PHH MORTGAGE CAPITAL LLC, Depositor PHH MORTGAGE CORPORATION, Master Servicer CITIBANK N.A., Trustee POOLING AND SERVICING AGREEMENT Dated as of April 1, 2007 PHHMC Mortgage Pass-Through Certificates, Series 2007-2
PHH
MORTGAGE CAPITAL LLC,
Depositor
PHH
MORTGAGE CORPORATION,
Master
Servicer
CITIBANK
N.A.,
Trustee
Dated
as
of April 1, 2007
PHHMC
Mortgage Pass-Through Certificates, Series 2007-2
TABLE
OF
CONTENTS
Page
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms.
Section
1.02 Accounting.
ARTICLE
II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section
2.01 Conveyance
of Mortgage Loans.
Section
2.02 Acceptance
of Trust Fund by the Trustee.
Section
2.03 Repurchase
or Substitution of Mortgage Loans by the Sellers- Assignment of Interest in
Pledged Assets.
Section
2.04 Representations,
Warranties and Covenants of the Master Servicer.
Section
2.05 Representations
and Warranties of the Depositor.
Section
2.06 Purpose
and Powers of the Trust.
Section
2.07 Issuance
of Certificates.
ARTICLE
III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section
3.01 Master
Servicer to Act as Master Servicer.
Section
3.02 Sub-Servicing
Agreements Between the Master Servicer and Sub-Servicers.
Section
3.03 Successor
Sub-Servicers.
Section
3.04 Liability
of the Master Servicer.
Section
3.05 No
Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders.
Section
3.06 Assumption
or Termination of Sub-Servicing Agreements by Trustee.
Section
3.07 Collection
of Certain Mortgage Loan Payments.
Section
3.08 Sub-Servicing
Accounts.
Section
3.09 Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
Section
3.10 Collection
Account and Distribution Account.
Section
3.11 Withdrawals
from the Collection Account and Distribution Account.
Section
3.12 Investment
of Funds in the Collection Account, Servicing Accounts and the Distribution
Account.
Section
3.13 Maintenance
of the Primary Insurance Policies; Collections Thereunder.
Section
3.14 Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity Coverage.
Section
3.15 Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
Section
3.16 Realization
Upon Defaulted Mortgage Loans.
Section
3.17 Trustee
to Cooperate; Release of Mortgage Files.
Section
3.18 Servicing
Compensation.
Section
3.19 Reports
to the Trustee; Collection Account Statements.
Section
3.20 Annual
Statement as to Compliance.
Section
3.21 Assessments
of Compliance and Attestation Reports.
Section
3.22 Access
to
Certain Documentation.
Section
3.23 Title,
Management and Disposition of REO Property.
Section
3.24 Obligations
of the Master Servicer in Respect of Prepayment Interest Shortfalls.
Section
3.25 Administration
of Buydown Funds.
Section
3.26 Obligations
of the Master Servicer in Respect of Loan Rates and Monthly Payments.
ARTICLE
IV
PAYMENTS
TO CERTIFICATEHOLDERS
Section
4.01 Distribution
Account; Distributions.
Section
4.02 Statements
to Certificateholders.
Section
4.03 Remittance
Reports; Advances by the Master Servicer.
Section
4.04 Allocation
of Realized Losses.
Section
4.05 Information
Reports to Be Filed by the Master Servicer.
Section
4.06 Compliance
with Withholding Requirements.
Section
4.07 [Reserved].
Section
4.08 Limited
Purpose Surety Bond.
ARTICLE
V
THE
CERTIFICATES
Section
5.01 The
Certificates.
Section
5.02 Registration
of Transfer and Exchange of Certificates.
Section
5.03 Mutilated.
Destroyed. Lost or Stolen Certificates.
Section
5.04 Persons
Deemed Owners.
Section
5.05 Appointment
of Paying Agent.
ARTICLE
VI
THE
MASTER SERVICER AND THE DEPOSITOR
Section
6.01 Liability
of the Master Servicer and the Depositor.
Section
6.02 Merger
or
Consolidation of or Assumption of the Obligations of the Master Servicer or
the
Depositor.
Section
6.03 Limitation
on Liability of the Master Servicer and Others.
Section
6.04 Master
Servicer Not to Resign.
Section
6.05 Delegation
of Duties.
ARTICLE
VII DEFAULT
Section
7.01 Master
Servicer Events of Termination.
Section
7.02 Trustee
to Act; Appointment of Successor.
Section
7.03 Waiver
of
Master Servicer Events of Termination.
Section
7.04 Notification
to Certificateholders.
Section
7.05 Survivability
of Master Servicer Liabilities.
ARTICLE
VIII
THE
TRUSTEE
Section
8.01 Duties
of
Trustee.
Section
8.02 Certain
Matters Affecting the Trustee.
Section
8.03 Trustee
Not Liable for Certificates or Mortgage Loans.
Section
8.04 Trustee
May Own Certificates.
Section
8.05 Master
Servicer to Pay Trustee Expenses; Trustee Fees.
Section
8.06 Eligibility
Requirements for Trustee.
Section
8.07 Resignation
or Removal of Trustee.
Section
8.08 Successor
Trustee.
Section
8.09 Merger
or
Consolidation of Trustee.
Section
8.10 Appointment
of Co-Trustee or Separate Trustee.
Section
8.11 Limitation
of Liability.
Section
8.12 Trustee
May Enforce Claims Without Possession of Certificates.
Section
8.13 Suits
for
Enforcement.
Section
8.14 Waiver
of
Bond Requirement.
Section
8.15 Waiver
of
Inventory. Accounting and Appraisal Requirement.
Section
8.16 Right
of
Trustee in Capacity of Certificate Registrar or Paying Agent.
Section
8.17 Periodic
Filings.
Section
8.18 Intention
of the Parties and Interpretation.
Section
8.19 Communications
with the Trustee.
ARTICLE
IX
REMIC
ADMINISTRATION
Section
9.01 REMIC
Administration.
Section
9.02 Prohibited
Transactions and Activities.
Section
9.03 Master
Servicer and Trustee Indemnification.
ARTICLE
X
TERMINATION
Section
10.01 Termination.
Section
10.02 Additional
Termination Requirements.
ARTICLE
XI
[RESERVED]
ARTICLE
XII
MISCELLANEOUS PROVISIONS
Section
12.01 Amendment.
Section
12.02 Recordation
of Agreement: Counterparts.
Section
12.03 Limitation
on Rights of Certificateholders.
Section
12.04 Governing
Law: Jurisdiction.
Section
12.05 Notices.
Section
12.06 Severability
of Provisions.
Section
12.07 Article
and Section References.
Section
12.08 Notice
to
the Rating Agency.
Section
12.09 Further
Assurances.
Section
12.10 Benefits
of Agreement.
Section
12.11 Acts
of
Certificateholders.
EXHIBITS:
Exhibit
A Form
of
Class A Certificates
Exhibit
B [Reserved]
Exhibit
C-1 Form
of
Class R Certificates
Exhibit
C-2 Form
of
Class B Certificates
Exhibit
D Mortgage
Loan Schedule
Exhibit
E Form
of
Request for Release
Exhibit
F-1 Form
of
Rule 144A Representation Letter
Exhibit
F-2 Form
of
Transferor Certificate
Exhibit
F-3 Form
of
Transferee Representation Letter
Exhibit
F-4 Form
of
Transfer Affidavit and Agreement and Form of Transferor Affidavit
Exhibit
G-1 Form
of
ERISA Representation Letter (Class B-4, Class B-5 and Class B-6)
Exhibit
G-2 Form
of
ERISA Representation Letter (Class A-5, Class A-6 and Class B-1)
Exhibit
H Form
of
Lost Note Affidavit
Exhibit
I-1 Form
of
Trustee’s Initial Certification
Exhibit
I-2 Form
of
Trustee’s Final Certification
Exhibit
J Mortgage
Loan Purchase Agreement
Exhibit
K Assignment,
Assumption and Recognition Agreement (Pledged Asset Servicing
Agreement)
Exhibit
L Planned
Principal Balances
Exhibit
M Form
of
Form 10-K Certificate
Exhibit
N Form
of
Back-up Certification to Form 10-K Certificate
Exhibit
O Servicing
Criteria to Be Addressed in Assessment of Compliance
Exhibit
P Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
Exhibit
Q Transaction
Parties
This
Pooling and Servicing Agreement is dated as of April 1, 2007 (the “Agreement”),
among PHH MORTGAGE CAPITAL LLC, as depositor (the “Depositor”), PHH MORTGAGE
CORPORATION, as master servicer (the “Master Servicer”) and CITIBANK, N.A., as
trustee (the “Trustee”).
