer and their respective Affiliates,
(ii) does not have any direct financial interest in or any material
indirect financial interest in the Depositor or the Servicer or any Affiliate
thereof, and (iii) is not connected with the Depositor or the Servicer or
any Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided,
however,
that a
Person shall not fail to be Independent of the Depositor or the Servicer or
any
Affiliate thereof merely because such Person is the beneficial owner of 1%
or
less of any class of securities issued by the Depositor or the Servicer or
any
Affiliate thereof, as the case may be.
29
Independent
Contractor:
Either
(i) any Person (other than the Servicer) that would be an “independent
contractor” with respect to the Trust Fund within the meaning of
Section 856(d)(3) of the Code if the Trust Fund were a real estate
investment trust (except that the ownership tests set forth in that section
shall be considered to be met by any Person that owns, directly or indirectly,
35 percent or more of any Class of Certificates), so long as the Trust Fund
does
not receive or derive any income from such Person and provided that the
relationship between such Person and the Trust Fund is at arm’s length, all
within the meaning of Treasury Regulations Section 1.856-4(b)(5), or
(ii) any other Person (including the Servicer) if the Trustee has received
an Opinion of Counsel, which Opinion of Counsel shall be an expense of the
Trust
Fund, to the effect that the taking of any action in respect of any REO Property
by such Person, subject to any conditions therein specified, that is otherwise
herein contemplated to be taken by an Independent Contractor will not cause
such
REO Property to cease to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents
from
Real Property.
Index:
With
respect to each Adjustable-Rate Mortgage Loan and with respect to each related
Adjustment Date, the index as specified in the related Mortgage
Note.
Initial
Certificate Principal Balance:
With
respect to any Certificate of a Class other than a Class CE or Residual
Certificate, the amount designated “Initial Certificate Principal Balance” on
the face thereof.
Initial
Overcollateralization Amount:
$9,588,711.88
Insurance
Proceeds:
Proceeds of any title policy, hazard policy or other insurance policy covering
a
Mortgage Loan, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor
in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, subject to the terms and conditions
of
the related Mortgage Note and Mortgage.
Interest
Accrual Period:
With
respect to any Distribution Date and (i) with respect to the Floating Rate
Certificates, the period from the preceding Distribution Date through the day
prior to the current Distribution Date (or, in the case of the first
Distribution Date, the period from the Closing Date through and including the
day prior to the initial Distribution Date), and (ii) with respect to (a)
the Fixed-Rate Certificates, the REMIC 3 Class CE-1 Interest, the REMIC 3 Class
CE-2 Interest, the REMIC 3 Class P Interest, the REMIC A Class CE-1 Interest,
the REMIC B Class P Interest and the REMIC D Class CE-2 Interest and (b) the
REMIC 1 Regular Interests and the REMIC 2 Regular Interests, the calendar month
immediately preceding the month in which such Distribution Date
occurs.
Interest
Carry Forward Amount:
For any
Class of Certificates (other than the Class CE, Class P and Residual
Certificates) and any Distribution Date, the sum of (a) the excess, if any,
of the Accrued Certificate Interest for such Distribution Date and any Interest
Carry Forward Amount for such Class for the prior Distribution Date, over the
amount in respect of interest actually distributed on such Class on such
Distribution Date and (b) interest on such excess at the applicable
Certificate Interest Rate (x) with respect to the Floating Rate
Certificates, on the basis of the actual number of days elapsed on the basis
of
a 360-day year since the prior Distribution Date, and (y) with respect to
the Fixed-Rate Certificates, on the basis of a 360-day year consisting of twelve
30-day months.
30
Interest
Percentage:
With
respect to any Class of Certificates and any Distribution Date, the ratio
(expressed as a decimal carried to six places) of the Accrued Certificate
Interest for such Class to the sum of the Accrued Certificate Interest for
all
Classes of Certificates, in each case with respect to such Distribution Date
and
without regard to Relief Act Interest Shortfalls.
Interest
Remittance Amount:
As of
any Distribution Date, (A) the sum, without duplication, of (i) all interest
collected or advanced with respect to the related Collection Period on the
Mortgage Loans received by the Servicer on or prior to the Determination Date
for such Distribution Date (less the Administrative Fees for such Mortgage
Loans, amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05, expenses reimbursable pursuant to Section 6.03
and indemnification payments pursuant to Sections 3.26 and 8.05), (ii) all
Compensating Interest paid by the Servicer on such Distribution Date with
respect to the Mortgage Loans, (iii) the portion of any payment in connection
with any Principal Prepayment (other than any Prepayment Interest Excess),
any
Substitution Adjustment Amount, Termination Price, Purchase Price, Net
Liquidation Proceeds, Insurance Proceeds or Condemnation Proceeds relating
to
interest with respect to the Mortgage Loans received during the related
Prepayment Period and (iv) any Reimbursement Amount relating to the Mortgage
Loans received during the related Prepayment Period less (B) any amounts payable
to the Swap Provider (including any Net Swap Payment and any Swap Termination
Payment owed to the Swap Provider but excluding any Defaulted Swap Termination
Payment).
Issuing
Entity:
C-BASS
2007-CB5 Trust.
Late
Collections:
With
respect to any Mortgage Loan, all amounts received subsequent to the
Determination Date immediately following any related Collection Period, whether
as late payments of Monthly Payments or as Insurance Proceeds, Liquidation
Proceeds or otherwise, which represent late payments or collections of principal
and/or interest due (without regard to any acceleration of payments under the
related Mortgage and Mortgage Note) but delinquent on a contractual basis for
such Collection Period and not previously recovered.
Lender:
As
defined in Section 6.05(a).
LIBOR:
With
respect to each Interest Accrual Period, the rate determined by the Trustee
on
the related LIBOR Determination Date on the basis of the offered rate for
one-month United States dollar deposits, as such rate appears on the Reuters
Screen LIBOR01 Page, as of 11:00 a.m. (London time) on such LIBOR Determination
Date. If no such quotations are available on an LIBOR Determination Date, LIBOR
for the related Interest Accrual Period will be established by the Trustee
as
follows:
31
(i) If
on
such LIBOR Determination Date two or more Reference Banks provide quotations
as
to the rate at which deposits in U.S. Dollars are offered as of 11:00 a.m.
(London time) to prime banks in the London interbank market for a period of
one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Floating Rate Certificates, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If
on
such LIBOR Determination Date fewer than two Reference Banks provide such
offered quotations, LIBOR for the related Interest Accrual Period shall be
the
arithmetic mean of the rates quoted by one or more major banks in New York
City,
selected by the Trustee, as of 11:00 a.m., New York City time, on such date
for loans in U.S. Dollars to leading European banks for a period of one month
in
amounts approximately equal to the aggregate Certificate Principal Balance
of
the Floating Rate Certificates; and
(iii) If
no
such quotations can be obtained, LIBOR for the related Interest Accrual Period
shall be LIBOR for the prior Distribution Date.
LIBOR
Business Day:
Any day
on which banks in London, England and The City of New York are open and
conducting transactions in foreign currency and exchange.
LIBOR
Determination Date:
With
respect to the Floating Rate Certificates, (i) for the first Distribution
Date, the second LIBOR Business Day preceding the Closing Date and (ii) for
each subsequent Distribution Date, the second LIBOR Business Day prior to the
immediately preceding Distribution Date.
Liquidated
Mortgage Loan:
As to
any Distribution Date, any Mortgage Loan in respect of which the Servicer has
determined, in accordance with the servicing procedures specified herein, as
of
the end of the related Prepayment Period, that all Liquidation Proceeds and
Insurance Proceeds which it expects to recover with respect to the liquidation
of the Mortgage Loan or disposition of the related REO Property have been
recovered.
Liquidation
Event:
With
respect to any Mortgage Loan, any of the following events: (i) such
Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made
as to such Mortgage Loan; or (iii) such Mortgage Loan is removed from the
Trust Fund by reason of its being purchased, sold or replaced pursuant to or
as
contemplated by Section 2.03 or Section 10.01. With respect to any REO
Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant
to
Section 3.13 or Section 10.01.
Liquidation
Proceeds:
The
amount (other than amounts received in respect of the rental of any REO Property
prior to REO Disposition) received by the Servicer in connection with
(i) the taking of all or a part of a Mortgaged Property by exercise of the
power of eminent domain or condemnation or (ii) the liquidation of a
defaulted Mortgage Loan by means of a trustee’s sale, foreclosure sale or
otherwise.
32
Losses:
As
defined in Section 9.03.
Lost
Note Affidavit:
With
respect to any Mortgage Loan as to which the original Mortgage Note has been
permanently lost or destroyed and has not been replaced, an affidavit from
the
Seller certifying that the original Mortgage Note has been lost, misplaced
or
destroyed (together with a copy of the related Mortgage Note and indemnifying
the Trust against any loss, cost or liability resulting from the failure to
deliver the original Mortgage Note) in the form of Exhibit
H
hereto.
Majority
Certificateholders:
The
Holders of Certificates evidencing at least 51% of the Voting
Rights.
Majority
Class R Certificateholders:
The
Holders of Class R Certificates evidencing at least a 51% Percentage
Interest in the Class R Certificates.
Marker
Rate:
With
respect to the Class CE Interest and any Distribution Date, a per annum rate
equal to two (2) times the weighted average of the Uncertificated REMIC 2
Pass-Through Rates for REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest LT2M1, REMIC
2
Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest
LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest LT2M6, REMIC
2
Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC 2 Regular Interest
LT2M9, REMIC 2 Regular Interest LT2B1 and REMIC 2 Regular Interest LT2ZZ, (i)
with the rate on each such REMIC Regular Interest (other than REMIC 2 Regular
Interest LT2ZZ) subject to a cap equal to the lesser of the Pass-Through Rate
of
its Corresponding Class and the REMIC 3 Cap for the purposes of this calculation
and (ii) with the rate on REMIC 2 Regular Interest LT2ZZ subject to a cap of
zero for the purpose of this calculation; provided, however, that for this
purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and the
REMIC 3 Cap with respect to each such REMIC Regular Interest (other than REMIC
2
Regular Interest LT2B1 and REMIC 2 Regular Interest LT2ZZ) shall be multiplied
by a fraction, the numerator of which is the actual number of days in the
Interest Accrual Period and the denominator of which is 30.
Maximum
LT2ZZ Uncertificated Accrued Interest Deferral Amount:
With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest
LT2ZZ for such Distribution Date on a balance equal to the Uncertificated
Balance of REMIC 2 Regular Interest LT2ZZ minus the REMIC 2 Overcollateralized
Amount, in each case for such Distribution Date, over (b) Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2,
REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular
Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4,
REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest LT2M6, REMIC 2 Regular
Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC 2 Regular Interest LT2M9
and REMIC 2 Regular Interest LT2B1, each subject to a cap equal to the lesser
of
the Pass-Through Rate of the related Corresponding Class and the REMIC 3 Cap
for
the purpose of this calculation; provided, however, that for this purpose,
calculations of the Uncertificated REMIC 2 Pass-Through Rate and the related
caps with respect to Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3, REMIC
2
Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest
LT2M3, REMIC 2 Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5, REMIC
2
Regular Interest LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular Interest
LT2M8 and REMIC 2 Regular Interest LT2M9 shall be multiplied by a fraction,
the
numerator of which is the actual number of days in the Interest Accrual Period
and the denominator of which is 30.
33
Maximum
Mortgage Interest Rate:
With
respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the maximum Mortgage Interest Rate
thereunder.
Maximum
Rate Cap:
With
respect to any Distribution Date and the Class A and Class M Certificates,
a per
annum rate (expressed on the basis of an assumed 360-day year and the actual
number of days elapsed during the related Interest Accrual Period) equal to
(i)
the Net Maximum WAC plus (ii) 12 times the quotient of (a) the Net Swap Payment
and Swap Termination Payment (other than a Defaulted Swap Termination Payment),
if any, made to the Supplemental Interest Trust and (b) the Pool Balance as
of
the first day of the related Collection Period.
Minimum
Mortgage Interest Rate:
With
respect to each Adjustable-Rate Mortgage Loan, either the percentage set forth
in the related Mortgage Note as the minimum Mortgage Interest Rate thereunder
or
if no such percentage is set forth in the related Mortgage Note, the Gross
Margin set forth in the related Mortgage Note.
Monthly
Excess Cashflow Amount:
The sum
of the Monthly Excess Interest Amount, the Overcollateralization Release Amount
and (without duplication) any portion of the Principal Distribution Amount
remaining after principal distributions pursuant to Section
4.02(a).
Monthly
Excess Interest Amount:
With
respect to each Distribution Date, the amount, if any, by which the Interest
Remittance Amount for such Distribution Date exceeds the aggregate amount
distributed on such Distribution Date pursuant to paragraphs (i)
through (xii) under Section 4.01.
Monthly
Payment:
With
respect to any Mortgage Loan, the scheduled monthly payment of principal and
interest on such Mortgage Loan which is payable by the related Mortgagor from
time to time under the related Mortgage Note, determined: (a) after giving
effect to (i) any Deficient Valuation and/or Debt Service Reduction with
respect to such Mortgage Loan and (ii) any Relief Act Interest Shortfalls;
(b) without giving effect to any extension granted or agreed to by the
Servicer pursuant to Section 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when
due.
Monthly
Statement:
As
defined in Section 4.06.
Moody’s:
Xxxxx’x
Investors Service, Inc. and its successors, and if such company shall for any
reason no longer perform the functions of a securities rating agency, “Moody’s”
shall be deemed to refer to any other “nationally recognized statistical rating
organization” as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
34
Mortgage:
The
mortgage, deed of trust or other instrument creating a first or second lien
on,
or first or second priority security interest in, a Mortgaged Property securing
a Mortgage Note.
Mortgage
File:
The
mortgage documents listed in Section 2.01 pertaining to a particular
Mortgage Loan and any additional documents required to be added to the Mortgage
File pursuant to this Agreement.
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate (i) in the case of each Fixed-Rate Mortgage Loan
shall
remain constant at the rate set forth in the Mortgage Loan Schedule as the
Mortgage Interest Rate in effect immediately following the Cut-off Date and
(ii)
in the case of each Adjustable-Rate Mortgage Loan (A) as of any date of
determination until the first Adjustment Date following the Cut-off Date shall
be the rate set forth in the Mortgage Loan Schedule as the Mortgage Interest
Rate in effect immediately following the Cut-off Date and (B) as of any date
of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date, to equal the sum, rounded to the nearest 0.125% as provided
in
the Mortgage Note, of the Index, determined as set forth in the related Mortgage
Note, plus the related Gross Margin subject to the limitations set forth in
the
related Mortgage Note. With respect to each Mortgage Loan that becomes an REO
Property, as of any date of determination, the annual rate determined in
accordance with the immediately preceding sentence as of the date such Mortgage
Loan became an REO Property.
Mortgage
Loan:
Each
mortgage loan transferred and assigned to the Trustee pursuant to
Section 2.01 or Section 2.03(d) as from time to time held as a part of
the Trust Fund, the Mortgage Loans so held being identified in the Mortgage
Loan
Schedule and set forth in Exhibit
D
attached
hereto.
Mortgage
Loan Purchase Agreement:
The
agreement between the Seller and the Depositor, dated as of May 1, 2007,
regarding the transfer of the Mortgage Loans by the Seller to or at the
direction of the Depositor.
Mortgage
Loan Schedule:
As of
any date with respect to the Mortgage Loans, the lists of such Mortgage Loans
included in the Trust Fund on such date, attached hereto as Exhibit D.
The
Mortgage Loan Schedule shall be prepared by the Seller and shall set forth
the
following information with respect to each Mortgage Loan:
(1) the
Seller’s Mortgage Loan identifying number;
(2) the
city,
state, and zip code of the Mortgaged Property;
(3) the
type
of Residential Dwelling constituting the Mortgaged Property or a designation
that the Mortgaged Property is a multi-family property;
(4) the
occupancy status of the Mortgaged Property at origination;
(5) the
original months to maturity;
35
(6) the
date
of origination;
(7) the
first
payment date;
(8) the
stated maturity date;
(9) the
stated remaining months to maturity;
(10) the
original principal amount of the Mortgage Loan;
(11) the
Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the
Mortgage Interest Rate of the Mortgage Loan as of the Cut-off Date;
(13) the
current principal and interest payment of the Mortgage Loan as of the Cut-off
Date;
(14) the
contractual interest paid to date of the Mortgage Loan;
(15) the
Combined Loan-to-Value Ratio at origination;
(16) a
code
indicating the loan performance status of the Mortgage Loan as of the Cut-off
Date;
(17) a
code
indicating whether the Mortgaged Property is in bankruptcy or in its forbearance
period as of the Cut-off Date;
(18) a
code
indicating the Index that is associated with such Mortgage Loan;
(19) the
Gross
Margin;
(20) the
Periodic Rate Cap;
(21) the
Minimum Mortgage Interest Rate;
(22) the
Maximum Mortgage Interest Rate;
(23) a
code
indicating whether the Mortgage Loan has a Prepayment Penalty and the type
of
Prepayment Penalty;
(24) the
first
Adjustment Date immediately following the Cut-off Date;
(25) the
rate
adjustment frequency;
(26) the
payment adjustment frequency; and
36
(27) a
code
indicating whether the Mortgage Loan is a Second Lien Mortgage
Loan.
The
Mortgage Loan Schedule shall set forth the following information, as of the
Cut-off Date, with respect to the Mortgage Loans in the aggregate: (1) the
number of Mortgage Loans; (2) the current Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Seller in
accordance with the provisions of this Agreement. With respect to any Eligible
Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date
for such Mortgage Loan, determined in accordance with the definition of Cut-off
Date herein.
Mortgage
Note:
The
original executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage
Pool:
The
pool of Mortgage Loans, identified on Exhibit D
from
time to time, and any REO Properties acquired in respect thereof.
Mortgaged
Property:
The
underlying property securing a Mortgage Loan, including any REO Property,
consisting of an Estate in Real Property improved by a Residential Dwelling
or
multi-family dwelling.
Mortgagor:
The
obligor on a Mortgage Note.
Net
Liquidation Proceeds:
With
respect to any Liquidated Mortgage Loan or any other disposition of related
Mortgaged Property (including REO Property) the related Liquidation Proceeds
net
of Advances, Servicing Advances, Servicing Fees, Excess Servicing Fees and
any
other accrued and unpaid Servicing Fees and Excess Servicing Fees received
and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property.
Net
Maximum Mortgage Interest Rate:
With
respect to any Adjustable-Rate Mortgage Loan, the applicable Maximum Mortgage
Interest Rate minus the Administrative Fee Rate. With respect to any Fixed-Rate
Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan minus the
Administrative Fee Rate.
Net
Maximum WAC:
With
respect to any Distribution Date, the average of the Net Maximum Mortgage
Interest Rates for the Mortgage Loans, weighted on the basis of the Principal
Balances of the Mortgage Loans as of the first day of the related Collection
Period.
Net
Mortgage Interest Rate:
With
respect to any Mortgage Loan, the Mortgage Interest Rate borne by such Mortgage
Loan minus the Administrative Fee Rate.
Net
Swap Payment:
With
respect to any Distribution Date, any net payment (other than a Swap Termination
Payment) payable by the Supplemental Interest Trust to the Swap Provider on
the
related Fixed Rate Payer Payment Date (as defined in the Swap Agreement).
Net
Swap Receipt:
With
respect to any Distribution Date, any net payment (other than a Swap Termination
Payment) made by the Swap Provider to the Supplemental Interest Trust on the
related Floating Rate Payer Payment Date (as defined in the Swap Agreement),
or
any amount withdrawn from the Swap Account that is required under that paragraph
to be treated as a Net Swap Receipt for purposes of determining the
distributions from the Supplemental Interest Trust.
37
Net
WAC:
With
respect to any Distribution Date, the average of the Net Mortgage Interest
Rates
for the Mortgage Loans, weighted on the basis of the Principal Balances of
the
Mortgage Loans as of the first day of the related Collection
Period.
New
Lease:
Any
lease of REO Property entered into on behalf of the Trust, including any lease
renewed or extended on behalf of the Trust if the Trust has the right to
renegotiate the terms of such lease.
Nonrecoverable
Advance:
Any
Advance or Servicing Advance previously made or proposed to be made in respect
of a Mortgage Loan or REO Property that, in the good faith business judgment
of
the Servicer, will not or, in the case of a proposed Advance or Servicing
Advance, would not be ultimately recoverable from Late Collections on such
Mortgage Loan or REO Property as provided herein.
Notional
Amount:
With
respect to the Class CE-1 Certificates, the REMIC 3 Class CE-1 Interest and
the
REMIC A Class CE-1 Interest, an amount equal to the aggregate Uncertificated
Principal Balance of the REMIC 2 Regular Interests other than REMIC 2 Regular
Interest LT2P.
Offered
Certificates:
The
Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates.
Officers’
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a vice president (however denominated), and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries
of
the Servicer, the Seller or the Depositor, as applicable.
Opinion
of Counsel:
A
written opinion of counsel, who may, without limitation, be a salaried counsel
for the Depositor or the Servicer except that any opinion of counsel relating
to
(a) the qualification of any REMIC as a REMIC or (b) compliance with
the REMIC Provisions must be an opinion of Independent counsel.
Optional
Termination Date:
The
first Distribution Date on which the Servicer may opt to terminate the Mortgage
Pool pursuant to Section 10.01.
Original
Class Certificate Principal Balance:
With
respect to each Class of Certificates, the Certificate Principal Balance thereof
on the Closing Date, as set forth opposite such Class in the Preliminary
Statement, except (i) with respect to the Class CE-1 and Class CE-2 Certificates
and the Residual Certificates, which have an Original Class Certificate
Principal Balance of zero, (ii) with respect to any Class A, Class M, Class
B or
Class P REMIC 3 Regular Interest, the amount set forth opposite such Class
in
the Preliminary Statement, (iii) with respect to the REMIC 3 Class CE Regular
Interest, which, solely for federal income tax purposes, has an Original Class
Certificate Principal Balance equal to the Initial Overcollateralization
Amount.
38
Overcollateralization
Amount:
As of
any Distribution Date, the excess, if any, of (x) the Pool Balance as of the
last day of the immediately preceding Collection Period after giving effect
to
Principal Prepayments in the related Prepayment Period over (y) the
aggregate Certificate Principal Balances of all Classes of Offered Certificates,
the Class B-1 Certificates and the Class P Certificates (after taking into
account all distributions of principal on such Distribution Date and the
increase of any Certificate Principal Balance as a result of Subsequent
Recoveries).
Overcollateralization
Deficiency:
As of
any Distribution Date, the excess, if any, of (x) the Targeted
Overcollateralization Amount for such Distribution Date over (y) the
Overcollateralization Amount for such Distribution Date, calculated for this
purpose after taking into account the reduction on such Distribution Date of
the
Certificate Principal Balances of all Classes of Offered Certificates and the
Class B-1 Certificates resulting from the distribution of the Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
Overcollateralization
Floor:
The
product of 0.50% and the Pool Balance as of the Cut-off Date.
Overcollateralization
Release Amount:
With
respect to any Distribution Date on and after the Stepdown Date on which a
Trigger Event is not in effect, the lesser of (x) the Principal Remittance
Amount for such Distribution Date and (y) the excess, if any, of
(i) the Overcollateralization Amount for such Distribution Date, assuming
that 100% of the Principal Remittance Amount is applied as a principal payment
on the Offered Certificates and the Class B-1 Certificates on such Distribution
Date, over (ii) the Targeted Overcollateralization Amount for such
Distribution Date. With respect to any Distribution Date on which a Trigger
Event is in effect, the Overcollateralization Release Amount will be
zero.
Ownership
Interest:
As to
any Certificate, any ownership or security interest in such Certificate,
including any interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner
or
as pledgee.
Pass-Through
Rate:
Any of
the Class A-1 Pass-Through Rate, Class A-2 Pass-Through Rate, the
Class A-3 Pass-Through Rate, the Class M-1 Pass-Through Rate, the
Class M-2 Pass-Through Rate, the Class M-3 Pass-Through Rate, the
Class M-4 Pass-Through Rate, the Class M-5 Pass-Through Rate, the
Class M-6 Pass-Through Rate, the Class M-7 Pass-Through Rate, the
Class M-8 Pass-Through Rate, the Class M-9 Pass-Through Rate and the
Class B-1 Pass-Through Rate.
With
respect to the REMIC 1 Regular Interests, the Uncertificated REMIC 1
Pass-Through Rate. With respect to the REMIC 2 Regular Interests, the
Uncertificated REMIC 2 Pass-Through Rate. With respect to the REMIC 3 Regular
Interests (other than the Class CE-1 REMIC 3 Regular Interest and Class SWAP-IO
REMIC 3 Regular Interest), the Uncertificated REMIC 3 Pass-Through
Rate.
With
respect to the Class CE-1 REMIC 3 Regular Interest and any Distribution Date,
a
per annum rate equal to the percentage equivalent of a fraction,
the numerator of which is the sum of the amounts calculated pursuant to clauses
(A) through (P) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC
2
Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest
LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC
2
Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest
LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC
2
Regular Interest LT2M9, REMIC 2 Regular Interest LT2B1 and REMIC 2 Regular
Interest LT2ZZ. For purposes of calculating the Pass-Through Rate for the REMIC
3 Class CE-1 Regular Interest, the numerator is equal to the sum of the
following components:
39
(A) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2AA
minus the Marker Rate, applied to an amount equal to the Uncertificated Balance
of REMIC 2 Regular Interest LT2AA;
(B) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2A1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2A1;
(C) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2A2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2A2;
(D) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2A3
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2A3;
(E) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M1;
(F) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M2;
(G) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M3
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M3;
(H) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M4
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M4;
(I) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M5
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M5;
(J) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M6
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M6;
40
(K) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M7
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M7;
(L) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M8
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M8;
(M) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2M9
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2M9;
(N) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2B1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2B1;
(O) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2ZZ
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2ZZ; and
(P) 100%
of
the Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2P.
For
federal income tax purposes, the Pass-Through Rate for the Class CE-1
Certificates shall be an amount equal to 100% of the amounts distributable
to
the Class CE-1 REMIC A Regular Interest for such Distribution Date. The Class
CE-1 REMIC A Regular Interest will be entitled to 100% of the amounts
distributable to the Class CE-1 REMIC 3 Regular Interest.
The
Class
SWAP-IO Interest shall not have a Pass-Through Rate, but interest for such
regular interest and each Distribution Date shall be an amount equal to 100%
of
the amounts distributable to REMIC 2 Regular Interest LT2IO for such
Distribution Date.
Paying
Agent:
Any
paying agent appointed pursuant to Section 5.05.
Percentage
Interest:
With
respect to any Certificate (other than a Class CE, Class P or Residual
Certificate), a fraction, expressed as a percentage, the numerator of which
is
the Initial Certificate Principal Balance represented by such Certificate and
the denominator of which is the Original Class Certificate Principal Balance
of
the related Class. With respect to a Class CE Certificate, the undivided
percentage interest obtained by dividing the Initial Class CE Notional Amount
by
the Original Class CE Notional Amount of such Class. With respect to a Class
P
or Residual Certificate, the portion of the Class evidenced thereby, expressed
as a percentage, as stated on the face of such Certificate; provided,
however,
that
the sum of all such percentages for each such Class totals 100%.
41
Periodic
Rate Cap:
With
respect to each Adjustable-Rate Mortgage Loan and any Adjustment Date therefor,
the fixed percentage set forth in the related Mortgage Note, which is the
maximum amount by which the Mortgage Interest Rate for such Mortgage Loan may
increase or decrease (without regard to the Maximum Mortgage Interest Rate
or
the Minimum Mortgage Interest Rate) on such Adjustment Date from the Mortgage
Interest Rate in effect immediately prior to such Adjustment Date.
Permitted
Investments:
Any one
or more of the following obligations or securities acquired at a purchase price
of not greater than par, regardless of whether issued or managed by the
Depositor, the Servicer, the Trustee or any of their respective Affiliates
or
for which an Affiliate of the Trustee serves as an advisor:
(i) direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit
of
the United States;
(ii) (A) demand
and time deposits in, certificates of deposit of, bankers’ acceptances issued by
or federal funds sold by any depository institution or trust company (including
the Trustee or its agents acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal and/or state authorities,
so long as, at the time of such investment or contractual commitment providing
for such investment, such depository institution or trust company or its
ultimate parent has a short-term uninsured debt rating in one of the two highest
available rating categories of S&P, Moody’s and DBRS and provided that each
such investment has an original maturity of no more than 365 days and
(B) any other demand or time deposit or deposit which is fully insured by
the FDIC;
(iii) repurchase
obligations with a term not to exceed 30 days with respect to any security
described in clause (i) above and entered into with a depository
institution or trust company (acting as principal) rated A or higher by S&P
and DBRS and rated A2 or higher by Moody’s, provided,
however,
that
collateral transferred pursuant to such repurchase obligation must be of the
type described in clause (i) above and must (A) be valued daily at
current market prices plus accrued interest or (B) pursuant to such
valuation, be equal, at all times, to 105% of the cash transferred by the
Trustee in exchange for such collateral and (C) be delivered to the Trustee
or, if the Trustee is supplying the collateral, an agent for the Trustee, in
such a manner as to accomplish perfection of a security interest in the
collateral by possession of certificated securities;
(iv) securities
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States of America or any State thereof
and that are rated by each Rating Agency in its highest long-term unsecured
rating categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than 30 days after the date of acquisition thereof) that is rated by each Rating
Agency in its highest short-term unsecured debt rating available at the time
of
such investment;
42
(vi) units
of
money market funds registered under the Investment Company Act of 1940 including
funds managed or advised by the Trustee or affiliates thereof having the highest
rating category by the applicable Rating Agency; and
(vii) if
previously confirmed in writing to the Trustee, any other demand, money market
or time deposit, or any other obligation, security or investment, as may be
acceptable to the Rating Agencies in writing as a permitted investment of funds
backing securities having ratings equivalent to its highest initial rating
of
the Class A Certificates;
provided,
that no
instrument described hereunder shall evidence either the right to receive
(a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provide a yield to maturity at par greater
than
120% of the yield to maturity at par of the underlying obligations.
Permitted
Transferee:
Any
transferee of a Residual Certificate other than a Disqualified Organization
or a
Disqualified Non-U.S. Person.
Person:
Any
individual, corporation, partnership, joint venture, association, joint stock
company, trust, limited liability company, unincorporated organization or
government or any agency or political subdivision thereof.
Pool
Balance:
As of
any date of determination, the aggregate Principal Balance of the Mortgage
Loans.
Prepayment
Interest Excess:
With
respect to any Distribution Date, any interest collected by the Servicer with
respect to any Mortgage Loan as to which a Principal Prepayment in Full occurs
from the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the
1st
day of such month to the date of such Principal Prepayment in Full.
Prepayment
Interest Shortfall:
With
respect to any Distribution Date, for each Mortgage Loan that was the subject
of
a Principal Prepayment in Full during the portion of the related Prepayment
Period occurring in the prior calendar month that was applied by the Servicer
to
reduce the outstanding Principal Balance of such Mortgage Loan on a date
preceding the related Due Date, an amount equal to interest at the applicable
Net Mortgage Interest Rate on the amount of such Principal Prepayment in Full
for the number of days commencing on the date on which the Principal Prepayment
is applied and ending on the last day of the calendar month in which
applied.
Prepayment
Penalty:
With
respect to any Prepayment Period, any prepayment premium, fee or charge payable
by a Mortgagor in connection with any principal prepayment pursuant to the
terms
of the related Mortgage Note.
43
Prepayment
Period:
With
respect to any Distribution Date, the period commencing on the 16th day of
the
calendar month preceding the calendar month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, from May 1, 2007) and
ending on the 15th day of the calendar month in which the related Distribution
Date occurs.
Primary
Insurance Policy:
Each
policy of primary guaranty mortgage insurance issued by a Qualified Insurer
in
effect with respect to any Mortgage Loan, or any replacement policy therefor
obtained by the Servicer pursuant to Section 3.08.
Principal
Balance:
As to
any Mortgage Loan and any day, other than a Liquidated Mortgage Loan, the
related Cut-off Date Principal Balance, minus
the sum
of (i) all collections and other amounts credited against the principal balance
of any such Mortgage Loan, (ii) the principal portion of Advances, (iii) any
Deficient Valuation and (iv) any principal reduction resulting from a Servicer
Modification. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any
day,
the Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
Principal
Distribution Amount:
As to
any Distribution Date, the sum of (i) the Principal Remittance Amount
minus
the
Overcollateralization Release Amount, if any, and (ii) the Extra Principal
Distribution Amount, if any.
Principal
Prepayment:
Any
payment of principal made by the Mortgagor on a Mortgage Loan which is received
in advance of its scheduled Due Date and which is not accompanied by an amount
of interest representing the full amount of scheduled interest due on any Due
Date in any month or months subsequent to the month of prepayment.
Principal
Prepayment in Full:
Any
Principal Prepayment made by a Mortgagor of the entire Principal Balance of
a
Mortgage Loan.
Principal
Remittance Amount:
With
respect to any Distribution Date, the amount equal to (A) the sum (less amounts
available for reimbursement of Advances and Servicing Advances pursuant to
Section 3.05 and expenses and indemnification payments pursuant to
Sections 6.03 and 8.05) of the following amounts (without duplication) with
respect to the Mortgage Loans: (i) each payment of principal on a Mortgage
Loan
due during the immediately preceding Collection Period and received by the
Servicer on or prior to the Determination Date for that Distribution Date,
including any Advances with respect thereto, (ii) all full and partial Principal
Prepayments received by the Servicer during the related Prepayment Period,
(iii)
the Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (net
of
certain expenses) allocable to principal actually collected by the Servicer
during the related Prepayment Period, (iv) the portion of the Purchase Price
allocable to principal of all repurchased Defective Mortgage Loans with respect
to that Prepayment Period, (v) any Substitution Adjustment Amount received
during the related Prepayment Period and (vi) on the Distribution Date on which
the Trust is to be terminated in accordance with Section 10.01 hereof, that
portion of the Termination Price in respect of principal less
(B) any
amounts payable to the Swap Provider (including any Net Swap Payment and any
Swap Termination Payment owed to the Swap Provider, other than a Defaulted
Swap
Termination Payment) not covered by the Interest Remittance Amount.
44
Private
Certificates:
Any of
the Class B-1, Class CE-1, Class CE-2, Class P and Residual
Certificates.
Property
Insurance Proceeds:
Proceeds of any title policy, hazard policy or other insurance policy covering
a
Mortgage Loan, to the extent such proceeds are received by the Servicer and
are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the Servicer’s servicing
procedures, subject to the terms and conditions of the related Mortgage Note
and
Mortgage.
Prospectus
Supplement:
That
certain Prospectus Supplement dated May 29, 2007 relating to the public offering
of the Offered Certificates.
Purchase
Price:
With
respect to any Mortgage Loan or REO Property to be purchased pursuant to or
as
contemplated by Section 2.03 or 10.01, and as confirmed by an Officers’
Certificate from the Servicer to the Trustee, an amount equal to the sum of
(i) 100% of the Principal Balance thereof as of the date of purchase (or
such other price as provided in Section 10.01), (ii) in the case of
(x) a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Interest Rate in effect from time to time from the Due
Date
as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar
month
in which the purchase is to be effected, and (y) an REO Property, its fair
market value, determined in good faith by the Servicer, (iii) any unreimbursed
Servicing Advances and Advances and any unpaid Servicing Fees and Excess
Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.13, and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Servicer or the Trustee
in
respect of the breach or defect giving rise to the purchase
obligation.
Qualified
Insurer:
Any
insurance company acceptable to Xxxxxx Xxx or Xxxxxxx Mac.
Rate
Cap:
With
respect to any Distribution Date and the Certificates, a per annum rate
(expressed, in the case of the Floating Rate Certificates, on the basis of
an
assumed 360-day year and the actual number of days elapsed during the related
accrual period) equal to (i) the Net WAC less (ii) 12 times the quotient of
(a)
the Net Swap Payment and Swap Termination Payment (other than a Defaulted Swap
Termination Payment), if any, made to the Swap Provider and (b) the Pool Balance
as of the first day of the related Collection Period.
Rating
Agency
or
Rating
Agencies:
Xxxxx’x, S&P and DBRS, or their respective successors. If such agencies or
their successors are no longer in existence, “Rating Agencies” shall be such
nationally recognized statistical rating organizations as set forth on the
most
current list of such organizations released by the Securities and Exchange
Commission and designated by the Depositor, notice of which designation shall
be
given to the Trustee and the Servicer.
45
Realized
Loss:
With
respect to a Liquidated Mortgage Loan, the amount by which the remaining unpaid
Principal Balance of the Mortgage Loan plus accrued and unpaid interest thereon
at the Mortgage Interest Rate through the last day of the month of liquidation,
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
Realized
Loss Amortization Amount:
Any of
the Class M-1 Realized Loss Amortization Amount, the Class M-2
Realized Loss Amortization Amount, the Class M-3 Realized Loss Amortization
Amount, the Class M-4 Realized Loss Amortization Amount, the Class M-5
Realized Loss Amortization Amount, the Class M-6 Realized Loss Amortization
Amount, the Class M-7 Realized Loss Amortization Amount, the Class M-8
Realized Loss Amortization Amount, the Class M-9 Realized Loss Amortization
Amount and the Class B-1 Realized Loss Amortization Amount.
Record
Date:
With
respect to the Floating Rate Certificates, the Business Day immediately
preceding such Distribution Date; provided,
however,
that if
any such Certificate becomes a Definitive Certificate, the Record Date for
such
Certificate shall be the last Business Day of the month immediately preceding
the month in which the related Distribution Date occurs. With respect to the
Fixed-Rate Certificates and the Class CE, Class P and Residual Certificates,
the
last Business Day of the month immediately preceding the month in which the
related Distribution Date occurs.
Reference
Banks:
Those
banks (i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor
or
the Trustee, (iii) that have been designated as such by the Trustee and (iv)
that are engaged in transactions in the London interbank market.
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.
Reimbursement
Amount:
As
defined in Section 2.03.
Related
Documents:
With
respect to any Mortgage Loan, the related Mortgage Notes, Mortgages and other
related documents.
Relief
Act:
The
Servicemembers Civil Relief Act.
Relief
Act Interest Shortfall:
With
respect to any Distribution Date, for any Mortgage Loan with respect to which
there has been a reduction in the amount of interest collectible thereon for
the
most recently ended Collection Period as a result of the application of the
Relief Act or similar state or local laws, the amount by which (i) interest
collectible on such Mortgage Loan during such Collection Period is less than
(ii) one month’s interest on the Principal Balance of such Mortgage Loan at
the Mortgage Interest Rate for such Mortgage Loan before giving effect to the
application of the Relief Act or similar state or local laws.
46
REMIC:
A “real estate mortgage investment conduit” within the meaning of Section 860D
of the Code.
REMIC
1 Regular Interests:
REMIC 1 Regular Interest I and REMIC 1 Regular Interest I-1-A through REMIC
1
Regular Interest I-47-B and REMIC 1 Regular Interest I-CE-2 as designated in
the
Preliminary Statement hereto. Each REMIC 1 Regular Interest shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect
from
time to time, and shall be entitled to distributions of principal, subject
to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 2
Interest Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
sum of the aggregate Principal Balance of the Mortgage Loans and related REO
Properties then outstanding and (ii) the Uncertificated REMIC 2
Pass-Through Rate for REMIC 2 Regular Interest LT2AA minus the Marker Rate,
divided by (b) 12.