PRELIMINARY
STATEMENT:
The
Depositor intends to sell mortgage 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 Mortgage
Loans (as defined herein). As provided herein, the Trustee will make, in
accordance with Section 9.01, an election to treat the entire segregated pool
of
assets described in the definition of Trust Fund (as defined herein), and
subject to this Agreement (including the Mortgage Loans), as two real estate
mortgage investment conduits (each a “REMIC”) for federal income tax
purposes.
REMIC
I
The
following table sets forth (or describes) the Class designation, Pass-Through
Rate and Uncertificated Principal Balance, for each Class of REMIC I Regular
Interest comprising the interests in REMIC I created hereunder:
|
REMIC
I Regular Interest
|
Uncertificated
Principal
Balance
|
Uncertificated
Pass-Through
Rate(1)
|
Assumed
Final
Maturity
Date(2)
|
||||
|
A-1
|
$
|
40,623,367.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
A-2
|
$
|
49,813,341.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
A-3
|
$
|
38,921,344.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
A-5
|
$
|
6,091,021.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
A-6
|
$
|
19,821,845.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
R-II
Interest
|
$
|
100.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
B-1
|
$
|
7,515,783.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
B-2
|
$
|
908,501.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
B-3
|
$
|
578,137.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
B-4
|
$
|
330,364.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
B-5
|
$
|
330,364.00
|
Variable
Rate
|
May
18, 2037
|
|||
|
B-6
|
$
|
247,773.79
|
Variable
Rate
|
May
18, 2037
|
|||
|
(1)
|
Calculated
in accordance with the definition of “Uncertificated Pass-Through Rate”
herein.
|
|
(2)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the month of the maturity
date
for the Mortgage Loan with the latest maturity date has been designated
as
the “latest possible maturity date” for each REMIC I Regular
Interest.
|
REMIC
II
The
following table sets forth (or describes) the Class designation, Pass-Through
Rate and Original Certificate Principal Balance or Original Notional Amount
for
each Class of Certificates comprising the interests in the Trust Fund created
hereunder:
|
Class
|
Original
Certificate
Principal
Balance
or Original Notional Amount
|
Initial
Pass-
Through
Rate
|
Assumed
Final
Maturity
Dates(1)
|
||||
|
A-1
|
$
|
40,623,367.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
A-2
|
$
|
49,813,341.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
A-3
|
$
|
38,921,344.00
|
Variable
Rate(3)
|
May
18, 2037
|
|||
|
A-4(4)
|
$
|
38,921,344.00
|
0.25%
|
May
18, 2037
|
|||
|
A-5
|
$
|
6,091,021.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
A-6
|
$
|
19,821,845.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
R-I
|
$
|
100.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
R-II
|
$
|
100.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
B-1
|
$
|
7,515,783.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
B-2
|
$
|
908,501.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
B-3
|
$
|
578,137.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
B-4
|
$
|
330,364.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
B-5
|
$
|
330,364.00
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
B-6
|
$
|
247,773.79
|
Variable
Rate(2)
|
May
18, 2037
|
|||
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the month of the maturity
date
for the Mortgage Loan with the latest maturity date has been designated
as
the “latest possible maturity date” for each Regular
Certificate.
|
|
(2)
|
Varies
according to the weighted average of the Net Mortgage Rate on each
Mortgage Loan.
|
|
(3)
|
Varies
according to (i) the weighted average of the Net Mortgage Rate on
each
Mortgage Loan minus (ii) 0.25% per annum.
|
|
(4)
|
For
federal income tax purposes, the notional balance of the Class A-4
Certificates will be equal the Uncertificated Principal Balance of
REMIC I
Regular Interest A-3.
Interest
will accrue on a Notional Amount as described herein. No principal
will be
paid on the Class A-4 Certificates.
|
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 will be
calculated for all Certificates on the basis of a 360-day year consisting of
twelve 30-day months.
“1933
Act”: The Securities Act of 1933, as amended.
“Account”:
Any of the Collection Account and Distribution Account.
“Accretion
Termination Date”: With respect to the Class A-5 Certificates, the Class A-5
Accretion Termination Date and with respect to the Class A-6 Certificates,
the
Class A-6 Accretion Termination Date.
“Accrual
Distribution Amount”: With respect to the Class A-5 Certificates, the Class A-5
Accrual Distribution Amount and with respect to the Class A-6 Certificates,
the
Class A-6 Accrual Distribution Amount.
“Advance”:
As to any Mortgage Loan or REO Property, any advance made by the Master Servicer
in respect of any Distribution Date pursuant to Section 4.03.
“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.
“Agreement”:
This Pooling and Servicing Agreement and all amendments and supplements
hereto.
“Assessment
of Compliance”: As defined in Section 3.21.
“Attestation
Report”: As defined in Section 3.21.
“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.
“Available
Distribution Amount”: With respect to any Distribution Date and the Mortgage
Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of
the
related Monthly Payments received on or prior to the related Determination
Date,
(b) Liquidation Proceeds, Insurance Proceeds, Subsequent Recoveries and other
unscheduled recoveries of principal and interest in respect of the Mortgage
Loans, and Principal Prepayments during the related Prepayment Period, (c)
the
aggregate of any amounts received in respect of a related REO Property withdrawn
from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any related
Advances made by the Master Servicer for such Distribution Date, over (ii)
the
sum of (a) related amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case
may
be, in error, (d) any Extraordinary Trust Fund Expenses and (e) the Trustee
Fee.
The Available Distribution Amount shall also be increased by any Required Surety
Payment.
“Bankruptcy
Amount”: As of any date of determination prior to the first anniversary of the
Cut-off Date, an amount equal to the excess, if any, of (A) $50,000 over (B)
the
aggregate amount of Bankruptcy Losses allocated solely to one or more specific
Classes of Certificates in accordance with Section 4.02. As of any date of
determination on or after the first anniversary of the Cut-off Date, an amount
equal to the excess, if any, of (1) the lesser of (a) the Bankruptcy Amount
calculated as of the close of business on the Business Day immediately preceding
the most recent anniversary of the Cut-off Date coinciding with or preceding
such date of determination (or, if such date of determination is an anniversary
of the Cut-off Date, the Business Day immediately preceding such date of
determination) (for purposes of this definition, the “Relevant Anniversary”) and
(b) the greater of:
(A)
the
greater of (i) 0.0006 times the aggregate principal balance of all the Mortgage
Loans in the Mortgage Pool as of the Relevant Anniversary having a Loan-to-Value
Ratio at origination which exceeds 75% and (ii) $50,000; and (B) the greater
of
(i) the product of (x) an amount equal to the largest difference in the related
Monthly Payment for any Non-Primary Residence Loan remaining in the Mortgage
Pool which had an original Loan-to-Value Ratio greater than 80% that would
result if the Net Mortgage Rate thereof was equal to the greater of (I) 5%
or
(II) the weighted average (based on the principal balance of the Mortgage Loans
as of the Relevant Anniversary) of the Net Mortgage Rates of all Mortgage Loans
as of the Relevant Anniversary less 1.25% per annum, (y) a number equal to
the
weighted average remaining term to maturity, in months, of all Mortgage Loans
with a Loan-to-Value Ratio of greater than 80% remaining in the Mortgage Pool
as
of the Relevant Anniversary, and (z) one plus the quotient of the number of
all
Non-Primary Residence Loans with a Loan-to-Value Ratio of greater than 80%
remaining in the Mortgage Pool divided by the total number of outstanding
Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary, and (ii)
$50,000,
over
(2)
the aggregate amount of Bankruptcy Losses allocated solely to one or more
specific Classes of Certificates in accordance with Section 4.02 since the
Relevant Anniversary.