REMIC
2 Overcollateralization Target Amount:
1.00%
of the Targeted Overcollateralization Amount.
REMIC
2 Overcollateralized Amount:
With
respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
Principal Balances of the REMIC 2 Regular Interests minus (ii) the aggregate
of
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC
2
Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest
LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC
2
Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest
LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC
2
Regular Interest LT2M9, REMIC 2 Regular Interest LT2B1 and 1.00% of REMIC 2
Regular Interest LTP, in each case as of such date of
determination.
REMIC
2 Principal Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to the product of (i) the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular
Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3,
REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular
Interest LT2M3, REMIC 2 Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5,
REMIC 2 Regular Interest LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular
Interest LT2M8, REMIC 2 Regular Interest LT2M9 and REMIC 2 Regular Interest
LT2B1 and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest LT2M1, REMIC
2
Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest
LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest LT2M6, REMIC
2
Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC 2 Regular Interest
LT2M9, REMIC 2 Regular Interest LT2B1 and REMIC 2 Regular Interest
LT2ZZ.
47
REMIC
2 Regular Interests:
REMIC 2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest LT2M1, REMIC
2
Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest
LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest LT2M6, REMIC
2
Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC 2 Regular Interest
LT2M9, REMIC 2 Regular Interest LT2B1, REMIC 2 Regular Interest LT2P, REMIC
2
Regular Interest LT2IO, REMIC 2 Regular Interest LT2CE2 and REMIC 2 Regular
Interest LT2ZZ as designated in the Preliminary Statement hereto. Each REMIC
2
Regular Interest shall accrue interest at the related Uncertificated REMIC
2
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal (other than REMIC 2 Regular Interest LT2IO and REMIC
2 Regular Interest LT2CE2), subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Balance as set forth in
the
Preliminary Statement hereto.
REMIC
3 Regular Interests:
Class
A-1 REMIC 3 Regular Interest, Class A-2 REMIC 3 Regular Interest, Class A-3
REMIC 3 Regular Interest, Class M-1 REMIC 3 Regular Interest, Class M-2 REMIC
3
Regular Interest, Class M-3 REMIC 3 Regular Interest, Class M-4 REMIC 3 Regular
Interest, Class M-5 REMIC 3 Regular Interest, Class M-6 REMIC 3 Regular
Interest, Class M-7 REMIC 3 Regular Interest, Class M-8 REMIC 3 Regular
Interest, Class M-9 REMIC 3 Regular Interest, Class B-1 REMIC 3 Regular
Interest, Class CE-1 REMIC 3 Regular Interest, Class CE-2 REMIC 3 Regular
Interest, Class P REMIC 3 Regular Interest and Class SWAP-IO REMIC 3 Regular
Interest as designated in the Preliminary Statement. Each REMIC 3 Regular
Interest shall accrue interest at the related Uncertificated REMIC 3
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal (other than Class CE-2 REMIC 3 Regular Interest
and
Class SWAP-IO REMIC 3 Regular Interest), subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto or with respect to
Class CE-1 REMIC 3 Regular Interest, the Class CE-1 Uncertificated Principal
Balance (in all cases, subject to the obligation of the Class CE-1 Certificates
to pay Cap Carryover Amounts, Swap Termination Payments and Class SWAP-IO
Distributions).
REMIC
3 Cap:
With
respect to any Distribution Date, the weighted average (other than with respect
to calculations in respect of the REMIC Regular Interests corresponding to
the
Fixed Rate Certificates, adjusted for the actual number of days in the Interest
Accrual Period) of the Uncertificated REMIC 2 Pass-Through Rates on the REMIC
2
Regular Interests (other than the REMIC 2 Regular Interest LT2IO and REMIC
2
Regular Interest LT2CE2), weighted on the basis of the Uncertificated Principal
Balance of each such REMIC 2 Regular Interest.
REMIC
Regular Interest:
Any
regular interest in REMIC 1, REMIC 2, REMIC 3, REMIC A, REMIC B, REMIC C or
REMIC D.
Remittance
Report:
A
report prepared by the Servicer and delivered to the Trustee pursuant to
Section 4.07.
48
Rents
from Real Property:
With
respect to any REO Property, gross income of the character described in
Section 856(d) of the Code.
REO
Disposition:
The
sale or other disposition of an REO Property on behalf of the Trust
Fund.
REO
Principal Amortization:
With
respect to any REO Property, for any calendar month, the aggregate of all
amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable pursuant to Section 3.13 in respect of the
proper operation, management and maintenance of such REO Property or (ii)
payable or reimbursable to the Servicer pursuant to Section 3.13 for unpaid
Servicing Fees and Excess Servicing Fees in respect of the related Mortgage
Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related Mortgage Loan.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Trust Fund through
foreclosure or deed-in-lieu of foreclosure, as described in
Section 3.13.
Reportable
Event:
An
event requiring disclosure on Form 8-K.
Request
for Release:
A
release signed by a Servicing Officer, in the form of Exhibit E
attached
hereto.
Residential
Dwelling:
Any one
of the following: (i) a one-family dwelling, (ii) a two- to
four-family dwelling, (iii) a one-family dwelling unit in a Xxxxxx Xxx
eligible condominium project, (iv) a one-family dwelling in a planned unit
development, which is not a co-operative, or (v) a mobile or manufactured home
(as defined in 00 Xxxxxx Xxxxxx Code, Section 5402(6)).
Residual
Certificates:
The
Class R and Class R-X Certificates.
Residual
Interest:
The
sole Class of “residual interests” in each REMIC within the meaning of
Section 860G(a)(2) of the Code.
Responsible
Officer:
When
used with respect to the Trustee, any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President,
Assistant Vice President, Trust Officer, any Assistant Secretary, any trust
officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and in each
case having direct responsibility for the administration of this
Agreement.
Reuters
Screen LIBOR01 Page:
The
display page currently so designated on the Reuters Monitor Rates Service (or
such other page as may replace such page on that service for the purpose of
displaying comparable rates or prices).
S&P:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc., and its
successors, and if such company shall for any reason no longer perform the
functions of a securities rating agency, “S&P” shall be deemed to refer to
any other “nationally recognized statistical rating organization” as set forth
on the most current list of such organizations released by the Securities and
Exchange Commission.
49
Second
Lien Mortgage Loan:
Any of
the of the Mortgage Loans which are secured by a second mortgage lien that
is
junior to a first lien on the related Mortgaged Property.
Seller:
Credit-Based Asset Servicing and Securitization LLC, or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase
Agreement.
Senior
Certificates:
The
Class A-1, Class A-2 and Class A-3 Certificates.
Senior
Enhancement Percentage:
For any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Certificate Principal Balances of the Class M and Class B-1
Certificates, before taking into account the distribution of the Principal
Distribution Amount on such Distribution Date and (ii) the Overcollateralization
Amount, calculated for this purpose only after taking into account the reduction
of the Certificate Principal Balances of all Classes of Certificates resulting
from the distribution of the Principal Distribution Amount (but not the Extra
Principal Distribution Amount), by (y) the Pool Balance as of the last day
of
the related Collection Period after giving effect to Principal Prepayments
in
the related Prepayment Period.
Senior
Principal Distribution Amount:
As of
any Distribution Date (i) before the Stepdown Date or on which a Trigger Event
is in effect, the Principal Distribution Amount and (ii) on or after the
Stepdown Date and as long as a Trigger Event is not in effect, the excess of
(a)
the sum of the Certificate Principal Balances of the Class A Certificates
immediately prior to such Distribution Date over (b) the lesser of (x) the
product of (1) 57.20% and (2) the Pool Balance as of the last day of the related
Collection Period after giving effect to Principal Prepayments in the related
Prepayment Period and (y) the amount by which Pool Balance as of the last day
of
the related Collection Period after giving effect to Principal Prepayments
in
the related Prepayment Period exceeds the Overcollateralization
Floor.
Senior
Specified Enhancement Percentage:
On any
date of determination thereof, 42.80%.
Servicer:
Xxxxxx
Loan Servicing LP, a Delaware limited partnership, or any successor servicer
appointed as herein provided, in its capacity as Servicer
hereunder.
Servicer
Affiliate:
A
Person (i) controlling, controlled by or under common control with the
Servicer or which is 50% or more owned by the Servicer and (ii) which is
qualified to service residential mortgage loans.
Servicer
Event of Termination:
One or
more of the events described in Section 7.01.
Servicer
Modification:
A
modification to the terms of a Mortgage Loan, in accordance with the terms
of
Section 3.01, as to which the Mortgagor is in default or as to which, in the
judgment of the Servicer, default is reasonably foreseeable.
50
Servicer
Remittance Date:
With
respect to any Distribution Date, one Business Day prior to such Distribution
Date.
Servicer’s
Assignee:
As
defined in Section 6.05(b) hereof.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including legal fees) incurred by the Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the REO Property and
(iv) compliance with the obligations under Section 3.08.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time a form of which as of the Closing Date is listed
on
Exhibit
S.
Servicing
Fee:
With
respect to each Mortgage Loan (including each REO Property) and for any calendar
month, an amount equal to one month’s interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered
by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar
month.
Servicing
Fee Rate:
So long
as Xxxxxx Loan Servicing LP is the Servicer, with respect to each Mortgage
Loan,
0.15% per annum. At anytime Xxxxxx Loan Servicing LP is not the Servicer and
with respect to each Mortgage Loan, 0.50% per annum.
Servicing
Function Participant:
Any
Subservicer, Subcontractor or other Person engaged by the Servicer or the
Trustee that is participating in the servicing function with respect to the
Mortgage Loans, within the meaning of Item 1122 of Regulation AB.
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of Mortgage Loans, whose name appears on a list of servicing officers
furnished by the Servicer to the Trustee and the Depositor on the Closing Date,
as such list may from time to time be amended.
Servicing
Rights Pledgee:
One or
more lenders, selected by the Servicer, to which the Servicer may pledge and
assign all of its right, title and interest in, to and under this Agreement,
including JPMorgan Chase Bank, National Association, as the representative
of
certain lenders.
Servicing
Standard:
Shall
mean the standards set forth in Section 3.01.
Special
Hazard Loss:
Any
Realized Losses that result from direct physical damage to Mortgaged Properties
caused by natural disasters and other hazards (i) which are not covered by
hazard insurance policies (such as earthquakes) and (ii) for which claims have
been submitted and rejected by the related hazard insurer and any shortfall
in
insurance proceeds for partial damage due to the application of the co-insurance
clauses contained in hazard insurance policies.
51
SPV:
As
defined in Section 6.05(b).
Startup
Day:
As
defined in Section 9.01(b) hereof.
Stayed
Funds:
Any
payment required to be made under the terms of the Certificates and this
Agreement but which is not remitted by the Servicer because the Servicer is
the
subject of a proceeding under the Bankruptcy Code and the making of such
remittance is prohibited by Section 362 of the Bankruptcy Code.
Stepdown
Date:
The
earlier to occur of (A) the Distribution Date on which the aggregate Certificate
Principal Balance of the Class A Certificates is reduced to zero, and (B) the
later to occur of (x) Distribution Date in June 2010, and (y) the first
Distribution Date on which the Senior Enhancement Percentage is greater than
or
equal to the Senior Specified Enhancement Percentage.
Subcontractor:
Any
third-party or Affiliated vendor, subcontractor or other Person utilized by
the
Servicer, a Subservicer, the Trustee or the Custodian, as applicable, that
is
not responsible for the overall servicing (as “servicing” is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans.
Subordinated
Certificates:
The
Class M, Class B-1, Class CE-1, Class P and Residual
Certificates.
Subsequent
Recovery:
Any
amount (net of reimbursable expenses) received on a Mortgage Loan subsequent
to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan that
resulted in a Realized Loss in a prior month.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Servicer or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Servicer under this Agreement, with respect
to
some or all of the Mortgage Loans, that are identified in Item 1122(d) of
Regulation AB.
Subservicing
Accounts:
As
defined in Section 3.34.
Subservicing
Agreements:
As
defined in Section 3.30.
Substitution
Adjustment Amount:
As
defined in Section 2.03(d) hereof.
Supplemental
Interest Trust:
The
corpus of a trust created pursuant to Section 4.09 of this Agreement and
designated as the “Supplemental Interest Trust,” consisting of the Swap
Agreement, the Cap Agreement, the Swap Account, the Cap Account, the Class
SWAP-IO REMIC 3 Regular Interest and the right to receive any Net Swap Receipt
and Swap Termination Payments from the Swap Provider and any Cap Payments from
the Cap Provider, subject to the obligation to pay the amounts specified in
Section 4.09. The Supplemental Interest Trust is not an asset of any REMIC
created hereunder.
52
Supplemental
Interest Trust Trustee:
LaSalle
Bank National Association, a national banking association organized under the
laws of the United States, in its capacity as trustee of the Supplemental
Interest Trust, or any successor Supplemental Interest Trust Trustee appointed
as herein provided.
Swap
Account:
The
trust account created and maintained by the Supplemental Interest Trust Trustee
pursuant to Section 4.09 which shall be entitled “Swap Account, LaSalle Bank
National Association, as Supplemental Interest Trust Trustee, in trust for
registered Holders of C-BASS Mortgage Loan Asset-Backed Certificates, Series
2007-CB5” and which must be an Eligible Account. Amounts on deposit in the Swap
Account shall not be invested. The Swap Account shall not be an asset of any
REMIC formed under this Agreement.
Swap
Agreement:
The
interest rate swap agreement, dated May 31, 2007, between the Swap Provider
and
the Supplemental Interest Trust Trustee, a copy of which is attached hereto
as
Exhibit
O-2.
Swap
LIBOR:
A per
annum rate equal to the floating rate payable by the Swap Provider under the
Swap Agreement.
Swap
Notional Balance:
With
respect to each Distribution Date, an amount equal to the amount set forth
for
such period on Schedule I of the Swap Agreement.
Swap
Provider:
JPMorgan Chase Bank, N.A.
Swap
Termination Payment:
Any
payment payable by the Supplemental Interest Trust or the Swap Provider upon
termination of the Swap Agreement as a result of an Event of Default (as defined
in the Swap Agreement) or a Termination Event (as defined in the Swap
Agreement).
Targeted
Overcollateralization Amount:
As of
any Distribution Date, (x) prior to the Stepdown Date, 2.70% of the Pool Balance
on the Cut-off Date and (y) on and after the Stepdown Date, (A) if a Trigger
Event has not occurred, the greater of (x) the lesser of (i) 2.70% of the Pool
Balance on the Cut-off Date and (ii) 5.40% of the Pool Balance as of the last
day of the related Collection Period after giving effect to Principal
Prepayments in the related Prepayment Period and (y) 0.50% of the Pool Balance
on the Cut-off Date and (B) if a Trigger Event has occurred, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
On
any Distribution Date following the reduction of the aggregate Certificate
Principal Balance of the Offered Certificates and the Class B-1 Certificates
to
zero, the Targeted Overcollateralization Amount shall be zero.
Tax
Matters Person:
The tax
matters person appointed pursuant to Section 9.01(e) hereof.
Tax
Returns:
The
federal income tax returns on Internal Revenue Service Form 1066, U.S. Real
Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q
thereto, Quarterly Notice to Residual Interest Holders of the REMIC Taxable
Income or Net Loss Allocation, or any successor forms, to be filed on behalf
of
the Trust for each of the eight REMICs created pursuant to this Agreement under
the REMIC Provisions, together with any and all other information reports or
returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax
laws.
53
Termination
Price:
As
defined in Section 10.01(a) hereof.
Trigger
Event:
With
respect to any Distribution Date, if (i) the six-month rolling average of 60+
Day Delinquent Loans equals or exceeds 37.38% of the Senior Enhancement
Percentage or (ii) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Collection Period (reduced
by
the aggregate amount of Subsequent Recoveries received since the Cut-off Date
through the last day of the related Collection Period) divided by the Pool
Balance as of the Cut-off Date exceeds the applicable percentages set forth
below with respect to such Distribution Date:
|
Distribution
Date Occurring In
|
Percentage
|
|
June
2009 through May 2010
|
1.50%
for the first month, plus an additional 1/12th of 2.00% for each
month
thereafter,
|
|
June
2010 through May 2011
|
3.50%
for the first month, plus an additional 1/12th of 1.95% for each
month
thereafter,
|
|
June
2011 through May 2012
|
5.45%
for the first month, plus an additional 1/12th of 1.60% for each
month
thereafter,
|
|
June
2012 through May 2013
|
7.05%
for the first month, plus an additional 1/12th of 0.90% for each
month
thereafter,
|
|
June
2013 through May 2014
|
7.95%
for the first month, plus an additional 1/12th of 0.15% for each
month
thereafter,
|
|
June
2014 through May 2015
|
8.10%
for the first month, plus an additional 1/12th of 0.05% for each
month
thereafter, and
|
|
June
2015 and thereafter
|
8.15%
|
Trust:
C-BASS
2007-CB5 Trust, the trust created hereunder.
Trust
Fund:
The
segregated pool of assets subject hereto, constituting the primary trust created
hereby and to be administered hereunder, with respect to a portion of which
eight REMIC elections are to be made, such entire Trust Fund consisting of:
(i) such Mortgage Loans as from time to time are subject to this Agreement,
together with the Mortgage Files relating thereto, and together with all
collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee’s
rights with respect to the Mortgage Loans under all insurance policies required
to be maintained pursuant to this Agreement and any proceeds thereof,
(iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement
(including any security interest created thereby) and (v) the Collection
Account, the Distribution Account, the Cap Carryover Reserve Account and any
REO
Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto.
Trustee:
LaSalle
Bank National Association, a national banking association organized under the
laws of the United States, or any successor Trustee appointed as herein
provided.
54
Trustee
Fee:
With
respect to any Distribution Date, the product of (x) one-twelfth of the
Trustee Fee Rate and (y) the aggregate of the Principal Balances of all
Mortgage Loans as of the opening of business on the first day of the related
Collection Period.
Trustee
Fee Rate:
With
respect to any Distribution Date, 0.01% per annum.
Uncertificated
Accrued Interest:
With
respect to each REMIC Regular Interest, REMIC 2 Regular Interest or REMIC 3
Regular Interest (other than Class CE-1 Regular Interest and Class SWAP-IO
Regular Interest) on each Distribution Date, an amount equal to one month’s
interest at the related Pass-Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount of such REMIC Regular Interest. With
respect to the Class XX XXXXX 3 Regular Interest on each Distribution Date,
an
amount equal to one month’s interest at its Pass-Through Rate on its Notional
Amount. In each case, Uncertificated Accrued Interest will be reduced by any
Relief Act Interest Shortfalls (allocated to such REMIC 1 Regular Interest,
REMIC 2 Regular Interest, or REMIC 3 Regular Interest based on their respective
entitlements to interest irrespective of any Relief Act Interest Shortfalls
for
such Distribution Date).
Uncertificated
Notional Amount:
With
respect to REMIC 2 Regular Interest LT2IO and each Distribution Date listed
below, a notional amount equal to the aggregate Uncertificated Principal Balance
of the REMIC 1 Regular Interests ending with the designation “A” listed
below:
|
Distribution
Date
|
REMIC
1 Regular Interests
|
|
|
1
|
I-1-A
through X-00-X
|
|
|
0
|
X-0-X
xxxxxxx X-00-X
|
|
|
0
|
X-0-X
through X-00-X
|
|
|
0
|
X-0-X
xxxxxxx X-00-X
|
|
|
0
|
X-0-X
through X-00-X
|
|
|
0
|
X-0-X
xxxxxxx X-00-X
|
|
|
0
|
X-0-X
through X-00-X
|
|
|
0
|
X-0-X
xxxxxxx X-00-X
|
|
|
0
|
X-0-X
through I-47-A
|
|
|
10
|
I-10-A
through I-47-A
|
|
|
11
|
I-11-A
through I-47-A
|
|
|
12
|
I-12-A
through I-47-A
|
|
|
13
|
I-13-A
through I-47-A
|
|
|
14
|
I-14-A
through I-47-A
|
|
|
15
|
I-15-A
through I-47-A
|
|
|
16
|
I-16-A
through I-47-A
|
|
|
17
|
I-17-A
through I-47-A
|
|
|
18
|
I-18-A
through I-47-A
|
|
|
19
|
I-19-A
through I-47-A
|
|
|
20
|
I-20-A
through I-47-A
|
|
|
21
|
I-21-A
through I-47-A
|
|
|
22
|
I-22-A
through I-47-A
|
|
|
23
|
I-23-A
through I-47-A
|
|
|
24
|
I-24-A
through I-47-A
|
|
|
25
|
I-25-A
through I-47-A
|
|
|
26
|
I-26-A
through I-47-A
|
|
|
27
|
I-27-A
through I-47-A
|
|
|
28
|
I-28-A
through I-47-A
|
|
|
29
|
I-29-A
through I-47-A
|
|
|
30
|
I-30-A
through I-47-A
|
|
|
31
|
I-31-A
through I-47-A
|
|
|
32
|
I-32-A
through I-47-A
|
55
|
Distribution
Date
|
REMIC
1 Regular Interests
|
|
|
33
|
I-33-A
through I-47-A
|
|
|
34
|
I-34-A
through I-47-A
|
|
|
35
|
I-35-A
through I-47-A
|
|
|
36
|
I-36-A
through I-47-A
|
|
|
37
|
I-37-A
through I-47-A
|
|
|
38
|
I-38-A
through I-47-A
|
|
|
39
|
I-39-A
through I-47-A
|
|
|
40
|
I-40-A
through I-47-A
|
|
|
41
|
I-41-A
through I-47-A
|
|
|
42
|
I-42-A
through I-47-A
|
|
|
43
|
I-43-A
through I-47-A
|
|
|
44
|
I-44-A
through I-47-A
|
|
|
45
|
I-45-A
through I-47-A
|
|
|
46
|
I-46-A
through I-47-A
|
|
|
47
|
I-47-A
|
|
|
Thereafter
|
$0.00
|
With
respect to the Class SWAP-IO Interest and any Distribution Date, an amount
equal
to the Uncertificated Notional Amount of REMIC 2 Regular Interest
LT2IO.
With
respect to the REMIC 1 Regular Interest I-CE-2, REMIC 2 Regular Interest LT2CE2
and Class CE-2 REMIC 3 Regular Interest, the sum of the aggregate principal
balances of the Mortgage Loans serviced by Xxxxxx Loan Servicing LP pursuant
to
the terms of this Agreement for such Distribution Date.
Uncertificated
Principal Balance:
The
principal amount of any REMIC Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance
of
each REMIC Regular Interest shall equal the amount set forth in the Preliminary
Statement hereto as its initial uncertificated principal balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC Regular
Interest shall be reduced by all distributions of principal made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.08 and, if
and
to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.08(b) and shall
be
increased by all Subsequent Recoveries allocated to such REMIC Regular Interest
on such Distribution Date pursuant to Section 4.08. The Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2ZZ shall be increased by interest
deferrals as provided in Section 4.08(a)(i). The Uncertificated Principal
Balance of each REMIC 2 Regular Interest shall never be less than
zero.
Uncertificated
REMIC 1 Pass-Through Rate:
With
respect to REMIC 1 Regular Interest I, a per annum rate equal to the weighted
average of the Net Mortgage Interest Rates of the Mortgage Loans. With respect
to each REMIC 1 Regular Interest ending with the designation “A”, a per annum
rate equal to the weighted average of the Net Mortgage Interest Rates of the
Mortgage Loans multiplied by 2, subject to a maximum rate of the Fixed Payer
Rate multiplied by 2. With respect to each REMIC 1 Regular Interest ending
with
the designation “B”, a per annum rate equal to the excess, if any, of (i) 2
multiplied by the weighted average of the Net Mortgage Interest Rates of the
Mortgage Loans over (ii) the Fixed Payer Rate multiplied by 2 (or 0.00% if
there
is no such excess). With respect to the REMIC 1 Regular Interest I-CE-2, a
weighted average per annum rate, determined on a Mortgage Loan by Mortgage
Loan
basis (and solely with respect to the Mortgage Loans serviced by Xxxxxx Loan
Servicing LP pursuant to the terms of this Agreement), equal to the excess,
if
any, of (i) the excess of (a) the Mortgage Interest Rate for each such Mortgage
Loan over (b) the sum of the (x) Servicing Fee Rate and (y) Trustee Fee Rate,
over (ii) the Net Mortgage Interest Rate of each such Mortgage
Loan.
56
Uncertificated
REMIC 2 Pass-Through Rate:
With
respect to REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest LT2A1,
REMIC
2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular
Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3,
REMIC 2 Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular
Interest LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8,
REMIC 2 Regular Interest LT2M9, REMIC 2 Regular Interest LT2B1, REMIC 2 Regular
Interest LT2P and REMIC 2 Regular Interest LT2ZZ, a per annum rate (but not
less
than zero) equal to the weighted average of: (x) with respect to REMIC 1 Regular
Interest I and each REMIC 1 Regular Interest ending with the designation “B”,
the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for such
REMIC 1 Regular Interests, weighted on the basis of the Uncertificated Principal
Balances of such REMIC 1 Regular Interests for each such Distribution Date
and
(y) with respect to REMIC 1 Regular Interests ending with the designation “A”,
for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC 1 Regular Interest listed below, weighted
on
the basis of the Uncertificated Principal Balances of each such REMIC 1 Regular
Interest for each such Distribution Date:
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
||
|
1
|
I-1-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
2
|
I-2-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
3
|
I-3-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
and I-2-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
4
|
I-4-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-3-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
5
|
I-5-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-4-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
6
|
I-6-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-5-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
7
|
I-7-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-6-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
8
|
I-8-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
57
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
||
|
I-1-A
through I-7-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
9
|
I-9-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-8-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
10
|
I-10-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-9-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
11
|
I-11-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-10-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
12
|
I-12-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-11-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
13
|
I-13-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-12-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
Uncertificated
REMIC 1 Pass-Through Rate
|
||||
|
14
|
I-14-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-13-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
15
|
I-15-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-14-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
16
|
I-16-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-15-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
17
|
I-17-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-16-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
18
|
I-18-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-17-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
19
|
I-19-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-18-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
20
|
I-20-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-19-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
21
|
I-21-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-20-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
58
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
||
|
22
|
I-22-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-21-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
23
|
I-23-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-22-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
24
|
I-24-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-23-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
25
|
I-25-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-24-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
26
|
I-26-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-25-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
27
|
I-27-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-26-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
28
|
I-28-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-27-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
29
|
I-29-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-28-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
30
|
I-30-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-29-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
31
|
I-31-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-30-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
32
|
I-32-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-31-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
33
|
I-33-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-32-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
34
|
I-34-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-33-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
35
|
I-35-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
59
|
Distribution
Date
|
REMIC
1 Regular Interest
|
Rate
|
||
|
I-1-A
through I-34-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
36
|
I-36-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-35-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
37
|
I-37-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-36-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
38
|
I-38-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-37-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
39
|
I-39-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-38-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
40
|
I-40-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-39-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
41
|
I-41-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-40-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
42
|
I-42-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-41-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
43
|
I-43-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-42-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
44
|
I-44-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-43-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
45
|
I-45-A
through I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-44-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
46
|
I-46-A
and I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-45-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
47
|
I-47-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC 1 Pass-Through Rate
|
||
|
I-1-A
through I-46-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
|||
|
thereafter
|
I-1-A
through I-47-A
|
Uncertificated
REMIC 1 Pass-Through Rate
|
||
60
With
respect to REMIC 2 Regular Interest LT2IO, and (i) the first Distribution Date
through the 47th Distribution Date, the excess, if any, of (x) the weighted
average of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular
Interests including the designation “A,” over (y) 2 multiplied by Swap LIBOR (or
0.00% if there is no such excess) and (ii) thereafter, 0.00%.
With
respect to the REMIC 2 Regular Interest LT2CE2, REMIC 2 Regular Interest LT2CE2
will be entitled to 100% of the amounts distributable with respect to the REMIC
1 Regular Interest I-CE-2.
Uncertificated
REMIC 3 Pass-Through Rate:
As set
forth in the Preliminary Statement.
Underwriters:
Banc of
America Securities LLC and Barclays Capital Inc., as underwriters with respect
to the Offered Certificates.
Underwriter’s
Exemption:
Any
exemption listed in footnote 1 of, and amended by, PTCE 2007-05 at 72 Fed.
Reg.
13130 (March 20, 2007) or any substantially similar successor administrative
exemption granted by the U.S. Department of Labor.
United
States Person
or
U.S.
Person:
(i) A citizen or resident of the United States, (ii) a corporation,
partnership or other entity treated as a corporation or partnership for United
States federal income tax purposes organized in or under the laws of the United
States or any state thereof or the District of Columbia (unless, in the case
of
a partnership, Treasury regulations provide otherwise) or (iii) an estate
the income of which is includible in gross income for United States tax
purposes, regardless of its source, or (iv) a trust if a court within the
United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust. Notwithstanding the preceding
sentence, to the extent provided in Treasury regulations, certain Trusts in
existence on August 20, 1996, and treated as United States persons prior to
such date, that elect to continue to be treated as United States persons will
also be a U.S. Person; provided, that for purposes of the definition of a
“Permitted Transferee,” a U.S. Person shall not include any person whose income
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.
Unpaid
Realized Loss Amount:
For any
Class M and Class B-1 Certificates and as to any Distribution Date, the excess
of (x) the cumulative amount of related Applied Realized Loss Amounts with
respect to such Class for all prior Distribution Dates over (y) the sum of
(a) the cumulative amount of any Subsequent Recoveries allocated to such
Class, (b) the aggregate Realized Loss Amortization Amounts with respect to
such
Class for all prior Distribution Dates and (c) the cumulative amount of Unpaid
Realized Loss Amounts reimbursed to such Class for all prior Distribution Dates
from the Supplemental Interest Trust.
Value:
With
respect to any Mortgaged Property, the lower of the value thereof as determined
by an independent appraisal made at the time of the origination of the related
Mortgage Loan or the sale price.
Voting
Rights:
The
portion of the voting rights of all of the Certificates which is allocated
to
any Certificate. The Voting Rights allocated among Holders of the Certificates
(other than the Class CE-1, Class CE-2, Class P and Residual Certificates)
shall
be 98%, and shall be allocated among each such Class according to the fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of all the Certificates of such Class then outstanding and
the
denominator of which is the aggregate Certificate Principal Balance of all
the
Certificates (other than the Class CE-1, Class CE-2, Class P and Residual
Certificates) then outstanding. The Voting Rights allocated to each such Class
of Certificates shall be allocated among all holders of each such Class in
proportion to the outstanding Certificate Principal Balance of such
Certificates; provided,
however,
that
any Certificate registered in the name of the Servicer, the Depositor or the
Trustee or any of their respective affiliates shall not be included in the
calculation of Voting Rights; provided that only such Certificates as are known
by a Responsible Officer of the Trustee to be so registered will be so excluded.
The percentage of all the Voting Rights allocated among the Holders of the
Class
CE-1 and Class P Certificates shall be 2%. The Class CE-2 and Residual
Certificates shall have no Voting Rights.
61
Weighted
Average Net Mortgage Rate:
The
weighted average (based on Principal Balance as of the first day of the related
Collection Period or, in the case of the first Distribution Date, the Cut-Off
Date) of the Net Mortgage Interest Rates of the Mortgage Loans, expressed as
an
annual rate and calculated on the basis of twelve months consisting of 30 days
each and a 360-day year.
Written
Order to Authenticate:
A
written order by which the Depositor directs the Trustee to execute,
authenticate and deliver the Certificates.
Section
1.02. Accounting.
Unless
otherwise specified herein, for the purpose of any definition or calculation,
whenever amounts are required to be netted, subtracted or added or any
distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication
of
such functions.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
ORIGINAL
ISSUANCE OF CERTIFICATES
Section
2.01. Conveyance
of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, on behalf of
the
Trust, without recourse for the benefit of the Certificateholders all the right,
title and interest of the Depositor, including any security interest therein
for
the benefit of the Depositor, in and to (i) each Mortgage Loan identified
on the Mortgage Loan Schedule, including the related Cut-off Date Principal
Balance, all interest accruing thereon after the Cut-off Date and all
collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest
in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Mortgage Loan Purchase Agreement, and (vi) all other assets included or to
be included in the Trust Fund. Such assignment includes all interest and
principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans. On the Closing Date, the Depositor shall pay,
without any right of reimbursement from the Trust, to the Cap Provider the
“Fixed Amount” (as defined in the Cap Agreement) due and payable to the Cap
Provider pursuant to the terms of the Cap Agreement.
62
It
is
agreed and understood by the parties hereto that it is not intended that any
mortgage loan be included in the Trust that is a “High-Cost Home Loan” as
defined in any
of (i) the
New Jersey Home Ownership Act effective November 27, 2003, (ii) the
New Mexico Home Loan Protection Act effective January 1, 2004, (iii) the
Massachusetts Predatory Home Loan Practices Act effective November 7, 2004,
(iv)
the Indiana Home Loan Practices Act, effective January 1, 2005 or (v) the
Illinois High Risk Home Loan Act, effective January 1, 2004.
In
connection with such transfer and assignment, the Seller, on behalf of the
Depositor, does hereby deliver to, and deposit with the Custodian, the following
documents or instruments with respect to each Mortgage Loan (a “Mortgage
File”)
so
transferred and assigned:
(i) the
original Mortgage Note, endorsed either (A) in blank or (B) in the
following form: “Pay to the order of LaSalle Bank National Association, as
Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB5,
without recourse,” or with respect to any lost Mortgage Note, an original Lost
Note Affidavit, together with a copy of the related Mortgage Note;
(ii) the
original Mortgage with evidence of recording thereon, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of attorney,
with evidence of recording thereon or, if such Mortgage or power of attorney
has
been submitted for recording but has not been returned from the applicable
public recording office, has been lost or is not otherwise available, a copy
of
such Mortgage or power of attorney, as the case may be, certified to be a true
and complete copy of the original submitted for recording;
(iii) an
original Assignment of Mortgage, in form and substance acceptable for recording.
The Mortgage shall be assigned either (A) in blank or (B) to “LaSalle
Bank National Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2007-CB5, without recourse”;
(iv) an
original or copy of any intervening assignment of Mortgage showing a complete
chain of assignments;
(v) the
original or a certified copy of lender’s title insurance policy except with
respect to those Mortgage Loans identified on Exhibit
Q
hereto;
and
(vi) the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any.
On
or
prior to the Closing Date, the Custodian agrees, pursuant to the terms of the
Custodial Agreement, to deliver to the Depositor an acknowledgment of receipt
of
the original Mortgage Note (with any exceptions noted), substantially in the
form attached as Exhibit
F-3
hereto.
63
If
any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but
either (x) has not been returned from the applicable public recording office
or
(y) has been lost or such public recording office has retained the original
of such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Custodian no later than
the Closing Date, of a copy of each such document certified by the Seller in
the
case of (x) above or the applicable public recording office in the case of
(y) above
to be a true and complete copy of the original that was submitted for recording
and (2) if such copy is certified by the Seller, delivery to the Custodian,
promptly upon receipt thereof of either the original or a copy of such document
certified by the applicable public recording office to be a true and complete
copy of the original. The Seller shall deliver or cause to be delivered to
the
Custodian promptly upon receipt thereof any other documents constituting a
part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.
Upon
discovery or receipt of notice of any materially defective document in, or
that
a document is missing from, a Mortgage File, the Seller shall have 120 days
to
cure such defect or 150 days following the Closing Date, in the case of missing
Mortgages or Assignments or deliver such missing document to the Trustee or
the
Custodian. If the Seller does not cure such defect or deliver such missing
document within such time period and such defect or the absence of such document
materially and adversely affects Certificateholders, the Seller shall either
repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
The
Servicer shall cause the Assignments of Mortgage which were delivered in blank
to be completed and shall cause all Assignments referred to in
Section 2.01(iii) hereof and, to the extent necessary, in
Section 2.01(iv) hereof to be recorded at the expense of the Servicer;
provided,
however,
the
Servicer need not cause to be recorded any Assignment which relates to a
Mortgage Loan in any jurisdiction under the laws of which, as evidenced by
an
Opinion of Counsel delivered by the Servicer to the Trustee and the Rating
Agencies, the recordation of such assignment is not necessary to protect the
Trustee’s interest, on behalf of the Trust, in the related Mortgage Loan. The
Servicer shall be required to deliver such assignments for recording within
30
days of the Closing Date. The Servicer shall furnish the Custodian with a copy
of each assignment of Mortgage submitted for recording. In the event that any
such Assignment is lost or returned unrecorded because of a defect therein,
the
Servicer shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment
to
be duly recorded. In the event that any Mortgage Note is endorsed in blank
as of
the Closing Date, promptly following the Closing Date the Servicer shall cause
to be completed such endorsements “Pay to the order of LaSalle Bank National
Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2007-CB5, without recourse.”
The
Depositor herewith delivers to the Trustee executed copies of the Mortgage
Loan
Purchase Agreement.
64
Section
2.02. Acceptance
by Trustee.
The
Trustee acknowledges the Custodian’s receipt of, subject to the provisions of
Section 2.01 and subject to the review described below and any exceptions noted
on the exception report described in this Section
2.02,
the
Mortgage File and declares that the Custodian holds and will hold the documents
delivered to it constituting a Mortgage File, and that the Custodian holds
or
will hold all such assets in trust for the exclusive use and benefit of all
present and future Certificateholders.
The
Trustee acknowledges the receipt of, subject to the provisions of Section 2.01
and the
preceding paragraph, the assets included in the definition of “Trust Fund” and
declares that it holds and will hold the assets included in the definition
of
“Trust Fund” in trust for the exclusive use and benefit of all present and
future Certificateholders.
Pursuant
to the terms of the Custodial Agreement, the Custodian shall review each
Mortgage File within 60 days after the Closing Date (or, with respect to any
document delivered after the Startup Day, within 60 days of receipt and with
respect to any Qualified Substitute Mortgage, within 60 days after the
assignment thereof) and certify in substantially the form attached hereto as
Exhibit
F-1
that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in
the
exception report annexed thereto as not being covered by such certification),
(i) all documents required to be delivered to it pursuant to
Section 2.01 of this Agreement are in its possession, (ii) such
documents have been reviewed by it and have not been mutilated, damaged or
torn
and relate to such Mortgage Loan and (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (1), (2), (3), (5), (13) and (23) (in the
case of (23), only as to whether there is a Prepayment Penalty) of the Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage File.
It
is herein acknowledged that, in conducting such review, the Custodian is under
no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be
on
their face.
Prior
to
the first anniversary date of this Agreement the Custodian agrees, pursuant
to
the terms of the Custodial Agreement, to deliver to the Depositor and the
Servicer a final certification in the form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If
in the
process of reviewing the Mortgage Files and making or preparing, as the case
may
be, the certifications referred to above, the Custodian finds any document
or
documents constituting a part of a Mortgage File to be missing or defective
in
any material respect, at the conclusion of its review the Custodian, pursuant
to
the terms of the Custodial Agreement, shall so notify the Seller, the Depositor,
the Trustee and the Servicer. In addition, upon the discovery by the Seller,
Depositor, the Trustee or the Servicer (or upon receipt by the Trustee of
written notification of such breach) of a breach of any of the representations
and warranties made by the Seller in the related Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially adversely affects
such Mortgage Loan or the interests of the related Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
65
The
Depositor and the Trustee intend that the assignment and transfer herein
contemplated constitute a sale of the Mortgage Loans and the Related Documents,
conveying good title thereto free and clear of any liens and encumbrances,
from
the Depositor to the Trustee and that such property not be part of the
Depositor’s estate or property of the Depositor in the event of any insolvency
by the Depositor. In the event that such conveyance is deemed to be, or to
be
made as security for, a loan, the parties intend that the Depositor shall be
deemed to have granted and does hereby grant to the Trustee, on behalf of the
Trust, a first priority perfected security interest in all of the Depositor’s
right, title and interest in and to the Mortgage Loans and the Related
Documents, and that this Agreement shall constitute a security agreement under
applicable law.