The
Bankruptcy Amount may be further reduced by the Master Servicer (including
accelerating the manner in which such coverage is reduced) provided that prior
to any such reduction, the Master Servicer shall (i) obtain written confirmation
from the Rating Agency that such reduction shall not reduce the rating assigned
to any Class of Certificates by such Rating Agency below the lower of the then
current rating or the rating assigned to such Certificates as of the Closing
Date by such Rating Agency and (ii) provide a copy of such written confirmation
to the Trustee.
“Bankruptcy
Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
as amended.
“Bankruptcy
Losses”: Losses that are incurred as a result of Debt Service Reductions and
Deficient Valuations.
“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 Certificates (other
than the Class R, Class B-4, Class B-5 and Class B-6 Certificates) shall be
Book-Entry Certificates.
“Business
Day”: Any day other than (a) a Saturday or Sunday, (b) a legal holiday in the
State of New Jersey or the State of New York, or (c) a day on which banking
or
savings and loan institutions in the State of New Jersey or the State of New
York are authorized or obligated by law or executive order to be
closed.
“Buydown
Account”: The custodial account or accounts created and maintained pursuant to
Section 3.25.
“Buydown
Agreement”: An agreement between the applicable originator and a Mortgagor, or
an agreement among such originator, a Mortgagor and an employer of a relocated
Mortgagor which, in each case, provides for the application of Buydown
Funds.
“Buydown
Funds”: In respect of any Buydown Mortgage Loan, any amount contributed by the
related originator or the employer of a relocated borrower in order to enable
the Mortgagor to reduce the payments required to be made from the Mortgagor’s
funds during the Buydown Period. The Buydown Funds are not part of the Trust
Fund prior to deposit into the Collection Account or the Distribution
Account.
“Buydown
Mortgage Loan”: Any Mortgage Loan in respect of which, pursuant to a Buydown
Agreement, (i) the Mortgagor pays less than the full monthly payment specified
in the Mortgage Note during the Buydown Period and (ii) the difference between
the payments required under such Buydown Agreement and the Mortgage Note is
paid
from the related Buydown Funds.
“Buydown
Period”: The period during which Buydown Funds are required to be applied to the
related Buydown Mortgage Loans as provided in Section 3.25.
“Cash-Out
Refinancing”: A Refinanced Mortgage Loan the proceeds of which were more than 2%
or $2,000 in excess of the principal balance of any existing first mortgage
or
seasoned subordinate mortgage on the related Mortgaged Property and related
closing costs.
“Cash
Liquidation”: As to any defaulted Mortgage Loan other than REO Property which
has been acquired by the Master Servicer on behalf of the Trustee for the
benefit of the Certificateholders, a determination by the Master Servicer that
it has received all Insurance Proceeds, Liquidation Proceeds and other payments
or cash recoveries which the Master Servicer reasonably or in good faith expects
to be finally recoverable with respect to such Mortgage Loan, plus, with respect
to a defaulted Mortgage Loan that is a Pledged Asset Loan, the amount realized
on the related Pledged Assets with respect to such Mortgage Loan in accordance
with Section 3.16.
“Certificate”:
Any Regular Certificate or Class R Certificate.
“Certificateholder”
or “Holder”: The Person in whose name a Certificate is registered in the
Certificate Register, except that a Disqualified Organization or non-U.S. Person
shall not be a Holder of a Class R Certificate for any purpose
hereof.
“Certificate
Owner”: With respect to each Book-Entry Certificate, any beneficial owner
thereof.
“Certificate
Principal Balance”: With respect to any Certificate (other than any Class A-4
Certificate) as of any date of determination, (x) the Certificate Principal
Balance of such Certificate on the Distribution Date immediately prior to such
date of determination, plus (y) (i) in the case of the Class A-5 Certificates,
an amount equal to the Monthly Interest Distributable Amount added to the
Certificate Principal Balance of the Class A-5 Certificates on the Distribution
Date immediately prior to such date of determination on or prior to the Class
A-5 Accretion Termination Date and (ii) in the case of the Class A-6
Certificates, an amount equal to the Monthly Interest Distributable Amount
added
to the Certificate Principal Balance of the Class A-6 Certificates on the
Distribution Date immediately prior to such date of determination on or prior
to
the Class A-6 Accretion Termination Date plus (z) in the case of the Class
B
Certificates, any Subsequent Recoveries added to the Certificate Principal
Balance of any such Certificate pursuant to Section 4.01(h), reduced by the
aggregate of (a) all distributions of principal made thereon on such immediately
prior Distribution Date and (b) without duplication of amounts described in
clause (a) above, reductions in the Certificate Principal Balance thereof in
connection with allocations thereto of Realized Losses on the Mortgage Loans
and
Extraordinary Trust Fund Expenses on such immediately prior Distribution Date
(or, in the case of any date of determination up to and including the initial
Distribution Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereon); provided, however, that, the
Certificate Principal Balance of each Subordinate Certificate of the Class
of
Subordinate Certificates outstanding with the highest numerical designation
at
any given time shall be calculated to equal the Percentage Interest evidenced
by
such Certificate multiplied by the excess, if any, of (A) the then aggregate
Stated Principal Balance of the Mortgage Loans over (B) the then aggregate
Certificate Principal Balances of all other Classes of Certificates then
outstanding. The Class A-4 Certificates shall not have a Certificate Principal
Balance and shall not be entitled to any distributions of
principal.
“Certificate
Register” and “Certificate Registrar”: The register maintained and registrar
appointed pursuant to Section 5.02 hereof.
“Class”:
Collectively, Certificates 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
Certificate”: Any of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5
and Class A-6 Certificates as designated on the face thereof substantially
in
the form annexed hereto as Exhibit A, executed by the Trustee and authenticated
and delivered by the Trustee, representing the right to distributions as set
forth herein and therein.
“Class
A
Certificateholder”: Any Holder of a Class A Certificate.
“Class
A-5 Accretion Termination Date”: The earlier to occur of (i) the Distribution
Date on which the Certificate Principal Balance of the Class
A-3
Certificates has
been
reduced to zero and (ii) the Credit Support Depletion Date.
“Class
A-5 Accrual Distribution Amount”: With respect to each Distribution Date prior
to the Class A-5 Accretion Termination Date, an amount equal to the aggregate
amount of Monthly Interest Distributable Amount on the Class A-5 Certificates,
for such date, to the extent added to the Certificate Principal Balance thereof
pursuant to Section 4.01(j); provided that, with respect to each Distribution
Date on or after the Class A-5 Accretion Termination Date, the Monthly Interest
Distributable Amount on the Class A-5 Certificates for such date remaining
after
reduction of the Certificate Principal Balance of the Class A-3 Certificates
to
zero on the Class A-5 Accretion Termination Date will be payable to the Class
A-5 Certificateholders pursuant to Section 4.01(c)(i) hereof; and provided
further, that if the Class A-5 Accretion Termination Date is the Credit Support
Depletion Date, the entire amount of Monthly Interest Distributable Amount
on
the Class A-5 Certificates for that date will be payable to the Class A-5
Certificateholders pursuant to Section 4.01(c)(i) hereof.