The
Trustee is hereby directed to execute, deliver and perform its obligations
under
the Swap Agreement and the Cap Agreement as Supplemental Interest Trust Trustee
on behalf of the Supplemental Interest Trust (including making any
representations on behalf of the Supplemental Interest Trust) in the forms
presented to it by the Depositor. The Seller, the Servicer and the Depositor
acknowledge and agree that (i) the Trustee shall execute, deliver and perform
its obligations under the Swap Agreement and the Cap Agreement and shall do
so
solely in its capacity as Supplemental Interest Trust Trustee of the
Supplemental Interest Trust and not in its individual capacity, and
(ii) the Trustee shall have no responsibility for the contents of such Swap
Agreement and the Cap Agreement, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Supplemental Interest Trust or Supplemental Interest Trust Trustee under the
Swap Agreement and the Cap Agreement at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in the Swap
Agreement and the Cap Agreement, neither the Trustee nor the Supplemental
Interest Trust Trustee shall be required to make any payments to the Cap
Provider or Swap Provider.
Section
2.03. Repurchase
or Substitution of Mortgage Loans by the Seller.
(a) Upon
discovery or receipt of written notice of any materially defective document
in,
or that a document is missing from, a Mortgage File or of the breach by the
Seller of any representation, warranty or covenant under the Mortgage Loan
Purchase Agreement or in Section 2.04 in respect of any Mortgage Loan, the
Trustee (or the Custodian, as applicable) shall promptly notify the Seller,
the
Servicer and the Trustee of such defect, missing document or breach and request
that the Seller deliver such missing document or cure such defect or breach
within 120 days or 150 days following the Closing Date, in the case of missing
Mortgages or Assignments from the date the Seller was notified of such missing
document, defect or breach, and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period and such missing document, defect or breach materially and adversely
affects Certificateholders, the Trustee shall enforce the Seller’s obligation
under the Mortgage Loan Purchase Agreement and cause the Seller to repurchase
such Mortgage Loan from the Trust Fund at the Purchase Price on or prior to
the
Determination Date following the expiration of such 120 day period (subject
to
Section 2.03(e)); provided that, in connection with any such breach that
could not reasonably have been cured within such 120 day or 150 day period,
if
the Seller shall have commenced to cure such breach within such 120 day or
150
day period, the Seller shall be permitted to proceed thereafter diligently
and
expeditiously to cure the same within the additional period provided under
the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Custodian,
upon receipt of written certification from the Servicer of such deposit, shall
release to the Seller the related Mortgage File and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
as
the Seller shall furnish to it and as shall be necessary to vest in the Seller
any Mortgage Loan released pursuant hereto and the Custodian shall have no
further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, the Seller may cause
such
Mortgage Loan to be removed from the Trust Fund (in which case it shall become
a
Defective Mortgage Loan) and substitute one or more Eligible Substitute Mortgage
Loans in the manner and subject to the limitations set forth in
Section 2.03(d). In addition to the foregoing, in the case of a breach of
the Seller’s representation set forth in Section 3.01(f) or 3.01(yy) of the
Mortgage Loan Purchase Agreement, the Seller shall reimburse the Trust for
all
costs or damages incurred by the Trust as a result of the violation of such
law
(such amount, the “Reimbursement
Amount”).
The
Reimbursement Amount shall be delivered to the Servicer for deposit into the
Collection Account within 10 days from the date the Seller was notified by
the
Trustee of the amount of such costs and damages. It is understood and agreed
that the obligation of the Seller to pay the Reimbursement Amount and to either
cure or repurchase (or substitute for) any Mortgage Loan as to which a document
is missing, a material defect in a constituent document exists or as to which
such a breach has occurred and is continuing shall constitute the sole remedy
against the Seller respecting such omission, defect or breach available to
the
Trustee and the Trustee on behalf of the Certificateholders.
66
(b) [Reserved].
(c) Within
90
days of the earlier of discovery by the Servicer or receipt of notice by the
Servicer of the breach of any representation, warranty or covenant of the
Servicer set forth in Section 2.05 which materially and adversely affects
the interests of the Certificateholders in any Mortgage Loan, the Servicer
shall
cure such breach in all material respects.
(d) Any
substitution of Eligible Substitute Mortgage Loans for Defective Mortgage Loans
made pursuant to Section 2.03(a) must be effected prior to the last
Business Day that is within two years after the Closing Date. As to any
Defective Mortgage Loan for which the Seller substitutes a Eligible Substitute
Mortgage Loan or Loans, such substitution shall be effected by the Seller
delivering to the Custodian for such Eligible Substitute Mortgage Loan or Loans,
the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers’ Certificate providing that
each such Eligible Substitute Mortgage Loan satisfies the definition thereof
and
specifying the Substitution Adjustment Amount (as described below), if any,
in
connection with such substitution. The Custodian shall acknowledge receipt
for
such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, pursuant to the terms of the Custodial Agreement, review such
documents as specified in Section 2.02 and deliver to the Servicer, with
respect to such Eligible Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit
F-1,
with
any applicable exceptions noted thereon. Within one year of the date of
substitution, pursuant to the terms of the Custodial Agreement, the Custodian
shall deliver to the Servicer a certification substantially in the form of
Exhibit F-2
hereto
with respect to such Eligible Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the month of substitution are not part
of
the Trust Fund and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will reflect the collections
and recoveries in respect of such Defective Mortgage Loan in the Collection
Period preceding the month of substitution and the Depositor or the Seller,
as
the case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Defective Mortgage Loan. The Seller shall give
or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Defective Mortgage Loan from the terms of this Agreement
and
the substitution of the Eligible Substitute Mortgage Loan or Loans and shall
deliver a copy of the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Eligible Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms
of
this Agreement and, in the case of a substitution effected by the Seller, the
Mortgage Loan Purchase Agreement, including, in the case of a substitution
effected by the Seller all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement and all applicable
representations and warranties thereof set forth in Section 2.04, in each
case as of the date of substitution.
67
For
any
month in which the Seller substitutes one or more Eligible Substitute Mortgage
Loans for one or more Defective Mortgage Loans, the Servicer will determine
the
amount (the “Substitution
Adjustment Amount”),
if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of
the
principal balance thereof as of the date of substitution, together with one
month’s interest on such principal balance at the applicable Net Mortgage
Interest Rate. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account
an
amount equal to the Substitution Adjustment Amount, if any, and the Trustee,
upon receipt by it or the Custodian of the related Eligible Substitute Mortgage
Loan or Loans and certification by the Servicer of such deposit, shall cause
the
Custodian to release to the Seller the related Mortgage File or Files and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty as the Seller shall deliver to
it
and as shall be necessary to vest therein any Defective Mortgage Loan released
pursuant hereto.
In
addition, the Seller shall obtain at its own expense and deliver to the Trustee
an Opinion of Counsel to the effect that such substitution will not cause
(a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on “prohibited transactions” under
Section 860F(a)(l) of the Code or on “contributions after the startup date”
under Section 860G(d)(l) of the Code, or (b) any REMIC formed under
this Agreement to fail to qualify as a REMIC at any time that any Certificate
is
outstanding. If such Opinion of Counsel can not be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.
(e) Upon
discovery by the Seller, the Servicer or the Trustee that any Mortgage Loan
does
not constitute a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code, the party discovering such fact shall
within two Business Days give written notice thereof to the other parties.
In
connection therewith, the Seller shall repurchase or, subject to the limitations
set forth in Section 2.03(d), substitute one or more Eligible Substitute
Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier
of
discovery or receipt of such notice with respect to such affected Mortgage
Loan.
In addition, upon discovery that a Mortgage Loan is defective in a manner that
would cause it to be a “defective obligation” within the meaning of Treasury
regulations relating to REMICs, the Seller shall cure the defect or make the
required purchase or substitution no later than 90 days after the discovery
of
the defect. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a), if made by the Seller. The Trustee and
Custodian shall reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would
a
Mortgage Loan repurchased for breach of a representation or
warranty.
68
Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge that
the functions of the Custodian with respect to the custody, acceptance,
inspection and release of the Mortgage Files pursuant to Sections 2.01,
2.02 and 2.03 and preparation and delivery of the certifications in the form
of
Exhibit F-1
and
Exhibit F-2
shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement. The fees and expenses of the Custodian shall be paid by the
Servicer.
Section
2.04. Representations
and Warranties of the Seller with Respect to the Mortgage Loans.
The
Seller hereby represents and warrants to the Trustee for the benefit of the
Certificateholders that as of the Closing Date or as of such other date
specifically provided herein:
(a) The
representations and warranties made by the Seller pursuant to Section 3.01
of the Mortgage Loan Purchase Agreement are hereby being made to the Trustee
and
are true and correct as of the Closing Date.
(b) Any
written agreement between the Mortgagor in respect of a Mortgage Loan and the
Servicer modifying such Mortgagor’s obligation to make payments under the
Mortgage Loan (such modified Mortgage Loan, a “Modified
Mortgage Loan”)
involved some assessment of the Mortgagor’s ability to repay the Modified
Mortgage Loan.
With
respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Seller’s knowledge or as to
which the Seller has no knowledge, if it is discovered by the Depositor, the
Seller, the Servicer or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan or the interest therein of the
Certificateholders then, notwithstanding the Seller’s lack of knowledge with
respect to the substance of such representation and warranty being inaccurate
at
the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
Upon
discovery by the Depositor, the Seller, the Servicer or the Trustee of a breach
of any of the representations and warranties contained in this Section that
materially and adversely affects the value of any Mortgage Loan or the interest
therein of the Certificateholders, the party discovering the breach shall give
prompt written notice to the others and in no event later than two Business
Days
from the date of such discovery. Within ninety days of its discovery or its
receipt of notice of any such missing or materially defective documentation
or
any such breach of a representation or warranty, the Seller shall promptly
deliver such missing document or cure such defect or breach in all material
respects, or in the event such defect or breach cannot be cured, the Seller
shall repurchase the affected Mortgage Loan or cause the removal of such
Mortgage Loan from the Trust Fund and substitute for it one or more Eligible
Substitute Mortgage Loans, in either case, in accordance with
Section 2.03.
69
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 Trustee
and shall inure to the benefit of the Certificateholders notwithstanding any
restrictive or qualified endorsement or assignment. It is understood and agreed
that the obligations of the Seller set forth in Section 2.03(a) to cure,
substitute for or repurchase a Mortgage Loan pursuant to the Mortgage Loan
Purchase Agreement and to reimburse the Trust the Reimbursement Amount,
constitute the sole remedies available to the Certificateholders or to the
Trustee on their behalf respecting a breach of the representations and
warranties contained in this Section 2.04.
Section
2.05. Representations,
Warranties and Covenants of the Servicer.
The
Servicer hereby represents, warrants and covenants to the Trustee, for the
benefit of each of the Trustee and the Certificateholders and to the Depositor
that as of the Closing Date or as of such date specifically provided
herein:
(i) The
Servicer is duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its formation and has all licenses necessary to
carry on its business as now being conducted, except for such licenses,
certificates and permits the absence of which, individually or in the aggregate,
would not have a material adverse effect on the ability of the Servicer to
conduct its business as it is presently conducted, and is licensed, qualified
and in good standing in the states where the Mortgaged Property is located
if
the laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer or to ensure the enforceability
or validity of each Mortgage Loan; the Servicer has the power and authority
to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Servicer and
the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Servicer, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of
creditors’ rights generally; and all requisite corporate action has been taken
by the Servicer to make this Agreement valid and binding upon the Servicer
in
accordance with its terms;
(ii) The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Servicer and will not result in the breach
of
any term or provision of the certificate of formation or the partnership
agreement of the Servicer or result in the breach of any term or provision
of,
or conflict with or constitute a default under or result in the acceleration
of
any obligation under, any agreement, indenture or loan or credit agreement
or
other instrument to which the Servicer or its property is subject, or result
in
the violation of any law, rule, regulation, order, judgment or decree to which
the Servicer or its property is subject;
70
(iii) The
Servicer is an approved servicer of conventional mortgage loans for Xxxxxx
Xxx
and has the facilities, procedures and experienced personnel necessary for
the
sound servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is, and shall remain for as long as it is servicing the Mortgage Loans
hereunder, in good standing to servicer mortgage loans for HUD, Xxxxxx Mae
or
Xxxxxxx Mac, and no event has occurred, including but not limited to a change
in
insurance coverage, which would make the Servicer unable to comply with HUD,
Xxxxxx Mae or Xxxxxxx Mac or which would require notification to any of HUD,
Xxxxxx Mae or Xxxxxxx Mac;
(iv) This
Agreement, and all documents and instruments contemplated hereby which are
executed and delivered by the Servicer, constitute and will constitute valid,
legal and binding obligations of the Servicer, enforceable in accordance with
their respective terms, except as the enforcement thereof may be limited by
applicable bankruptcy laws and general principles of equity;
(v) The
Servicer does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this
Agreement;
(vi) There
is
no action, suit, proceeding or investigation pending or, to its knowledge,
threatened against the Servicer that, either individually or in the aggregate,
may result in any material adverse change in the business, operations, financial
condition, properties or assets of the Servicer, or in any material impairment
of the right or ability of the Servicer to carry on its business substantially
as now conducted, or in any material liability on the part of the Servicer,
or
that would draw into question the validity or enforceability of this Agreement
or of any action taken or to be taken in connection with the obligations of
the
Servicer contemplated herein, or that would be likely to impair materially
the
ability of the Servicer to perform under the terms of this
Agreement;
(vii) No
consent, approval or order of any court or governmental agency or body is
required for the execution, delivery and performance by the Servicer of or
compliance by the Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders, if any, that have been
obtained;
(viii) Neither
this Agreement nor any information, certificate of an officer, statement
furnished in writing or report delivered to the Trustee by the Servicer in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein,
in
light of the circumstances under which they were made, not misleading;
and
71
(ix) The
Servicer has fully furnished, and shall continue to fully furnish for so long
as
it is servicing the Mortgage Loans hereunder, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on the Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company on a monthly basis.
It
is
understood and agreed that the representations, warranties and covenants set
forth in this Section 2.05 shall survive delivery of the Mortgage Files to
the Custodian and shall inure to the benefit of the Trustee, the Depositor
and
the Certificateholders. Upon discovery by any of the Depositor, the Servicer,
the Seller or the Trustee of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of
any
Mortgage Loan or the interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties
hereto.
Section
2.06. Representations
and Warranties of the Depositor.
The
Depositor represents and warrants to the Trust and the Trustee on behalf of
the
Certificateholders as follows:
(i) This
agreement constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors’ rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(ii) Immediately
prior to the sale and assignment by the Depositor to the Trustee on behalf
of
the Trust of each Mortgage Loan, the Depositor had good and marketable title
to
each Mortgage Loan (insofar as such title was conveyed to it by the Seller)
subject to no prior lien, claim, participation interest, mortgage, security
interest, pledge, charge or other encumbrance or other interest of any
nature;
(iii) As
of the
Closing Date, the Depositor has transferred all right, title interest in the
Mortgage Loans to the Trustee on behalf of the Trust;
(iv) The
Depositor has not transferred the Mortgage Loans to the Trustee on behalf of
the
Trust with any intent to hinder, delay or defraud any of its
creditors;
(v) The
Depositor has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Delaware, with full corporate
power
and authority to own its assets and conduct its business as presently being
conducted;
(vi) The
Depositor is not in violation of its certificate of incorporation or by-laws
or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Depositor is a
party or by which it or its properties may be bound, which default might result
in any material adverse changes in the financial condition, earnings, affairs
or
business of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
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(vii) The
execution, delivery and performance of this Agreement by the Depositor, and
the
consummation of the transactions contemplated thereby, do not and will not
result in a material breach or violation of any of the terms or provisions
of,
or, to the knowledge of the Depositor, constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party or by which the Depositor is bound
or to which any of the property or assets of the Depositor is subject, nor
will
such actions result in any violation of the provisions of the certificate of
incorporation or by-laws of the Depositor or, to the best of the Depositor’s
knowledge without independent investigation, any statute or any order, rule
or
regulation of any court or governmental agency or body having jurisdiction
over
the Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse effect
on
the ability of the Depositor to perform its obligations under this
Agreement);
(viii) To
the
best of the Depositor’s knowledge without any independent investigation, no
consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or body of the United States or any other
jurisdiction is required for the issuance of the Certificates, or the
consummation by the Depositor of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or Blue Sky
laws, (b) have been previously obtained or (c) the failure of which to
obtain would not have a material adverse effect on the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement; and
(ix) There
are
no actions, proceedings or investigations pending before or, to the Depositor’s
knowledge, threatened by any court, administrative agency or other tribunal
to
which the Depositor is a party or of which any of its properties is the subject:
(a) which if determined adversely to the Depositor would have a material
adverse effect on the business, results of operations or financial condition
of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates or
the consummation by the Depositor of any of the transactions contemplated by
this Agreement, as the case may be; (d) which might materially and
adversely affect the performance by the Depositor of its obligations under,
or
the validity or enforceability of, this Agreement.
Section
2.07. Issuance
of Certificates and the Uncertificated Regular Interests.
The
Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
to it (or the Custodian, as bailee and Custodian of the Trustee) of the Mortgage
Files, subject to the provisions of Sections 2.01 and 2.02, and the Trustee
acknowledges the assignment to it of all other assets included in the Trust
Fund, receipt of which is hereby acknowledged. Concurrently with such assignment
and delivery and in exchange therefor, the Trustee, pursuant to the Written
Order to Authenticate executed by an officer of the Depositor, has executed,
and
the Certificate Registrar has authenticated and delivered to or upon the order
of the Depositor, the Certificates (other than the Residual Certificates) in
minimum dollar denominations of $100,000 and integral dollar multiples of $1
in
excess. The Class CE and Class P Certificates are issuable only in minimum
Percentage Interests of 10%. The Class R and Class R-X Certificates are
issuable only in minimum Percentage Interests of 100%. The Trustee acknowledges
the issuance of the uncertificated REMIC 1 Regular Interests and declares that
it holds such regular interests as assets of REMIC 2. The Trustee
acknowledges the issuance of the uncertificated REMIC 2 Regular Interests and
declares that it holds such regular interests as assets of REMIC 3. The Trustee
acknowledges the obligation of the Class CE-1 Certificates to pay Cap Carryover
Amounts, and declares that it holds the same on behalf of the Holders of the
Class A, Class B and Class M Certificates, respectively, which shall be treated
as beneficially owning the right to receive the Cap Carryover Amounts. The
interests evidenced by the Certificates constitute the entire beneficial
ownership interest in the Trust Fund. The Trustee acknowledges the issuance
of
the uncertificated REMIC 3 Class CE-1 Interest and declares that it holds such
regular interest as the asset of REMIC A. The Trustee acknowledges the
issuance of the uncertificated REMIC 3 Class P Interest and declares that it
holds such regular interest as the asset of REMIC B. The Trustee
acknowledges the issuance of the uncertificated REMIC 3 Class B-1 Regular
Interest and declares that it holds such regular interest as the asset of REMIC
C. The Trustee acknowledges the issuance of the uncertificated REMIC 3 Class
CE-2 Interest and declares that it holds such regular interest as the asset
of
REMIC D. The Trustee acknowledges the obligation of the Class CE Certificate
to
pay Cap Carryover Amounts, Swap Termination Payments and Class Swap-IO
Distribution Amounts. The Trustee also acknowledges the obligation of the
Offered Certificates and Class B-1 Certificates to pay Class SWAP-IO
Distribution Amounts. The “latest possible maturity date” for all REMIC Regular
Interests pursuant to Section 1.860G-1(a)(4)(iii) of the Treasury Regulations
is
the Distribution Date immediately following the maturity date for the Mortgage
Loan with the latest maturity date.
73
Section
2.08. Representations
and Warranties of the Seller.
The
Seller hereby represents and warrants to the Trust and the Trustee on behalf
of
the Certificateholders that as of the Closing Date or as of such date
specifically provided herein:
(i) The
Seller is duly organized, validly existing and in good standing as a limited
liability company under the laws of the State of Delaware and has the power
and
authority to own its assets and to transact the business in which it is
currently engaged. The Seller is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business transacted
by it or properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect on
(a) its business, properties, assets or condition (financial or other),
(b) the performance of its obligations under this Agreement, (c) the
value or marketability of the Mortgage Loans, or (d) its ability to
foreclose on the related Mortgaged Properties.
(ii) The
Seller has the power and authority to make, execute, deliver and perform this
Agreement and to consummate all of the transactions contemplated hereunder
and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will
constitute the Seller’s legal, valid and binding obligations enforceable in
accordance with its terms, except as enforcement of such terms may be limited
by
(1) bankruptcy, insolvency, reorganization, receivership, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies, (2) general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law) or (3) public policy considerations underlying the securities
laws, to the extent that such policy considerations limit the enforceability
of
the provisions of this Agreement which purport to provide indemnification from
securities laws liabilities.
74
(iii) The
Seller holds all necessary licenses, certificates and permits from all
governmental authorities necessary for conducting its business as it is
presently conducted, except for such licenses, certificates and permits the
absence of which, individually or in the aggregate, would not have a material
adverse effect on the ability of the Seller to conduct its business as it is
presently conducted. It is not required to obtain the consent of any other
party
or any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or authorizations,
or
registrations or declarations as shall have been obtained or filed, as the
case
may be, prior to the Closing Date.
(iv) The
execution, delivery and performance of this Agreement by the Seller will not
conflict with or result in a breach of, or constitute a default under, any
provision of any existing law or regulation or any order or decree of any court
applicable to the Seller or any of its properties or any provision of its
Limited Liability Company Agreement, or constitute a material breach of, or
result in the creation or imposition of any lien, charge or encumbrance upon
any
of its properties pursuant to any mortgage, indenture, contract or other
agreement to which it is a party or by which it may be bound.
(v) No
certificate of an officer, written statement or report delivered pursuant to
the
terms hereof by the Seller contains any untrue statement of a material fact
or
omits to state any material fact necessary to make the certificate, statement
or
report not misleading.
(vi) The
transactions contemplated by this Agreement are in the ordinary course of the
Seller’s business.
(vii) The
Seller is not insolvent, nor will the Seller be made insolvent by the transfer
of the Mortgage Loans to the Depositor, nor is the Seller aware of any pending
insolvency.
(viii) The
Seller is not in violation of, and the execution and delivery of this Agreement
by it and its performance and compliance with the terms of this Agreement will
not constitute a violation with respect to any order or decree of any court,
or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction, which violation would materially and adversely affect
the
Seller’s condition (financial or otherwise) or operations or any of the Seller’s
properties, or materially and adversely affect the performance of any of its
duties hereunder.
75
(ix) There
are
no actions or proceedings against, or investigations of, the Seller pending
or,
to its knowledge, threatened, before any court, administrative agency or other
tribunal (i) that, if determined adversely, would prohibit the Seller from
entering into this Agreement, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (iii) that, if
determined adversely, would prohibit or materially and adversely affect the
Seller’s performance of any of its respective obligations under, or the validity
or enforceability of, this Agreement.
(x) The
Seller did not transfer the Mortgage Loans to the Depositor with any intent
to
hinder, delay or defraud any of its creditors.
(xi) The
Seller acquired title to the Mortgage Loans in good faith, without notice of
any
adverse claims.
(xii) The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by
the Seller to the Depositor are not subject to the bulk transfer laws or any
similar statutory provisions in effect in any applicable
jurisdiction.
Section
2.09. Covenants
of the Seller.
The
Seller hereby covenants that except for the transfer hereunder, the Seller
will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any Mortgage Loan, or any interest
therein; the Seller will notify the Trustee, as assignee of the Depositor,
of
the existence of any lien on any Mortgage Loan immediately upon discovery
thereof, and the Seller will defend the right, title and interest of the Trust,
as assignee of the Depositor, in, to and under the Mortgage Loans, against
all
claims of third parties claiming through or under the Seller; provided, however,
that nothing in this Section 2.09 shall prevent or be deemed to prohibit the
Seller from suffering to exist upon any of the Mortgage Loans any liens for
municipal or other local taxes and other governmental charges if such taxes
or
governmental charges shall not at the time be due and payable or if the Seller
shall currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
THE TRUST FUND
Section
3.01. Servicer
to Act as Servicer.
The
Servicer, as independent contract servicer, shall service and administer the
Mortgage Loans in accordance with this Agreement and the normal and usual
standards of practice of prudent mortgage servicers, and shall have full power
and authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement (the
“Servicing
Standards”).
76
Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor if in
the
Servicer’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Certificateholders;
provided,
however,
that
the Servicer shall not make future advances and (unless the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment
of
the Servicer, reasonably foreseeable) the Servicer shall not permit any
modification with respect to any Mortgage Loan that would (i) change the
Mortgage Interest Rate, defer or forgive the payment thereof of any principal
or
interest payments, reduce the outstanding principal amount (except for actual
payments of principal) or extend the final maturity date with respect to such
Mortgage Loan, (ii) affect adversely the status of any REMIC constituting part
of the Trust Fund as a REMIC or (iii) cause any REMIC to be subject to a
tax on “prohibited transactions” or “contributions” pursuant to the REMIC
Provisions. Notwithstanding the foregoing, the Servicer shall not permit any
modification with respect to any Mortgage Loan that would both (x) effect
an exchange or reissuance of such Mortgage Loan under Section 1.860G-2(b)
of the Treasury Regulations and (y) cause any REMIC constituting part of
the Trust Fund to fail to qualify as a REMIC under the Code or the imposition
of
any tax on “prohibited transactions” or “contributions” after the Startup Day
under the REMIC Provisions. Without limiting the generality of the foregoing,
the Servicer shall continue, and is hereby authorized and empowered to execute
and deliver on behalf of itself, and the Trustee, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and
all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Property. The Servicer shall make all required
Servicing Advances and shall service and administer the Mortgage Loans in
accordance with Applicable Regulations, and shall provide to the Mortgagors
any
reports required to be provided to them thereby. If reasonably required by
the
Servicer, the Trustee shall furnish the Servicer with a power of attorney
(substantially in the form annexed hereto as Exhibit
R)
and
other documents necessary or appropriate to enable the Servicer to carry out
its
servicing and administrative duties under this Agreement. The Trustee shall
not
be liable for the actions of the Servicer or any Subservicers under such powers
of attorney and shall be indemnified by Servicer for any costs, liabilities
or
expenses incurred by the Trustee in connection with the Servicer’s misuse of
such power of attorney.
Notwithstanding
anything contained herein to the contrary, the Servicer shall not, without
the
Trustee’s written consent: (i) initiate any action, suit or proceeding directly
relating to the servicing of a Mortgage Loan solely under the Trustee’s name
without indicating the Servicer’s representative capacity (provided that the
Servicer shall not be required to sign the Power of Attorney in order to perform
the functions enumerated therein), (ii) initiate any other action, suit or
proceeding not directly relating to the servicing of a Mortgage Loan (including
but not limited to actions, suits or proceedings against Certificateholders,
or
against the Depositor or the Seller for breaches of representations and
warranties) solely under the Trustee’s name, (iii) engage counsel to represent
the Trustee in any action, suit or proceeding not directly related to the
servicing of any Mortgage Loan (including but not limited to actions, suits
or
proceedings against Certificateholders, or against the Depositor or the Seller
for breaches of representations and warranties, or (iv) prepare, execute or
deliver any government filings, forms, permits, registrations or other documents
or take any action with the intent to cause, and that actually causes, the
Trustee to be registered to do business in any state.
77
In
connection with any modification pursuant to this Section 3.01 and to the extent
there are any unreimbursed Advances or Servicing Advances, the Servicer shall
reimburse itself for such amounts from the Collection Account.
In
servicing and administering the Mortgage Loans, the Servicer shall employ
procedures including collection procedures and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account giving due consideration to accepted mortgage servicing
practices of prudent lending institutions and the Certificateholders’ reliance
on the Servicer.
The
Servicer shall give prompt notice to the Trustee of any action, of which the
Servicer has actual knowledge, which action purports to (i) assert a claim
against the Trust Fund or (ii) assert jurisdiction over the Trust
Fund.
Notwithstanding
anything in this Agreement to the contrary, in the event of a Principal
Prepayment in Full, the Servicer may not waive any Prepayment Penalty or portion
thereof required by the terms of the related Mortgage Note unless (i) the
related Mortgage Loan is in default or foreseeable default and such waiver
(A)
is standard and customary in servicing mortgage loans similar to the Mortgage
Loans and (B) the Servicer determines that such waiver would maximize recovery
of Liquidation Proceeds for such Mortgage Loan, taking into account the value
of
such prepayment penalty, (ii) (A) the enforceability thereof is limited (1)
by
bankruptcy, insolvency, moratorium, receivership, or other similar law relating
to creditors’ rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is otherwise
limited or prohibited by applicable law, (iii) the Servicer has not been
provided with information sufficient to enable it to collect the Prepayment
Penalty, (iv) if the collection of such Prepayment Penalty would be considered
“predatory” pursuant to written guidance published or issued by an applicable
federal, state, or local regulatory authority acting in its official capacity
and having jurisdiction over such matters or (v) there is a certified class
action in which a similar type of prepayment penalty is being challenged. In
the
event of a Principal Prepayment in Full with respect to any Mortgage Loan,
the
Servicer shall deliver to the Trustee an Officer’s Certificate substantially in
the form of Exhibit
M
no later
than the third Business Day following the immediately succeeding Determination
Date with a copy to the Class P Certificateholder. If the Servicer has waived
or
does not collect all or a portion of a Prepayment Penalty relating to a
Principal Prepayment in Full due to any action or omission of the Servicer,
other than as provided above, the Servicer shall (a), on or prior to the
Distribution Date immediately following the date on which the Principal
Prepayment in Full is remitted to the Trustee or (b) if the Servicer is notified
that its waiver was not in accordance with subparts (i), (ii), (iii), (iv)
or
(v) above, and it is determined by the notifying party and the Servicer that
its
waiver was not in accordance with such subparts, on or prior to the Distribution
Date immediately following such date of determination, deliver to the Trustee
the amount of such Prepayment Penalty (or such portion thereof as had been
waived for deposit) into the Distribution Account for distribution to the Class
P Certificates in accordance with the terms of this Agreement.
78
Section
3.02. Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Servicer will diligently collect all payments due under each
Mortgage Loan when the same shall become due and payable and shall, to the
extent such procedures shall be consistent with this Agreement and the terms
and
provisions of any related Primary Insurance Policy and Applicable Regulations,
follow such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Further, the
Servicer will take special care in ascertaining and estimating taxes, fire
and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable to that end
that
the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section
3.03. Realization
Upon Defaulted Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Servicer shall take such action as
it
shall deem to be in the best interest of the Certificateholders, including
either foreclosing on any such Mortgage Loan or working out an agreement with
the Mortgagor, which may involve waiving or modifying certain terms of the
Mortgage Loan, subject to the second paragraph of Section 3.01. With respect
to
any defaulted Mortgage Loan, the Servicer shall have the right to review the
status of the related forbearance plan and, subject to the second paragraph
of
Section 3.01, may modify such forbearance plan; including, extending the
Mortgage Loan repayment date for a period of one year or reducing the Mortgage
Interest Rate.
In
connection with a foreclosure or other conversion, the Servicer shall exercise
such rights and powers vested in it hereunder and use the same degree of care
and skill in its exercise as prudent mortgage servicers would exercise or use
under the circumstances in the conduct of their own affairs and consistent
with
Applicable Regulations and the servicing standards set forth in the Xxxxxx
Xxx
Guide, including, without limitation, advancing funds for the payment of taxes
and insurance premiums with respect to first lien Mortgage Loans.
Notwithstanding
the foregoing provisions of this Section 3.03, with respect to any Mortgage
Loan as to which the Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Servicer shall not either (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, or take any other action with respect
to, such Mortgaged Property if, as a result of any such action, the Trust Fund
would be considered to hold title to, to be a mortgagee-in-possession of, or
to
be an owner or operator of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended from time to time, or any comparable law, unless the Servicer has also
previously determined, based on its reasonable judgment and a prudent report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
79
A. such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Certificateholders
to
take such actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
B. there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation, or that if any such materials are
present for which such action could be required, that it would be in the best
economic interest of the Certificateholders to take such actions with respect
to
the affected Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 3.03 shall be
advanced by the Servicer, subject to the Servicer’s right to be reimbursed
therefor from the Collection Account as provided in
Section 3.05(ii).
If
the
Servicer determines, as described above, that it is in the best economic
interest of the Certificateholders to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes,
or
petroleum-based materials affecting any such Mortgaged Property, then the
Servicer shall take such action as it deems to be in the best economic interest
of the Certificateholders. The cost of any such compliance, containment, cleanup
or remediation shall be advanced by the Servicer, subject to the Servicer’s
right to be reimbursed therefor from the Collection Account as provided in
Section 3.05(ii).
Section
3.04. Collection
Account, Distribution Account and Cap Carryover Reserve Account.
(a) The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Collection Accounts. Each
Collection Account shall be an Eligible Account.
The
Servicer shall deposit in the Collection Account on a daily basis within two
Business Days after determining the proper cash application after receipt of
such funds, and retain therein, the following payments and collections received
or made by it after the Cut-off Date with respect to the Mortgage
Loans:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Interest Rate less the Servicing Fee Rate;
(iii) all
proceeds from a Cash Liquidation and any Subsequent Recoveries;
80
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 3.10, other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or released
to
the Mortgagor in accordance with the Servicer’s normal servicing procedures, the
loan documents or applicable law;
(v) all
Condemnation Proceeds affecting any Mortgaged Property which are not released
to
the Mortgagor in accordance with the Servicer’s normal servicing procedures, the
loan documents or applicable law; and
(vi) any
amounts required to be deposited by the Servicer in connection with any REO
Property pursuant to Section 3.13.
Any
interest paid on funds deposited in the Collection Account, subject to
Section 3.25, shall accrue to the benefit of the Servicer and the Servicer
shall be entitled to retain and withdraw such interest from the Collection
Account pursuant to Section 3.05(v). The foregoing requirements for deposit
from the Collection Account shall be exclusive, it being understood and agreed
that, without limiting the generality of the foregoing, payments in the nature
of late payment charges, prepayment charges that are not Prepayment Penalties,
and assumption fees need not be deposited by the Servicer in the Collection
Account.
(b) On
behalf
of the Trust Fund, the Trustee shall establish and maintain one or more accounts
(such account or accounts, the “Distribution
Account”),
held
in trust for the benefit of the Certificateholders. On behalf of the Trust
Fund,
the Servicer shall deliver to the Trustee in immediately available funds for
deposit in the Distribution Account by 3:00 PM New York time on the Servicer
Remittance Date, that portion of the Interest Remittance Amount and Principal
Remittance Amount (calculated without regard to the references in the definition
thereof to amounts that may be deposited to the Distribution Account from a
different source as provided herein) then on deposit in the Collection Account;
provided, further, in connection with any failure by the Servicer to make any
remittance required to be made by the Servicer to the Distribution Account
on
the day and by the time such remittance is required to be made under the terms
of this Agreement (without giving effect to any grace or sure period), the
Servicer shall pay to the Trustee for the account of the Trustee interest at
the
Prime Rate (as set forth in The Wall Street Journal) or such other rate mutually
agreed to between the Servicer and the Trustee or any amount not timely remitted
from and including the day such remittance was required to be made to, but
not
including, the day on which such remittance was actually made. Amounts in the
Distribution Account (other than non-REMIC assets) shall be deemed to be held
on
behalf of the related REMICs in accordance with the REMIC distributions set
forth in Section 4.08.
(c) Funds
in
the Collection Account and the Distribution Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.25. The
Servicer shall give notice to the Trustee of the location of the Collection
Account maintained by it when established and prior to any change thereof.
The
Trustee shall give notice to the Servicer and the Depositor of the location
of
the Distribution Account when established and prior to any change
thereof.
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(d) In
the
event the Servicer shall deliver to the Trustee for deposit in the Distribution
Account any amount not required to be deposited therein, it may at any time
request in writing that the Trustee withdraw such amount from the Distribution
Account and remit to the Servicer any such amount, any provision herein to
the
contrary notwithstanding. In addition, the Servicer shall deliver to the Trustee
from time to time for deposit, and the Trustee shall so deposit, in the
Distribution Account in respect of REMIC 1:
(i) any
Advances, as required pursuant to Section 4.07;
(ii) any
Stayed Funds, as soon as permitted by the federal bankruptcy court having
jurisdiction in such matters;
(iii) any
Prepayment Penalties or amounts in connection with the waiver of such Prepayment
Penalties, in each case required to be deposited pursuant to
Section 3.01;
(iv) any
amounts required to be deposited in the Distribution Account pursuant to
Sections 2.03, 3.04, 3.15, 3.16, 3.23 or 4.07; and
(v) any
amounts required to be deposited by the Servicer pursuant to Section 3.11
in connection with the deductible clause in any blanket hazard insurance policy,
such deposit being made from the Servicer’s own funds, without reimbursement
therefor.
(e) Promptly
upon receipt of any Stayed Funds, whether from the Servicer, a trustee in
bankruptcy, or federal bankruptcy court or other source, the Trustee shall
notify the Servicer of such receipt and deposit such funds in the Distribution
Account, subject to withdrawal thereof as permitted hereunder. In addition,
the
Trustee shall deposit in the Distribution Account any amounts required to be
deposited pursuant to Section 3.25(b) in connection with losses realized on
Permitted Investments with respect to funds held in the Distribution
Account.
(f) No
later
than the Closing Date, the Trustee shall establish and maintain with itself
a
separate, segregated trust account which will be the Cap Carryover Reserve
Account.
On
each
Distribution Date as to which there is a Cap Carryover Amount payable to the
Offered Certificates, the Trustee has been directed by the Class CE-1
Certificateholders to, and therefore will, deposit into the Cap Carryover
Reserve Account the amounts described in Section 4.02(b)(xxxiii), rather than
distributing such amounts to the Class CE-1 Certificateholders. On each such
Distribution Date, the Trustee shall hold all such amounts for the benefit
of
the Holders of the Offered Certificates, and will distribute such amounts to
the
Holders of the Offered Certificates in the amounts and priorities set forth
in
Sections 4.01 and 4.02.
For
federal and state income tax purposes, the Class CE-1 Certificateholders will
be
deemed to be the owners of the Cap Carryover Reserve Account and all amounts
deposited into the Cap Carryover Reserve Account shall be treated as amounts
distributed by REMIC 3 with respect to the Class XX XXXXX 3 Regular Interests.
Upon the termination of the Trust Fund, or the payment in full of the Offered
Certificates, all amounts remaining on deposit in the Cap Carryover Reserve
Account will be released by the Trust Fund and distributed to the Class CE-1
Certificateholders or their designees. The Cap Carryover Reserve Account will
be
part of the Trust Fund but not part of any REMIC and any payments to the Holders
of the Offered Certificates of Cap Carryover Amounts will not be payments with
respect to a “regular interest” in a REMIC within the meaning of Code Section
860G(a)(1).