“Class
A-6 Accretion Termination Date”: The earliest to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A-1,
Class A-2, Class A-3 and Class A-5 Certificates has been reduced to zero, (ii)
the Credit Support Depletion Date and (iii) the Distribution Date occurring
in
May 2012.
“Class
A-6 Accrual Distribution Amount”: With respect to each Distribution Date prior
to the Class A-6 Accretion Termination Date, an amount equal to the aggregate
amount of Monthly Interest Distributable Amount on the Class A-6 Certificates,
for such date, to the extent added to the Certificate Principal Balance thereof
pursuant to Section 4.01(k); provided that, with respect to each Distribution
Date on or after the Class A-6 Accretion Termination Date, the Monthly Interest
Distributable Amount on the Class A-6 Certificates for such date remaining
after
reduction of the aggregate Certificate Principal Balance of the Class A-1,
Class
A-2, Class A-3 and Class A-5 Certificates to zero on the Class A-6 Accretion
Termination Date will be payable to the Class A-6 Certificateholders pursuant
to
Section 4.01(c)(i) hereof; and provided further, that if the Class A-6 Accretion
Termination Date is the Credit Support Depletion Date or the Distribution Date
occurring in May 2012, the entire amount of Monthly Interest Distributable
Amount on the Class A-6 Certificates for that date will be payable to the Class
A-6 Certificateholders pursuant to Section 4.01(c)(i) hereof.
“Class
B
Certificate”: Any one of the Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 or Class B-6 Certificates as designated on the face thereof substantially
in
the form annexed hereto as Exhibit C-2, executed by the Trustee and
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein.
“Class
B
Certificateholder”: Any Holder of a Class B Certificate.
“Class
B
Percentage”: The Class B-1 Percentage, Class B-2 Percentage, Class B-3
Percentage, Class B-4 Percentage, Class B-5 Percentage or Class B-6
Percentage.
“Class
B-1 Percentage”: With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the Certificate
Principal Balance of the Class B-1 Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Stated Principal
Balance of all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-1 Percentage is
approximately 4.55%.
“Class
B-2 Percentage”: With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class B-2 Certificates immediately prior
to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date. The initial Class B-2 Percentage
is
approximately 0.55%.
“Class
B-3 Percentage”: With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class B-3 Certificates immediately prior
to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date. The initial Class B-3 Percentage
is
approximately 0.35%.
“Class
B-4 Percentage”: With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class B-4 Certificates immediately prior
to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date. The initial Class B-4 Percentage
is
approximately 0.20%.
“Class
B-5 Percentage”: With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class B-5 Certificates immediately prior
to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date. The initial Class B-5 Percentage
is
approximately 0.20%.
“Class
B-6 Percentage”: With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class B-6 Certificates immediately prior
to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date. The initial Class B-6 Percentage
is
approximately 0.15%.
“Class
R
Certificates”: The Class R-I Certificates and Class R-II Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit C-1 and each evidencing
the
ownership of an interest designated as the Residual Interest in the related
REMIC.
“Class
Subordination Percentage”: With respect to any Distribution Date and each Class
of Subordinate Certificates, the fraction (expressed as a percentage) the
numerator of which is the Certificate Principal Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Certificate Principal Balances
of
all Classes of Certificates immediately prior to such Distribution
Date.
“Closing
Date”: April 25, 2007.
“Code”:
The Internal Revenue Code of 1986, as amended.
“Collection
Account”: The account or accounts created and maintained by the Master Servicer
pursuant to Section 3.10, which shall be entitled “PHH Mortgage Corporation, as
Master Servicer for Citibank, N.A., as Trustee, in trust for registered Holders
of PHHMC Mortgage Pass-Through Certificates, Series 2007-2”, and which must be
an Eligible Account.
“Commission”:
The Securities and Exchange Commission.
“Compensating
Interest”: As defined in Section 3.24 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.
“Control
Agreement”: With respect to each Mortgage 100K
Loan,
the Xxxxxxx Xxxxx Pledged Collateral Account Control Agreement between the
guarantor or mortgagor, as applicable, the Pledged Asset Servicer and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, pursuant to which the guarantor
or mortgagor, as applicable, has granted a security interest in a Securities
Account.
“Cooperative”:
A corporation that has been formed for the purpose of cooperative apartment
ownership.
“Cooperative
Assets”: Shares issued by Cooperatives, the related Cooperative Lease and any
other collateral securing the Cooperative Loans.
“Cooperative
Building”: The building and other property owned by a Cooperative.
“Cooperative
Lease”: With respect to a Cooperative Loan, the proprietary lease or occupancy
agreement with respect to the Cooperative Apartment occupied by the Mortgagor
and relating to the related Cooperative Assets, which lease or agreement confers
an exclusive right to the holder of such Cooperative Assets to occupy such
apartment.
“Cooperative
Loan”: The indebtedness of a Mortgagor evidenced by a Mortgage Note which is
secured by Cooperative Assets and which is being sold to the Depositor pursuant
to this Agreement, the Mortgage Loans so sold being identified in the Mortgage
Loan Schedule.
“Cooperative
Unit”: A specific dwelling unit in a Cooperative Building as to which exclusive
occupancy rights have been granted pursuant to a Lease.
“Corporate
Trust Office”: The principal corporate trust office of the Trustee at which at
any particular time its corporate trust business in connection with this
Agreement shall be administered, which office at the date of the execution
of
this instrument is located, for Certificate transfer purposes, at 000 Xxxx
Xxxxxx, 00xx
Xxxxx,
Attn: Securities Window, Xxx Xxxx, Xxx Xxxx 00000, Attn: PHHMC, Series 2007-2,
or at such other address as the Trustee may designate from time to time by
notice to the Certificateholders, the Depositor and the Master
Servicer.
“Corresponding
Certificated Interests”: With respect to each REMIC I Regular Interest, the
Class with the same designation.
“Credit
Support Depletion Date”: The first Distribution Date on which the Senior
Percentage equals 100%.
“Curtailment”:
Any Principal Prepayment made by a Mortgagor which is not a Principal Prepayment
in Full.
“Cut-off
Date”: April 1, 2007.
“Cut-off
Date Principal Balance”: With respect to any Mortgage Loan, the unpaid principal
balance thereof as of the Cut-off Date (or as of the applicable date of
substitution with respect to an Eligible Substitute Mortgage Loan).
“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.
“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”:
As used herein, a Mortgage Loan is considered to be: “one month” delinquent when
a payment due on any scheduled due date remains unpaid as of the close of
business on the last Business Day immediately prior to the next following
monthly scheduled due date; “two months” delinquent when a payment due on any
scheduled due date remains unpaid as of the close of business on the last
Business Day immediately prior to the second following monthly scheduled due
date; and so on. The determination as to whether a Mortgage Loan falls into
these categories is made as of the close of business on the last Business Day
of
each month. For example, a Mortgage Loan with a payment due on July 1 that
remained unpaid as of the close of business on July 31 would then be considered
to be one month delinquent. Delinquency information as of the Cut-off Date
is
determined and prepared as of the close of business on the last Business Day
immediately prior to the Cut-off Date.
“Depositor”:
PHH Mortgage Capital LLC, a Delaware limited liability company, 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 Securities Exchange Act of 1934, as amended.
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
Agreement”: With respect to any Book-Entry Certificates, either of the
agreements among the Depositor, the Trustee and the initial Depository, to
be
dated on or about the Closing Date.