82
By
accepting a Class CE-1 Certificate, each Class CE-1 Certificateholder hereby
agrees to direct the Trustee, and the Trustee hereby is directed, to deposit
into the Cap Carryover Reserve Account the amounts described above on each
Distribution Date as to which there is any Cap Carryover Amount rather than
distributing such amounts to the Class CE-1 Certificateholders. By accepting
a
Class CE-1 Certificate, each Class CE-1 Certificateholder further agrees that
such direction is given for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by such acceptance. Amounts held in the
Cap
Carryover Reserve Account shall be held uninvested.
Any
Cap
Carryover Amounts paid by the Trustee pursuant to this Section 3.04(f) to the
applicable Offered Certificates shall be accounted for by the Trustee as amounts
paid first to the Holder of the Class CE-1 Interest and then to such Class
or
Classes of Offered Certificates. In addition, the Trustee shall account for
the
Fixed-Rate and Floating Rate Certificates’ rights to receive payments of Cap
Carryover Amounts as rights in a limited recourse interest rate cap contract
written by the Holders of the Class CE-1 Interest in favor of such
Certificates.
For
federal tax return and information reporting, the value of the right of the
Holders of the Offered Certificates to receive payments from the Cap Carryover
Reserve Account in respect of any Cap Carryover Amount shall be de
minimis unless
and until required otherwise by an applicable taxing authority.
Section
3.05. Permitted
Withdrawals From the Collection Account.
The
Servicer may, from time to time, withdraw from the Collection Account for the
following purposes:
(i) to
remit
to the Trustee for deposit in the Distribution Account the amounts required
to
be so remitted pursuant to Section 3.04(b) or permitted to be so remitted
pursuant to clause (ii) of first sentence of the second paragraph of Section
4.07(b);
(ii) to
reimburse itself for (a) Advances and Servicing Advances to the extent of
amounts received on the related Mortgage Loan which represent payments of (x)
principal and/or interest respecting which any such Advance was made or (y)
Condemnation Proceeds, Insurance Proceeds or Liquidation Proceeds respecting
which any such Servicing Advance was made; including in connection with the
modification of a Mortgage Loan to the extent that such amounts have not
previously been reimbursed; or (b) any unreimbursed Advances or Servicing
Advances to the extent of funds held in the Collection Account for future
distribution that were not included in Available Funds for the preceding
Distribution Date; provided,
however,
any
funds so applied will be replaced by the Servicer by deposit in the Collection
Account no later than one Business Day prior to the Distribution Date on which
such funds are required to be distributed;
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(iii) to
reimburse itself for unreimbursed Servicing Advances, any unpaid Servicing
Fees
and for unreimbursed Advances to the extent that such amounts are deemed to
be
Nonrecoverable Advances and to reimburse itself for such amounts to the extent
that such amounts are nonrecoverable from the disposition of REO Property or
have been written-off pursuant to Section 3.13;
(iv) to
reimburse itself for any amounts paid pursuant to Section 3.03 (and not
otherwise previously reimbursed);
(v) to
pay to
itself as servicing compensation (a) any interest earned on funds in the
Collection Account (all such interest to be withdrawn monthly not later than
each Servicer Remittance Date) and (b) the Servicing Fee from that portion
of any payment or recovery as to interest to a particular Mortgage Loan to
the
extent not retained pursuant to Section 3.04(ii);
(vi) to
pay or
reimburse itself for any amounts payable or paid pursuant to Section 6.03
(and not otherwise previously reimbursed) and to reimburse itself as set forth
in Section 9.01(c); and
(vii) to
clear
and terminate the Collection Account upon the termination of this
Agreement.
The
foregoing requirements for withdrawal from the Collection Account shall be
exclusive. In the event the Servicer shall deposit in the Collection Account
any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding.
Section
3.06. Establishment
of Escrow Account; Deposits in Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts, in the form of time deposit or demand accounts. A copy of
such
letter agreement shall be furnished to the Trustee upon request. The Escrow
Account shall be an Eligible Account.
The
Servicer shall deposit in the Escrow Account on a daily basis within two
Business Days after determining the proper cash application after receipt of
such funds, and retain therein, (i) all Escrow Payments collected on
account of the Mortgage Loans, for the purpose of effecting timely payment
of
any such items as required under the terms of this Agreement, and (ii) all
Insurance Proceeds which are to be applied to the restoration or repair of
any
Mortgaged Property. The Servicer shall make withdrawals therefrom only to effect
such payments as are required under this Agreement, and for such other purposes
as shall be set forth in, or in accordance with, Section 3.07. The Servicer
shall be entitled to retain any interest paid on funds deposited in the Escrow
Account by the depository institution other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required by
the
related Mortgage Loan or Applicable Regulations, the Servicer shall pay interest
on escrowed funds to the Mortgagor notwithstanding that the Escrow Account
is
non-interest bearing or that interest paid thereon is insufficient for such
purposes.
84
Section
3.07. Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account may be made by the Servicer (i) to effect timely
payments of taxes, fire, flood and hazard insurance premiums, Primary Insurance
Policy premiums, if applicable, and comparable items, (ii) to reimburse the
Servicer for any Servicing Advance made by the Servicer with respect to a
related Mortgage Loan but only from amounts received on the related Mortgage
Loan which represent late payments or Late Collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined
to be overages, (iv) for transfer to the Collection Account in accordance
with the terms of this Agreement, (v) for application to restoration or
repair of the Mortgaged Property, (vi) to pay to the Servicer, or to the
Mortgagor to the extent required by the related Mortgage Loan or Applicable
Regulations, any interest paid on the funds deposited in the Escrow Account,
(vii) to clear and terminate the Escrow Account on the termination of this
Agreement or (viii) to transfer to the Collection Account any insurance
proceeds. As part of its servicing duties, the Servicer shall pay to the
Mortgagor interest on funds in the Escrow Account, to the extent required by
the
related Mortgage Loan or Applicable Regulations, and to the extent that interest
earned on funds in the Escrow Account is insufficient, shall pay such interest
from its own funds, without any reimbursement therefor.
In
the
event the Servicer shall deposit in the Escrow Account any amount not required
to be deposited therein, it may at any time withdraw such amount from the Escrow
Account, any provision herein to the contrary notwithstanding.
Section
3.08. Payment
of Taxes, Insurance and Other Charges; Collections Thereunder.
With
respect to each first lien Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of taxes and other charges which are or may become
a lien upon the Mortgaged Property and the status of Primary Insurance Policy
premiums and fire, flood and hazard insurance coverage and shall obtain, from
time to time, all bills for the payment of such charges (including renewal
premiums) and shall effect payment thereof prior to the applicable penalty
or
termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Servicer in
amounts sufficient for such purposes, as allowed under the terms of the Mortgage
or Applicable Regulations. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall (i) determine whether any such payments
are
made by the Mortgagor in a manner and at a time that is necessary to avoid
the
loss of the Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien and (ii) ensure that all insurance required to be maintained
on
the Mortgaged Property pursuant to this Agreement is maintained. If any such
payment has not been made and the Servicer receives notice of a tax lien with
respect to the Mortgage Loan being imposed, the Servicer will, promptly and
to
the extent required to avoid loss of the Mortgaged Property, advance or cause
to
be advanced funds necessary to discharge such lien on the Mortgaged Property.
The Servicer assumes full responsibility for the payment of all such bills
and
shall effect payments of all such bills irrespective of the Mortgagor’s faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances from its own funds to effect such
payments.
85
The
Servicer, on behalf of the Trustee, as mortgagee, will maintain in full force
and effect (to the extent a Mortgage Loan has a Primary Insurance Policy) a
Primary Insurance Policy issued by a Qualified Insurer with respect to each
Mortgage Loan for which such coverage is required. Such coverage will be
maintained until the Combined Loan-to-Value Ratio of the related Mortgage Loan
is reduced to 80% or less. The Servicer will not cancel or refuse to renew
any
Primary Insurance Policy in effect on the Closing Date that is required to
be
kept in force under this Agreement unless a replacement Primary Insurance Policy
for such cancelled or non-renewed policy is obtained from and maintained with
a
Qualified Insurer. The Servicer shall not take any action which would result
in
non-coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Servicer, would have been covered thereunder. In
connection with any assumption or substitution agreement entered into or to
be
entered into pursuant to Section 3.14, the Servicer shall promptly notify
the insurer under the related Primary Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as
a
condition to the continuation of coverage under the Primary Insurance Policy.
If
such Primary Insurance Policy is terminated as a result of such assumption
or
substitution of liability, the Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present, on behalf of itself and the Trustee, claims to the insurer under any
Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary
to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 3.04, any amounts collected by the
Servicer under any Primary Insurance Policy shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.05.
Section
3.09. Transfer
of Accounts.
The
Servicer may transfer the Collection Account or the Escrow Account to a
different depository institution from time to time. Upon such transfer, the
Servicer shall deliver to the Trustee and the Depositor, a certification or
letter agreement, as the case may be, as required pursuant to Sections 3.04
and 3.06.
Section
3.10. Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each first lien Mortgage Loan fire
and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser
of (i) the amount necessary to fully compensate for any damage or loss to
the improvements which are a part of such property on a replacement cost basis
or (ii) the Principal Balance of the Mortgage Loan, in each case in an
amount not less than such amount as is necessary to prevent the Mortgagor and/or
the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an
area identified in the Federal Register by the Flood Emergency Management Agency
as having special flood hazards and flood insurance has been made available,
the
Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the Principal Balance of the
Mortgage Loan, (ii) the maximum insurable value of the improvements
securing such Mortgage Loan or (iii) the maximum amount of insurance which
is available under the Flood Disaster Protection Act of 1973, as amended. The
Servicer shall also maintain on the REO Property for the benefit of the
Certificateholders, (x) fire and hazard insurance with extended coverage in
an amount which is at least equal to the replacement cost of the improvements
which are a part of such property, (y) public liability insurance and,
(z) to the extent required and available under the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Any amounts collected by the Servicer under any such policies other
than
amounts to be deposited in the Escrow Account and applied to the restoration
or
repair of the Mortgaged Property or REO Property, or released to the Mortgagor
in accordance with the Servicer’s normal servicing procedures, shall be
deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.05. It is understood and agreed that no earthquake or other
additional insurance is required to be maintained by the Servicer or the
Mortgagor or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to such Applicable Regulations as shall at any time be
in
force and as shall require such additional insurance. All such policies shall
be
endorsed with standard mortgagee clauses with loss payable to the Servicer
and
shall provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of or material change in coverage to the Servicer.
The
Servicer shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided,
however,
that
the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a general policy rating of
B:VI or better in Best’s Key Rating Guide and are licensed to do business in the
state wherein the property subject to the policy is located.
86
Section
3.11. Maintenance
of Mortgage Impairment Insurance Policy.
In
the
event that the Servicer shall obtain and maintain a blanket policy issued by
an
insurer that has a general policy rating of B:VI or better in Best’s Key Rating
Guide insuring against hazard losses on all of the Mortgage Loans, then, to
the
extent such policy provides coverage in an amount equal to the amount required
pursuant to Section 3.10 and otherwise complies with all other requirements
of Section 3.10, it shall conclusively be deemed to have satisfied its
obligations as set forth in Section 3.10, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with Section 3.10, and there
shall have been a loss which would have been covered by such policy, deliver
to
the Trustee for deposit in the Distribution Account the amount not otherwise
payable under the blanket policy because of such deductible clause, which amount
shall not be reimbursable to the Servicer from the Trust Fund. In connection
with its activities as servicer of the Mortgage Loans, the Servicer agrees
to
prepare and present, on behalf of the Trustee, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy. Upon
request of the Trustee, the Servicer shall cause to be delivered to the Trustee
a certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified without
thirty days prior written notice to the Trustee.
87
Section
3.12. Fidelity
Bond, Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket fidelity bond (the
“Fidelity
Bond”)
and an
errors and omissions insurance policy, with broad coverage with financially
responsible companies on all officers, employees or other persons acting in
any
capacity with regard to the Mortgage Loans to handle funds, money, documents
and
papers relating to the Mortgage Loans. The Fidelity Bond and errors and
omissions insurance shall be in the form of the Mortgage Banker’s Blanket Bond
and shall protect and insure the Servicer against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
persons. Such Fidelity Bond shall also protect and insure the Servicer against
losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 3.12 requiring the Fidelity Bond
and errors and omissions insurance shall diminish or relieve the Servicer from
its duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by Xxxxxx Mae in the Xxxxxx Xxx MBS Selling
and
Servicing Guide or by Xxxxxxx Mac in the Xxxxxxx Mac Servicer’s Guide. Upon the
Trustee’s request, the Servicer shall cause to be delivered to the requesting
party proof of coverage of the Fidelity Bond and errors and omissions insurance
policy and a statement that the surety and the insurer shall endeavor to notify
the Trustee within thirty (30) days prior to such Fidelity Bond and errors
and
omissions insurance policy’s termination or material modification.
Section
3.13. Title,
Management and Disposition of REO Property and Certain Delinquent Mortgage
Loans.
(a) In
the
event that title to a Mortgaged Property is acquired in foreclosure or by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken (pursuant
to a limited power of attorney to be provided by the Trustee to the Servicer)
in
the name of the Trustee or a nominee thereof (which nominee shall not be the
Servicer), on behalf of the Certificateholders, or in the event the Trustee
or a
nominee thereof (which nominee shall not be the Servicer) is not authorized
or
permitted to hold title to real property in the state where the REO Property
is
located, or would be adversely affected under the “doing business” or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Servicer from an attorney duly licensed
to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Trustee shall acknowledge in writing
that such title is being held as nominee for the benefit of the Trustee. The
Trustee’s name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that such title to such REO Property references this Agreement and the Trustee’s
capacity hereunder.
(b) In
the
event that the Trust Fund acquires any REO Property as aforesaid or otherwise
in
connection with a default or imminent default on a Mortgage Loan, the Servicer
shall dispose of such REO Property before the end of the third calendar year
beginning after the year of its acquisition by the Trust Fund for purposes
of
Section 860G(a)(8) of the Code or, at the expense of the Trust Fund,
request from the Internal Revenue Service, more than 60 days before the day
on
which the above-mentioned grace period would otherwise expire, an extension
of
the above-mentioned grace period, unless the Servicer obtains an Opinion of
Counsel, addressed to the Servicer and the Trustee, to the effect that the
holding by the Trust Fund of such REO Property subsequent to such period will
not: (i) result in the imposition of any tax on “prohibited transactions”
as defined in Section 860F of the Code; or (ii) cause any REMIC
constituting part of the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates are outstanding, in which case the Trust Fund may continue
to hold such REO Property (subject to any conditions contained in such
Opinion of Counsel). The Servicer shall be entitled to be reimbursed from the
Collection Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.05.
88
Subject
to compliance with applicable laws and regulations as shall at any time be
in
force, and notwithstanding any other provisions of this Agreement, no REO
Property acquired by the Trust Fund shall be rented (or allowed to continue
to
be rented) or otherwise used by or on behalf of the Trust Fund in such a manner
or pursuant to any terms that would: (i) cause such REO Property to fail to
qualify as “foreclosure property” within the meaning of Section 860G(a)(8)
of the Code; or (ii) subject any REMIC constituting part of the Trust Fund
to
the imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Sections 860F or 860G(c)
of the Code, unless the Servicer has agreed to indemnify and hold harmless
the
Trust Fund with respect to the imposition of any such taxes.
The
Servicer shall manage, conserve, protect and operate each REO Property for
the
Certificateholders and the Trust Fund solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to
fail
to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related
REMIC of any “income from non-permitted assets” within the meaning of
Section 860F(a)(2)(B) of the Code, or any “net income from foreclosure
property” which is subject to taxation under the REMIC Provisions. The Servicer
shall cause each REO Property to be inspected promptly upon the acquisition
of
title thereto and shall cause each REO Property to be inspected at least
annually thereafter. The Servicer shall make or cause to be made a written
report of each such inspection. Such reports shall be retained in the servicing
file and copies thereof shall be forwarded by the Servicer to the Trustee upon
request. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders and the Trust Fund.
With
respect to each REO Property, the Servicer shall account separately for each
REO
Property with respect to all funds collected and received in connection with
the
operation of such REO Property.
The
Servicer shall deposit or cause to be deposited, on a daily basis, within two
Business Days after determining the proper cash application after receipt of
such funds, in the Collection Account, all revenues received with respect to
each REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the related REO Property, including
the
cost of maintaining any hazard insurance pursuant to Section 3.10 hereof
and the fees of any managing agent acting on behalf of the
Servicer.
89
The
Servicer shall furnish to the Trustee, on each Servicer Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Trustee shall reasonably request.
The
Servicer shall use its best efforts to dispose of the REO Property as promptly
as is practically consistent with protecting the Certificateholders’
interests.
Each
REO
Disposition shall be carried out by the Servicer at such price and upon such
terms and conditions as the Servicer deems to be in the best interest of the
Certificateholders. If as of the date title to any REO Property was acquired
by
the Servicer there were outstanding unreimbursed Servicing Advances with respect
to the REO Property or the related Mortgage Loan, the Servicer, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Servicer as provided above, shall be deposited in the Collection
Account for distribution on the succeeding Servicer Remittance Date in
accordance with Section 4.01.
Any
REO
Disposition shall be for cash only (unless changes in the REMIC Provisions
made
subsequent to the Startup Day allow a sale for other consideration and an
Opinion of Counsel is obtained by the Servicer to the effect that such sale
shall not cause any REMIC constituting part of the Trust Fund to fail to qualify
as a REMIC).
(c) The
Servicer may write-off any Second Lien Mortgage Loan that has been Delinquent
for a period of 180 days or more.
Section
3.14. Due-on-Sale
Clauses; Assumption and Substitution Agreements.
When
a
Mortgaged Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall, except as set forth below, to the extent it has knowledge of
such conveyance or prospective conveyance, exercise its rights to accelerate
the
maturity of the related Mortgage Loan under any “due-on-sale” clause contained
in the related Mortgage or Mortgage Note; provided,
however,
that
the Servicer shall not exercise any such right if the “due-on-sale” clause, in
the reasonable belief of the Servicer, is not enforceable under applicable
law.
An Opinion of Counsel at the expense of the Servicer (which expense shall
constitute a Servicing Advance) delivered to the Trustee and the Depositor
to
the foregoing effect shall conclusively establish the reasonableness of such
belief. In such event, the Servicer shall make reasonable efforts to enter
into
an assumption and modification agreement with the Person to whom such property
has been or is about to be conveyed, pursuant to which such Person becomes
liable under the Mortgage Note and, unless prohibited by applicable law or
the
Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Servicer is authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted
as
Mortgagor and becomes liable under the Note. In addition to the foregoing,
the
Servicer shall not be required to enforce any “due-on-sale” clause if, in the
reasonable judgment of the Servicer, entering into an assumption and
modification agreement with a person to whom such Mortgaged Property shall
be
conveyed and releasing the original Mortgagor from liability would be in the
best interests of the Certificateholders. The Mortgage Loan, as assumed, shall
conform in all respects to the requirements, representations and warranties
of
this Agreement. The Servicer shall notify the Trustee that any such assumption
or substitution agreement has been completed by forwarding to the Trustee (or
the Custodian, as the case may be) the original copy of such assumption or
substitution agreement (indicating the Mortgage File to which it relates) which
copy shall be added by the Trustee (or the Custodian, as the case may be) to
the
related Mortgage File and which shall, for all purposes, be considered a part
of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. The Servicer shall be responsible for recording
any
such assumption or substitution agreements. In connection with any such
assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven.
Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to
the
Servicer as additional servicing compensation.
90
Notwithstanding
the foregoing paragraph or any other provision of this Agreement, the Servicer
shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or any assumption which the Servicer may be restricted by
law
from preventing, for any reason whatsoever.
Section
3.15. Notification
of Adjustments.
On
each
Adjustment Date, the Servicer shall make Mortgage Interest Rate adjustments
for
each Adjustable-Rate Mortgage Loan in compliance with the requirements of the
related Mortgage and Mortgage Note and Applicable Regulations. The Servicer
shall execute and deliver the notices required by each Mortgage and Mortgage
Note and Applicable Regulations regarding Mortgage Interest Rate adjustments.
The Servicer also shall provide timely notification to the Trustee of all
applicable data and information regarding such Mortgage Interest Rate
adjustments and the Servicer’s methods of implementing such Mortgage Interest
Rate adjustments. Upon the discovery by the Servicer, the Trustee that the
Servicer has failed to adjust or has incorrectly adjusted a Mortgage Interest
Rate or a Monthly Payment pursuant to the terms of the related Mortgage Note
and
Mortgage, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor; provided,
however,
the
Servicer shall be held harmless with respect to any Mortgage Interest Rate
adjustments made by any servicer prior to the Servicer. Under no circumstances
shall the Trustee be responsible for monitoring or recalculating any Mortgage
Interest Rate adjustment by the Servicer.
Section
3.16. Optional
Purchases and Sales of Mortgage Loans by Servicer.
The
Servicer (or an affiliate of the Servicer) may, at its option, purchase a
Mortgage Loan or REO Property which becomes 120 or more days Delinquent or
for
which the Servicer has accepted a deed in lieu of foreclosure, during the period
commencing on the first day of the calendar quarter succeeding the calendar
quarter in which the Initial Delinquency Date occurred with respect to such
Mortgage Loan and ending on the last Business Day of such calendar quarter.
If
the Servicer (or an affiliate of the Servicer) does not exercise its purchase
right with respect to a Mortgage Loan during the period specified in the
preceding sentence, such Mortgage Loan shall thereafter again become eligible
for purchase pursuant to the preceding sentence only after the Mortgage Loan
ceases to be 120 days or more Delinquent and thereafter becomes 120 days
Delinquent again. The “Initial
Delinquency Date”
of
a
Mortgage Loan shall mean the date on which the Mortgage Loan first became 120
days Delinquent. Prior to repurchase pursuant to this Section 3.16, the
Servicer shall be required to continue to make monthly advances pursuant to
Section 4.07. The Servicer shall not use any procedure in selecting
Mortgage Loans to be repurchased which is materially adverse to the interests
of
the Certificateholders. The Servicer shall purchase such (i) delinquent Mortgage
Loan at a price equal to the Principal Balance of the Mortgage Loan plus accrued
interest thereon at the Mortgage Interest Rate from the date to which interest
has last been paid to the Trust Fund to the date of purchase plus any
unreimbursed Servicing Advances and Advances or (ii) REO Property at its fair
market value as determined in good faith by the Servicer. Any such repurchase
of
a Mortgage Loan or REO Property pursuant to this Section 3.16 shall be
accomplished by delivery to the Trustee for deposit in the Distribution Account
of the amount of the purchase price. The Trustee shall immediately effectuate
the conveyance of such delinquent Mortgage Loan or REO Property to the Servicer
to the extent necessary, including the prompt delivery of all documentation
to
the Servicer.
91
Section
3.17. Trustee
to Cooperate; Release of Files.
(a) Upon
the
payment in full of any Mortgage Loan (including any liquidation of such Mortgage
Loan through foreclosure or otherwise, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes), the Servicer shall deliver to the Custodian two executed copies
of a completed “Request for Release” in the form of Exhibit
E.
Upon
receipt of such Request for Release of Documents, the Custodian shall promptly
release the related Mortgage File, in trust to (i) the Servicer, or
(ii) such other party identified in the related Request for Release. Upon
any such payment in full, or the receipt of such notification that such funds
have been placed in escrow, the Servicer shall direct the Trustee in writing
to
execute an instrument of satisfaction (or assignment of Mortgage without
recourse, representation or warranty) regarding the Mortgaged Property relating
to such Mortgage, which instrument of satisfaction or assignment, as the case
may be, shall be delivered to the Person or Persons entitled thereto against
receipt therefor of payment in full, it being understood and agreed that no
expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Collection Account.
In lieu of executing any such satisfaction or assignment, as the case may be,
the Servicer may prepare and submit to the Trustee a satisfaction (or assignment
without recourse, representation or warranty if requested by the Person or
Persons entitled thereto) in form for execution by the Trustee with all
requisite information completed by the Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment, as the case
may
be, and deliver the same with the related Mortgage File, as
aforesaid.
(b) From
time
to time and as appropriate in the servicing of any Mortgage Loan, including,
without limitation, foreclosure or other comparable conversion of a Mortgage
Loan or collection under any insurance policy relating to a Mortgage Loan,
the
Trustee shall (except in the case of the payment or liquidation pursuant to
which the related Mortgage File is released to an escrow agent or an employee,
agent or attorney of the Trustee), upon written request of the Servicer and
delivery to the Custodian of two executed copies of a “Request for Release” in
the form of Exhibit
E
signed
by a Servicing Officer, release the related Mortgage File to the Servicer and
shall execute such documents as shall be necessary to the prosecution of any
such proceedings, including, without limitation, an assignment without recourse,
representation or warranty of the related Mortgage to the Servicer. Such receipt
shall obligate the Servicer to return the Mortgage File to the Custodian when
the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a Request for Release
evidencing such liquidation, the receipt shall be released by the Trustee (or
the Custodian, as the case may be) to the Servicer.
92
(c) Subject
to Section 3.01, the Servicer shall have the right to accept applications of
Mortgagors for consent to (i) partial releases of Mortgages,
(ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages and (iv) second mortgage subordination agreements. No
application for approval shall be considered by the Servicer unless: (w) it
has received an Opinion of Counsel, addressed to the Trustee (which opinion
shall not be an expense of the Trustee or the Trust Fund) that such sale,
disposition, substitution, acquisition or contribution will not affect adversely
the status of any REMIC constituting part of the Trust Fund as a REMIC or cause
any REMIC constituting part of the Trust Fund to be subject to a tax on
“prohibited transactions” or “contributions” pursuant to the REMIC Provisions;
(x) the provisions of the related Note and Mortgage have been complied
with; (y) the Combined Loan-to-Value Ratio and debt-to-income ratio after
any release does not exceed the maximum Combined Loan-to-Value Ratio and
debt-to-income ratio established in accordance with the underwriting standards
of the Mortgage Loans; and (z) the lien priority of the related Mortgage is
not affected. Upon receipt by the Trustee of a Servicing Officer’s certificate
setting forth the action proposed to be taken in respect of a particular
Mortgage Loan and certifying that the criteria set forth in the immediately
preceding sentence have been satisfied, the Trustee shall execute and deliver
to
the Servicer the consent or partial release so requested by the Servicer. A
proposed form of consent or partial release, as the case may be, shall accompany
any Servicing Officer’s certificate delivered by the Servicer pursuant to this
paragraph.
Section
3.18. Servicing
Compensation.
As
compensation for its activities hereunder, the Servicer shall be entitled to
retain the amount of the Servicing Fee with respect to each Mortgage Loan
(including REO Properties). The Servicer shall be entitled to retain additional
servicing compensation in the form of Prepayment Interest Excess, release fees,
bad check charges, assumption fees, modification or extension fees, late payment
charges, customary real estate referral fees or any other service-related fees,
Insurance Proceeds and Liquidation Proceeds not required to be deposited in
the
Collection Account or the Distribution Account and similar items, to the extent
collected from Mortgagors.
Section
3.19. Annual
Statement as to Compliance.
The
Servicer shall deliver or cause to be delivered, and shall cause each
Subservicer engaged by the Servicer to deliver or cause to be delivered to
the
Depositor, the Rating Agencies and the Trustee on or before March 15th of each
calendar year, commencing in 2008, an Officer’s Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer or such
Subservicer, as applicable, during the preceding calendar year and of
performance under this Agreement, or the applicable Subservicing Agreement,
as
the case may be, has been made under such officer’s supervision, and (ii) to the
best of such officer’s knowledge, based on such review, the Servicer or any
Subservicer, and each Subcontractor utilized by the Servicer and determined
by
the Servicer pursuant to Section 3.30(e) to be “participating in a servicing
function” within the meaning of Item 1122 of Regulation AB, as applicable, has
fulfilled all of its obligations under this Agreement in all material respects
throughout such year, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officers and the nature and status thereof. Promptly after receipt of such
Officer’s Certificate, the Depositor shall review each such Officer’s
Certificate and, if applicable, consult with the Servicer as to the nature
of
any defaults by the Servicer or any related Subservicer in the fulfillment
of
the Servicer’s or any related Subservicer’s obligations. The obligations of the
Servicer or a Subservicer under this Section apply to any Servicer that serviced
a Mortgage Loan during the applicable period, whether or not the Servicer or
a
Subservicer is acting as the Servicer or a Subservicer at the time such
Officer’s Certificate is required to be delivered. For purposes of (ii) above,
the Servicer or Subservicer will be entitled to rely reasonably upon a
certification of any Subcontractor not affiliated with the Servicer or
Subservicer. Notwithstanding anything to the contrary set forth herein, the
statement required under this Section 3.19 with respect to any Subservicer
or
Subcontractor shall not be required to be delivered with respect to any year
in
which an annual report on Form 10-K for the Trust is not required to be filed
pursuant to the Exchange Act.
93
Section
3.20. Assessment
of Compliance with Servicing Criteria; Independent Public Accountants’
Attestation.
(a) Not
later
than March 15th of each calendar year commencing in 2008, the Servicer and
the
Custodian (pursuant to the Custodial Agreement), each shall deliver, and the
Servicer shall cause each Subservicer engaged by the Servicer and the Servicer
shall cause each Subcontractor utilized by the Servicer and determined by the
Servicer pursuant to Section 3.30(e) to be “participating in a servicing
function” within the meaning of Item 1122 of Regulation AB, to deliver, and not
later than March 15th of each calendar year in which the annual report on Form
10-K for the Trust contemplated by this Agreement is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, (or, if such March 15th is not a Business Day, the immediately
preceding Business Day), the Trustee shall deliver, and the Trustee shall cause
each Subcontractor utilized by the Trustee and determined by the Trustee to
be
“participating in a servicing function” within the meaning of Item 1122 of
Regulation AB, to deliver, each at its own expense, to the Depositor and the
Trustee, with a copy to the Rating Agencies, a report on an assessment of
compliance with the Servicing Criteria that contains (A) a statement by such
party of its responsibility for assessing compliance with the Servicing Criteria
applicable to it, (B) a statement that such party used the Servicing Criteria
to
assess compliance with the applicable Servicing Criteria, (C) such party’s
assessment of compliance with the applicable Servicing Criteria as of and for
the period ending the end of the fiscal year covered by the Form 10-K required
to be filed pursuant to Section 3.29, setting forth any material instance of
noncompliance with the applicable Servicing Criteria, and (D) a statement that
a
registered public accounting firm has issued an attestation report on such
Person’s assessment of compliance with the applicable Servicing Criteria as of
and for such period. Each such assessment of compliance report shall be
delivered to the Depositor and shall address each of the Servicing Criteria
applicable to such party specified on a certification substantially in the
form
of Exhibit
S
hereto
delivered to the Depositor on the Closing Date. Notwithstanding anything to
the
contrary set forth herein, the statements and attestations required under this
Section 3.20 with respect to any Subservicer or Subcontractor shall not be
required to be delivered with respect to any year in which an annual report
on
Form 10-K for the Trust is not required to be filed pursuant to the Exchange
Act.
94
(b) Not
later
than March 15th of each calendar year commencing in 2008, the Servicer and
the
Custodian (pursuant to the Custodial Agreement) shall, and the Servicer shall
cause each Subservicer engaged by the Servicer and each Subcontractor utilized
by the Servicer and determined by the Servicer pursuant to Section 3.30(e)
to be
“participating in a servicing function” within the meaning of Item 1122 of
Regulation AB, to, cause, and not later than March 15 of each calendar year
in
which the Depositor’s annual report on Form 10-K with respect to the
transactions contemplated by this Agreement is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission
(or, if such March 15 is not a Business Day, the immediately preceding Business
Day), the Trustee shall cause, each at its own expense, a registered public
accounting firm (which may also render other services to such party) and that
is
a member of the American Institute of Certified Public Accountants to furnish
a
report to the Trustee and the Depositor, with a copy to the Rating Agencies,
to
the effect that (i) it has obtained a representation regarding certain matters
from the management of such Person, which includes an assertion that such Person
has complied with the Servicing Criteria and (ii) on the basis of an examination
conducted by such firm in accordance with standards for attestation engagements
issued or adopted by The Public Company Accounting Oversight Board, it is
expressing an opinion as to whether such Person’s compliance with the Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such Person’s assessment of compliance with the
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. Each such related accountant’s
attestation report shall be in accordance with Rules 1-02(a)(3) and 2-02(g)
of
Regulation S-X under the Securities Act and the Exchange Act. Notwithstanding
anything to the contrary set forth herein, the statements and attestations
required under this Section 3.20 with respect to any Subservicer or
Subcontractor shall not be required to be delivered with respect to any year
in
which an annual report on Form 10-K for the Trust is not required to be filed
pursuant to the Exchange Act.
(c) On
the
Closing Date, the Servicer, the Trustee and the Custodian (pursuant to the
Custodial Agreement) shall furnish to the Depositor the Servicing Criteria,
substantially in the form of Exhibit
S
hereto
appropriately completed, to be subject of the assessment of compliance to be
delivered pursuant to Section 3.20(a) by each of them (and in the case of the
Servicer, each Subservicer engaged by such Servicer and in the case of the
Servicer and Trustee each Subcontractor utilized by the Servicer or the Trustee,
as applicable, and determined by the Servicer pursuant to Section 3.30(e) or
the
Trustee, as applicable, to be “participating in a servicing function” within the
meaning of Item 1122 of Regulation AB).
95
Section
3.21. Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
The
Servicer shall provide to the Trustee, Certificateholders that are federally
insured savings and loan associations, the Office of Thrift Supervision, the
FDIC and the supervisory agents and examiners of each of the foregoing (which,
in the case of supervisory agents and examiners, may be required by applicable
state and federal regulations) access to the documentation regarding the
Mortgage Loans, such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it.
Section
3.22. Reserved.
Section
3.23. Obligations
of the Servicer in Respect of Compensating Interest.
Not
later
than the close of business on each Servicer Remittance Date, the Servicer shall
deliver to the Trustee for deposit in the Distribution Account an amount
(“Compensating
Interest”)
equal
to the lesser of (A) the aggregate of the Prepayment Interest Shortfalls on
the Mortgage Loans for the related Distribution Date resulting from Principal
Prepayments in Full on the Mortgage Loans during the related Prepayment Period
and (B) 50% of (x) its aggregate Servicing Fee received in the related
Collection Period and (y) the Excess Servicing Fee with respect to such
Distribution Date. The Servicer shall apply Compensating Interest to offset
any
Prepayment Interest Shortfalls. The Servicer shall not have the right to
reimbursement for any amounts remitted to the Trustee in respect of Compensating
Interest. Such amounts so remitted shall be included in the Interest Remittance
Amount and distributed therewith on the next Distribution Date. The Servicer
shall not be obligated to pay Compensating Interest with respect to Relief
Act
Interest Shortfalls, shortfalls due to bankruptcy proceedings or Principal
Prepayments in part.
Section
3.24. Obligations
of the Servicer in Respect of Mortgage Interest Rates and Monthly
Payments.
In
the
event that a shortfall in any collection on or liability with respect to any
Mortgage Loan results from or is attributable to adjustments to Mortgage
Interest Rates, Monthly Payments or Principal Balances that were made by the
Servicer in a manner not consistent with the terms of the related Mortgage
Note
and this Agreement, the Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Trustee for deposit in the Distribution Account
from its own funds the amount of any such shortfall and shall indemnify and
hold
harmless the Trust Fund, the Trustee, the Depositor and any successor servicer
in respect of any such liability. Such indemnities shall survive the termination
or discharge of this Agreement.
Section
3.25. Investment
of Funds in the Collection Account and the Distribution Account.
(a) The
Servicer (with respect to the Collection Account) and the Trustee (with respect
to the Distribution Account) may direct any depository institution maintaining
the Collection Account or Distribution Account, as the case may be, to invest
the funds in the Collection Account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if a Person other than the Trustee is the obligor thereon, and
(ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Trustee is the
obligor thereon. In the absence of such direction, funds in the Collection
Account and the Distribution Account shall remain uninvested. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in the Collection Account or Distribution Account shall be made in
the
name of the Trustee or in the name of a nominee of the Trustee. The Trustee
shall be entitled to sole possession (except with respect to investment
direction of funds held in the Collection Account) over each such investment
and
the income thereon, and any certificate or other instrument evidencing any
such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment
to
the Trustee or its nominee. In the event amounts on deposit in the Collection
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee shall at the direction of the Servicer:
96
|
(x)
|
consistent
with any notice required to be given thereunder, demand that payment
thereon be made on the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of (1) all amounts
then payable thereunder and (2) the amount required to be withdrawn
on such date; and
|
|
(y)
|
demand
payment of all amounts due thereunder promptly upon determination
by a
Responsible Officer of the Trustee that such Permitted Investment
would
not constitute a Permitted Investment in respect of funds thereafter
on
deposit in the Collection Account.
|
(b) All
income and gain realized from the investment of funds in the Collection Account
shall be for the benefit of the Servicer. All income and gain realized from
the
investment of funds in the Distribution Account shall be for the benefit of
the
Trustee. The Servicer shall deposit in the Collection Account and the Trustee
shall deposit in the Distribution Account the amount of any loss incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss.
(c) Except
as
otherwise expressly provided in this Agreement, if any default occurs in the
making of a payment due under any Permitted Investment, or if a default occurs
in any other performance required under any Permitted Investment, the Trustee
may and, subject to Section 8.01 and Section 8.02(a)(v), upon the
request of the Holders of Certificates representing more than 50% of the Voting
Rights allocated to any Class of Certificates, shall take such action as may
be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
Except
as
set forth in clause (b) above with respect to the Distribution Account, the
Trustee shall not in any way be held liable by reason of any insufficiency
in
any Account held by the Trustee resulting from any investment loss on any
Permitted Investment included therein (except to the extent that the Trustee
is
the obligor and has defaulted thereon).
97
Section
3.26. Liability
of Servicer; Indemnification.
(a) Subject
to clause (b) below and Section 6.03, the Servicer (except the Trustee if it
is
required to succeed the Servicer hereunder) indemnifies and holds the Trustee,
the Seller, the Depositor and each Certificateholder harmless against any and
all claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Depositor and any Certificateholder may sustain in any way related
to the failure of the Servicer to perform its duties and service the Mortgage
Loans in compliance with the Servicing Standards. The Servicer shall immediately
notify the Trustee, the Depositor and each Certificateholder if a claim is
made
that may result in such claims, losses, penalties, fines, forfeitures, legal
fees or related costs, judgments, or any other costs, fees and expenses, and
the
Servicer shall assume (with the consent of the Trustee) the defense of any
such
claim and pay all expenses in connection therewith, including reasonable counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which
may
be entered against the Servicer, Trustee, the Depositor and/or Certificateholder
in respect of such claim. The provisions of this Section 3.26 shall survive
the
termination of this Agreement and the payment of the outstanding
Certificates.
(b) None
of
the Depositor, the Seller, the Servicer, or any of the directors, officers,
employees or agents of the Depositor, the Seller or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken,
or for refraining from the taking of any action, in good faith pursuant to
this
Agreement, or for errors in judgment; provided,
however,
that
this provision shall not protect the Depositor, the Seller or the Servicer
or
any such Person against any breach of warranties or representations made herein,
or against any specific liability imposed on the Servicer for a breach of the
Servicing Standard, or against any liability which would otherwise be imposed
by
reason of its respective willful misfeasance, bad faith, fraud or negligence
in
the performance of its duties or by reasons of negligent disregard of its
respective obligations or duties hereunder.
The
Depositor, the Servicer, the Seller and any director, officer, employee or
agent
of the Depositor, the Seller or the Servicer, may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted
by
any appropriate Person with respect to any matters arising hereunder. The
Depositor, the Servicer, the Seller, and any director, officer, employee or
agent of the Depositor, the Seller or the Servicer shall be indemnified and
held
harmless by the Trust Fund against any loss, liability or expense incurred
in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred in connection with any legal
action incurred by reason of its respective misfeasance, bad faith, fraud or
negligence, a breach of a representation or warranty hereunder or (in the case
of the Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor, the Seller nor the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action unless such action is related to its respective duties under this
Agreement and in its opinion does not expose it to any expense or liability;
provided,
however,
that
the Depositor, the Seller or the Servicer may in its discretion undertake any
action related to its obligations hereunder which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders
hereunder.
98
Section
3.27. Reports
of Foreclosure and Abandonment of Mortgaged Properties.
On
or
before the last day of February of each year beginning in 2008, the Servicer
shall file the reports of foreclosure and abandonment of any Mortgaged Property
required by Section 6050J of the Code with the Internal Revenue Service and
provide an Officer’s Certificate certifying its compliance with this Section
3.27 to the Trustee. The reports from the Servicer shall be in form and
substance sufficient to meet the reporting requirements imposed by such
Section 6050J.
Section
3.28. Protection
of Assets.
(a) Except
for transactions and activities entered into in connection with the
securitization that is the subject of this Agreement, the Trust is not
authorized and has no power to:
(1) borrow
money or issue debt;
(2) merge
with another entity, reorganize, liquidate or sell assets; or
(3) engage
in
any business or activities.
(b) Each
party to this Agreement agrees that it will not file an involuntary bankruptcy
petition against the Trustee or the Trust Fund or initiate any other form of
insolvency proceeding until after the Certificates have been paid.
Section
3.29. Periodic
Filings.
(a) The
Trustee and the Servicer shall reasonably cooperate with the Depositor in
connection with the reporting requirements of the Trust under the Exchange
Act.
As set forth below, the Trustee shall prepare for execution by the Servicer
any
Form 10-K and shall prepare for execution by the Depositor any Forms 8-K, 10-D
or 12b-25 required by the Exchange Act and the rules and regulations of the
Commission thereunder, in order to permit the timely filing thereof, and the
Trustee shall file (via the Commission’s Electronic Data Gathering and Retrieval
System) such Forms executed by the Servicer or Depositor, as the case may
be.
(b) Each
Form
10-D shall be filed by the Trustee within 15 days after each Distribution Date,
including (i) a copy of the Monthly Statement to the Certificateholders for
such
Distribution Date as an exhibit thereto; and (ii) such other information
(“Additional
Form 10-D Disclosure”)
as is
required by Form 10-D as listed on Exhibit
T-2
and
provided by the party listed on Exhibit
T-2
to the
Trustee, the Servicer and the Depositor in the manner provided in the following
paragraph; provided that such information is provided to the Trustee no later
than the fifth Business Day immediately following the related Distribution
Date.
The Trustee shall not be responsible for determining what information is
required to be filed on Form 10-D (unless such information is specific to the
Trustee or any Servicing Function Participant utilized by the Trustee, in which
case the Trustee will be responsible for making such a determination) or for
any
filing that is not made on a timely basis in accordance with Regulation AB
in
the event that such information is not delivered to the Trustee on or prior
to
the date specified in Section 4.07 hereof. The Trustee will have no duty or
liability for any failure hereunder to determine or prepare any Additional
Form
10-D Disclosure, except as set forth in the next paragraph.
99
As
set
forth on Exhibit
T-2
hereto,
within 5 calendar days after the related Distribution Date, (i) the parties
described on Exhibit
T-2
shall be
required to provide to the Trustee and to the Depositor, to the extent known
by
a responsible officer thereof, in XXXXX-compatible format, or in such other
format as otherwise agreed upon by the Trustee and such party, the form and
substance of any Additional Form 10-D Disclosure, if applicable, together with
an Additional Disclosure Notification in the form of Exhibit
U
hereto
(an “Additional
Disclosure Notification”)
and
(ii) the Depositor will approve, as to form and substance, or disapprove, as
the
case may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D.
The Trustee has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit
T-2
(other
than with respect to the Trustee or any Servicing Function Participant utilized
by the Trustee) of their duties under this paragraph or proactively solicit
or
procure from such parties any Additional Form 10-D Disclosure.
After
preparing the Form 10-D, the Trustee shall forward electronically a copy of
the
Form 10-D to the Depositor and the Servicer no later than the 10th
calendar
day after the related Distribution Date. Within two Business Days after receipt
of such copy, but no later than the 12th calendar day after the Distribution
Date, the Depositor and the Servicer shall notify the Trustee in writing (which
may be furnished electronically) of any changes to or approval of such Form
10-D
and the Depositor shall sign the Form 10-D. If a Form 10-D cannot be filed
on
time or if a previously filed Form 10-D needs to be amended, the Trustee will
follow the procedures set forth in Section 3.29(h). Promptly (but no later
than
one Business Day) after filing with the Commission, the Trustee will make
available on its internet website a final executed copy of each Form 10-D filed
by the Trustee. Each party to this Agreement acknowledges that the performance
by the Trustee of its duties under this Section 3.29(b) related to the timely
preparation, arrangement for execution and filing of Form 10-D is contingent
upon such parties strictly observing all applicable deadlines in the performance
of their duties under this Section 3.29(b). The Trustee shall not have any
liability for any loss, expense, damage, claim arising out of or with respect
to
any failure to properly prepare, execute and/or timely file such Form 10-D,
where such failure results from the Trustee’s inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto (other
than any Servicing Function Participant engaged by the Trustee) or any Servicing
Function Participant of any party hereto needed to prepare, arrange for
execution or file such Form 10-D, not resulting from its own negligence, bad
faith or willful misconduct.
On
or
prior to the 90th
day
after the end of each year commencing in 2008 (or such earlier date as may
be
required by the Exchange Act and the Rules and Regulations of the Commission),
the Trustee shall file a Form 10-K. Such Form 10-K shall include the information
listed on Exhibit
T-3
and each
party shall provide the information they are responsible for pursuant to
Exhibit
T-3.
Such
Form 10-K shall include as exhibits (to the extent they have been delivered
to
the Trustee in accordance with the timeframes contained in this Agreement)
(i)
each annual statement as to compliance described under Section 3.19 of this
Agreement and (ii) the annual report on assessments of compliance and annual
independent public accountant’s servicing reports described under Section 3.20
of the Agreement, in each case to the extent they have been timely delivered
to
the Trustee. Promptly upon receipt by the Servicer of (i) (A) any Officer’s
Certificate relating to the Trustee’s or Subservicer’s annual statement as to
compliance delivered pursuant to Section 3.19 of this Agreement and (B) any
annual report on assessment of compliance and annual independent public
accountant’s servicing report, pursuant to Section 3.20 of this Agreement, the
Servicer shall review such Officer’s Certificate’s and reports. As part of the
Form 10-K required to be filed pursuant to this Section 3.29, the Servicer
shall
include (i) each such annual statement as to compliance, annual report on
assessment of servicing compliance with servicing criteria and annual
independent public accountant’s servicing report required to be delivered under
this Agreement. In addition, if there is any material instance of non-compliance
disclosed in a report delivered pursuant to Section 3.19 or 3.20 of this
Agreement, a description of each material instance of non-compliance shall
be
provided to the Trustee and the Trustee shall include such disclosure in the
Form 10-K required to be filed pursuant to this Section 3.29. If the Trustee
is
unable to file such Form 10-K by the applicable due date, the Trustee shall
prepare for execution by the Servicer and file a Form 12b-25 not later than
one
Business Day following the due date for such Form 10-K. Within 5 days following
the filing of such Form 12b-25, the Trustee shall prepare and file the related
Form 10-K. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit
P-1,
with
such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission (the “Sarbanes
Certification”),
which
shall, except as described below, be signed by the senior officer in charge
of
the servicing function of the Servicer. The Trustee shall have no liability
with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee’s inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. If an annual report on assessment of compliance and the related annual
independent public accountant’s servicing report described under Section 3.20 of
this Agreement is not included as an exhibit to such Form 10-K, the party
responsible for delivering such report shall provide disclosure that such report
is not included and an explanation why such report is not included.
100
Any
disclosure or information in addition to the attachments listed above that
is
required to be included on Form 10-K (“Additional
Form 10-K Disclosure”)
shall
be reported by the parties set forth on Exhibit
T-3
to the
Depositor, the Servicer and the Trustee and directed and approved by the
Depositor and the Servicer pursuant to the following paragraph, and the Trustee
will have no duty or liability for any failure hereunder to determine or prepare
any Additional Form 10-K Disclosure, except as set forth in the next
paragraph.
As
set
forth on Exhibit
T-3
hereto,
no later than March 15 of each year, commencing in 2008, (i) the parties
described on Exhibit
T-3
shall be
required to provide to the Trustee, the Servicer and the Depositor, to the
extent known by a responsible officer thereof, in XXXXX-compatible format,
or in
such other format as otherwise agreed upon by the Trustee and such party, the
form and substance of any Additional Form 10-K Disclosure, together with an
Additional Disclosure Notification, and (ii) the Depositor and the Servicer
will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Trustee
has
no duty under this Agreement to monitor or enforce the performance by the
parties listed on Exhibit
T-3
(other
than with respect to the Trustee or any Servicing Function Participant engaged
by the Trustee) of their duties under this paragraph or proactively solicit
or
procure from such parties any Additional Form 10-K Disclosure information.
The
Servicer will be responsible for any reasonable fees and expenses assessed
or
incurred by the Trustee in connection with including any Additional Form 10-K
Disclosure on Form 10-K pursuant to this paragraph unless the party required
to
provide the Additional Form 10-K Disclosure information is the Depositor as
specified in Exhibit T-3, in which case the Depositor shall be responsible
for
such fees and expenses.
101
After
preparing the Form 10-K, the Trustee shall forward electronically a copy of
the
Form 10-K to the Depositor and the Servicer. Within three Business Days after
receipt of such copy, but no later than March 25th, the Depositor and the
Servicer shall notify the Trustee in writing (which may be furnished
electronically) of any changes to or approval of such Form 10-K and the Servicer
shall cause a senior officer in charge of the servicing function of the Servicer
shall return a signed copy of the Form 10-K to the Trustee. If a Form 10-K
cannot be filed on time or if a previously filed Form 10-K needs to be amended,
the Trustee will follow the procedures set forth in Section 3.29(e). Promptly
(but no later than one Business Day) after filing with the Commission, the
Trustee will make available on its internet website a final executed copy of
each Form 10-K filed by the Trustee. The parties to this Agreement acknowledge
that the performance by the Trustee of its duties under this Section 3.29(c)
related to the timely preparation, arrangement for execution and filing of
Form
10-K is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties under this Section 3.29(c), Section 3.29(d),
Section 3.19 and Section 3.20. The Trustee shall not have any liability for
any
loss, expense, damage or claim arising out of or with respect to any failure
to
properly prepare, arrange for execution and/or timely file such Form 10-K,
where
such failure results from the Trustee’s inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto or
any
Servicing Function Participant (other than the Trustee or any Servicing Function
Participant utilized by the Trustee) needed to prepare, arrange for execution
or
file such Form 10-K, not resulting from its own negligence, bad faith or willful
misconduct.
In
connection with the Form 10-K, the Trustee shall sign a back-up certification
(in the form attached hereto as Exhibit
P-2)
for the
benefit of the Servicer and its officers, directors and Affiliates. Each such
back-up certification shall be delivered to the Servicer no later than March
15th of each year (or if such day is not a Business Day, the immediately
preceding Business Day) and the Servicer shall deliver the Sarbanes
Certification to be filed with each Form 10-K to the Trustee and the Depositor
no later than March 20th of each year (or if such day is not a Business Day,
the
immediately preceding Business Day). In the event that prior to the filing
date
of the Form 10-K in March of each year, if any party hereto has actual knowledge
of information material to the Sarbanes Certification, that party shall promptly
notify the Servicer and each of the other parties signing the
certifications.
In
addition, (i) the Trustee shall, subject to Sections 8.01 and 8.02 hereof,
indemnify and hold harmless the Depositor, the Servicer and their 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 (other than punitive damages) arising out of or
based upon (A) any inaccuracy in the Assessment of Compliance with the Servicing
Criteria pursuant to Section 3.20 provided by the Trustee or any Servicing
Function Participant appointed by the Trustee and (B) any inaccuracy in the
back-up certification provided by the Trustee pursuant to this Section 3.29(b),
and (C) any breach by the Trustee of its obligations (or of the obligations
of
any Servicing Function Participant appointed by the Trustee) under Sections
3.20
and 3.29 or the Trustee’s or such Servicing Function Participant’s negligence,
bad faith or willful misconduct in connection therewith and (ii) Servicer shall
indemnify and hold harmless the Depositor and the Trustee and any of 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 (other than punitive
damages) arising out of or based upon any breach of the Servicer’s obligations
under Section 3.29 or any any material misstatement contained in any Assessment
of Compliance provided on its behalf pursuant to Section 3.20 or the Sarbanes
Certification. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, the Servicer, the Trustee and
their
officers, directors and Affiliates, then the indemnifying party agrees that
it
shall contribute to the amount paid or payable by the indemnified party and
any
of their officers, directors or Affiliates as a result of the losses, claims,
damages or liabilities of the indemnified party, any of their officers,
directors or Affiliates in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and each of their officers, directors
and Affiliates on the one hand and the indemnified party on the other in
connection with a breach of the indemnifying party’s obligations under this
Section 3.29(b) or Section 3.20 or the indemnifying party’s negligence, bad
faith or willful misconduct in connection therewith.
102
(c) Within
four (4) Business Days after the occurrence of a Reportable Event, and if
requested by the Depositor, the Trustee shall prepare and file on behalf of
the
Trust any Form 8-K, as required by the Exchange Act, provided that the Depositor
shall file the initial Form 8-K in connection with the issuance of the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K other than the initial
Form 8-K (“Form
8-K Disclosure Information”)
shall
be reported by the parties set forth on Exhibit
T-1
to the
Depositor, the Servicer and the Trustee (unless such item is specific to the
Trustee, in which case the Trustee will be deemed to have notice) and directed
and approved by the Depositor pursuant to the following paragraph, and the
Trustee will have no duty or liability for any failure hereunder to determine
or
prepare any Form 8-K Disclosure Information or any Form 8-K, except as set
forth
in the next paragraph.
As
set
forth on Exhibit
T-1
hereto,
for so long as the Trust is subject to the Exchange Act reporting requirements,
no later than the close of business (New York City time) on the 2nd Business
Day
after the occurrence of a Reportable Event (i) the parties described on
Exhibit
T-1
shall be
required to provide to the Trustee, the Servicer and to the Depositor, to the
extent known by a responsible officer thereof, in XXXXX-compatible form, or
in
such other form as otherwise agreed upon by the Trustee and such party, the
form
and substance of any Form 8-K Disclosure Information, if applicable, together
with an Additional Disclosure Notification in the form attached hereto as
Exhibit
U
and (ii)
the Depositor will approve, as to form and substance, or disapprove, as the
case
may be, the inclusion of the Form 8-K Disclosure Information. The Trustee has
no
duty under this Agreement to monitor or enforce the performance by the parties
listed on Exhibit
T-1
(other
than with respect to the Trustee or any Servicing Function Participant utilized
by the Trustee) of their duties under this paragraph or proactively solicit
or
procure from such parties any Form 8-K Disclosure information. The Servicer
will
be responsible for any reasonable fees and expenses assessed or incurred by
the
Trustee in connection with including any Form 8-K Disclosure Information on
Form
8-K pursuant to this paragraph unless the party required to provide the Form
8-K
Disclosure Information is the Depositor as specified in Exhibit T-1, in which
case the Depositor shall be responsible for such fees and expenses.
103
After
preparing the Form 8-K, the Trustee shall forward electronically a copy of
the
Form 8-K to the Depositor. Promptly, but no later than the close of business
on
the third Business Day after the Reportable Event, the Depositor shall notify
the Trustee in writing (which may be furnished electronically) of any changes
to
or approval of such Form 8-K and the Depositor shall return a signed copy of
the
Form 8-K to the Trustee. If a Form 8-K cannot be filed on time or if a
previously filed Form 8-K needs to be amended, the Trustee will follow the
procedures set forth in Section 3.29(e). Promptly (but no later than one
Business Day) after filing with the Commission, the Trustee will make available
on its internet website a final executed copy of each Form 8-K filed by it.
The
parties to this Agreement acknowledge that the performance by the Trustee of
its
duties under this Section 3.29(c) related to the timely preparation, arrangement
for execution and filing of Form 8-K is contingent upon such parties strictly
observing all applicable deadlines in the performance of their duties under
this
Section 3.29(c). The Trustee shall not have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
arrange for execution and/or timely file such Form 8-K, where such failure
results from the Trustee’s inability or failure to obtain or receive, on a
timely basis, any information from any other party hereto (unless such item
is
specific to the Trustee or any Servicing Function Participant utilized by the
Trustee, in which case the Trustee will be deemed to have notice) or any
Servicing Function Participant needed to prepare, arrange for execution or
file
such Form 8-K, not resulting from its own negligence, bad faith or willful
misconduct.
(d) Upon
any
filing with the Commission, the Trustee shall promptly deliver to the Depositor
and Servicer a copy of any executed report, statement or
information.
(e) The
obligations set forth in paragraphs (a) through (d) of this Section shall only
apply with respect to periods for which reports are required to be filed with
respect to the Trust under the Exchange Act. Prior to January 30 of the first
year in which the Trustee is able to do so under applicable law, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust. At
any
time after the filing of a Form 15 Suspension Notification, if the number of
Certificateholders of record exceeds the number set forth in Section 15(d)
of
the Exchange Act or the regulations promulgated pursuant thereto which would
cause the Trust to again become subject to the reporting requirements of the
Exchange Act, the Trustee shall recommence preparing and filing reports on
Form
10-K and Form 10-D as required pursuant to this Section 3.29 and the parties
hereto shall have the obligations set forth in this Section.
In
the
event that the Trustee is unable to timely file with the Commission all or
any
required portion of any Form 8-K, 10-D or 10-K required to be filed by this
Agreement because required disclosure information was either not delivered
to it
or delivered to it after the delivery deadlines set forth in this Agreement
or
for any other reason, the Trustee will promptly notify the Depositor and the
Servicer. In the case of Form 10-D and 10-K, the parties to this Agreement
will
cooperate to prepare and file a Form 12b-25 and a 10-D/A and 10-K/A as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Trustee will, upon receipt of all required Form 8-K Disclosure
Information and upon the approval and direction of the Depositor, either include
such Form 8-K Information in a Form 8-K and file such Form 8-K or include such
disclosure information on the next Form 10-D. In the event that any previously
filed Form 8-K, 10-D or 10-K needs to be amended in connection with any
Additional Form 10-D Disclosure (other than, in the case of Form 10-D, for
the
purpose of restating any Monthly Statement), Additional Form 10-K Disclosure
or
Form 8-K Disclosure Information, the Trustee will notify the Depositor and
the
Servicer and such other parties to the transaction as are affected by such
amendment, and such parties will cooperate to prepare any necessary 8-K/A,
10-D/A or 10-K/A. Any Form 15, Form 12b-25 or amendment to Form 10-D or 8-K
shall be signed by the Depositor and any amendment to 10-K shall be signed
by a
senior officer in charge of the servicing function of the Servicer, as
applicable, . The parties to this Agreement acknowledge that the performance
by
the Trustee of its duties under this Section 3.29(e) related to the timely
preparation, arrangement for execution and filing of Form 15, a Form 12b-25
or
any amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
performing its duties under this Section. The Trustee shall not have any
liability for any loss, expense, damage, claim arising out of or with respect
to
any failure to properly prepare, arrange for execution and/or timely file any
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where
such failure results from the Trustee’s inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto (other
than the Trustee or any Servicing Function Participant utilized by the Trustee)
or any Servicing Function Participant needed to prepare, arrange for execution
or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K,
not resulting from its own negligence, bad faith or willful
misconduct.
104
(f) For
so
long as reports are required to be filed with the Commission under the Exchange
Act with respect to the Trust, each of the Depositor, the Trustee and the
Servicer shall notify the Depositor, the Servicer and the Trustee in writing
of
any litigation (material to Certificateholders) or proceeding pending against
such notifying person (or in the case of the Servicer, against the Servicer
or
any Subservicer engaged by it), or any affiliations or relationships that
develop following the Closing Date between such notifying person, or in the
case
of the Servicer, between the Servicer or any Subservicer engaged by it) and
any
other party hereto or any originator, that may have to be reported on a Form
8-K, Form 10-K or Form 10-D with respect to the Trust.
(g) To
the
extent that, following the Closing Date, the Depositor certifies that reports
and certifications differing from those required under this Section 3.29 comply
with the reporting requirements under the Exchange Act, the Trustee and the
Servicer hereby agree that they will reasonably cooperate to amend the
provisions of this Section 3.29 in order to comply with such amended reporting
requirements and such amendment of this Section 3.29. Any such amendment may
result in the reduction of the reports filed by the Depositor under the Exchange
Act. Notwithstanding the foregoing, no party hereto shall be obligated to enter
into any amendment pursuant to this Section 3.29 that adversely affects its
obligations and immunities under this Agreement.
Section
3.30. Subservicing
Agreements between the Servicer and Subservicers.
(a) The
Servicer may enter into subservicing agreements with Subservicers, for the
servicing and administration of the Mortgage Loans (“Subservicing
Agreements”).
The
Servicer represents and warrants to the other parties hereto that, except as
otherwise set forth herein, no Subservicing Agreement is in effect as of the
Closing Date with respect to any Mortgage Loans required to be serviced by
it
hereunder. The Servicer shall give notice to the Depositor and the Trustee
of
any such Subservicer and Subservicing Agreement, which notice shall contain
all
information (including without limitation a copy of the Subservicing Agreement)
reasonably necessary to enable the Trustee, pursuant to Section 3.29(g), to
accurately and timely report the event under Item 6.02 of Form 8-K pursuant
to
the Exchange Act (if such reports under the Exchange Act are required to be
filed under the Exchange Act). During the period when reports are required
to be
filed for the Trust under the Exchange Act, no Subservicing Agreement shall
be
effective until 30 days after such written notice is received by both the
Depositor and the Trustee and thereafter shall be effective at the time the
Servicer and any Subservicer enter into any such Subservicing Agreement. The
Trustee shall not be required to review or consent to such Subservicing
Agreements and shall have no liability in connection therewith.
105
(b) Each
Subservicer shall be (i) authorized to transact business in the state or states
in which the related Mortgaged Properties it is to service are situated, if
and
to the extent required by applicable law to enable the Subservicer to perform
its obligations hereunder and under the Subservicing Agreement and (ii) a
Xxxxxxx Mac or Xxxxxx Xxx approved mortgage servicer. Each Subservicing
Agreement must impose on the Subservicer requirements conforming to the
provisions set forth in Section 3.34 and provide for servicing of the Mortgage
Loans consistent with the terms of this Agreement. The Servicer will examine
each Subservicing Agreement and will be familiar with the terms thereof. The
terms of any Subservicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into different
forms
of Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of
this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Trustee, without the consent of the Trustee. Any variation
without the consent of the Trustee from the provisions set forth in Section
3.34
relating to insurance or priority requirements of Subservicing Accounts, or
credits and charges to the Subservicing Accounts or the timing and amount of
remittances by the Subservicers to the Servicer, are conclusively deemed to
be
inconsistent with this Agreement and therefore prohibited. The Servicer shall
deliver to the Trustee and the Depositor copies of all Subservicing Agreements,
and any amendments or modifications thereof, within a reasonable time period
after the Servicer’s execution and delivery of such instruments.
(c) As
part
of its servicing activities hereunder, the Servicer (except as otherwise
provided in the last sentence of this paragraph), for the benefit of the
Trustee, shall enforce the obligations of each Subservicer under the related
Subservicing Agreement, including, without limitation, any obligation to make
advances in respect of delinquent payments as required by a Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried out to such
an
extent and at such time as the Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Servicer
shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts
due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys’ fees against the party against whom such
enforcement is directed.
(d) The
Servicer shall cause any Subservicer engaged by the Servicer (or by any
Subservicer) for the benefit of the Depositor to comply with the provisions
of
this Section 3.30 and with Sections 3.19, 3.20, 6.02 and 6.04 of this Agreement
to the same extent as if such Subservicer were the Servicer, and to provide
the
information required with respect to such Subservicer under Section 3.29(f)
of
this Agreement. The Servicer shall be responsible for obtaining from each such
Subservicer and delivering to applicable Persons any servicer compliance
statement required to be delivered by such Subservicer under Section 3.19 and
any assessment of compliance report and related accountant’s attestation
required to be delivered by such Subservicer under Section 3.20, in each case
as
and when required to be delivered.
106
(e) Subject
to the conditions set forth in this Section 3.30(e), the Servicer and any
Subservicer engaged by the Servicer is permitted to utilize one or more
Subcontractors to perform certain of its obligations hereunder. As a condition
to the utilization by the Servicer or any such Subservicer of any Subcontractor
determined to be “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor
used
by the Servicer (or by any such Subservicer) for the benefit of the Depositor
to
comply with the provisions of Section 3.20 of this Agreement to the same extent
as if such Subcontractor were the Servicer. The Servicer shall be responsible
for obtaining from each such Subcontractor and delivering to the applicable
Persons any assessment of compliance report and related accountant’s attestation
required to be delivered by such Subcontractor under Section 3.20, in each
case
as and when required to be delivered.
Notwithstanding
the foregoing, if the Servicer engages a Subcontractor in connection with the
performance of any of its duties under this Agreement, the Servicer shall be
responsible for determining whether such Subcontractor is a “servicer” within
the meaning of Item 1101 of Regulation AB and whether any such affiliate or
third-party vendor meets the criteria in Item 1108(a)(2)(i) through (iii) of
Regulation AB. If the Servicer determines, pursuant to the preceding sentence,
that such Subcontractor is a “servicer” within the meaning of Item 1101 of
Regulation AB and meets any of the criteria in Item 1108(a)(2)(i) through (iii)
of Regulation AB, then such Subcontractor shall be deemed to be a Subservicer
for purposes of this Agreement (and shall not be required to meet the
requirements of a Subservicer set forth in Section 3.30(b)), the engagement
of
such Subservicer shall not be effective unless and until notice is given
pursuant to Section 3.30(a) and the Servicer shall comply with Section 3.30(d)
with respect thereto.
(f) Notwithstanding
any Subservicing Agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from
the
Subservicer and to the same extent and under the same terms and conditions
as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such
indemnification.
(g) Notwithstanding
anything to the contrary contained in this Agreement, the Servicer shall
indemnify the Depositor, the Trustee and any director, officer, employee or
agent of the Depositor or the Trustee and hold them harmless against any and
all
claims, economic losses, damages, penalties, fines, forfeitures, reasonable
and
necessary legal fees and related costs, judgments, and any other related costs,
fees and expenses that any of them actually sustain, in each case that are
likely foreseeable and directly related to any failure by the Servicer or any
Subservicer engaged by such Servicer or any Subcontractor utilized by such
Servicer to deliver any information, report, certification or accountants’
letter when and as required under Sections 3.19, 3.20, 3.29 or 6.02, including,
without limitation, any failure by the Servicer to determine correctly that
any
Subcontractor is “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB; provided, however, the Servicer shall not be liable
for any punitive damages.
107
Section
3.31. Successor
Subservicers.
The
Servicer shall be entitled to terminate any Subservicing Agreement and the
rights and obligations of any Subservicer pursuant to any Subservicing Agreement
in accordance with the terms and conditions of such Subservicing Agreement;
provided, however, that during the period when reports are required to be filed
for the Trust under the Exchange Act, the termination, resignation or removal
of
a Subservicer shall be not be effective until 30 days after written notice
is
received by both the Depositor and the Trustee that contains all information
reasonably necessary to enable the Trustee, pursuant to Section 3.29(g), to
accurately and timely report the event under Item 6.02 of Form 8-K pursuant
to
the Exchange Act (if such reports under the Exchange Act are required to be
filed under the Exchange Act). In the event of termination of any Subservicer,
all servicing obligations of such Subservicer shall be assumed simultaneously
by
the Servicer without any act or deed on the part of such Subservicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.30.
Any
Subservicing Agreement shall include the provision that such agreement may
be
immediately terminated by the Depositor or the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Servicer
shall, for any reason, no longer be the Servicer (including termination due
to a
Servicer Event of Termination).
Section
3.32. No
Contractual Relationship between Subservicers and the Trustee.
Any
Subservicing Agreement that may be entered into and any transactions or services
relating to the Mortgage Loans involving a Subservicer in its capacity as such
shall be deemed to be between the Subservicer and the Servicer alone, and the
Trustee (or any successor Servicer) shall not be deemed a party thereto and
shall have no claims, rights, obligations, duties or liabilities with respect
to
the Subservicer except as set forth in Section 3.33. The Servicer shall be
solely liable for all fees owed by it to any Subservicer, irrespective of
whether the Servicer’s compensation pursuant to this Agreement is sufficient to
pay such fees.
Section
3.33. Assumption
or Termination of Subservicing Agreements by Trustee.
In
the
event the Servicer at any time shall for any reason no longer be the Servicer
(including by reason of the occurrence of a Servicer Event of Termination),
the
Trustee, or its designee or the successor Servicer if the successor is not
the
Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee or the successor Servicer
if
the successor is not the Trustee, prior to the Trustee or the successor Servicer
if the successor is not the Trustee, assuming such rights and obligations,
unless the Trustee elects to terminate any Subservicing Agreement in accordance
with its terms as provided in Section 3.31.
108
Upon
such
assumption, the Trustee, its designee or the successor servicer shall be deemed,
subject to Section 3.31, to have assumed all of the Servicer’s interest therein
and to have replaced the Servicer as a party to each Subservicing Agreement
to
the same extent as if each Subservicing Agreement had been assigned to the
assuming party, except that (i) the Servicer shall not thereby be relieved
of
any liability or obligations under any Subservicing Agreement that arose before
it ceased to be the Servicer and (ii) none of the Depositor, the Trustee, their
designees or any successor Servicer shall be deemed to have assumed any
liability or obligation of the Servicer that arose before it ceased to be the
Servicer.
The
Servicer at its expense shall, upon request of the Trustee, its designee or
the
successor Servicer deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Mortgage Loans then being
serviced and an accounting of amounts collected and held by or on behalf of
it,
and otherwise use its best efforts to effect the orderly and efficient transfer
of the Subservicing Agreements to the assuming party.
Section
3.34. Subservicing
Accounts.
In
those
cases where a Subservicer is servicing a Mortgage Loan pursuant to a
Subservicing Agreement, the Subservicer will be required to establish and
maintain one or more segregated accounts (collectively, the “Subservicing
Account”). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Servicer. The Subservicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer’s receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation
to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Subservicing Account.
For purposes of this Agreement, the Servicer shall be deemed to have received
payments on the Mortgage Loans when the Subservicer receives such
payments.
ARTICLE
IV
FLOW
OF FUNDS
Section
4.01. Interest
Distributions.
On
each
Distribution Date, for so long as Xxxxxx is the Servicer of the Mortgage Loans,
the Trustee shall distribute to the Holders of the Class CE-2 Certificates,
with
respect to each Mortgage Loan and for each such calendar month, the Excess
Servicing Fee. Following such distribution, the Trustee shall withdraw from
the
Distribution Account the Trustee Fee and pay it to itself and then withdraw
the
Interest Remittance Amount and apply it in the following order of priority
(based upon the Mortgage Loan information provided to it in the Remittance
Report, upon which the Trustee may conclusively rely), and the calculations
required to be made by the Trustee, to the extent available:
109
(i) concurrently,
to the Class A-1, Class A-2 and Class A-3 Certificates, pro
rata,
the
applicable Accrued Certificate Interest thereon for such Distribution
Date;
(ii) concurrently,
to the Class A-1, Class A-2 and Class A-3 Certificates, pro
rata,
the
applicable Interest Carry Forward Amount thereon for such Distribution
Date;
(iii) to
the
Class M-1 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(iv) to
the
Class M-2 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(v) to
the
Class M-3 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(vi) to
the
Class M-4 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(vii) to
the
Class M-5 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(viii) to
the
Class M-6 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(ix) to
the
Class M-7 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(x) to
the
Class M-8 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(xi) to
the
Class M-9 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(xii) to
the
Class B-1 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date; and
(xiii) the
amount, if any, of the Interest Remittance Amount remaining after application
with respect to the priorities set forth above will be applied as described
under Section 4.02(b) hereof.
110
Section
4.02. Distributions
of Principal and Monthly Excess Cashflow Amounts.
(a) On
each
Distribution Date, the Trustee shall withdraw from the Distribution Account
the
Principal Distribution Amount and apply it in the following order of priority
(based upon the Mortgage Loan information provided to it in the Remittance
Report, upon which the Trustee may conclusively rely), and the calculations
required to be made by the Trustee, to the extent available:
(i) before
the Stepdown Date or on which a Trigger Event is in effect, sequentially, as
follows:
(A) sequentially,
to the Class A-1, Class A-2 and Class A-3 Certificates, in that order, the
Senior Principal Distribution Amount until the Certificate Principal Balances
thereof have been reduced to zero;
(B) to
the
Class M-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(C) to
the
Class M-2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(D) to
the
Class M-3 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(E) to
the
Class M-4 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(F) to
the
Class M-5 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(G) to
the
Class M-6 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(H) to
the
Class M-7 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(I) to
the
Class M-8 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(J) to
the
Class M-9 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(K) to
the
Class B-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; and
(L) any
remaining amount of the Principal Distribution Amount shall be applied as part
of the Monthly Excess Cashflow Amount as set forth in Section
4.02(b).
111
(ii) on
or
after the Stepdown Date and as long as a Trigger Event is not in
effect:
(A) sequentially,
to the Class A-1, Class A-2 and Class A-3 Certificates, in that order, the
Senior Principal Distribution Amount until the Certificate Principal Balances
thereof have been reduced to zero;
(B) to
the
Class M-1 Certificates, up to the Class M-1 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(C) to
the
Class M-2 Certificates, up to the Class M-2 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(D) to
the
Class M-3 Certificates, up to the Class M-3 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(E) to
the
Class M-4 Certificates, up to the Class M-4 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(F) to
the
Class M-5 Certificates, up to the Class M-5 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(G) to
the
Class M-6 Certificates, up to the Class M-6 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(H) to
the
Class M-7 Certificates, up to the Class M-7 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(I) to
the
Class M-8 Certificates, up to the Class M-8 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(J) to
the
Class M-9 Certificates, up to the Class M-9 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
(K) to
the
Class B-1 Certificates, up to the Class B-1 Principal Distribution Amount,
until
the Certificate Principal Balance thereof has been reduced to zero;
and
112
(L) any
remaining amount of the Principal Distribution Amount shall be applied as part
of the Monthly Excess Cashflow Amount as set forth in Section
4.02(b).
(b) On
each
Distribution Date, any Monthly Excess Cashflow Amount shall be distributed,
to
the extent available, in the following order of priority on such Distribution
Date:
(i) to
the
Class A Certificates, pro
rata,
any
remaining Accrued Certificate Interest for such Classes for such Distribution
Date;
(ii) to
the
Class A Certificates, pro
rata,
any
Interest Carry Forward Amounts for such Classes for such Distribution
Date;
(iii) to
the
Class M-1 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(iv) to
the
Class M-1 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(v) to
the
Class M-1 Certificates, any Class M-1 Realized Loss Amortization Amount for
such
Distribution Date;
(vi) to
the
Class M-2 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(vii) to
the
Class M-2 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(viii) to
the
Class M-2 Certificates, any Class M-2 Realized Loss Amortization Amount for
such
Distribution Date;
(ix) to
the
Class M-3 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(x) to
the
Class M-3 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xi) to
the
Class M-3 Certificates, any Class M-3 Realized Loss Amortization Amount for
such
Distribution Date;
(xii) to
the
Class M-4 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(xiii) to
the
Class M-4 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xiv) to
the
Class M-4 Certificates, any Class M-4 Realized Loss Amortization Amount for
such
Distribution Date;
113
(xv) to
the
Class M-5 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(xvi) to
the
Class M-5 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xvii) to
the
Class M-5 Certificates, any Class M-5 Realized Loss Amortization Amount for
such
Distribution Date;
(xviii) to
the
Class M-6 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(xix) to
the
Class M-6 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xx) to
the
Class M-6 Certificates, any Class M-6 Realized Loss Amortization Amount for
such
Distribution Date;
(xxi) to
the
Class M-7 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(xxii) to
the
Class M-7 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xxiii) to
the
Class M-7 Certificates, any Class M-7 Realized Loss Amortization Amount for
such
Distribution Date;
(xxiv) to
the
Class M-8 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(xxv) to
the
Class M-8 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xxvi) to
the
Class M-8 Certificates, any Class M-8 Realized Loss Amortization Amount for
such
Distribution Date;
(xxvii) to
the
Class M-9 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
(xxviii) to
the
Class M-9 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xxix) to
the
Class M-9 Certificates, any Class M-9 Realized Loss Amortization Amount for
such
Distribution Date;
(xxx) to
the
Class B-1 Certificates, any remaining Accrued Certificate Interest for such
Class for such Distribution Date;
114
(xxxi) to
the
Class B-1 Certificates, any Interest Carry Forward Amount for such Class for
such Distribution Date;
(xxxii) to
the
Class B-1 Certificates, any Class B-1 Realized Loss Amortization Amount for
such
Distribution Date;
(xxxiii)
from
amounts otherwise distributable to the Class CE-1 Certificates, to the Cap
Carryover Reserve Account, first, to the Class A Certificates, pro
rata,
based
on Cap Carryover Amount, and then sequentially, to the Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9
and
Class B-1 Certificates, any Cap Carryover Amount for such Class;
(xxxiv)
from
amounts otherwise distributable to the Class CE-1 Certificates, to the
Supplemental Interest Trust, to fund any Defaulted Swap Termination
Payment;
(xxxv) from
amounts otherwise distributable to the Class CE-1 Certificates, if a 40-Year
Trigger Event is in effect, sequentially, to the Class X-0, Xxxxx X-0, Class
A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9 and Class B-1 Certificates, in that order, until
the
earlier of (a) the Overcollateralization Amount (after giving effect to all
principal distributions on such Distribution Date other than principal
distributions resulting from this Section 4.02(b)(xxxv)) equals the aggregate
Principal Balance of the Mortgage Loans with 40-year original terms to maturity
as of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period or (b) the Certificate
Principal Balances of such Certificates have been reduced to zero;
(xxxvi) to
the
Class CE-1 Certificates, up to the Class CE Distributable Amount for
such Distribution Date; and
(xxxvii) on
the
sixtieth Distribution Date (or the final Distribution Date, if earlier), to
the
holders of the Class P Certificates $100.00 in reduction of the Certificate
Principal Balance of such Class.