“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 8th day of the calendar month
in which such Distribution Date occurs or, if such 8th day is not a Business
Day, the Business Day immediately preceding such 8th 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 Fund other than through an
Independent Contractor, provided, however, that the Trustee (or the Master
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master Servicer on behalf
of
the Trustee) 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
Organization”: Any of the following: (i) the United States, any State or
political subdivision thereof, any possession of the United States, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
which is a corporation if all of its activities are subject to tax and, except
for the Xxxxxxx Mac or any successor thereto, a majority of its board of
directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality
of
any of the foregoing, (iii) any organization (other than certain farmers’
cooperatives described in Section 521 of the Code) which is exempt from the
tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511
of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v)
any
other Person so designated by the Trustee based upon an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, that the
holding of an ownership interest in a Residual Certificate by such Person may
cause the Trust or any Person having an ownership interest in the Residual
Certificate (other than such Person) to incur a 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. The terms
“United States,” “State” and “international organization” shall have the
meanings set forth in Section 7701 of the Code or successor
provisions.
“Distribution
Account”: The trust account or accounts created and maintained by the Trustee
pursuant to Section 3.10(b) which shall be entitled “Distribution Account,
Citibank, N.A., as Trustee, in trust for the registered Holders of the PHHMC
Mortgage Pass-Through Certificates, Series 2007-2” and which must be an Eligible
Account.
“Distribution
Date”: The 18th day of any calendar month, or if such 18th day is not a Business
Day, the Business Day immediately following such 18th day, commencing in May
2007.
“Due
Date”: With respect to each Mortgage Loan and any Distribution Date, the first
day of the calendar month in which such Distribution Date occurs on which the
Monthly Payment for such Mortgage Loan was due, exclusive of any days of
grace.
“Due
Period”: With respect to any Distribution Date, the period commencing on the
second day of the month preceding the month in which such Distribution Date
(or
with respect to the first Due Period, the day following the Cut-off Date) occurs
and ending on the first day of the month in which such Distribution Date
occurs.
“Effective
Loan-to-Value Ratio”: With respect to a Pledged Asset Loan, the ratio, expressed
as a percentage, of (A) the principal amount of the Mortgage Loan at origination
less the value of any Pledged Assets securing the Mortgage Loan, to (B) the
lesser of (1) the appraised value determined in an appraisal or other collateral
assessment tool obtained at origination of the Mortgage Loan and (2) the sales
price for the related Mortgaged Property.
“Eligible
Account”: Any of (i) an account or accounts maintained with a depository
institution the short-term debt obligations of which have been rated by the
Rating Agency in its highest rating available, (ii) in a depository institution
in which such accounts are fully insured to the limits established by the FDIC,
provided that any deposits not so insured shall, to the extent acceptable to
the
Rating Agency, as evidenced in writing, be maintained such that (as evidenced
by
an Opinion of Counsel delivered to the Trustee and the Rating Agency) the
registered Holders of Certificates have a claim with respect to the funds in
such account or a perfected first security interest against any 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, (iv) an account or accounts of a depository institution
acceptable to the Rating Agency (as evidenced in writing by the Rating Agency
that use of any such account will not reduce the rating assigned to any Class
of
Certificates by such Rating Agency below the lower of the then-current rating
or
the rating assigned to such Certificates as of the Closing Date by such Rating
Agency) or (v) an account or accounts maintained with a federal or state
chartered depository institution or trust company that meet the depository
requirements of Xxxxxx Xxx or Xxxxxxx Mac. 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 the outstanding principal balance of
the
Defective Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs, the amount of any shortfall to be deposited by the
Master Servicer in the Collection Account in the month of substitution, (ii)
have a Loan Rate, not less than the Loan Rate of the Defective Mortgage Loan
and
not more than 1% in excess of the Loan Rate of such Defective Mortgage Loan,
(iii) have a remaining term to maturity not greater than (and not more than
one
year less than) that of the Defective Mortgage Loan, (iv) be current as of
the
date of substitution, (v) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Defective
Mortgage Loan as of such date and (vi) conform to each representation and
warranty set forth in Section 2.04 hereof 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 Loan Rates
described in clause (ii) hereof shall be determined on the basis of weighted
average Loan Rates, the terms described in clause (iii) hereof shall be
determined on the basis of weighted average remaining term to maturity, the
Loan-to-Value Ratios described in clause (v) 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 (vi) hereof
must be satisfied as to each Eligible Substitute Mortgage Loan or in the
aggregate, as the case may be. Any Mortgage Loan substituted for a Mortgage
Loan
which has an arrearage due to the application of any related forbearance plan
with respect to such Mortgage Loan, will be treated as having such an arrearage
due to the application of any related forbearance plan with respect to such
Mortgage Loan.
“ERISA”:
The Employee Retirement Income Security Act of 1974, as amended.
“ERISA-Restricted
Certificates”: Any of the Class B-4, Class B-5, Class B-6 and Class R
Certificates.
“Escrow
Payments”: The amounts constituting ground rents, taxes, assessments, water
rates, 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.
“Excess
Losses”: (i) Special Hazard Losses in excess of the Special Hazard Amount, (ii)
Bankruptcy Losses in excess of the Bankruptcy Amount, (iii) Fraud Losses in
excess of the Fraud Loss Amount and (iv) Extraordinary Losses.
“Excess
Subordinate Principal Amount”: With respect to any Distribution Date on which
the Certificate Principal Balance of the Class or Classes of Certificates then
outstanding with the Lowest Priority is to be reduced to zero and on which
Realized Losses are to be allocated to that Class or those Classes, the amount,
if any, by which (i) the amount of principal that would otherwise be
distributable on that Class or those Classes of Certificates on such
Distribution Date is greater than (ii) the excess, if any, of the aggregate
Certificate Principal Balance of that Class or those Classes of Certificates
immediately prior to such Distribution Date over the aggregate amount of
Realized Losses to be allocated to that Class or those Classes of Certificates
on such Distribution Date.
“Exchange
Act”: The Securities and Exchange Act of 1934, as amended.
“Extraordinary
Loss”: Any Realized Loss or portion thereof caused by or resulting
from:
(i)
nuclear
or chemical reaction or nuclear radiation or radioactive or chemical
contamination, all whether controlled or uncontrolled and whether such loss
be
direct or indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the definition of the term
“Special Hazard Loss”;
(ii) hostile
or warlike action in time of peace or war, including action in hindering,
combating or defending against an actual, impending or expected attack by any
government or sovereign power, de
jure
or
de
facto,
or by
any authority maintaining or using military, naval or air forces, or by
military, naval or air forces, or by an agent of any such government, power,
authority or forces;
(iii) any
weapon of war employing atomic fission or radioactive forces whether in time
of
peace or war, and
(iv) insurrection,
rebellion, revolution, civil war, usurped power or action taken by governmental
authority in hindering, combating or defending against such an occurrence,
seizure or destruction under quarantine or customs regulations, confiscation
by
order of any government or public authority, or risks of contraband or illegal
transactions or trade.
“Extraordinary
Trust Fund Expenses”: Any amounts reimbursable to the Master Servicer or the
Depositor pursuant to Section 6.03, any amounts reimbursable to the Trustee
from
the Trust Fund pursuant to this Agreement, including but not limited to Section
8.05, and any other costs, expenses, liabilities and losses borne by the Trust
Fund (exclusive of any cost, expense, liability or loss that is specific to
a
particular Mortgage Loan or REO Property and is taken into account in
calculating a Realized Loss in respect thereof) for which the Trust Fund has
not
and, in the reasonable good faith judgment of the Trustee, shall not, obtain
reimbursement or indemnification from any other Person.
“Xxxxxx
Mae”: Federal National Mortgage Association or any successor
thereto.
“FDIC”:
Federal Deposit Insurance Corporation or any successor thereto.
“Fidelity
Bond”: Shall have the meaning assigned thereto in Section 3.14.
“Final
Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO
Property (other than a Mortgage Loan or REO Property purchased by a Seller
or
the Master Servicer pursuant to or as contemplated by Section 2.03 or 10.01),
a
determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination
made thereby.