On
each
Distribution Date, there shall be distributed to the Holders of the Class R
Certificates in respect of the Class R-1 Interest, the Class R-2 Interest and
the Class R-3 Interest and to the Class R-X Certificates in respect of the
Class
R-A Interest, the Class R-B Interest and the Class R-C Interest and Class R-D
Interest, any remaining amount in the Distribution Account from the related
REMIC on such date after the application pursuant to Sections 4.01, 4.02(a),
4.02(b)(i)-(xxxvii) and 4.02(c).
(c) On
each
Distribution Date, all Prepayment Penalties (including amounts deposited in
connection with the full or partial waiver of such Prepayment Penalties pursuant
to Section 3.01) shall be allocated to the Class P Certificates. Such
amounts shall not reduce the Certificate Principal Balance of such
Class.
(d) Any
amounts distributed to the Certificates in respect of Cap Carryover Amounts
pursuant to Sections 4.02(b)(xxxiii) (to the extent such payments are not from
the Cap Agreement or the Swap Agreement) shall first be deemed distributed
by
REMIC 3 as a distribution in respect of the REMIC 3 Class CE Interest, to REMIC
A and distributed thereby as a distribution to the REMIC A Class CE Certificates
as payments on notional principal contracts in the nature of interest rate
cap
contracts.
115
(e) Any
amounts distributed to the Class B-1 Certificates pursuant to Section 4.01
or
this Section 4.02, other than Cap Carryover Amounts, shall be deemed distributed
by REMIC 3 in respect of the REMIC 3 Class B-1 Interest to REMIC C, and
distributed thereby as a distribution in respect of the Class B-1
Certificates.
(f) On
each
Distribution Date, Unpaid Realized Loss Amounts on the Class M and Class B-1
Certificates will be reduced by the amount of any Subsequent Recoveries received
during the related Prepayment Period in the same order as Realized Loss
Amortization Amounts are paid to such Certificates pursuant to Section 4.02(b)
above.
(g) Notwithstanding
the priority of distributions set forth in Section 4.02(a)(i)(A) and (B) and
Section 4.02(a)(ii)(A) and (B), on any Distribution Date on and after the
Distribution Date on which the Overcollateralization Amount is zero and the
Certificate Principal Balances of the Class M and Class B-1 Certificates have
been reduced to zero, any principal distributions to the Class A Certificates
will be made concurrently on a pro
rata basis,
based on their Certificate Principal Balances immediately prior to such
Distribution Date.
Section
4.03. Allocation
of Losses.
Realized
Losses shall be allocated against the Overcollateralization Amount until the
Overcollateralization Amount has been reduced to zero. If, after giving effect
to the distribution of the Principal Distribution Amount on any Distribution
Date and the increase of any Certificate Principal Balances as a result of
Subsequent Recoveries, the aggregate Certificate Principal Balance of the
Offered Certificates and the Class B-1 Certificates exceeds the Pool Balance
as
of the end of the related Collection Period, after giving effect to Principal
Prepayments in the related Prepayment Period, any Applied Realized Loss Amount
for such Distribution Date will be allocated against the Class B-1, Class M-9,
Class M-8, Class M-7, Class M-6, Class M-5, Class M-4, Class M-3, Class M-2
and Class M-1 Certificates, in that order, until the respective Certificate
Principal Balances thereof are reduced to zero.
Special
Hazard Losses will be allocated as described above, provided that if the
cumulative amount of such losses, as of any date of determination, exceeds
the
greatest of (i) 1.0% of the Pool Balance as of the Cut-off Date, (ii) two times
the amount of the principal balance of the largest Mortgage Loan as of the date
of determination and (iii) an amount equal to the aggregate Principal Balances
of the Mortgage Loans in the largest zip-code concentration in the State of
California as of the date of determination, such excess will be allocated among
the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7,
Class M-8, Class M-9 and Class B-1 Certificates, pro
rata,
based
on their respective Certificate Principal Balances. For the avoidance of doubt,
any losses allocated pursuant to this paragraph shall not be reimbursed pursuant
to Section 4.02(b) as Realized Loss Amortization Amounts.
116
Section
4.04. Method
of Distribution.
The
Trustee shall make distributions in respect of a Distribution Date to each
Certificateholder of record on the related Record Date (other than as provided
in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates the aggregate initial Certificate
Principal Balance of which is in excess of $5,000,000 (or the aggregate
Percentage Interest of which is in excess of 66% Percentage Interest in the
case
of the Class CE, Class P and Residual Certificates), or by check mailed by
first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register, provided that the Trustee
may
deduct a reasonable wire transfer fee from any payment made by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
Section
4.05. Distributions
on Book-Entry Certificates.
Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to the accounts
of its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution
to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a “brokerage firm” or “indirect participating firm”) for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Depositor, the Servicer or the Seller
shall have any responsibility therefor except as otherwise provided by
applicable law.
Section
4.06. Statements.
(a) On
each
Distribution Date, based on the Mortgage Loan information contained in the
Remittance Report, the Trustee shall prepare and post on its website at
xxxx://xxx.xxxxxxxx.xxx, a statement as to the distributions made on such
Distribution Date (a “Monthly
Statement”):
(i) the
date
of such Distribution Date and the Determination Date and LIBOR Determination
Date for such Distribution Date;
(ii) for
each
Class, the applicable Record Date and Interest Accrual Period;
(iii) the
amount of the distribution made on such Distribution Date to the Holders of
each
Class of Certificates allocable to principal or reduction of Notional Amount,
separately identified;
117
(iv) the
amount of the distribution made on such Distribution Date to the Holders of
each
Class of Certificates allocable to interest or Class CE Distributable Amount,
separately identified;
(v) the
Overcollateralization Amount, the Overcollateralization Release Amount, the
Overcollateralization Deficiency and the Targeted Overcollateralization Amount
as of such Distribution Date and the Monthly Excess Interest Amount and Monthly
Excess Cashflow Amount for such Distribution Date;
(vi) the
aggregate amount of servicing compensation received by the Servicer during
the
related Collection Period;
(vii) the
aggregate amount of Advances for the related Collection Period;
(viii) the
Pool
Balance at the close of business at the end of the related Collection
Period;
(ix) the
number, weighted average remaining term to maturity and weighted average
Mortgage Interest Rate of the Mortgage Loans as of the related Due
Date;
(x) the
number and aggregate unpaid principal balance of Mortgage Loans (a) 30 to
59 days past due on a contractual basis, (b) 60 to 89 days past due on a
contractual basis, (c) 90 or more days past due on a contractual basis,
(d) as to which foreclosure proceedings have been commenced and (e) in
bankruptcy as of the close of business on the last day of the calendar month
preceding such Distribution Date;
(xi) with
respect to any Mortgage Loan that became an REO Property during the preceding
calendar month, the loan number of such Mortgage Loan, the unpaid principal
balance and the Principal Balance of such Mortgage Loan as of the date it became
an REO Property;
(xii) the
book
value of any REO Property as of the close of business on the last Business
Day
of the calendar month preceding the Distribution Date, and, cumulatively, the
total number and cumulative principal balance of all REO Properties as of the
close of business of the last day of the preceding Collection
Period;
(xiii) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period;
(xiv) the
aggregate amount of Prepayment Penalties collected (including amounts deposited
in connection with the full or partial waiver of such Prepayment Penalties
pursuant to Section 3.01) during the related Collection Period and the
amounts thereof allocable to the Class P Certificates;
(xv) the
aggregate amount of Realized Losses incurred during the related Collection
Period and the cumulative amount of Realized Losses;
118
(xvi) the
Certificate Principal Balance, or Notional Amount, as applicable, of each Class
of Certificates, after giving effect to the distributions, and allocations
of
Realized Losses or Applied Realized Loss Amounts, as applicable, made on such
Distribution Date, separately identifying any reduction thereof due to
allocations of Realized Losses or Applied Realized Loss Amounts;
(xvii) the
Accrued Certificate Interest in respect of each Class of Fixed-Rate and Floating
Rate Certificates for such Distribution Date, separately identifying the
portions thereof attributable to Cap Carryover Amounts, and the respective
portions thereof, if any, remaining unpaid following the distributions made
in
respect of such Certificates on such Distribution Date;
(xviii) the
aggregate amount of any Prepayment Interest Shortfalls for such Distribution
Date, to the extent not covered by payments by the Servicer pursuant to
Section 3.23;
(xix) the
number, weighted average remaining term to maturity and weighted average
Mortgage Interest Rate of the Mortgage Loans as of the last day of the related
Collection Period;
(xx) the
amount of any Cap Payment, Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments, for such
Distribution Date;
(xxi) the
amount of the Trustee Fee paid;
(xxii) the
Cap
Carryover Amounts distributed on such Distribution Date and the portion thereof
constituting Cap Carryover Amounts, the amount of all Cap Carryover Amounts
covered by withdrawals from the Cap Carryover Reserve Account and the Swap
Account and the amounts remaining after giving effect to distributions thereof
on such Distribution Date;
(xxiii) any
Overcollateralization Deficiency after giving effect to the distribution of
principal on such Distribution Date;
(xxiv) whether
a
Trigger Event has occurred and is continuing (including the calculation thereof
and the aggregate outstanding balance of all 60+ Day Delinquent Mortgage Loans)
and the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xxv) the
Interest Remittance Amount and the Principal Remittance Amount;
(xxvi) the
rate
at which interest accrues for each Class of Certificates for such Distribution
Date;
(xxvii) [Reserved];
119
(xxviii) the
aggregate Principal Balance of Mortgage Loans purchased by the Servicer or
Seller during the related Collection Period and indicating the Section of this
Agreement requiring or allowing the purchase of each such Mortgage
Loan;
(xxix) the
aggregate Principal Balance of the Mortgage Loans repurchased by the Servicer
(or an affiliate) during the related Collection Period in connection with
Section 3.16;
(xxx) the
amount of Subsequent Recoveries received during the related Prepayment
Period;
(xxxi) whether
a
40-Year Trigger Event has occurred and is continuing;
(xxxii) material
breaches of Mortgage Loan representations and warranties of which the Trustee
or
Servicer has knowledge or has received written notice; and
(xxxiii) material
breaches of any covenants under this Agreement of which the Trustee or Servicer
has knowledge or has received written notice.
Parties
that are unable to use xxxx://xxx.xxxxxxxx.xxx are entitled to have a paper
copy
mailed to them via first class mail by calling the Trustee’s transaction manager
at (000) 000-0000 and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and
the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.
The
Trustee may fully rely upon and shall have no liability with respect to
information with respect to the Mortgage Loans provided by the
Servicer.
In
the
case of information furnished pursuant to subclauses (iii) through (v)
above, the amounts shall be expressed in a separate section of the report as
a
dollar amount for each Class for each $1,000 original dollar amount as of the
Cut-off Date.
(b) Within
a
reasonable period of time after the end of each calendar year, the Trustee
shall
furnish to each Person who at any time during the calendar year was a
Certificateholder (other than the Residual Certificateholders), if requested
in
writing by such Person, such information as is reasonably necessary to provide
to such Person a statement containing the information set forth in
subclauses (iii), (iv), (xvii) and (xxii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On
each
Distribution Date, the Trustee shall make available to the Residual
Certificateholders a copy of the reports made available to the
Certificateholders pursuant to Section 4.06(b) in respect of such Distribution
Date with such other information as the Trustee deems necessary or appropriate.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared and furnished
to Residual Certificateholders by the Trustee pursuant to any requirements
of
the Code as from time to time in force.
120
Section
4.07. Remittance
Reports; Advances.
(a) On
the
second Business Day following each Determination Date but in no event less
than
four Business Days prior to the related Distribution Date, the Servicer shall
deliver to the Trustee electronically (or by such other means as the Servicer
and the Trustee may agree from time to time) a Remittance Report with respect
to
the related Distribution Date and, in addition to the information provided
on
the Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably request or order
in
order for the Trustee to perform the calculations necessary to make the
distributions contemplated by Section 4.01, 4.02 and 4.03 and to prepare
the statements to Certificateholders contemplated by Section 4.06. The
Trustee shall not be responsible to recompute, recalculate or verify any
information provided to it by the Servicer.
(b) The
amount of Advances to be made by the Servicer for any Distribution Date shall
equal, subject to Section 4.07(d), the sum of (i) the aggregate amount of
Monthly Payments (net of the related Servicing Fee and the Excess Servicing
Fee), due during the related Collection Period, which Monthly Payments were
delinquent on a contractual basis as of the close of business on the related
Determination Date and (ii) with respect to each REO Property, which REO
Property was acquired during or prior to the related Prepayment Period and
as to
which such REO Property an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the interest
portion of Monthly Payments (net of the related Servicing Fee and Excess
Servicing Fee) that would have been due on the related Due Date in respect
of
the related Mortgage Loans, over the net income from such REO Property deposited
in the Collection Account pursuant to Section 3.13 for distribution on such
Distribution Date. For purposes of the preceding sentence, the Monthly Payment
on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to
the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for the such Balloon Mortgage
Loan. The Servicer shall not make any Advances with respect to the principal
portion of the Monthly Payments that would have been due on the related Due
Date
with respect to REO Properties and is required to advance only interest payments
with respect to Second Lien Mortgage Loans. Notwithstanding anything to the
contrary herein, the Sevicer will not make any Advances with respect to
shortfalls in interest due to bankruptcy proceedings or Relief Act Interest
Shortfalls.
On
or
before 3:00 PM New York time on the Servicer Remittance Date, the Servicer
shall
remit in immediately available funds to the Trustee for deposit in the
Distribution Account an amount equal to the aggregate amount of Advances, if
any, to be made in respect of the Mortgage Loans and REO Properties for the
related Distribution Date either (i) from its own funds or (ii) from
the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in
the
records of the Collection Account that amounts held for future distribution
have
been, as permitted by this Section 4.07, used by the Servicer in discharge
of any such Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of Advances to be made by
the Servicer with respect to the Mortgage Loans and REO Properties. In addition,
the Servicer shall have the right to reimburse itself for any Advances or
Servicing Advances previously made from amounts held from time to time in the
Collection Account for future distribution pursuant to Section 3.05(ii). Any
amounts held for future distribution and so used shall be appropriately
reflected in the Servicer’s records and replaced by the Servicer by deposit in
the Collection Account on or before any future Servicer Remittance Date to
the
extent that the Interest Remittance Amount and Principal Remittance Amount
for
the related Distribution Date (determined without regard to Advances to be
made
on the Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to
Section 4.01 and 4.02 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances. The Trustee will
provide notice to the Servicer by telecopy by the close of business on any
Servicer Remittance Date in the event that the amount remitted by the Servicer
to the Trustee on such date is less than the Advances required to be made by
the
Servicer for the related Distribution Date, as set forth in the related
Remittance Report.
121
(c) The
obligation of the Servicer to make such Advances is mandatory, notwithstanding
any other provision of this Agreement but subject to (d) below, and, with
respect to any Mortgage Loan or REO Property, shall continue until the earlier
of such time as the Trust acquires title to the related Mortgaged Property
or
such Mortgage Loan is paid in full by the Mortgagor or disposed of by the Trust,
or until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding
anything herein to the contrary, no Advance or Servicing Advance shall be
required to be made hereunder by the Servicer if such Advance would, if made,
constitute a Nonrecoverable Advance. The determination by the Servicer that
it
has made a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officer’s
Certificate of the Servicer delivered to the Depositor and the
Trustee.
Section
4.08. REMIC
Distributions.
(a) On
each
Distribution Date, the Trustee shall be deemed to cause in the following order
of priority, the following amounts to be distributed to REMIC 2 on account
of
the REMIC 1 Regular Interests or withdrawn from the Distribution Account and
distributed to the Holders of the Class R Certificates (in respect of the Class
R-1 Interest ), as the case may be:
(i) to
Holders of REMIC 1 Regular Interest I-CE-2, in an amount equal to (A)
Uncertificated Accrued Interest for such REMIC 1 Regular Interest for such
Distribution Date, plus (B) any amounts payable in respect thereof remaining
unpaid from previous Distribution Dates; and then to Holders of REMIC 1 Regular
Interest I and each of REMIC 1 Regular Interest I-1-A through I-47-B, pro rata,
in an amount equal to (A) Uncertificated Accrued Interest for such REMIC 1
Regular Interests for such Distribution Date, plus (B) any amounts payable
in
respect thereof remaining unpaid from previous Distribution Dates;
(ii) to
the
extent of amounts remaining after the distributions made pursuant to clause
(i)
above, payments of principal shall be allocated as follows: first, to REMIC
1
Regular Interest I, then to REMIC 1 Regular Interests I-1-A through I-47-B
starting with the lowest numerical denomination until the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest is reduced to zero,
provided that, for REMIC 1 Regular Interests with the same numerical
denomination, such payments of principal shall be allocated pro rata between
such REMIC 1 Regular Interests, and second, to the extent of any
Overcollateralization Release Amounts to REMIC 1 Regular Interest I until the
Uncertificated Principal Balance of such REMIC 1 Regular Interest is reduced
to
zero, then to REMIC 1 Regular Interests I-1-A through I-47-B starting with
the
lowest numerical denomination until the Uncertificated Principal Balance of
each
such REMIC 1 Regular Interest is reduced to zero; and
122
(iii) to
the
Holders of REMIC 1 Regular Interest I-47-B, all amounts representing Prepayment
Penalties in respect of the Mortgage Loans received during the related
Prepayment Period.
(b) On
each
Distribution Date, the Trustee shall cause in the following order of priority,
the following amounts to be distributed by REMIC 2 to REMIC 3 on account of
the
REMIC 2 Regular Interests or withdrawn from the Distribution Account and
distributed to the Holders of the Class R Certificates (in respect of the Class
R-2 Interest), as the case may be:
(i) first,
to
the Holders of REMIC 2 Regular Interest LT2CE2, 100% of the amounts received
in
respect of REMIC 1 Regular Interest I-CE-2; second, to the Holders of REMIC
2
Regular Interest LT2IO, in an amount equal to (A) Uncertificated Accrued
Interest for such REMIC 2 Regular Interest for such Distribution Date, plus
(B)
any amounts in respect thereof remaining unpaid from previous Distribution
Dates
and third, to Holders of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular
Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3,
REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular
Interest LT2M3, REMIC 2 Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5,
REMIC 2 Regular Interest LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular
Interest LT2M8, REMIC 2 Regular Interest LT2M9, REMIC 2 Regular Interest LT2B1,
REMIC 2 Regular Interest LT2P and REMIC 2 Regular Interest LT2ZZ, pro rata,
in
an amount equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Accrued Interest in
respect of REMIC 2 Regular Interest LT2ZZ shall be reduced and deferred when
the
REMIC 2 Overcollateralized Amount is less than the REMIC 2 Overcollateralization
Target Amount, by the lesser of (x) the amount of such difference and (y) the
Maximum LT2ZZ Uncertificated Accrued Interest Deferral Amount and such amount
will be payable to the Holders of REMIC 2 Regular Interest LT2A1, REMIC 2
Regular Interest LT2A2, REMIC 2 Regular Interest LT2A3, REMIC 2 Regular Interest
LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC
2
Regular Interest LT2M4, REMIC 2 Regular Interest LT2M5, REMIC 2 Regular Interest
LT2M6, REMIC 2 Regular Interest LT2M7, REMIC 2 Regular Interest LT2M8, REMIC
2
Regular Interest LT2M9 and REMIC 2 Regular Interest LT2B1, in the same
proportion as the Overcollateralization Deficiency is allocated to the
Corresponding Certificates and the Uncertificated Principal Balance of REMIC
2
Regular Interest LT2ZZ shall be increased by such amount;
123
(ii) to
the
Holders of REMIC 2 Regular Interests, in an amount equal to the remainder of
the
Available Funds for such Distribution Date after the distributions made pursuant
to clause (i) above, allocated as follows:
(A) to
REMIC
2 Regular Interest LT2AA, 98.00% of such remainder, until the Uncertificated
Principal Balance of such Uncertificated REMIC 2 Regular Interest is reduced
to
zero provided, however, that REMIC 2 Regular Interest LT2P shall not be reduced
until the Distribution Date immediately following the expiration of the latest
Prepayment Penalty or any Distribution Date thereafter, at which point such
amount shall be distributed to REMIC 2 Regular Interest LT2P, until $100 has
been distributed pursuant to this clause;
(B) to
REMIC
2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular
Interest LT2A3, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2,
REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4, REMIC 2 Regular
Interest LT2M5, REMIC 2 Regular Interest LT2M6, REMIC 2 Regular Interest LT2M7,
REMIC 2 Regular Interest LT2M8, REMIC 2 Regular Interest LT2M9 and REMIC 2
Regular Interest LT2B1, 1.00% of such remainder, in the same proportion as
principal payments are allocated to the Corresponding Certificates, until the
Uncertificated Principal Balances of such REMIC 2 Regular Interests are reduced
to zero; then
(C) to
REMIC
2 Regular Interest LT2ZZ, 1.00% of such remainder, until the Uncertificated
Principal Balance of such REMIC 2 Regular Interest is reduced to
zero;
(D) any
remaining amount to the Holders of the Class R Certificates (in respect of
the
Class R-2 Interest);
provided,
however,
that
(i) 98.00% and (ii) 2.00% of any principal payments that are attributable to
an
Aggregate Overcollateralization Release Amount shall be allocated to (i) REMIC
2
Regular Interest LT2AA and REMIC 2 Regular Interest LT2P and (ii) REMIC 2
Regular Interest LT2ZZ, respectively.
(iii) to
REMIC
2 Regular Interest LT2P, all amounts representing Prepayment Penalties received
in respect of the REMIC 1 Regular Interest I-47-B for such Distribution
Date.
On
each
Distribution Date, 100% of the amounts distributed on REMIC 2 Regular Interest
LT2IO shall be deemed distributed by REMIC 3 in respect of the Class SWAP-IO
Interest. Such amounts shall be deemed distributed by REMIC 3 to the
Supplemental Interest Trust for deposit into the Swap Account. On each
Distribution Date, 100% of the amounts distributed on REMIC 2 Regular Interest
LT2CE2 shall be deemed distributed by REMIC 3 in respect of the Class CE-2
REMIC
3 Regular Interest. On each Distribution Date, 100% of the amounts distributed
on REMIC 2 Regular Interest LT2P, including Prepayment Penalties, shall be
deemed distributed by REMIC 3 in respect of the Class P REMIC 3 Regular
Interest. Other amounts deemed distributed by REMIC 2 to REMIC 3 shall be deemed
distributed with respect to REMIC 3 Regular Interests (other than the Class
SWAP-IO Interest) so as to (i) pay the Uncertificated Accrued Interest on such
REMIC 3 Regular Interests and (ii) reduce the Certificate Principal Balance
or
Notional Amount of each such REMIC 3 Regular Interest to the extent necessary
so
that it equals the Certificate Principal Balance or Notional Amount of the
corresponding Class of Certificates. Any remaining amounts will be deemed
distributed with respect to the Class R-3 Interest.
124
(c) The
Trustee shall be deemed to cause the following allocation of
losses:
(i) (A) For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC 1 Regular Interests for any Distribution Date, the aggregate amount of
any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Servicer) and any Relief Act Interest Shortfalls shall be allocated first,
to
REMIC 1 Regular Interest I and to the REMIC 1 Regular Interests ending with
the
designation “B”, pro rata based on, and to the extent of, one month’s interest
at the then applicable respective Uncertificated REMIC 1 Pass-Through Rates
on
the respective Uncertificated Principal Balances of each such REMIC 1 Regular
Interest, and then, to REMIC 1 Regular Interests ending with the designation
“A”, pro rata based on, and to the extent of, one month’s interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rates on the
respective Uncertificated Principal Balances of each such REMIC 1 Regular
Interest.
(B) The
aggregate amount of any Relief Act Interest Shortfalls incurred in respect
of
the Mortgage Loans for any Distribution Date shall be allocated first, to
Uncertificated Accrued Interest payable to (i) REMIC 2 Regular Interest LT2AA
and REMIC 2 Regular Interest LT2P and (ii) REMIC 2 Regular Interest LT2ZZ up
to
an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 2 Regular Interest LT2AA,
REMIC
2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular
Interest LT2A3, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2,
REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4, REMIC 2 Regular
Interest LT2M5, REMIC 2 Regular Interest LT2M6, REMIC 2 Regular Interest LT2M7,
REMIC 2 Regular Interest LT2M8, REMIC 2 Regular Interest LT2M9, REMIC 2 Regular
Interest LT2B1 and REMIC 2 Regular Interest LT2ZZ, pro rata based on, and to
the
extent of, one month’s interest at the then applicable respective Uncertificated
REMIC 2 Pass-Through Rate on the respective Uncertificated Principal Balance
of
each such REMIC 2 Regular Interest;
(C) The
aggregate amount of any Relief Act Interest Shortfalls incurred in respect
of
the Mortgage Loans for any Distribution Date shall be allocated to the REMIC
3
Regular Interests (other than the Class CE-2 Interest and Class SWAP-IO
Interest) pro rata based on, and to the extent of, the Uncertificated Accrued
Interest for such REMIC 3 Regular Interest for such Distribution
Date.
125
(ii) (A) All
Realized Losses on the Mortgage Loans shall be allocated on each Distribution
Date first, to REMIC 1 Regular Interest I until the Uncertificated Principal
Balance of such REMIC 1 Regular Interest has been reduced to zero and second,
to
REMIC 1 Regular Interest I-1-A through REMIC 1 Regular Interest I-47-B, starting
with the lowest numerical denomination until such REMIC 2 Regular Interest
has
been reduced to zero, provided that, for REMIC 2 Regular Interests with the
same
numerical denomination, such Realized Losses shall be allocated pro rata between
such REMIC 1 Regular Interests.
(B) All
Realized Losses on the Mortgage Loans shall be allocated by the Trustee on
each
Distribution Date to the following REMIC 2 Regular Interests in the specified
percentages, as follows: first, to Uncertificated Accrued Interest payable
to
(i) REMIC 2 Regular Interest LT2AA and REMIC 2 Regular Interest LT2P and (ii)
REMIC 2 Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC
2
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA and REMIC
2
Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC 2 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2B1 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2B1 has
been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC
2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2M9 and REMIC 2 Regular
Interest LT2ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2M9 has been reduced to zero; fifth,
to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC
2
Regular Interest LT2M8 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2M8 has been reduced to zero; seventh, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2M7 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M7 has
been
reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC
2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2M6 and REMIC 2 Regular
Interest LT2ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2M6 has been reduced to zero; ninth,
to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC
2
Regular Interest LT2M5 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2M5 has been reduced to zero; tenth, to the Uncertificated Principal
Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest LT2M4
and
REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M4 has been
reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC
2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2M3 and REMIC 2 Regular
Interest LT2ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2M3 has been reduced to zero; twelfth,
to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC
2
Regular Interest LT2M2 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2M2 has been reduced to zero; and thirteenth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2M1 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2M1 has
been
reduced to zero.
126
(C) All
Realized Losses on the Mortgage Loans shall be allocated by the Trustee on
each
Distribution Date to the REMIC 3 Regular Interests such that the Uncertificated
Principal Balance of each such REMIC 3 Regular Interest equals the Certificate
Principal Balance of the corresponding Class of Certificates.
(d) On
each
Distribution Date, all amounts representing Prepayment Penalties will be
distributed from REMIC 2 Regular Interest LT2P to the holder of the Class P
Interest. Such amount shall not reduce the Certificate Balance of the Class
P
Interest.
(e) All
distributions in respect of the Class CE-1, Class CE-2, Class P and Class B-1
Certificates shall be treated as having been made first from REMIC 3 and then
to
the Class CE-1, Class P, Class B-1 and Class CE-2 Certificates by REMIC A,
REMIC
B, REMIC C and REMIC D, respectively. Any remaining amounts from any of REMIC
A,
REMIC B, REMIC C and REMIC D shall be distributed to the Class R-X Certificates,
respectively.
(f) Notwithstanding
anything to the contrary contained herein, the above distributions in this
Section 4.08 (other than on the Certificates are deemed distributions, and
distributions of funds from the Distribution Account shall be made only in
accordance with Sections 4.01 and 4.02 hereof.
Section
4.09. Supplemental
Interest Trust.
(a) A
separate trust is hereby established (the “Supplemental
Interest Trust”),
the
corpus of which shall be held by the Supplemental Interest Trust Trustee, in
trust, for the benefit of the holders of the Offered Certificates and the Class
CE-1 Certificates. On the Closing Date, the Supplemental Interest Trust Trustee
shall establish and maintain in its name, two separate accounts for the benefit
of the holders of the Certificates (the “Cap
Account”
and
the
“Swap
Account”).
Funds
on deposit in the Cap Account and Swap Account shall be held separate and apart
from, and shall not be commingled with, any other moneys, including, without
limitation, other moneys of the Trust held pursuant to this
Agreement.
On
any
Distribution Date, Cap Payments for such Distribution Date will be deposited
into the Cap Account and Swap Termination Payments, Net Swap Payments owed
to
the Swap Provider and Net Swap Receipts for that Distribution Date will be
deposited into the Swap Account. For federal income tax purposes, any amounts
paid to the Swap Provider on each Distribution Date shall first be deemed paid
to the Supplemental Interest Trust in respect of the Class SWAP-IO Interest
to
the extent of the amount distributable on the Class SWAP-IO Interest on such
Distribution Date, and any remaining amount shall be deemed paid to the
Supplemental Interest Trust for the benefit of the Swap Provider in respect
of a
Class SWAP-IO Distribution Amount (as defined below). Funds in the Cap Account
and Swap Account will be distributed in the following order of
priority:
127
(i) to
the
Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for
such
Distribution Date;
(ii) to
the
Swap Provider, any Swap Termination Payment, other than a Defaulted Swap
Termination Payment, if any, owed to the Swap Provider;
(iii) concurrently,
to the Class A Certificates, on a pro
rata
basis,
any remaining applicable Accrued Certificate Interest and Interest Carry Forward
Amounts for such Distribution Date to the extent unpaid from the Interest
Remittance Amount and Monthly Excess Cashflow Amounts;
(iv) sequentially,
to each Class of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in that order,
any
remaining Accrued Certificate Interest and Interest Carry Forward Amounts for
such Distribution Date to the extent unpaid from Interest Remittance Amounts
and
Monthly Excess Cashflow Amounts;
(v) to
the
Class X-0, Xxxxx X-0, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B-1
Certificates, to pay principal as described in Section 4.02(a), as applicable,
in order to maintain amounts in respect of the Targeted Overcollateralization
Amount, after giving effect to distributions of the Principal Distribution
Amount for each such Class;
(vi) sequentially,
to each Class of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in that order,
any
remaining Unpaid Realized Loss Amount for such Distribution Date;
(vii) first,
to
the Class A Certificates, pro
rata,
based
on Cap Carryover Amounts, and then sequentially, to the Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
M-9
Certificates, any Cap Carryover Amount for such Classes;
(viii) to
the
Swap Provider, to fund any Defaulted Swap Termination Payment, to the extent
not
already paid; and
(ix) to
the
Class CE-1 Certificates, any remaining amounts.
Amounts
distributed in respect of clauses (v) and (vi) above, together with amounts
distributed in respect of such clauses on prior Distribution Dates, shall not
exceed the aggregate of current or prior Realized Losses not previously
reimbursed by Subsequent Recoveries or through the Monthly Excess Cashflow
Amount.
128
Upon
the
occurrence of an “Early Termination Date” under the Swap Agreement or the Cap
Agreement, and at the direction of the Depositor, the Supplemental Interest
Trust Trustee shall use reasonable efforts to replace the Swap Agreement or
the
Cap Agreement, as the case may be, with one that is furnished by a replacement
for the Swap Provider or the Cap Provider, as applicable, acceptable to each
Rating Agency, and the Supplemental Interest Trust Trustee shall hold in trust
any amount that is paid to it by the Swap Provider or the Cap Provider, as
the
case may be, in respect of any such “Early Termination Date” and apply such
amount to the purchase of the related replacement. If such amount is
insufficient to purchase a replacement for the Swap Agreement or the Cap
Agreement, as applicable, the Supplemental Interest Trust Trustee shall apply
such amount to replace so much of the Swap Agreement or the Cap Agreement,
as
applicable, as it is possible to replace with such amount. If the Swap Provider
or the Cap Provider, as applicable, transfers its rights and obligations under
the Swap Agreement or the Cap Agreement, as the case may be, to another party
in
accordance therewith or the Supplemental Interest Trust Trustee replaces the
Swap Agreement or the Cap Agreement with one that is furnished by a replacement
for the Swap Provider or the Cap Provider, as the case may be, acceptable to
each Rating Agency in accordance with this Agreement, then the Supplemental
Interest Trust Trustee shall execute and deliver the related replacement for
or
novation of the Swap Agreement or the Cap Agreement, as applicable.
Notwithstanding
the foregoing, if any portion of the amount that is paid to the Supplemental
Interest Trust Trustee by the Swap Provider or the Cap Provider in respect
of
any “Early Termination Date” cannot be used to find a replacement Swap Agreement
or Cap Agreement, as the case may be (either because a replacement for the
Swap
Agreement or the Cap Agreement, as the case may be, is not available or such
amount exceeds the amount necessary to purchase such replacement), the
Supplemental Interest Trust Trustee shall (i) in the case of the Swap Agreement,
deposit such amount into a reserve account that is a sub-account of the Swap
Account and on each subsequent Distribution Date (so long as funds are available
in such reserve account), withdraw from the reserve account and deposit into
the
Swap Account an amount equal to the amount of any Net Swap Receipt due the
Supplemental Interest Trust (calculated in accordance with the terms of the
original Swap Agreement) and treat such amount as a Net Swap Receipt for
purposes of determining the distributions from the Swap Account or (ii) in
the
case of the Cap Agreement, deposit such amount into a reserve account that
is a
sub-account of the Cap Account and on each subsequent Distribution Date (so
long
as funds are available in such reserve account), withdraw from the reserve
account and deposit into the Cap Account an amount equal to the amount of any
Cap Payment due the Supplemental Interest Trust (calculated in accordance with
the terms of the original Cap Agreement) and treat such amount as a Cap Payment
for purposes of determining the distributions from the Cap Account. Upon
termination of the Trust, any amounts remaining in the Swap Account and the
Cap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.09.
(b) For
federal income tax purposes, each of the Swap Account and the Cap Account shall
be owned by the majority Holder of the Class CE-1 Certificates. It is the
intention and direction of the parties hereto that, for federal and state income
and state and local franchise tax purposes, the Supplemental Interest Trust
be
disregarded as an entity separate from the Holder of the Class CE-1 Certificates
unless and until the date when either (a) there is more than one Class CE-1
Certificateholder or (b) any Class of Certificates in addition to the Class
CE-1
Certificates is recharacterized as an equity interest in the Supplemental
Interest Trust for federal income tax purposes, in which case it is the
intention and direction of the parties hereto that, for federal and state income
and state and local franchise tax purposes, the Supplemental Interest Trust
be
treated as a partnership. The Trustee shall be entitled to additional reasonable
compensation for preparing any required partnership tax filings. The
Supplemental Interest Trust will be an “outside reserve fund” within the meaning
of Treasury Regulation Section 1.860G−2(h). The Trustee shall not be responsible
for the filing of any entity level tax filings of the majority Holders of the
Class CE-1 Certificates.
129
(c) The
Trustee shall treat the Holders of Certificates (other than the Class P, Class
CE-1, Class CE-2, Class R and Class R-X Certificates) as having entered into
a
notional principal contract with respect to the Holders of the Class CE-1
Certificates. Pursuant to each such notional principal contract, all Holders
of
Certificates (other than the Class P, Class CE-1, Class CE-2, Class R and Class
R-X Certificates) shall be treated as having agreed to pay, on each Distribution
Date, to the Holder of the Class CE-1 Certificates an aggregate amount equal
to
the excess, if any, of (i) the amount payable on such Distribution Date on
the
REMIC 3 Regular Interest corresponding to such Class of Certificates over (ii)
the amount payable on such Class of Certificates on such Distribution Date
(such
excess, a “Class SWAP-IO Distribution Amount”). A Class Swap-IO Distribution
Amount payable from interest collections shall be allocated pro rata among
such
Certificates based on the excess of (a) the amount of interest otherwise payable
to such Certificates over (ii) the amount of interest payable to such
Certificates at a per annum rate equal to the REMIC 3 Cap, and a Class SWAP-IO
Distribution Amount payable from principal collections shall be allocated to
the
most subordinate Class of Certificates with an outstanding principal balance
to
the extent of such balance. In addition, pursuant to such notional principal
contract, the Holder of the Class CE-1 Certificates shall be treated as having
agreed to pay Cap Carryover Amounts to the Holders of the Certificates (other
than the Class B-1, Class CE-1, Class CE-2, Class P, Class R and Class R-X
Certificates) in accordance with the terms of this Agreement. Any payments
to
the Certificates from amounts deemed received in respect of this notional
principal contract shall not be payments with respect to a Regular Interest
in a
REMIC within the meaning of Code Section 860G(a)(1). However, any payment from
the Certificates (other than the Class CE-1, Class CE-2, Class P, Class R and
Class R-X Certificates) of a Class SWAP-IO Distribution Amount shall be treated
for tax purposes as having been received by the Holders of such Certificates
in
respect of the corresponding REMIC 3 Regular Interest and as having been paid
by
such Holders to the Supplemental Interest Trust Trustee pursuant to the notional
principal contract. Thus, each Certificate (other than the Class CE-2, Class
P,
Class R and Class R-X Certificates) shall be treated as representing not only
ownership of a REMIC 3 Regular Interest, but also ownership of an interest
in,
and obligations with respect to, a notional principal contract.
(d) For
federal income tax purposes, each holder of a Class A, Class M and Class B-1
Certificate is deemed to own an undivided beneficial ownership interest in
a
REMIC 3 Regular Interest and the right to receive payments from either the
Cap
Carryover Reserve Account or the Supplemental Interest Trust Swap Account or
Cap
Account in respect of the Cap Carryover Amount or the obligation to make
payments to the Supplemental Interest Trust in respect of the Class SWAP-IO
Distribution Amount or Swap Termination Payment. For federal income tax
purposes, the Trustee will account for payments to each Class A, Class M and
Class B-1 Certificate as follows: each Class A, Class M and Class B-1
Certificate will be treated as receiving their entire payment from the
corresponding REMIC 3 Regular Interest (regardless of any Swap Termination
Payment, Class SWAP-IO Distribution Amount or obligation under the Swap
Agreement) and subsequently paying their portion of any Swap Termination Payment
or Class SWAP-IO Distribution Amount in respect of each such Class’ obligation
under the Swap Agreement. In the event that any such Class is resecuritized
in
another REMIC, the obligation under the Swap Agreement to pay any such Swap
Termination Payment (or any shortfall in the Net Swap Payment), will be made
by
one or more of the REMIC regular interests issued by the resecuritization REMIC
subsequent to such REMIC regular interest receiving its full payment from any
such Class A, Class B-1 or Class M Certificate. Resecuritization of any Class
A,
Class B-1 or Class M Certificate in a REMIC will be permissible only if the
Trustee hereunder is the trustee in such resecuritization.
130
(e) The
REMIC
3 Regular Interest corresponding to a Class A, Class M or Class B-1 Certificate
will be entitled to receive interest and principal payments at the times and
in
the amounts equal to those made on the certificate to which it corresponds,
except that the maximum interest rate payable on that REMIC 3 Regular Interest
will equal the REMIC 3 Cap. As a result of the foregoing, the amount of
distributions and taxable income on the REMIC 3 Regular Interest corresponding
to a Class A, Class M or Class B-1 Certificate may exceed the actual amount
of
distributions on the Class A, Class M, Class B-1 Certificate.
ARTICLE
V
THE
CERTIFICATES
Section
5.01. The
Certificates.
Each
of
the Class A-1, Class A-2, Class X- 0, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class B-1, Class CE-1, Class CE-2, Class P, Class R and Class R-X
Certificates shall be substantially in the forms annexed hereto as exhibits,
and
shall, on original issue, be executed by the Trustee and authenticated and
delivered by the Certificate Registrar to or upon the receipt of a Written
Order
to Authenticate from the Depositor concurrently with the sale and assignment
to
the Trustee of the Trust Fund. Each Class of the Offered Certificates and the
Class B-1 Certificates shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of
$100,000 and integral multiples of $1 in excess thereof. The minimum
denomination for each of the Class P, Class CE-1 and Class CE-2 Certificates
will be a 10% Percentage Interest in such Class, and the minimum denomination
for the Class R and Class R-X Certificates shall be 100% Percentage Interest
in
such Class.
The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature on behalf of the Trustee by a Responsible 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 Trustee
shall bind the Trust, notwithstanding that such individuals or any of them
have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificate.
No
Certificate shall be entitled to any benefit under this Agreement or be valid
for any purpose, unless such Certificate shall have been manually authenticated
by the Certificate Registrar substantially in the form provided for herein,
and
such authentication upon any Certificate shall be conclusive evidence, and
the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Subject to Section 5.02(c), the Offered Certificates and the Class B-1
Certificates shall be Book-Entry Certificates. The Class CE-1, Class CE-2,
Class P, Class R and Class R-X Certificates shall not be Book-Entry
Certificates but shall be issued in fully registered certificate
form.
131
Section
5.02. Registration
of Transfer and Exchange of Certificates.
(a) The
Certificate Registrar shall cause to be kept at the Corporate Trust Office
of
the Trustee a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for
the
registration of Certificates and of transfers and exchanges of Certificates
as
herein provided. The Trustee shall initially serve as Certificate Registrar
for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Trustee as Certificate Registrar shall
be
subject to the same standards of care, limitations on liability and rights
to
indemnity as the Trustee, and the provisions of Sections 8.01, 8.02, 8.03,
8.04,
8.05, 8.14, 8.15 and 8.16 shall apply to the Certificate Registrar to the same
extent as they apply to the Trustee. Any Certificate Registrar appointed in
accordance with this Section 5.02(a) may at any time resign by giving at least
30 days’ advance written notice of resignation to the Trustee, the Servicer and
the Depositor, such resignation to become effective upon appointment of a
successor Certificate Registrar.
Upon
surrender for registration of transfer of any Certificate at any office or
agency of the Certificate Registrar maintained for such purpose pursuant to
the
foregoing paragraph and, in the case of a Residual Certificate, upon
satisfaction of the conditions set forth below, the Trustee on behalf of the
Trust shall execute and the Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same aggregate Percentage Interest.
At
the
option of the Certificateholders, Certificates may be exchanged for other
Certificates in authorized denominations and the same aggregate Percentage
Interests, upon surrender of the Certificates to be exchanged at any such office
or agency. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute on behalf of the Trust and the Certificate Registrar
shall
authenticate and deliver the Certificates which the Certificateholder making
the
exchange is entitled to receive. Every Certificate presented or surrendered
for
registration of transfer or exchange shall (if so required by the Trustee or
the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in
writing.
(b) Upon
original issuance, the Book-Entry Certificates shall be issued in the form
of
one or more typewritten certificates, to be delivered to the Depository, the
initial Depository, by, or on behalf of, the Depositor; or to, and deposited
with the Certificate Custodian, on behalf of the Depository, if directed to
do
so pursuant to instructions from the Depository. Except as provided in paragraph
(c) below, the Book-Entry Certificates shall at all times remain registered
in
the name of the Depository or its nominee and at all times:
(i) registration of such Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership
and
transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall for all purposes deal
with the Depository as representative of the Certificate Owners of the
Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants
with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and
(vii) the direct participants of the Depository shall have no rights under
this Agreement under or with respect to any of the Certificates held on their
behalf by the Depository, and the Depository may be treated by the Trustee
and
their agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
132
All
transfers by Certificate Owners of Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owners. Each Depository Participant
shall only transfer Book-Entry Certificates of Certificate Owners that it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository’s normal procedures. The parties hereto are hereby authorized to
execute a Letter of Representations with the Depository or take such other
action as may be necessary or desirable to register a Book-Entry Certificate
to
the Depository. In the event of any conflict between the terms of any such
Letter of Representation and this Agreement, the terms of this Agreement shall
control.
(c) If
the
Depository or the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to discharge properly its responsibilities as
Depository and the Trustee or the Depositor is unable to locate a qualified
successor, the Trustee shall notify all Certificate Owners of Book-Entry
Certificates, through the Depository, of the occurrence of such event and of
the
availability of definitive, fully registered certificates (the “Definitive
Certificates”)
to
Certificate Owners requesting the same. Upon surrender to the Certificate
Registrar of the Book-Entry Certificates by the Depository, accompanied by
registration instructions from the Depository for registration, the Trustee
shall, at the Seller’s expense, execute on behalf of the Trust and the
Certificate Registrar shall authenticate the Definitive Certificates. Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of
such
instructions and may conclusively rely on, and shall be protected in relying
on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Certificate Registrar, the Servicer, any Paying Agent and the Depositor
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d) No
transfer, sale, pledge or other disposition of any Private Certificate shall
be
made unless such disposition is exempt from the registration requirements of
the
Securities Act of 1933, as amended (the “1933
Act”),
and
any applicable state securities laws or is made in accordance with the 1933
Act
and laws. In the event of any such transfer, other than the initial transfer
of
the Private Certificates by the Depositor, (i) unless such transfer is made
in reliance upon Rule 144A (as evidenced by the investment letter delivered
to the Certificate Registrar, in substantially the form attached hereto as
Exhibit J-2)
under
the 1933 Act, the Certificate Registrar and the Depositor may require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and in form
and
substance reasonably satisfactory to the Certificate Registrar and the Depositor
that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from the 1933 Act or is being
made
pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense
of
the Certificate Registrar, the Trustee or the Depositor or (ii) the
Certificate Registrar shall require the transferor to execute a transferor
certificate (in substantially the form attached hereto as Exhibit L)
and the
transferee to execute an investment letter in substantially the form attached
hereto as Exhibit J-1
or J-2
acceptable to and in form and substance reasonably satisfactory to the Depositor
and the Certificate Registrar certifying to the Depositor and the Certificate
Registrar the facts surrounding such transfer, which investment letter shall
not
be an expense of the Certificate Registrar or the Depositor. The Holder of
a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Certificate Registrar and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws. For purposes of this Section
5.02(d) the representations required in any transferor certificate
(substantially in the form of Exhibit
L
hereto)
and any investment letter (substantially in the form of Exhibit
J-1 or J-2
hereto)
shall be deemed to have been made in connection with the transfer of any Private
Certificate that is a Book-Entry Certificate.
133
For
so
long as the Supplemental Interest Trust is in existence, each beneficial owner
of a Class A or a Class M Certificate or any interest therein, shall be deemed
to have represented, by virtue of its acquisition or holding of such
Certificate, or interest therein, that either (i) it is not a Plan (as defined
below) nor a person acting on behalf of any such Plan or using the assets of
any
such Plan or (ii) (A) it is an accredited investor within the meaning of the
Underwriter’s Exemption and (B) the acquisition and holding of such certificate
and the separate right to receive payments from the Supplement Interest Trust
are eligible for the exemptive relief available under Department of Labor
Prohibited Transaction Class Exemption (“PTCE”)
84-14
(for transactions by independent “qualified professional asset managers”), XXXX
00-00 (for transactions by bank collective investment funds), XXXX 00-0 (for
transactions by insurance company pooled separate accounts), PTCE 95-60 (for
transactions by insurance company general accounts), PTCE 96-23 (for
transactions effected by “in-house asset managers”) or the statutory exemption
under Section 408(b)(17) of ERISA (for transactions with certain service
providers).
No
transfer of an ERISA-Restricted Certificate, other than the initial transfer
of
the Private Certificates by the Depositor, shall be made unless the Certificate
Registrar shall have received a representation from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the Trustee
and the Depositor (such requirement is satisfied only by the Certificate
Registrar’s receipt of a representation letter from the transferee substantially
in the form of Exhibit
I
hereto,
as appropriate), to the effect that such transferee (i) is not an employee
benefit plan or arrangement subject to Title I of ERISA or a plan subject to
Section 4975 of the Code (each, a “Plan”),
nor a
person acting on behalf of any such Plan nor using the assets of any such Plan
to effect such transfer or (ii) (except in the case of a Class R, Class R-X,
Class P or Class CE Certificate) if the purchaser is an insurance company,
using
funds from an “insurance company general account” (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60 (60 Fed. Reg.
35925
(July 12, 1995) (“PTCE
95-60”)
to
purchase such Certificates, that the purchase and holding of such Certificates
are covered under Sections I and III of PTCE 95-60 or (iii) (except in the
case
of the Class R or R-X Certificate) in the case of any such ERISA-Restricted
Certificate presented for registration in the name of a Plan, or any person
acting on behalf of any such Plan or using assets of any such Plan, an Opinion
of Counsel satisfactory to the Trustee and the Depositor which Opinion of
Counsel shall not be at the expense of the Trust, the Trustee, the Certificate
Registrar, the Depositor, the Sponsor or the Servicer, to the effect that the
purchase or holding of such ERISA Restricted Certificate will not constitute
or
result in a non-exempt prohibited transaction within the meaning of ERISA or,
Section 4975 of the Code and will not subject the Trustee, the Certificate
Registrar, the Depositor, the Sponsor or the Servicer to any obligation in
addition to those expressly undertaken in this Agreement. For purposes of clause
(i) of the preceding sentence, such representation shall be deemed to have
been
made to the Trustee by the acceptance by a Certificate Owner of the beneficial
interest in any such Class of ERISA-Restricted Certificates, unless the Trustee
shall have received from the transferee an alternative representation acceptable
in form and substance to the Depositor.
134
Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of or with assets of a Plan without
the delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee
and the Depositor as described above shall be void and of no
effect.
Any
representations required to be made with in subsection (i) and (ii) above in
the
case of an ERISA-Restricted Certificate or with respect to the Class A or Class
M Certificates and the Supplemental Interest Trust which is also a Book-Entry
Certificate shall be deemed to have been made by the acquisition of such
Certificate.
No
transfer of the Class CE-1 Certificates shall be made unless the proposed
transferee of such Certificates provides to the Trustee a duly executed IRS
Form
X-0, X-0XXX, X-0XXX orW-8ECI (or applicable successor form) and agrees to update
any such form (i) upon expiration of any such form, (ii) as required under
then
applicable U.S. Treasury regulations and (ii) promptly upon learning than any
such form has become obsolete or incorrect. Upon receipt of any such form,
the
Trustee shall provide a copy of such form to the Supplemental Interest Trustee
and the Supplemental Interest Trust Trustee shall provide a copy of such form
to
the Swap Provider. Each holder of a Class CE-1 Certificate and each transferee
shall be deemed to have consented to the Supplemental Interest Trust Trustee
forwarding to the Swap Provider any tax certification form it has provided
and
updated in accordance with the terms hereof.
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 to have irrevocably
appointed the Depositor or its designee as its attorney-in-fact to negotiate
the
terms of any mandatory sale under clause (v) below and to execute all
instruments of transfer and to do all other things necessary in connection
with
any such sale, and the rights of each Person acquiring any Ownership Interest
in
a Residual Certificate are expressly subject to the following
provisions:
(i) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Certificate
Registrar of any change or impending change in its status as a Permitted
Transferee.
135
(ii) No
Person
shall acquire an Ownership Interest in a Residual Certificate unless such
Ownership Interest is a pro
rata
undivided interest.
(iii) In
connection with any proposed transfer of any Ownership Interest in a Residual
Certificate, the Certificate Registrar shall as a condition to registration
of
the transfer, require delivery to it, in form and substance satisfactory to
it,
of each of the following:
A. an
affidavit in the form of Exhibit
K
hereto
from the proposed transferee to the effect that, among other things, such
transferee is a Permitted Transferee and that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of the proposed
transfer as a nominee, trustee or agent for any Person who is not a Permitted
Transferee; and
B. a
covenant of the proposed transferee to the effect that the proposed transferee
agrees to be bound by and to abide by the transfer restrictions applicable
to
the Residual Certificates.
(iv) Any
attempted or purported transfer of any Ownership Interest in a Residual
Certificate in violation of the provisions of this Section shall be absolutely
null and void and shall vest no rights in the purported transferee. If any
purported transferee shall, in violation of the provisions of this Section,
become a Holder of a Residual Certificate, then the prior Holder of such
Residual Certificate that is a Permitted Transferee shall, upon discovery that
the registration of transfer of such Residual Certificate was not in fact
permitted by this Section, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Residual
Certificate. The Certificate Registrar shall be under no liability to any Person
for any registration of transfer of a Residual Certificate that is in fact
not
permitted by this Section or for making any distributions due on such Residual
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 Certificate
Registrar received the documents specified in clause (iii). The Trustee
shall be entitled to recover from any Holder of a Residual Certificate that
was
in fact not a Permitted Transferee at the time such distributions were made
all
distributions made on such Residual Certificate. Any such distributions so
recovered by the Trustee shall be distributed and delivered by the Trustee
to
the prior Holder of such Residual Certificate that is a Permitted
Transferee.
(v) If
any
Person other than a Permitted Transferee acquires any Ownership Interest in
a
Residual Certificate in violation of the restrictions in this Section, then
the
Certificate Registrar shall have the right but not the obligation, without
notice to the Holder of such Residual Certificate or any other Person having
an
Ownership Interest therein, to notify the Depositor to arrange for the sale
of
such Residual Certificate. The proceeds of such sale, net of commissions (which
may include commissions payable to the Depositor or its affiliates in connection
with such sale), expenses and taxes due, if any, will be remitted by the Trustee
to the previous Holder of such Residual Certificate that is a Permitted
Transferee, except that in the event that the Trustee determines that the Holder
of such Residual Certificate may be liable for any amount due under this Section
or any other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim. The terms
and conditions of any sale under this clause (v) shall be determined in the
sole discretion of the Trustee and it shall not be liable to any Person having
an Ownership Interest in a Residual Certificate as a result of its exercise
of
such discretion.
136
(vi) If
any
Person other than a Permitted Transferee acquires any Ownership Interest in
a
Residual Certificate in violation of the restrictions in this Section, then
the
Trustee will provide to the Internal Revenue Service, and to the persons
specified in Sections 860E(e)(3) and (6) of the Code, information
needed to compute the tax imposed under Section 860E(e)(5) of the Code on
transfers of residual interests to disqualified organizations. The Trustee
shall
be entitled to reasonable compensation for providing such information from
the
person to whom it is provided.
The
foregoing provisions of this Section shall cease to apply to transfers occurring
on or after the date on which there shall have been delivered to the Certificate
Registrar, in form and substance satisfactory to the Certificate Registrar,
(i) written notification from each Rating Agency that the removal of the
restrictions on Transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No
service charge shall be made for any registration of transfer or exchange of
Certificates of any Class, but the Certificate Registrar may require payment
of
a sum sufficient to cover any tax or governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
All
Certificates surrendered for registration of transfer or exchange shall be
cancelled by the Certificate Registrar and disposed of pursuant to its standard
procedures.
Section
5.03. Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(i) any mutilated Certificate is surrendered to the Certificate Registrar
or the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (ii) there is delivered
to the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in
the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, and the Certificate Registrar shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee or
the
Certificate Registrar may require the payment of a sum sufficient to cover
any
tax or other governmental charge that may be imposed in relation thereto and
any
other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) in connection therewith. Any duplicate Certificate issued
pursuant to this Section, shall constitute complete and indefeasible evidence
of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
137
Section
5.04. Persons
Deemed Owners.
The
Servicer, the Depositor, the Trustee, the Certificate Registrar, any Paying
Agent and any agent of the Servicer, the Depositor, the Certificate Registrar,
any Paying Agent or the Trustee may treat the Person, including a Depository,
in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01 and 4.02
and for all other purposes whatsoever, and none of the Servicer, the Trust,
the
Trustee, any Paying Agent nor any agent of any of them shall be affected by
notice to the contrary.
Section
5.05. Appointment
of Paying Agent.
The
Paying Agent shall make distributions to Certificateholders from the
Distribution Account pursuant to Section 4.01 and 4.02 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent
may
include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.05 and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information
to Certificateholders as required hereunder. The Paying Agent hereunder shall
at
all times be an entity duly incorporated and validly existing under the laws
of
the United States of America or any state thereof, authorized under such laws
to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the Rating Agencies.
The
Trustee as Paying Agent shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Paying Agent to the same extent as they apply to the Trustee.
Any
Paying Agent appointed in accordance with this Section 5.05 may at any time
resign by giving at least 30 days’ advance written notice of resignation to the
Trustee, the Servicer and the Depositor, such resignation to become effective
upon appointment of a successor Paying Agent.
ARTICLE
VI
THE
SELLER, THE SERVICER AND THE DEPOSITOR
Section
6.01. Liability
of the Seller, the Servicer and the Depositor.
The
Seller and the Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Seller
or Servicer, as the case may be, herein. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor.
Section
6.02. Merger
or Consolidation of, or Assumption of the Obligations of, the Seller, the
Servicer or the Depositor.
Any
entity into which the Seller, the Servicer or the Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Seller, the Servicer or the Depositor shall be a
party, or any corporation succeeding to the business of the Seller, the Servicer
or the Depositor, shall be the successor of the Seller, the Servicer or the
Depositor, 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 Servicer shall satisfy all the requirements of Section 7.02
with respect to the qualifications of a successor Servicer.
138
As
a
condition to the succession to the Servicer under this Agreement by any Person
(i) into which a Servicer may be merged or consolidated, or (ii) which may
be
appointed as a successor to a Servicer, such Servicer shall provide to the
Depositor, at least 30 calendar days (or 10 Business Days in the case of the
appointment of the Servicing Rights Pledgee or its designee as successor
servicer); provided, however that the 30 calendar days or 10 Business Days
notice period shall not apply once the Depositor is not required to file reports
pursuant to the Exchange Act) prior to the effective date of such succession
or
appointment, (x) written notice to the Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Depositor, all information reasonably necessary to enable the Trustee,
pursuant to Section 3.29(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act).
Section
6.03. Limitation
on Liability of the Servicer and Others.
Neither
the Servicer nor any of the directors or officers or employees or agents of
the
Servicer shall be under any liability to the Trust or the Certificateholders
for
any action taken or for refraining from the taking of any action by the Servicer
in good faith pursuant to this Agreement, or for errors in judgment;
provided,
however,
that
this provision shall not protect the Servicer or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of duties of the Servicer
or by
reason of its reckless disregard of its obligations and duties of the Servicer
hereunder; provided,
further,
that
this provision shall not be construed to entitle the Servicer to indemnity
in
the event that amounts advanced by the Servicer to retire any senior lien exceed
Liquidation Proceeds (in excess of related liquidation expenses) realized with
respect to the related Mortgage Loan. The Servicer and any director or officer
or employee or agent of the Servicer may rely in good faith on any document
of
any kind prima facie
properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer and any director or officer or employee or agent of the Servicer
shall be indemnified by the Trust and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer may undertake any such action
which it may deem necessary or desirable in respect of this Agreement, and
the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the reasonable legal expenses
and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to pay
such expenses from the proceeds of the Trust or to be reimbursed therefor
pursuant to Section 3.05 upon presentation to the Trustee of documentation
of such expenses, costs and liabilities. The Servicer’s right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer pursuant to Section 6.04 or 7.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination). This paragraph shall apply to the Servicer solely in its
capacity as Servicer hereunder and in no other capacities.
139
Section
6.04. Servicer
Not to Resign.
Subject
to the provisions of Section 7.01, the second paragraph of Section 7.02,
Section 6.02 and the second paragraph of Section 6.04, the Servicer shall
not resign from the obligations and duties hereby imposed on it except
(i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by
it
or its subsidiaries or Affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer
or
its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) either (x) the Servicer has
proposed a successor servicer to the Trustee in writing and such proposed
successor servicer is reasonably acceptable to the Trustee or (y) the Servicing
Rights Pledgee has delivered to the Trustee a letter signed by the Servicer
whereunder the Servicer resigns as Servicer under this Agreement pursuant to
the
second paragraph of this Section 6.04 or the second paragraph of Section
7.02(a); and (b) each Rating Agency shall have delivered a letter to the
Trustee prior to the appointment of the successor servicer stating that the
proposed appointment of such successor servicer as Servicer hereunder will
not
result in the reduction or withdrawal of the then current rating of the Offered
Certificates and Class B-1 Certificates or the ratings that are in effect;
provided,
however,
that no
such resignation by the Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Trustee shall have assumed the
Servicer’s responsibilities and obligations hereunder or the Trustee shall have
designated a successor servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive
the resignation or termination of the Servicer. Any such determination
permitting the resignation of the Servicer pursuant to clause (i) above
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Trustee. Any such determination permitting the resignation of the Servicer
shall
be evidenced by an Opinion of Counsel to such effect delivered to the
Trustee.
Notwithstanding
anything to the contrary set forth above, the Trustee and the Depositor hereby
specifically (i) consent to the pledge and assignment by the Servicer of
all the Servicer’s right, title and interest in, to and under this Agreement to
the Servicing Rights Pledgee, for the benefit of certain lenders, and
(ii) provided that no Servicer Event of Termination exists, agree that upon
delivery to the Trustee by the Servicing Rights Pledgee of a letter signed
by
the Servicer whereunder the Servicer shall resign as Servicer under this
Agreement, the Trustee shall appoint the Servicing Rights Pledgee or its
designee as successor Servicer, provided that at the time of such appointment,
the Servicing Rights Pledgee or such designee meets the requirements of a
successor Servicer pursuant to Section 7.02(a) and agrees to be subject to
the terms of this Agreement. If, pursuant to any provision hereof, the duties
of
the Servicer are transferred to a successor, the entire amount of the Servicing
Fee and other compensation payable to the Servicer pursuant hereto shall
thereafter be payable to such successor.
140
Section
6.05. Advance
Facility.
(a) The
Servicer is hereby authorized to enter into a financing or other facility (any
such arrangement, an “Advance
Facility”),
the
documentation for which complies with Section 6.05(e) below, under which (1)
the
Servicer assigns or pledges its rights under this Agreement to be reimbursed
for
any or all Advances and/or Servicing Advances to (i) a Person, which may be
a
special-purpose bankruptcy-remote entity (an “SPV”),
(ii)
a Person, which may simultaneously assign or pledge such rights to an SPV or
(iii) a lender (a “Lender”),
which, in the case of any Person or SPV of the type described in either of
the
preceding clauses (i) or (ii), may directly or through other assignees and/or
pledgees, assign or pledge such rights to a Person, which may include a trustee
acting on behalf of holders of debt instruments (any such Person or any such
Lender, an “Advance
Financing Person”),
and/or (2) an Advance Financing Person agrees to fund all the Advances and/or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party
shall be required before the Servicer may enter into an Advance Facility nor
shall the Trustee or the Certificateholders be a third party beneficiary of
any
obligation of an Advance Financing Person to the Servicer. Notwithstanding
the
existence of any Advance Facility under which an Advance Financing Person agrees
to fund Advances and/or Servicing Advances, (A) the Servicer (i) shall remain
obligated pursuant to this Agreement to make Advances and/or Servicing Advances
pursuant to and as required by this Agreement and (ii) shall not be relieved
of
such obligations by virtue of such Advance Facility and (B) neither the Advance
Financing Person nor any Servicer’s Assignee (as hereinafter defined) shall have
any right to proceed against or otherwise contact any Mortgagor for the purpose
of collecting any payment that may be due with respect to any related Mortgage
Loan or enforcing any covenant of such Mortgagor under the related Mortgage
Loan
documents.
(b) If
the
Servicer enters into an Advance Facility, the Servicer and the related Advance
Financing Person shall deliver to the Trustee at the address set forth in
Section 11.05 hereof a written notice (an “Advance
Facility Notice”),
stating (a) the identity of the Advance Financing Person and (b) the identity
of
the Person (the “Servicer’s
Assignee”)
that
will, subject to Section 6.05(c) hereof, have the right to make withdrawals
from
the Collection Account pursuant to Section 3.05 hereof to reimburse previously
unreimbursed Advances and/or Servicing Advances (“Advance
Reimbursement Amounts”).
Advance Reimbursement Amounts (i) shall consist solely of amounts in respect
of
Advances and/or Servicing Advances for which the Servicer would be permitted
to
reimburse itself in accordance with Section 3.05 hereof, assuming the Servicer
had made the related Advance(s) and/or Servicing Advance(s) and (ii) shall
not
consist of amounts payable to a successor Servicer in accordance with Section
3.05 hereof to the extent permitted under Section 6.05(e) below.
(c) Notwithstanding
the existence of an Advance Facility, the Servicer, on behalf of the Advance
Financing Person, shall be entitled to receive reimbursements of Advances and/or
Servicing Advances in accordance with Section 3.05 hereof, which entitlement
may
be terminated by the Advance Financing Person pursuant to a written notice
to
the Trustee in the manner set forth in Section 11.05 hereof. Upon receipt of
such written notice, the Servicer shall no longer be entitled to receive
reimbursement for any Advance Reimbursement Amounts and the Servicer’s Assignee
shall immediately have the right to receive from the Collection Account all
Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer’s Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder pursuant
to Section 3.05 of this Agreement and shall not otherwise be entitled to make
withdrawals of, or receive, Advance Reimbursement Amounts that shall be
deposited in the Distribution Account pursuant to Section 3.04(b) hereof, and
(ii) none of the Trustee or the Certificateholders shall have any right to,
or
otherwise be entitled to, receive any Advance Reimbursement Amounts to which
the
Servicer or Servicer’s Assignee, as applicable, shall be entitled pursuant to
Section 3.05 hereof. Without limiting the foregoing, none of the Trustee or
the
Certificateholders shall have any right to set off against Advance Reimbursement
Amounts hereunder. An Advance Facility may be terminated by the joint written
direction of the Servicer and the related Advance Financing Person. Written
notice of such termination shall be delivered to the Trustee in the manner
set
forth in Section 11.05 hereof. The Trustee shall have no duty or liability
with
respect to the calculation of any Advance Reimbursement Amount and shall be
entitled to rely without independent investigation on the Advance Facility
Notice and on such Servicer’s report of the amount of Advance Reimbursement
Amounts and Servicing Advance Reimbursement Amounts that were included in the
remittance from such Servicer to the Trustee pursuant to Section 4.07. Such
Servicer shall maintain and provide to any successor Servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
141
(d) [Reserved].
(e) As
between a predecessor Servicer and its Advance Financing Person, on the one
hand, and a successor Servicer and its Advance Financing Person, if any, on
the
other hand, Advance Reimbursement Amounts on a loan-by-loan basis with respect
to each Mortgage Loan as to which an Advance and/or Servicing Advance shall
have
been made and be outstanding shall be allocated on a “first-in, first out”
basis. In the event the Servicer’s Assignee shall have received some or all of
an Advance Reimbursement Amount related to Advances and/or Servicing Advances
that were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer’s Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain entitled
to
be reimbursed by the Advance Financing Person for all Advances and/or Servicing
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person
or
Servicer’s Assignee.
(f) For
purposes of any certification of a Servicing Officer of the Servicer made
pursuant to Section 4.07(d), any Nonrecoverable Advance referred to therein
may
have been made by such Servicer or any predecessor Servicer. In making its
determination that any Advance or Servicing Advance theretofore made has become
a Nonrecoverable Advance, the Servicer shall apply the same criteria in making
such determination regardless of whether such Advance or Servicing Advance
shall
have been made by the Servicer or any predecessor Servicer.
142
(g) The
Trustee shall not, as a result of the existence of any Advance Facility, have
any additional responsibility to track or monitor Advance Reimbursement Amounts
or any Advance Facility, and, except as expressly provided in Section 6.05(c)
above, is not and shall not be obligated to make any payment with respect to
any
Advance Reimbursement Amount. The Servicer hereby indemnifies the Trustee,
the
Trust Fund and any successor Servicer, as applicable, from and against any
claims, losses, liabilities or damages resulting from any claim by the related
Advancing Person, except to the extent that such claim, loss, liability or
damage resulted from or arose out of negligence, recklessness or willful
misconduct on the part of the Trustee or the successor Servicer, or failure
by
the successor Servicer or the Trustee to remit funds as required by this
Agreement or the commission of an act or omission to act by the successor
Servicer or the Trustee, and the passage of any applicable cure or grace period,
such that a Servicer Event of Termination under this Agreement occurs or such
entity is subject to termination for cause under this Agreement.
ARTICLE
VII
DEFAULT
Section
7.01. Servicer
Events of Termination.
(a) If
any
one of the following events (each, a “Servicer
Event of Termination”)
shall
occur and be continuing:
(i) (A) The
failure by the Servicer to make any required Advance; or (B) any other
failure by the Servicer to deposit in the Collection Account or Distribution
Account any deposit required to be made under the terms of this Agreement which
continues unremedied for a period of one Business Day after the date upon which
written notice of such failure shall have been given to the Servicer by the
Trustee or by any Holder of a Certificate (other than the Residual Certificates)
evidencing at least 25% of the Voting Rights; or
(ii) The
failure by the Servicer to make any required Servicing Advance which failure
continues unremedied for a period of 30 days, or the failure by the Servicer
duly to observe or perform, in any material respect, any other covenants,
obligations or agreements of the Servicer as set forth in this Agreement, which
failure continues unremedied for a period of 30 days, after the date (A) on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee or by any Holder of a Certificate
(other than a Residual Certificate) evidencing at least 25% of the Voting Rights
or (B) actual knowledge of such failure by a Servicing Officer of the
Servicer; or
(iii) The
entry
against the Servicer of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a period
of 60 days; or
143
(iv) The
Servicer shall voluntarily go into liquidation, consent to the appointment
of a
conservator or receiver or liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or a decree or order of a court or agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors
or
voluntarily suspend payment of its obligations; or
(v) The
aggregate amount of cumulative Realized Losses incurred since the Cut-off Date
through the last day of the related Collection Period (reduced by the aggregate
amount of Subsequent Recoveries received since the Cut-off Date through the
last
day of the related Collection Period) divided by the Pool Balance as of the
Cut-off Date exceeds the applicable percentages set forth below with respect
to
such Distribution Date:
|
Distribution
Date Occurring In
|
Percentage
|
|
June
2010 through May 2011
|
5.250%
for the first month, plus an additional 1/12th of 2.925% for each
month
thereafter,
|
|
June
2011 through May 2012
|
8.175%
for the first month, plus an additional 1/12th of 2.400% for each
month
thereafter,
|
|
June
2012 through May 2013
|
10.575%
for the first month, plus an additional 1/12th of 1.350% for each
month
thereafter,
|
|
June
2013 and thereafter
|
11.925%
|
(b) Then,
and
in each and every such case, so long as a Servicer Event of Termination shall
not have been remedied within the applicable grace period, (x) with respect
solely to clause (i)(A) above, if such Advance is not made by 11:00 AM, New
York
time, on the Business Day immediately following the Servicer Remittance Date,
the Trustee may terminate all of the rights and obligations of the Servicer
under this Agreement and the Trustee, or a successor servicer appointed in
accordance with Section 7.02, shall immediately make such Advance and
assume, pursuant to Section 7.02, the duties of a successor Servicer and
(y) in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee
shall, at the direction of the Holders of each Class of Certificates (other
than
the Residual Certificates) evidencing Percentage Interests aggregating not
less
than 51%, by notice then given in writing to the Servicer (and to the Trustee
if
given by Holders of Certificates), terminate all of the rights and obligations
of the Servicer as servicer under this Agreement. Any such notice to the
Servicer shall also be given to each Rating Agency, the Depositor and the
Seller. On or after the receipt by the Servicer (and by the Trustee if such
notice is given by the Holders) of such written notice, all authority and power
of the Servicer under this Agreement, whether with respect to the Certificates
or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
pursuant to and under this Section; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and Related
Documents or otherwise. The Servicer agrees to cooperate with the Trustee (or
the applicable successor Servicer) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee (or the applicable successor Servicer)
of all documents and records requested by it to enable it to assume the
Servicer’s functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice
to
the applicable successor Servicer for the administration by it of all cash
amounts that shall at the time be held by the Servicer and to be deposited
by it
in the Collection Account, the Distribution Account, any REO Account or any
Escrow Account or that have been deposited by the Servicer in such accounts
or
thereafter received by the Servicer with respect to the Mortgage Loans or any
REO Property received by the Servicer. All reasonable costs and expenses
(including attorneys’ fees) incurred in connection with transferring the
servicing to the successor Servicer and amending this Agreement to reflect
such
succession as Servicer pursuant to this Section shall be paid by the predecessor
Servicer (or if the predecessor Servicer is the Trustee, the initial Servicer)
upon presentation of reasonable documentation of such costs and expenses, and
if
such predecessor Servicer defaults in its obligation to pay such costs, such
costs shall be borne by the Trust.
144
Section
7.02. Trustee
to Act; Appointment of Successor.
(a) Within
90
days of the time the Servicer (and the Trustee, if notice is sent by the
Holders) receives a notice of termination pursuant to Section 7.01 or 6.04,
the
Trustee (or such other successor Servicer as is approved in accordance with
this
Agreement) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof arising on and after its succession except that the Trustee shall not
be
(i) liable for any acts or omissions of the predecessor Servicer hereunder,
(ii)
responsible for expenses of the predecessor Servicer pursuant to Section 2.03,
(iii) obligated to make Advances if it is prohibited from doing so by applicable
law or (iv) deemed to have made any representations and warranties of the
Servicer hereunder. As compensation therefor, the Trustee (or such other
successor Servicer) shall be entitled to such compensation as the Servicer
would
have been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Trustee is unwilling to act as
successor Servicer or (ii) if the Trustee is legally unable so to act, the
Trustee shall appoint or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution, bank or other mortgage
loan or home equity loan servicer having a net worth of not less than
$50,000,000 as the successor to the Servicer hereunder in the assumption of
all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder; provided,
that
the appointment of any such successor Servicer will not result in the
qualification, reduction or withdrawal of the ratings assigned to the
Certificates or the ratings that are in effect by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Servicer would otherwise
have received pursuant to Section 3.18 (or such other compensation as the
Trustee and such successor shall agree, not to exceed the Servicing Fee). The
successor servicer shall be entitled to withdraw from the Collection Account
all
costs and expenses associated with the transfer of the servicing to the
successor servicer. The appointment of a successor servicer shall not affect
any
liability of the predecessor Servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.12 or to indemnify the parties indicated in
Section 3.26 pursuant to the terms thereof, nor shall any successor
Servicer be liable for any acts or omissions of the predecessor Servicer or
for
any breach by such Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall
be
necessary to effectuate any such succession.
145
In
the
event of a Servicer Event of Termination, notwithstanding anything to the
contrary above, the Trustee and the Depositor hereby agree that upon delivery
to
the Trustee by the Servicing Rights Pledgee of a letter signed by the Servicer
within ten Business Days of when notification of such event shall have been
provided to the Trustee, whereunder the Servicer shall resign as Servicer under
this Agreement, the Servicing Rights Pledgee or its designee shall be appointed
as successor Servicer (provided that at the time of such appointment the
Servicing Rights Pledgee or such designee meets the requirements of a successor
Servicer set forth above) and the Servicing Rights Pledgee agrees to be subject
to the terms of this Agreement.
(b) Any
successor, including the Trustee, to the Servicer as servicer shall during
the
term of its service as servicer continue to service and administer the Mortgage
Loans for the benefit of Certificateholders, and maintain in force a policy
or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a Fidelity Bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.12.
Section
7.03. Waiver
of Defaults.
The
Holders of Certificates entitled to at least 66 2/3% of the Voting Rights
allocated to the Class of Certificates affected by a Servicer Event of
Termination may, on behalf of all Certificateholders, waive any events
permitting removal of the Servicer as servicer pursuant to this
Article VII, provided,
however,
that
such Holders may not waive a default in making a required distribution on a
Certificate without the consent of the Holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination arising therefrom shall be deemed to have been remedied
for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee
to
the Rating Agencies.
146
Section
7.04. Notification
to Certificateholders.
(a) On
any
termination or appointment of a successor the Servicer pursuant to this
Article VII or Section 6.04, the Trustee shall give prompt written
notice thereof to the Certificateholders at their respective addresses appearing
in the Certificate Register and each Rating Agency.
(b) No
later
than 60 days after the occurrence of any event which constitutes or which,
with
notice or a lapse of time or both, would constitute a Servicer Event of
Termination for five Business Days after a Responsible Officer of the Trustee
becomes aware of the occurrence of such an event, the Trustee shall transmit
by
mail to all Certificateholders notice of such occurrence unless such default
or
Servicer Event of Termination shall have been waived or cured. Such notice
shall
be given to the Rating Agencies promptly after any such occurrence.
Section
7.05. Survivability
of Servicer Liabilities.
Notwithstanding
anything herein to the contrary, upon termination of the Servicer hereunder,
any
liabilities of the Servicer which accrued prior to such termination shall
survive such termination.
ARTICLE
VIII
THE
TRUSTEE
Section
8.01. Duties
of Trustee.
The
Trustee, prior to the occurrence of a Servicer Event of Termination of which
a
Responsible Officer of the Trustee shall have actual knowledge and after the
curing of all Servicer Events of Termination which may have occurred, undertakes
to perform such duties and only such duties as are specifically set forth in
this Agreement. If a Servicer Event of Termination has occurred (which has
not
been cured) of which a Responsible Officer has actual knowledge, the Trustee
shall exercise such of the rights and powers vested in it by this Agreement,
and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person’s
own affairs.
The
Trustee, upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee which
are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement; provided,
however,
that
that the Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer, the Seller or the Depositor hereunder.
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 instrument in the event that the Trustee, after so requesting, does
not
receive a satisfactorily corrected instrument.
147
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 misconduct; provided,
however,
that:
(i) prior
to
the occurrence of a Servicer Event of Termination, and after the curing of
all
such Servicer Events of Termination which may have occurred, 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, in the absence of bad faith on the part of the Trustee, 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;
(ii) the
Trustee shall not be liable for an error of judgment made in good faith by
a
Responsible Officer of the Trustee unless it shall be proved that the Trustee
was negligent in ascertaining or investigating the facts related
thereto;
(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
the
Majority Certificateholders 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 charged with knowledge of any failure by the Servicer
to
comply with the obligations of the Servicer referred to in clauses (i)
and (ii) of Section 7.01(a) or any Servicer Event of Termination
unless a Responsible Officer of the Trustee at the applicable Corporate Trust
Office obtains actual knowledge of such failure or the Trustee receives written
notice of such failure from the Servicer or the Majority Certificateholders.
In
the absence of such receipt of such notice, the Trustee may conclusively assume
that there is no Servicer Event of Termination.