“Fitch”:
Fitch, Inc., doing business as Fitch Ratings, and any successor thereto or
its
successor in interest.
“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.
“Foreclosure
Profits”: As to any Distribution Date or related Determination Date and any
Mortgage Loan, the excess, if any, of Liquidation Proceeds, Insurance Proceeds
and proceeds from any REO Disposition (net of all amounts reimbursable therefrom
pursuant to Section 3.11(a)(iii)) in respect of each Mortgage Loan or REO
Property for which a Cash Liquidation or REO Disposition occurred in the related
Prepayment Period over the sum of the unpaid principal balance of such Mortgage
Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.16) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month
in
which such Cash Liquidation or REO Disposition occurred.
“Fraud
Loss Amount”: As of any date of determination after the Cut-off Date, prior to
the third anniversary of the Cut-off Date, an amount equal to 1.00% of the
aggregate outstanding principal balance of all of the Mortgage Loans as of
the
Cut-off Date minus the Fraud Losses allocated solely to one or more specific
Classes of Certificates in accordance with Section 4.02 since the most recent
anniversary of the Cut-off Date up to such date of determination. On and after
the third anniversary of the Cut-off Date, the Fraud Loss Amount shall be
zero.
The
Fraud
Loss Amount may be further reduced by the Master Servicer (including
accelerating the manner in which such coverage is reduced) provided that prior
to any such reduction, the Master Servicer shall (i) obtain written conformation
from the Rating Agency that such reduction shall not reduce the rating assigned
to any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
conformation to the Trustee.
“Fraud
Losses”: Losses sustained on a Liquidated Mortgage Loan by reason of a default
arising from fraud, dishonesty or misrepresentation.
“Xxxxxxx
Mac”: Federal Home Loan Mortgage Corporation or any successor
thereto.
“Highest
Priority”: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the earliest priority for payments pursuant
to Section 4.01(c), in the following order: Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.
“HUD”:
The United States Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA
Regulations.
“Independent”:
When used with respect to any specified Person, any such Person who (a) is
in
fact independent of the Depositor, the Master Servicer and their respective
Affiliates, (b) does not have any direct financial interest in or any material
indirect financial interest in the Depositor or the Master Servicer or any
Affiliate thereof, and (c) is not connected with the Depositor or the Master
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 Master 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 Master
Servicer or any Affiliate thereof, as the case may be.
“Independent
Contractor”: Either (i) any Person (other than the Master 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 Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Master 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.
“Initial
Certificate Principal Balance”: With respect to any Regular Certificate, other
than the Class A-4 Certificates, the amount designated “Initial Certificate
Principal Balance” on the face thereof.
“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 Master 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 any Class of
Certificates, the calendar month immediately preceding the month in which such
Distribution Date occurs.
“Late
Collections”: With respect to any Mortgage Loan, all amounts received subsequent
to the Determination Date immediately following any related Due 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 Due Period and not previously recovered.
“Limited
Purpose Surety Bond”: The Limited Purpose Surety Bond (Policy No. AB0039BE),
dated February 28, 1996 in respect to certain Pledged Asset Loans, issued by
Ambac Assurance Corporation (f/k/a Ambac Indemnity Corporation) for the benefit
of certain beneficiaries, including the Trustee for the benefit of the
Certificateholders, but only to the extent that such Limited Purpose Surety
Bond
covers any Pledged Asset Loans.
“Liquidated
Mortgage Loan”: As to any Distribution Date, any Mortgage Loan in respect of
which the Master Servicer has determined, in accordance with the servicing
procedures specified herein, as of the end of the related Due 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 3.23 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 Master 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, (ii) the liquidation
of
a defaulted Mortgage Loan by means of a trustee’s sale, foreclosure sale or
otherwise (including, with respect to a defaulted Mortgage Loan that is a
Pledged Asset Loan, the amount realized on the related Pledged Assets with
respect to such Mortgage Loan in accordance with Section 3.16), or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16 or Section
10.01.
“Loan
Balance”: As of any date, the aggregate Stated Principal Balance of all of the
Mortgage Loans as of such date.
“Loan-to-Value
Ratio”: As of any date and Mortgage Loan (other than a Pledged Asset Loan), the
fraction, expressed as a percentage, the numerator of which is the Stated
Principal Balance of the Mortgage Loan, and the denominator of which is the
Value of the related Mortgaged Property. As of any date and any Pledged Asset
Loan, the related Effective Loan-to-Value Ratio.
“Loan
Rate”: With respect to each Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan from time to time in accordance with the
provisions of the related Mortgage Note, which rate shall remain constant at
the
rate set forth in the Mortgage Loan Schedule as the Loan Rate in effect
immediately following the Cut-off Date. 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.
“Lockout
Percentage”: With respect to any Distribution Date, the Certificate Principal
Balance of the Class A-6 Certificates, divided by the aggregate Certificate
Principal Balance of the Senior Certificates, in each case immediately prior
to
any allocations of losses or distributions on that Distribution
Date.
“Lockout
Prepayment Percentage”: With respect to any Distribution Date, the product of
(i) the Lockout Percentage and (ii) the Stepdown Percentage.
“Lockout
Scheduled Percentage”: With respect to any Distribution Date (i) occurring prior
to May 2012, 0% and (ii) occurring in or after May 2012, the Lockout
Percentage.
“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 Depositor as applicable certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of
the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note)
in
the form of Exhibit H hereto.
“Lower
Priority”: As of any date of determination and with respect to any Class of
Subordinate Certificates, any other Class of Subordinate Certificates then
outstanding with a later priority for payments pursuant to Section
4.01(c).
“Lowest
Priority”: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the latest priority for payments pursuant
to
Section 4.01(c), in the following order: Class B-6, Class B-5, Class B-4, Class
B-3, Class B-2 and Class B-1 Certificates.
“Majority
Certificateholders”: The Holders of Certificates evidencing at least 51% of the
Voting Rights.
“Master
Servicer Affiliate”: A Person (i) controlling, controlled by or under common
control with the Master Servicer or which is 50% or more owned by the Master
Servicer and (ii) which is qualified to service residential mortgage
loans.
“Master
Servicer Event of Termination”: One or more of the events described in Section
7.01.
“Master
Servicer Remittance Date”: With respect to any Distribution Date, the Business
Day prior to such Distribution Date.
“MERS”:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
“MERS®
System”: The system of recording transfers of Mortgages electronically
maintained by MERS.
“MIN”:
The Mortgage Identification Number for Mortgage Loans registered with MERS
on
the MERS® System.
“MLCC”:
Xxxxxxx Xxxxx Credit Corporation and its successors in interest.
“MOM
Loan”: With respect to any Mortgage Loan, MERS acting as the mortgagee of such
Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and
its successors and assigns, at the origination thereof.
“Monthly
Interest Distributable Amount”: An amount equal to the interest accrued during
the related Interest Accrual Period on the Certificate Principal Balance or
Notional Amount, as applicable, of each Class of Certificates at the
then-applicable Pass-Through Rate. The Monthly Interest Distributable Amount
on
any Class of Certificates will be reduced by the amount of (i) Prepayment
Interest Shortfalls (to the extent not offset by the Master Servicer with a
payment of Compensating Interest as provided in Section 3.24), (ii) the interest
portion (adjusted to the Net Mortgage Rate) of Realized Losses (including Excess
Losses and Extraordinary Losses) not allocated solely to one or more specific
Classes of Certificates pursuant to Section 4.02, (iii) the interest portion
of
Advances previously made with respect to a Mortgage Loan or REO Property which
remained unreimbursed following the Cash Liquidation or REO Disposition of
such
Mortgage Loan or REO Property that were made with respect to delinquencies
that
were ultimately determined to be Excess Losses or Extraordinary Losses and
(iv)
any other interest shortfalls not covered by the subordination provided by
the
Class B Certificates, including Relief Act Shortfalls, with all such reductions
allocated among all of the Certificates in proportion to their respective
amounts of Monthly Interest Distributable Amount payable on such Distribution
Date which would have resulted absent such reductions.