The
Trustee shall not be required to expend or risk its own funds or otherwise
incur
financial liability in the performance of any of its duties hereunder, or in
the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably 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 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 Servicer in accordance with the terms of this
Agreement.
The
Trustee shall not have any duty (A) to see 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 of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment,
or other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other than
from funds available in the Distribution Account.
148
The
Trustee shall have no duty hereunder with respect to any complaint, claim,
demand, notice or other document it may receive or which may be alleged to
have
been delivered to or served upon it by the parties as a consequence of the
assignment of any Mortgage Loan hereunder; provided, however, that the Trustee
shall promptly remit to the Servicer upon receipt any such complaint, claim,
demand, notice or other document (i) which is delivered to the Trustee at its
Corporate Trust Office; (ii) of which a Responsible Officer has actual knowledge
and (iii) which contains information sufficient to permit the Trustee to make
a
determination that the real property to which such document relates to is a
Mortgaged Property.
Section
8.02. Certain
Matters Affecting the Trustee.
(a) Except
as
otherwise provided in Section 8.01:
(i) the
Trustee may request and rely upon, and shall be protected in acting or
refraining from acting upon, any resolution, Officer’s Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or presented
by
the proper party or parties;
(ii) the
Trustee may consult with counsel 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 under any obligation to exercise any of the rights or
powers vested in it by this Agreement, or to institute, conduct or defend any
litigation hereunder or in relation hereto, at the request, order or direction
of the Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable security
or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct
in
the performance of any such act;
(iv) 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;
(v) prior
to
the occurrence of a Servicer Event of Termination and after the curing of all
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 documents, unless
requested in writing to do so by the Majority Certificateholder; provided,
however,
that if
the payment within a reasonable time to the Trustee of the costs, expenses
or
liabilities likely to be incurred by it in the making of such investigation
is,
in the opinion of the Trustee not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition
to
such proceeding. The reasonable expense of every such examination shall be
paid
by the Servicer or, if paid by the Trustee shall be reimbursed by the Servicer
upon demand. Nothing in this clause (v) shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
149
(vi) the
Trustee shall not be accountable, shall not have any liability and shall not
make any representation as to any acts or omissions hereunder of the Servicer
until such time as the Trustee may be required to act as Servicer pursuant
to
Section 7.02;
(vii) 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 a custodian
and the Trustee shall not be responsible for any misconduct or negligence on
the
part of the Custodian or any such agent, attorney or custodian appointed by
it
with due care; and
(viii) the
right
of the Trustee to perform any discretionary act enumerated in this Agreement
shall not be construed as a duty, and the Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance of such
act.
Section
8.03. Trustee
Not Liable for Certificates or Mortgage Loans.
The
recitals contained herein and in the Certificates (other than the authentication
of the Trustee on the Certificates) shall be taken as the statements of the
Seller, and the Trustee does not assumes any responsibility for the correctness
of the same. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (other than the signature
and authentication of the Trustee on the Certificates) or of any Mortgage Loan
or Related Document. The Trustee shall not be accountable for the use or
application by the Servicer, or for the use or application of any funds paid
to
the Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from
the Collection Account by the Servicer. The Trustee shall not at any time have
any responsibility or liability for or with respect to the legality, validity
and enforceability of any Mortgage or any Mortgage Loan, or the perfection
and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement, including, without limitation: the existence, condition and ownership
of any Mortgaged Property; the existence and enforceability of any hazard
insurance thereon (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment; the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer pursuant to
Section 7.02); the compliance by the Depositor, the Seller or the Servicer
with any warranty or representation made under this Agreement or in any related
document or the accuracy of any such warranty or representation prior to the
Trustee’s receipt of notice or other discovery of any non-compliance therewith
or any breach thereof; any investment of monies by or at the direction of the
Servicer or any loss resulting therefrom; the acts or omissions of the Servicer
(other than if the Trustee shall assume the duties of the Servicer pursuant
to
Section 7.02), or any Mortgagor; any action of the Servicer (other than if
the Trustee shall assume the duties of the Servicer pursuant to
Section 7.02), taken in the name of the Trustee; the failure of the
Servicer to act or perform any duties required of it as agent of the Trustee
hereunder; or any action by the Trustee taken at the instruction of the Servicer
(other than if the Trustee shall assume the duties of the Servicer pursuant
to
Section 7.02); provided,
however,
that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall not have any responsibility
for
filing any financing or continuation statement in any public office at any
time
or to otherwise perfect or maintain the perfection of any security interest
or
lien granted to it hereunder.
150
Section
8.04. Trustee
May Own Certificates.
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates with the same rights as it would have if it were not Trustee
and
may transact any banking and trust business with the Seller, the Servicer,
the
Depositor or their Affiliates.
Section
8.05. Seller
to Pay Trustee Fees and Expenses.
The
Trustee shall withdraw from the Distribution Account on each Distribution Date
and pay to itself the Trustee Fee and, to the extent the Interest Remittance
Amount is at any time insufficient for such purpose, the Seller shall pay such
fees as reasonable compensation (which shall not be limited by any provision
of
law in regard to the compensation of a trustee of an express trust) for all
services rendered by it in the execution of the trusts hereby created and in
the
exercise and performance of any of the powers and duties hereunder of the
Trustee, and the Seller will pay or reimburse the Trustee upon their request
for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from such party’s negligence or bad faith
or which is the responsibility of Certificateholders or the Trustee hereunder.
Notwithstanding any other provision of this Agreement, including
Section 2.03(a) and Section 2.04, to the contrary, the Seller
covenants and agrees to indemnify the Trustee and its officers, directors,
employees and agents from, and hold each of them harmless against, any and
all
losses, liabilities, damages, claims or expenses incurred in connection with
(a)
any legal action relating to this Agreement, the Custodial Agreement, the
Certificates or incurred in connection with the administration of the Trust,
other than with respect to a party, any loss, liability or expense incurred
by
reason of willful misfeasance, bad faith or negligence of such party in the
performance of its duties hereunder or by reason of such party’s reckless
disregard of obligations and duties hereunder and (b) the second paragraph
of
Section 2.01. Anything in this Agreement to the contrary notwithstanding, in
no
event shall the Trustee be liable for special, indirect or consequential loss
or
damage of any kind whatsoever (including but not limited to lost profits),
even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified, to the extent not paid
by
the Seller pursuant to this Section, by the Trust Fund and held harmless against
any loss, liability or expense (not including expenses, disbursements and
advances incurred or made by the Trustee, in the ordinary course of the
Trustee’s performance in accordance with the provisions of this Agreement)
incurred by the Trustee or such party arising out of or in connection with
the
acceptance or administration of its duties under this Agreement, other than
any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance by the Trustee of its duties under this
Agreement or by reason of the reckless disregard of the Trustee’s obligations
and duties under this Agreement. This section shall survive termination of
this
Agreement or the resignation or removal of any Trustee hereunder.
151
Section
8.06. Eligibility
Requirements for Trustee.
The
Trustee hereunder shall at all times be an entity duly organized and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and a minimum long-term debt rating
of BBB by S&P, a long term debt rating of at least A1 or better by Xxxxx’x
and a short-term rating of A-1 by S&P, and subject to supervision or
examination by federal or state authority. If such entity publishes reports
of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The principal office of the Trustee (other
than the initial Trustee) shall be in a state with respect to which an Opinion
of Counsel has been delivered to such Trustee at the time such Trustee is
appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of such state. In case at any time the Trustee 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.
Section
8.07. Resignation
or Removal of Trustee.
The
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Depositor, the Servicer and each Rating
Agency. Upon receiving such notice of resignation, the Depositor shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to
the
successor Trustee. If no successor Trustee shall have been so appointed and
having 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 and shall fail to resign after written request therefor by the
Depositor, or if at any time the Trustee shall be legally unable to act, or
shall be adjudged a 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, then the Depositor may remove
the
Trustee. If the Depositor or the Servicer removes the Trustee under the
authority of the immediately preceding sentence, the Depositor shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy
to
the successor Trustee.
152
The
Majority Certificateholders may at any time remove the Trustee by written
instrument or instruments delivered to the Servicer, the Depositor and the
Trustee; the Depositor shall thereupon use its best efforts to appoint a
successor Trustee in accordance with this Section.
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 not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08.
Section
8.08. Successor
Trustee.
Any
successor Trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the Rating Agencies, the Servicer
and
to its predecessor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective, and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Depositor, the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No
successor Trustee shall accept appointment as provided in this Section 8.08
unless at the time of such acceptance such successor Trustee shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
Trustee shall not result in a downgrading of the Offered Certificates or Class
B-1 Certificates by either Rating Agency, as evidenced by a letter from each
Rating Agency.
Upon
acceptance of appointment by a successor Trustee as provided in this
Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.
Section
8.09. Merger
or Consolidation of Trustee.
Any
entity into which the Trustee may be merged or converted or with which it may
be
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding
to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such entity shall be eligible under the provisions of Section 8.06
and 8.08, without the execution or filing of any paper or any further act on
the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section
8.10. Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding
any other provisions of this Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any part of the Trust or
any
Mortgaged Property may at the time be located, the Depositor and the Trustee
acting jointly shall have the power and 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, and to vest in such Person
or Persons, in such capacity and for the benefit of the Certificateholders,
such
title to the Trust, or any part thereof, and, subject to the other provisions
of
this Section 8.10, such powers, duties, obligations, rights and trusts as
the Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of
the
Servicer. If the Servicer shall not have joined in such appointment within
15
days after the receipt by it of a request so to do, or in the case a 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. The Servicer shall be responsible for the fees of any
co-trustee or separate trustee appointed hereunder.
153
Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) all
rights, powers, duties and obligations conferred or imposed upon the Trustee
shall be conferred or imposed upon and exercised or performed by the Trustee
and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without
the
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether
as
Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no
trustee hereunder shall be held personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the
Servicer and the Trustee, acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee except that following the
occurrence of a Servicer Event of Termination, the Trustee acting alone may
accept the resignation or remove any separate trustee or
co-trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing any separate trustee
or
co-trustee shall refer to this Agreement and the conditions of this
Article VIII. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified
in
its instrument of appointment, either jointly with the Trustee or separately,
as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to
the
Depositor, the Rating Agencies and the Servicer.
154
Any
separate trustee or co-trustee may, at any time, constitute the Trustee, its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section
8.11. Limitation
of Liability.
The
Certificates are executed by the Trustee, not in its individual capacity but
solely as Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
Section
8.12. Trustee
May Enforce Claims Without Possession of Certificates.
(a) All
rights of action and claims under this Agreement or the Certificates may be
prosecuted and enforced by the Trustee without the possession of any of the
Certificates or the production thereof in any proceeding relating thereto,
and
such proceeding instituted by the Trustee shall be brought in its own name
or in
its capacity as Trustee for the benefit of all Holders of such Certificates,
subject to the provisions of this Agreement. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursement and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment
has
been recovered.
(b) The
Trustee shall afford the Seller, the Depositor, the Servicer and each
Certificateholder upon reasonable notice during normal business hours, access
to
all records maintained by the Trustee in respect of its duties hereunder and
access to officers of the Trustee responsible for performing such duties. The
Trustee shall cooperate fully with the Seller, the Servicer, the Depositor
and
such Certificateholder and shall make available to the Seller, the Servicer,
the
Depositor and such Certificateholder for review and copying at the expense
of
the party requesting such copies, such books, documents or records as may be
requested with respect to the Trustee’s duties hereunder. The Seller, the
Depositor, the Servicer and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by the Trustee
and
are not obligated to supervise the performance of the Trustee under this
Agreement or otherwise.
Section
8.13. Suits
for Enforcement.
In
case a
Servicer Event of Termination or other default by the Servicer or the Seller
hereunder shall occur and be continuing, the Trustee may proceed to protect
and
enforce its rights and the rights of the Certificateholders under this Agreement
by a suit, action or proceeding in equity or at law or otherwise, whether for
the specific performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted in this Agreement
or
for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem
most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
155
Section
8.14. Waiver
of Bond Requirement.
The
Trustee shall be relieved of, and each Certificateholder hereby waives, any
requirement of any jurisdiction in which the Trust, or any part thereof, may
be
located that the Trustee post a bond or other surety with any court, agency
or
body whatsoever.
Section
8.15. Waiver
of Inventory, Accounting and Appraisal Requirement.
The
Trustee shall be relieved of, and each Certificateholder hereby waives, any
requirement of any jurisdiction in which the Trust, or any part thereof, may
be
located that the Trustee file any inventory, accounting or appraisal of the
Trust with any court, agency or body at any time or in any manner
whatsoever.
ARTICLE
IX
REMIC
ADMINISTRATION
Section
9.01. REMIC
Administration.
(a) The
Trustee shall make or cause to be made REMIC elections for each of REMIC 1,
REMIC 2, REMIC 3, REMIC A, REMIC B, REMIC C and REMIC D as set forth in the
Preliminary Statement on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued and shall apply for a taxpayer ID
number for each legal entity created under this Agreement. The regular interests
and residual interest in each REMIC shall be as designated in the Preliminary
Statement.
(b) The
Closing Date is hereby designated as the “Startup Day” of each REMIC within the
meaning of section 860G(a)(9) of the Code.
(c) The
Servicer shall pay any and all tax related expenses (not including taxes) of
each REMIC, including but not limited to any professional fees or expenses
related to audits or any administrative or judicial proceedings with respect
to
such REMIC that involve the Internal Revenue Service or state tax authorities,
but only to the extent that (i) such expenses are ordinary or routine
expenses, including expenses of a routine audit but not expenses of litigation
(except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Servicer in fulfilling its duties hereunder. The Servicer
shall be entitled to reimbursement of expenses to the extent provided in
clause (i) above from the Collection Account.
(d) The
Trustee shall prepare or cause to be prepared, sign and file or cause to be
filed, each REMIC’s federal and state tax and information returns as such
REMIC’s direct representative. The expenses of preparing and filing such returns
shall be borne by the Trustee.
156
(e) The
Holder of the Residual Certificates with respect to the Residual Interest in
the
related REMIC holding the largest Percentage Interest shall be the “tax matters
person” as defined in the REMIC Provisions (the “Tax
Matters Person”)
with
respect to the applicable REMICs, and the Trustee is irrevocably designated
as
and shall act as attorney-in-fact and agent for such Tax Matters Person for
each
REMIC. The Trustee, as agent for the Tax Matters Person, shall perform, on
behalf of each REMIC, all reporting and other tax compliance duties that are
the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or
local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority
such information as is necessary for the application of any tax relating to
the
transfer of a Residual Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are
required by the Code or REMIC Provisions.
(f) The
Trustee, the Servicer, and the Holders of Certificates shall take any action
or
cause any REMIC to take any action necessary to create or maintain the status
of
such REMIC as a REMIC under the REMIC Provisions and shall assist each other
as
necessary to create or maintain such status within the scope of their duties
as
described herein. Neither the Trustee, the Servicer, nor the Holder of any
Residual Certificate shall take any action or cause any REMIC to take any action
or fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of such REMIC as a REMIC or (ii) result in the imposition of a
tax upon such REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on
prohibited contributions set forth on Section 860G(d) of the Code) (either
such event, an “Adverse
REMIC Event”)
unless
such action or failure to take such action is expressly permitted under the
terms of this Agreement or the Trustee and the Servicer have received an Opinion
of Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such status or result
in
the imposition of such a tax. In addition, prior to taking any action with
respect to any REMIC or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement,
any
Holder of a Residual Certificate will consult with the Trustee and the Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to such REMIC, and
no
such Person shall take any such action or cause such REMIC to take any such
action as to which the Trustee or the Servicer has advised it in writing that
an
Adverse REMIC Event could occur.
(g) Each
Holder of a Residual Certificate shall pay when due its
pro
rata share
of
any and all taxes imposed on any related REMIC by federal or state governmental
authorities. To the extent that such REMIC taxes are not paid by Residual
Certificateholders, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in respect of the related REMIC or, if no such amounts are
available, out of other amounts held in the Collection Account, and shall reduce
amounts otherwise payable to Holders of the REMIC Regular Interests or the
Certificates, as the case may be.
157
(h) The
Trustee, shall, for federal income tax purposes, maintain or cause to be
maintained books and records with respect to each REMIC on a calendar year
and
on an accrual basis.
(i) No
additional contributions of assets shall be made to any REMIC, except as
expressly provided in this Agreement with respect to Eligible Substitute
Mortgage Loans.
(j) Neither
the Trustee nor the Servicer shall enter into any arrangement by which any
REMIC
will receive a fee or other compensation for services.
(k) On
or
before April 15 of each calendar year beginning in 2008, the Servicer shall
deliver to the Trustee and each Rating Agency an Officer’s Certificate stating
the Servicer’s compliance with the provisions of this
Section 9.01.
(l) In
order
to enable the Trustee to perform its duties as set forth herein, the Depositor
shall provide, or cause to be provided, to the Trustee within 10 days of written
request all information or data that the Trustee requests 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;
provided,
however,
that
the Trustee shall not be required to prepare and file partnership tax returns
on
behalf of the Supplemental Interest Trust unless it receives written
notification recognizing the creation of a partnership for federal income tax
purposes due to the transfer and additional reasonable compenation, including
any third party accounting fees, for the preparation of such filings or for
any
future revisions to any partneship agreement. Thereafter, the Depositor shall
provide to the Trustee promptly upon written request therefor, any such
additional information or data that the Trustee may, from time to time, request
in order to enable the Trustee to perform its duties as set forth
herein.
Section
9.02. Prohibited
Transactions and Activities.
Neither
the Seller, the Depositor, the Servicer nor the Trustee shall sell, dispose
of,
or substitute for any of the Mortgage Loans, except in a disposition pursuant
to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC pursuant to Article X of
this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II
of this Agreement, nor acquire any assets for any REMIC constituting part of
the
Trust Fund, nor sell or dispose of any investments in the Distribution Account
for gain, nor accept any contributions to any REMIC constituting part of the
Trust Fund after the Closing Date, unless it has received an Opinion of Counsel
(at the expense of the party causing such sale, disposition, or substitution)
that such disposition, acquisition, substitution, or acceptance will not
(a) affect adversely the status of such REMIC as a REMIC or of the
interests therein other than the Residual Certificates as the regular interests
therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause such REMIC to be subject to a tax on prohibited transactions
or prohibited contributions pursuant to the REMIC Provisions.
158
Section
9.03. Indemnification
with Respect to Certain Taxes and Loss of REMIC Status.
In
the
event that any REMIC formed hereunder fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions
due
to the negligent performance by the Servicer of its duties and obligations
set
forth herein, the Servicer shall indemnify the Holder of the related Residual
Certificate against any and all losses, claims, damages, liabilities or expenses
(“Losses”)
resulting from such negligence; provided,
however,
that
the Servicer shall not be liable for any such Losses attributable to the action
or inaction of the Trustee, the Depositor or the Holder of such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which
the
Servicer has relied. The foregoing shall not be deemed to limit or restrict
the
rights and remedies of the Holder of such Residual Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of,
or
which is expressly permitted by the terms of, this Agreement, (2) for any
Losses other than arising out of a negligent performance by the Servicer of
its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).
Section
9.04. REO
Property.
(a) Subject
to compliance with applicable laws and regulations as shall at any time be
in
force, and notwithstanding any other provision of this Agreement, the Servicer,
acting on behalf of the Trust hereunder, shall not rent, lease, or otherwise
earn income on behalf of any REMIC constituting part of the Trust Fund with
respect to any REO Property which might cause such REO Property to fail to
qualify as “foreclosure” property within the meaning of section 860G(a)(8)
of the Code or result in the receipt by any REMIC constituting part of the
Trust
Fund of any “income from non-permitted assets” within the meaning of
section 860F(a)(2) of the Code or any “net income from foreclosure
property” which is subject to tax under the REMIC Provisions unless the Servicer
has advised, or has caused the applicable Servicer to advise, the Trustee in
writing to the effect that, under the REMIC Provisions, such action would not
adversely affect the status of any REMIC constituting part of the Trust Fund
as
a REMIC and any income generated for such REMIC by the REO Property would not
result in the imposition of a tax upon such REMIC.
(b) The
Servicer shall make reasonable efforts to sell any REO Property for its fair
market value. In any event, however, the Servicer shall dispose of any REO
Property before the close of the third calendar year beginning after the year
of
its acquisition by the Trust Fund unless the Servicer has received a grant
of
extension from the Internal Revenue Service to the effect that, under the REMIC
Provisions and any relevant proposed legislation and under applicable state
law,
any REMIC constituting part of the Trust Fund may hold REO Property for a longer
period without adversely affecting its REMIC status or causing the imposition
of
a Federal or state tax upon any REMIC. If the Servicer has received such an
extension, then the Servicer shall continue to attempt to sell the REO Property
for its fair market value as determined in good faith by the Servicer for such
longer period as such extension permits (the “Extended
Period”).
If
the Servicer has not received such an extension and the Servicer is unable
to
sell the REO Property within 33 months after its acquisition by the Trust Fund
or if the Servicer has received such an extension, and the Servicer is unable
to
sell the REO Property within the period ending three months before the close
of
the Extended Period, the Servicer shall, before the end of the applicable
period, (i) purchase such REO Property at a price equal to the REO
Property’s fair market value as determined in good faith by the Servicer or
(ii) auction the REO Property to the highest bidder (which may be the
Servicer) in an auction reasonably designed to produce a fair price prior to
the
expiration of the applicable period.
159
ARTICLE
X
TERMINATION
Section
10.01. Termination.
(a) The
respective obligations and responsibilities of the Seller, the Servicer, the
Depositor, the Trustee and the Certificate Registrar created hereby (other
than
the obligation of the Trustee to make certain payments to Certificateholders
after the final Distribution Date and the obligation of the Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the
Certificate Principal Balance of each Class of Certificates has been reduced
to
zero, (ii) the final payment or other liquidation of the last Mortgage Loan
in the Trust Fund, and (iii) the optional purchase by the Servicer of the
Mortgage Loans as described below. Notwithstanding the foregoing, in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
The
Servicer (or an Affiliate) may, at its option, terminate the Mortgage Loans
in
the Trust Fund and retire the Certificates on the next succeeding Distribution
Date upon which the current Pool Balance is 10% or less than the Pool Balance
of
the Mortgage Loans as of the Cut-off Date by purchasing all of the outstanding
(i) Mortgage Loans in the Trust Fund at a price equal to the sum of the
outstanding Principal Balance of the Mortgage Loans and except to the extent
previously advanced by the Servicer, accrued and unpaid interest thereon at
the
weighted average of the Mortgage Interest Rates through the end of the
Collection Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances and any unpaid Servicing Fees and Excess Servicing
Fees allocable to such Mortgage Loans, (ii) REO Properties in the Trust Fund
at
a price equal to their fair market value as determined in good faith by the
Servicer and (iii) any Swap Termination Payment owed to the Swap Provider
pursuant to the Swap Agreement (the “Termination
Price”).
Notwithstanding the foregoing, the Servicer (or an Affiliate) may not exercise
its optional purchase right unless any Reimbursement Amount owed to the Trust
pursuant to Section 2.03 hereof has been paid.
In
connection with any such purchase pursuant to the preceding paragraph, the
Servicer shall deliver to the Trustee for deposit in the Distribution Account
all amounts then on deposit in the Collection Account (less amounts permitted
to
be withdrawn by the Servicer pursuant to Section 3.07), which deposit shall
be deemed to have occurred immediately following such purchase.
160
Any
such
purchase shall be accomplished by delivery to the Trustee for deposit into
the
Distribution Account as part of the Interest Remittance Amount and the Principal
Distribution Amount on the Determination Date before such Distribution Date
of
the Termination Price.
(b) Notice
of
any termination, specifying the Distribution Date (which shall be a date that
would otherwise be a Distribution Date) upon which the Certificateholders may
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Trustee upon
the
Trustee receiving notice of such date from the Servicer, by letter to the
Certificateholders mailed not earlier than the 15th day of the month preceding
the month of such final distribution and not later than the 15th day of the
month of such final distribution specifying (1) the Distribution Date upon
which final distribution of the Certificates will be made upon presentation
and
surrender of such Certificates at the office or agency of the Trustee therein
designated, (2) the amount of any such final distribution and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the
Certificates at the office or agency of the Trustee therein specified. Not
less
than five (5) Business Days prior to such Determination Date relating to such
Distribution Date, the Trustee shall notify the Seller of the amount of any
unpaid Reimbursement Amount owed to the Trust.
(c) Upon
presentation and surrender of the Certificates, the Trustee shall cause to
be
distributed to the Holders of the Certificates on the Distribution Date for
such
final distribution, in proportion to the Percentage Interests of their
respective Class and to the extent that funds are available for such purpose,
an
amount equal to the amount required to be distributed to such Holders in
accordance with the provisions of Sections 4.01 and 4.02 for such
Distribution Date.
(d) In
the
event that all Certificateholders shall not surrender their Certificates for
final payment and cancellation on or before such final Distribution Date, the
Trustee shall promptly following such date cause all funds in the Distribution
Account not distributed in final distribution to Certificateholders to be
withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Servicer (if the Servicer has exercised its right
to
purchase the Mortgage Loans) or the Trustee (in any other case) shall give
a
second written notice to the remaining Certificateholders, to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within nine months after the second notice, all the Certificates
shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto (except with respect to the Class B-1, Class CE-1,
Class CE-2 and Class P Certificates and the assets of REMIC A, REMIC B, REMIC
C
and REMIC D) and the Trustee upon transfer of such funds shall be discharged
of
any responsibility for such funds, and such Certificateholders shall look to
the
Class R Certificateholders for payment. The Class R-X Certificateholders
shall be entitled to all unclaimed funds and other assets with respect to REMIC
A, REMIC B, REMIC C and REMIC D. Holders of the Class CE Certificates and the
Class B-1 Certificates shall be entitled to look only to the Class R-X
Certificateholder (in respect of the Class R-X Interest) for
payment.
161
Section
10.02. Additional
Termination Requirements.
(a) In
the
event that the Servicer exercises its purchase option as provided in
Section 10.01, the Trust shall be terminated in accordance with the
following additional requirements, unless the Trustee shall have been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section will not (i) result in the imposition
of taxes on “prohibited transactions” of the Trust as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) The
Trustee shall designate a date within 90 days prior to the final Distribution
Date as the date of adoption of plans of complete liquidation of each of REMIC
1, REMIC 2, REMIC 3, REMIC A, REMIC B, REMIC C and REMIC D and shall specify
such date in the final federal income tax return of each REMIC;
(ii) After
the
date of adoption of such plans of complete liquidation and at or prior to the
final Distribution Date, the Trustee shall sell all of the assets of the Trust
to the Servicer for cash; and
(iii) At
the
time of the making of the final payment on the Certificates, the Trustee shall
distribute or credit, or cause to be distributed or credited in the following
order of priority (A) (i) to the Holders of each of the Class A-1, Class
A-2 and Class A-3, pro
rata
and (ii)
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9 and Class B-1 Certificates, the related Certificate
Principal Balance, as applicable, plus one month’s interest thereon at the
applicable Certificate Interest Rate, (B) to the Class CE-1 Certificates in
respect of the Class CE Interest, the amount of any remaining Class CE
Distributable Amount not previously distributed thereon, (C) to the
remaining REMIC Regular Interests the amounts allocable thereto pursuant to
Section 4.08 and (D) to the Class R and Class R-X Certificateholders,
all cash on hand in respect of the related REMICs after such payment (other
than
cash retained to meet claims) and the Trust shall terminate at such
time.
(b) By
their
acceptance of Certificates, the Holders thereof hereby appoint the Trustee
as
their attorney in fact to: (i) designate such date of adoption of plans of
complete liquidation and (ii) to take such other action in connection
therewith as may be reasonably required to carry out such plans of complete
liquidation all in accordance with the terms hereof.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01. Amendment.
This
Agreement may be amended from time to time by the Seller, the Depositor, the
Servicer and the Trustee; and without the consent of the Certificateholders,
(i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein, (iii) to comply with the provisions of Regulation AB or
(iv) to make any other provisions with respect to matters or questions
arising under this Agreement, which shall not be inconsistent with the
provisions of this Agreement; provided,
however,
that
any such action listed in clause (i) through (iv) above shall not
adversely affect in any respect the interests of any Certificateholder, as
evidenced by (i) notice in writing to the Depositor, the Servicer and the
Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency, or (ii) an Opinion of Counsel
delivered to the Servicer and the Trustee (at the expense of the Person seeking
such amendment).
162
In
addition, this Agreement may be amended from time to time by Seller, the
Depositor, the Servicer and the Trustee, with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing
in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however,
that no
such amendment or waiver shall (x) reduce in any manner the amount of, or
delay the timing of, payments on the Certificates which are required to be
made
on any Certificate without the consent of the Holder of such Certificate,
(y) adversely affect in any material respect the interests of the Holders
of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of
such Class evidencing at least a 66 2/3% Percentage Interest in such Class,
or
(z) reduce the percentage of Voting Rights required by
clause (y) above without the consent of the Holders of all
Certificates of such Class then outstanding. Upon approval of an amendment,
a
copy of such amendment shall be sent to the Rating Agencies. Prior to the
execution of any amendment to this Agreement, the Trustee shall be entitled
to
receive and rely upon an Opinion of Counsel (at the expense of the Person
seeking such amendment) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee’s own
rights, duties or immunities under this Agreement.
Notwithstanding
any provision of this Agreement to the contrary, the Trustee shall not consent
to any amendment to this Agreement unless it shall have first received an
Opinion of Counsel, delivered by (and at the expense of) the Person seeking
such
Amendment, to the effect that such amendment will not result in the imposition
of a tax on any REMIC constituting part of the Trust Fund pursuant to the REMIC
Provisions or cause any REMIC constituting part of the Trust to fail to qualify
as a REMIC at any time that any Certificates are outstanding and that the
amendment is being made in accordance with the terms hereof.
Promptly
after the execution of any such amendment the Trustee shall furnish, at the
expense of the Person that requested the amendment if such Person is the Seller
or the Servicer (but in no event at the expense of the Trustee), otherwise
at
the expense of the Trust, a copy of such amendment and the Opinion of Counsel
referred to in the immediately preceding paragraph to the Servicer and each
Rating Agency.
It
shall
not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to
such reasonable regulations as the Trustee may prescribe.
163
Notwithstanding
the foregoing, any amendment to this Agreement shall require the prior written
consent of the Swap Provider if such amendment materially and adversely affects
the rights or interests of the Swap Provider, and such consent shall not be
unreasonably withheld or delayed.
Section
11.02. Recordation
of Agreement; Counterparts.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the properties subject
to
the Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer at the expense
of
the Trust, but only upon direction of Certificateholders, accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall together constitute but one and the same
instrument.
Section
11.03. Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not (i) operate to terminate
this Agreement or the Trust, (ii) entitle such Certificateholder’s legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or
(iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except
as
expressly provided for herein, no Certificateholder shall have any right to
vote
or in any manner otherwise control the operation and management of the Trust,
or
the obligations of the parties hereto, nor shall anything herein set forth
or
contained in the terms of the Certificates be construed so as to constitute
the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person
by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
No
Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Agreement, unless such Holder previously shall
have given to the Trustee a written notice of default and of the continuance
thereof, as herein provided, and unless also the Holders of Certificates
entitled to at least 25% of the Voting Rights shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name
as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to
be
incurred therein or thereby, and the Trustee for 15 days after its receipt
of such notice, request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding. It is understood and intended,
and expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue of any provision of this
Agreement to affect, disturb or prejudice the rights of the Holders of any
other
of such Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, which priority or preference is not otherwise provided
for herein, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this
Section 11.03 each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
164
Section
11.04. Governing
Law; Jurisdiction.
This
Agreement shall be construed in accordance with the laws of the State of New
York, and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws. With respect to any claim arising
out
of this Agreement, each party irrevocably submits to the exclusive jurisdiction
of the courts of the State of New York and the United States District Court
located in the Borough of Manhattan in The City of New York, and each party
irrevocably waives any objection which it may have at any time to the laying
of
venue of any suit, action or proceeding arising out of or relating hereto
brought in any such courts, irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section
11.05. Notices.
All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service, to (a) in the
case of the Seller, Credit-Based Asset Servicing and Securitization LLC, 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Director -
Mortgage Finance (telecopy number (000) 000-0000), or such other address or
telecopy number as may hereafter be furnished to the Depositor and the Trustee
in writing by the Seller, (b) in the case of the Trustee, LaSalle Bank
National Association, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, 00000. Attention: Global
Securities and Trust Services — C-BASS 2007-CB5,
or such
other address as may hereafter be furnished to the Depositor, the Seller and
the
Servicer in writing by the Trustee, (c) in the case of the Depositor,
Asset Backed Funding Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000 Attention: Xxxxx Xxxxxxxxx, with a copy to Bank of America Legal
Department, 000 Xxxxx Xxxxx Xxxxxx, 101 X. Xxxxx St., 30th Floor, NC1-002-29-01,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Associate General Counsel, or such
other address as may be furnished to the Seller, the Servicer and the Trustee
in
writing by the Depositor, and (d) in the case of the Servicer, Xxxxxx Loan
Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx
XxXxxxx, or such other address as may be furnished to the Seller, the Depositor
and the Trustee in writing by the Servicer. Any notice required or permitted
to
be mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Servicer Event of Termination shall be given by telecopy and
by
certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
165
Section
11.06. Severability of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
Section
11.07. Article
and Section References.
All
article and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section
11.08. Notice
to the Rating Agencies.
(a) Each
of
the Trustee and the Servicer shall be obligated to use its best reasonable
efforts promptly to provide notice to the Rating Agencies with respect to each
of the following of which a Responsible Officer of the Trustee or the Servicer,
as the case may be, has actual knowledge:
(i) any
material change or amendment to this Agreement;
(ii) the
occurrence of any Servicer Event of Termination that has not been cured or
waived;
(iii) the
resignation or termination of the Servicer or the Trustee;
(iv) the
final
payment to Holders of the Certificates of any Class;
(v) any
change in the location of any Account; and
(vi) if
the
Trustee is acting as successor Servicer pursuant to Section 7.02 hereof,
any event that would result in the inability of the Trustee to make
Advances.
(vii) In
addition, the Servicer shall promptly furnish to each Rating Agency copies
of
the following:
(A) each
annual statement as to compliance described in Section 3.19
hereof;
(B) each
annual independent public accountants’ servicing report described in Section
3.20 hereof; and
(C) each
notice delivered pursuant to Section 7.01(a) hereof which relates to the
fact that the Servicer has not made an Advance.
166
Any
such
notice pursuant to this Section 11.08 shall be in writing and shall be
deemed to have been duly given if personally delivered or mailed by first class
mail, postage prepaid, or by express delivery service to DBRS, Xxx Xxxxxxxx
Xxxxx, 00 Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000; Xxxxx’x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Managing Director, Residential Mortgage-Backed
Securities; and Standard & Poor’s, a division of The XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Surveillance Group.
Section
11.09. Further
Assurances.
Notwithstanding
any other provision of this Agreement, neither the Certificateholders (other
than the Residual Certificateholders), nor the Trustee shall have any obligation
to consent to any amendment or modification of this Agreement unless they have
been provided reasonable security or indemnity against their out-of-pocket
expenses (including reasonable attorneys’ fees) to be incurred in connection
therewith.
Section
11.10. Benefits
of Agreement.
Nothing
in this Agreement or in the Certificates, expressed or implied, shall give
to
any Person, other than the Certificateholders and the parties hereto and their
successors hereunder, and the Swap Provider, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section
11.11. Acts
of Certificateholders.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by the Certificateholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Certificateholders in person or by agent duly
appointed in writing; and such action shall become effective when such
instrument or instruments are delivered to the Trustee, the Seller and the
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “act” of the
Certificateholders signing such instrument or instruments. Proof of execution
of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this
Section 11.11.
(b) The
fact
and date of the execution by any Person of any such instrument or writing may
be
proved by the affidavit of a witness of such execution or by the certificate
of
a notary public or other officer authorized by law to take acknowledgments
of
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Whenever such execution is by a
signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by any Certificateholder shall bind every future Holder of such
Certificate and the Holder of every Certificate issued upon the registration
of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Trust in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
167
Section
11.12. Regulation
AB Compliance; Intent of the Parties; Reasonableness.
The
parties hereto acknowledge that interpretations of the requirements of
Regulation AB may change over time, whether due to interpretive guidance
provided by the Securities and Exchange Commission or its staff, consensus
among
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agree to comply with requests made by the Depositor in good
faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the C-BASS 2007-CB5 Trust,
the Servicer, the Seller and the Trustee shall cooperate fully with the
Depositor to deliver to the Depositor (including its assignees or designees),
any and all statements, reports, certifications, records and any other
information available to such party and reasonably necessary in the good faith
determination of the Depositor to permit the Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Servicer, the Seller, the Custodian and the Trustee, as applicable, reasonably
believed by the Depositor to be necessary in order to effect such
compliance.
168
IN
WITNESS WHEREOF, the Seller, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
ASSET
BACKED FUNDING CORPORATION,
as
Depositor
By:
/s/
Xxxxxxx X. Xxxxx-Xxxxxx
Name:
Xxxxxx X. Xxxxx-Xxxxxx
Title:
Vice President
CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC,
as Seller
By:
/s/
Xxxxx X. Xxxx
Name:
Xxxxx X. Xxxx
Title:
Vice President
XXXXXX
LOAN SERVICING LP,
as Servicer
By:
/s/
Xxxxxx XxXxxxx
Name:
Xxxxxx XxXxxxx
Title:
Senior Vice President
LASALLE
BANK NATIONAL ASSOCIATION, not in its individual capacity but solely
as
Trustee for the 2007-CB5 Trust, C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2007-CB5
By:
/s/
Xxxxx X. Xxxx
Name:
Xxxxx X. Xxxx
Title:
Vice President
|
STATE
OF NEW YORK
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
the
31st day of May, 2007 before me, a notary public in and for said State,
personally appeared Xxxxxx X. Xxxxx-Xxxxxx, known to me to be a Vice President
of Asset Backed Funding Corporation, a Delaware corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
Xxxx XxXxxxx
Notary
Public
|
STATE
OF NEW YORK
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
the
31st day of May, 2007 before me, a notary public in and for said State,
personally appeared Xxxxx X. Xxxx known to me to be a Vice President of
Credit-Based Asset Servicing and Securitization LLC, a limited liability company
that executed the within instrument, and also known to me to be the person
who
executed it on behalf of said limited liability company, and acknowledged to
me
that such limited liability company executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
Xxxxxx Xxxxxxx
Notary
Public
|
STATE
OF ILLINOIS
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF XXXX
|
)
|
On
the
31st day of May, 2007 before me, a notary public in and for said State,
personally appeared Xxxxx X. Xxxx, known to me to be a Vice President of LaSalle
Bank National Association, a national banking association that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said association, and acknowledged to me that such association
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
Xxxxxxxxx X. Xxxx
Notary
Public
|
STATE
OF TEXAS
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF XXXXXX
|
)
|
On
the
31st day of May, 2007 before me, a notary public in and for said State,
personally appeared Xxxxxx XxXxxxx, known to me to be a Senior Vice President
of
Xxxxxx Loan Servicing LP, a Delaware limited partnership, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said limited partnership, and acknowledged to me that such limited
partnership executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/
Xxxxx Xxxx Xxxxx
Notary
Public