“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 reduction in the amount of
interest collectible from the related Mortgagor pursuant to the Relief Act;
(b)
without giving effect to any extension granted or agreed to by the Master
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.
“Moody’s”:
Xxxxx’x Investors Service, Inc., and its successors.
“Mortgage”:
The mortgage, deed of trust or other instrument creating a first lien on, or
first priority security interest in, a Mortgaged Property securing a Mortgage
Note.
“Mortgage
100K
Loan”: A
Mortgage Loan secured by Pledged Assets in the form of a security interest
in
the Securities Account and the financial assets held therein and having a value,
as of the date of origination of such Mortgage Loan, of at least equal to the
related Original Pledged Asset Requirement.
“Mortgage
100K
Pledge
Agreement”: With respect to each Mortgage 100K
Loan,
the Pledge Agreement for Securities Account between the related mortgagor and
the Pledged Asset Servicer pursuant to which such mortgagor granted a security
interest in the related securities and other financial assets held
therein.
“Mortgage
File”: The mortgage documents listed in Section 2.01(A) and (B) pertaining to a
particular Mortgage Loan and any additional documents required to be added
to
the Mortgage File pursuant to this Agreement.
“Mortgage
Loan”: Each mortgage loan (including the Cooperative Loans) 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.
“Mortgage
Loan Purchase Agreement”: The mortgage loan purchase agreement, dated as of
April 1, 2007, among the Sellers and the Depositor, regarding the transfer
of
the Mortgage Loans.
“Mortgage
Loan Schedule”: As of any date, the list of Mortgage Loans identifying the
Mortgage Loans transferred from the Sellers, and attached hereto as Exhibit
D.
The Mortgage Loan Schedule shall set forth the following information with
respect to each Mortgage Loan:
|
(i)
|
the
Sellers’ Mortgage Loan identifying number;
|
|
|
(ii)
|
[reserved];
|
|
|
(iii)
|
the
zip code of the related Mortgaged Property;
|
|
|
(iv)
|
a
code indicating whether the Mortgaged Property is
owner-occupied;
|
|
|
(v)
|
the
type of Residential Dwelling constituting the Mortgaged
Property;
|
|
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(vi)
|
the
original months to maturity;
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|
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(vii)
|
the
original date of the mortgage;
|
|
|
(viii)
|
the
Loan-to-Value Ratio or Effective Loan-to-Value Ratio, as applicable,
at
origination;
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|
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(ix)
|
the
loan rate;
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|
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(x)
|
the
date on which the first Monthly Payment was due on the Mortgage
Loan;
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|
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(xi)
|
the
stated maturity date;
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|
|
(xii)
|
the
amount of the Monthly Payment at origination;
|
|
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(xiii)
|
the
amount of the Monthly Payment as of the Cut-off Date;
|
|
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(xiv)
|
the
next Due Date on which a Monthly Payment is due;
|
|
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(xv)
|
the
original principal amount of the Mortgage Loan;
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|
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(xvi)
|
the
unpaid principal balance of the Mortgage Loan as of the close of
business
on the Cut-off Date;
|
|
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(xvii)
|
a
code indicating the purpose of the Mortgage Loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out
Refinancing);
|
|
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(xviii)
|
a
code indicating the documentation style (i.e., full, alternative
or
reduced);
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(xix)
|
a
code indicating if the Mortgage Loan is subject to a Primary Insurance
Policy;
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|
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(xx)
|
the
name of the Qualified Insurer and the certificate number for any
Primary
Insurance Policy, if applicable;
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|
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(xxi)
|
the
depth of coverage of any Primary Insurance Policy, if
applicable;
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|
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(xxii)
|
the
Value of the Mortgaged Property;
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|
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(xxiii)
|
the
sale price of the Mortgaged Property, if applicable;
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|
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(xxiv)
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the
Servicing Fee;
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|
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(xxv)
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whether
the Mortgage Loan is a Buydown Mortgage Loan; and
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|
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(xxvi)
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the
amount of the Original Pledged Asset Requirement, if
any.
|
The
Mortgage Loan Schedule shall set forth the following information with respect
to
the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number
of
Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3)
the
weighted average Loan Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended
from
time to time by the Master Servicer 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.
“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 and
any
other accrued and unpaid Servicing Fees received and retained in connection
with
the liquidation of such Mortgage Loan or Mortgaged Property Rate.
“Net
Mortgage Rate”: With respect to any Mortgage Loan, (x) the Loan Rate minus (y)
the Servicing Fee Rate and the Trustee Fee Rate.
“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 Master 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 A-4 Certificates and any Distribution Date,
the Certificate Principal Balance of the Class A-3 Certificates immediately
prior to that Distribution Date. For federal income tax purposes, the Notional
Amount of the Class A-4 Certificates shall be equal to the Uncertificated
Principal Balance of REMIC I Regular Interest A-3.
“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 Master Servicer 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 Master Servicer, acceptable to the
Trustee, 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 Master Servicer may
opt to terminate the Trust Fund pursuant to Section 10.01.
“Original
Certificate Principal Balance”: With respect to each Class of the Certificates
other than the Class A-4 Certificates, the Certificate Principal Balance thereof
on the Closing Date, as set forth opposite such Class above in the Preliminary
Statement.
“Original
Notional Amount”: With respect to the Class A-4 Certificates,
$38,921,344.00.
“Original
Pledged Asset Requirement’: With respect to any Pledged Asset Loan, an amount
equal to the Pledged Assets required at the time of the origination of such
Pledged Asset Loan in order to achieve an Effective Loan-to-Value Ratio for
such
Pledged Asset Loan, generally equal to seventy percent (70%); for purposes
of
the Required Surety Payment, in no event shall the Original Pledged Asset
Requirement for a Pledged Asset Loan exceed thirty percent (30%) of its original
principal balance.
“Original
Subordinated Principal Balance”: The aggregate of the Certificate Principal
Balances of the Subordinate Certificates as of the Cut-off Date.
“Other
Insurance Proceeds”: Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan, other than the Primary Insurance
Policy, if any, 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 Master Servicer would follow in
servicing mortgage loans held for its own account.
“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.
“Parent
Power® Agreement”: With respect to each Parent Power® Mortgage Loan, a Parent
Power® Guaranty and Security Agreement for Securities Account.
“Parent
Power® Guaranty and Security Agreement for Securities Account”: With respect to
a Parent Power® Mortgage Loan, an agreement between the Pledged Asset Servicer
and a guarantor on behalf of the mortgagor under such Parent Power® Mortgage
Loan pursuant to which such guarantor guarantees the payment of certain losses
under such Parent Power® Mortgage Loan and has granted a security interest to
the Pledged Asset Servicer in certain marketable securities to collateralize
such guaranty. The required amount of such collateral is at least equal to
the
Original Pledged Asset Requirement for such Parent Power® Mortgage
Loan.
“Parent
Power® Mortgage Loan”: A Mortgage Loan having at the time of origination a
Loan-to-Value Ratio generally in excess of the Master Servicer’s maximum
acceptable Loan-to-Value Ratio for such Mortgage Loan as set forth in the
Underwriting Guide, which Mortgage Loan is supported by a Parent Power®
Agreement.
“Pass-Through
Rate”: With respect to the Certificates (other than the Class A-3 Certificates
and Class A-4 Certificates) and any Distribution Date, a per annum rate equal
to
the weighted average of the Net Mortgage Rate on each Mortgage Loan. For federal
income tax purposes, the equivalent of the foregoing shall be expressed as
the
weighted average of the Uncertificated Pass-Through Rate on each REMIC I Regular
Interest, weighted on the basis of the Uncertificated Principal Balance of
each
such REMIC I Regular Interest. With respect to the Class A-3 Certificates and
any Distribution Date, a per annum rate equal to (i) the weighted average of
the
Net Mortgage Rate on each Mortgage Loan minus (ii) 0.25%. For federal income
tax
purposes, however, the Class A-3 Certificates will have a per annum rate equal
to (i) the Uncertificated Pass-Through Rate on the REMIC I Regular Interest
A-3
minus (ii) 0.25%. With respect to any Distribution Date and the Class A-4
Certificates, a per annum rate equal to 0.25%.
“Paying
Agent”: Any paying agent appointed pursuant to Section 5.05.
“Percentage
Interest”: With respect to any Certificate (other than a Class R Certificate), a
fraction, expressed as a percentage, the numerator of which is the Initial
Certificate Principal Balance or Initial Notional Amount, represented by such
Certificate and the denominator of which is the Original Certificate Principal
Balance or original Notional Amount, as the case may be, of the related Class.
With respect to any Class of Class R Certificates, the portion of such 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%.
“Permitted
Investments”: Any one or more of the following obligations or securities
acquired at a purchase price of not greater than par, regardless of whether
issued or managed by the Depositor, the Master Servicer, the Trustee or any
of
their respective Affiliates or for which an Affiliate of the Trustee serves
as
an advisor:
(i)
obligations
of or guaranteed as to principal and interest by the United States or any agency
or instrumentality thereof when such obligations are backed by the full faith
and credit of the United States;
(ii) repurchase
agreements on obligations specified in clause (i) maturing not more than one
month from the date of acquisition thereof, provided that the unsecured
obligations of the party agreeing to repurchase such obligations are at the
time
rated by the Rating Agency in its highest short-term rating
available;
(iii) federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than 90
days
and, in the case of bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or
trust
company incorporated under the laws of the United States or any state thereof
or
of any domestic branch of a foreign depository institution or trust company;
provided that the debt obligations of such depository institution or trust
company (or, if the only Rating Agency is S&P, in the case of the principal
depository institution in a depository institution holding company, debt
obligations of the depository institution holding company) at the date of
acquisition thereof have been rated by the Rating Agency in its highest
short-term rating available; and provided further that, if the only Rating
Agency is S&P and if the depository or trust company is a principal
subsidiary of a bank holding company and the debt obligations of such subsidiary
are not separately rated, the applicable rating shall be that of the bank
holding company; and, provided further that, if the original maturity of such
short-term obligations of a domestic branch of a foreign depository institution
or trust company shall exceed 30 days, the short-term rating of such institution
shall be A-1+ in the case of S&P if S&P is the Rating
Agency;
(iv) commercial
paper and demand notes (having original maturities of not more than 365 days)
of
any corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by the Rating Agency
in
its highest short-term rating available; provided that such commercial paper
shall have a remaining maturity of not more than 30 days;
(v) a
money
market fund or a qualified investment fund rated by the Rating Agency in its
highest long-term rating available; and
(vi) other
obligations or securities that are acceptable to the Rating Agency as a
Permitted Investment hereunder and will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the lower of the then-current
rating or the rating assigned to such Certificates as of the Closing Date by
such Rating Agency, as evidenced in writing;
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 Person other than a Disqualified Organization, an “electing
large partnership” as defined in Section 775(a) of the Code, or a 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.
“Planned
Principal Balance”: With respect to the Class A-1 Certificates and each
Distribution Date, the amount set forth for such Distribution Date on Exhibit
L
hereto.
“Pledged
Assets”: (i) With respect to any Mortgage 100K
Loan,
the Securities Account and the financial assets held therein subject to a
security interest pursuant to the related Mortgage 100K
Pledge
Agreement, or (ii) with respect to any Parent Power® Mortgage Loan, the related
Parent Power® Agreement and collateral pledged pursuant thereto.
“Pledged
Asset Agreements”: Each Mortgage 100K
Pledge
Agreement, Parent Power® Guaranty and Security Agreement for Securities Account
and Control Agreement, as applicable, for each Pledged Asset Loan.
“Pledged
Asset Loan”: A Mortgage Loan that is supported by Pledged Assets.
“Pledged
Asset Servicer”: MLCC.
“Pledged
Asset Servicing Agreement”: The Additional Collateral Transfer and Servicing
Agreement, dated as of November 1, 2001, between MLCC and the Master
Servicer.
“Prepayment
Distribution Trigger”: With respect to any Distribution Date and any Class of
Subordinate Certificates (other than the Class B-1 Certificates), a test that
shall be satisfied if the fraction (expressed as a percentage) equal to the
sum
of the Certificate Principal Balances of such Class and each Class of
Subordinate Certificates with a Lower Priority than such Class immediately
prior
to such Distribution Date divided by the aggregate Stated Principal Balance
of
all of the Mortgage Loans (or related REO Properties) immediately prior to
such
Distribution Date is greater than or equal to the sum of the related initial
Class B Percentages of such Classes of Subordinate Certificates.
“Prepayment
Interest Shortfall”: As to any Distribution Date and any Mortgage Loan (other
than a Mortgage Loan relating to an REO Property) that was the subject of (a)
a
Principal Prepayment in Full during the related Prepayment Period, an amount
equal to the excess of one month’s interest at the Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan over the amount of interest
(adjusted to the Net Mortgage Rate) paid by the Mortgagor for such Prepayment
Period to the date of such Principal Prepayment in Full or (b) a Curtailment
during the prior calendar month, an amount equal to one month’s interest at the
Net Mortgage Rate on the amount of such Curtailment. The obligations of the
Master Servicer in respect of any Prepayment Interest Shortfall are set forth
in
Section 3.24.
“Prepayment
Period”: With respect to any Distribution Date, the calendar month preceding the
month in which such 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 Master Servicer pursuant to Section
3.13.
“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
unpaid principal balance of the Mortgage Loan.
“Private
Certificates”: Any of the Class A-5, Class A-6, Class B-1, Class B-4, Class B-5
and Class B-6 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 Master Servicer and are not to be applied to the restoration
of
the related Mortgaged Property or released to the Mortgagor in accordance with
the Master Servicer’s servicing procedures, subject to the terms and conditions
of the related Mortgage Note and Mortgage.
“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 Master Servicer to the Trustee, an amount equal
to the sum of (i) 100% of the Stated 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 Stated Principal Balance at the
applicable Loan 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
Master 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, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Loan 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 Master Servicer through
the
end of the calendar month immediately preceding the calendar month in which
such
REO Property was acquired, plus (2) REO Imputed Interest for such REO Property
for each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase
had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.07,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid 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 3.23, 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 Master 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 Mae or Xxxxxxx
Mac.
“Rate/Term
Refinancing”: A Refinanced Mortgage Loan which is not a Cash-Out
Refinancing.
“Rating
Agency”: Fitch or its successors. If such agency or its successors are no longer
in existence, “Rating Agency” shall be such nationally recognized statistical
rating agency, or other comparable Person, designated by the Depositor, notice
of which designation shall be given to the Trustee and Master
Servicer.
“Realized
Loss”: With respect to a Liquidated Mortgage Loan, the amount by which the
remaining unpaid principal balance of the Mortgage Loan exceeds the amount
of
Liquidation Proceeds applied to the principal balance of the related Mortgage
Loan. To the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with respect
to
that Mortgage Loan will be reduced to the extent such recoveries are applied
to
reduce the Certificate Principal Balance of any Class of Certificates on any
Distribution Date.
“Record
Date”: With respect to all of the Certificates and (i) the first Distribution
Date, the Closing Date and (ii) any Distribution Date after the first
Distribution Date, the last Business Day of the month immediately preceding
the
month in which the related Distribution Date occurs.
“Refinanced
Mortgage Loan”: A Mortgage Loan the proceeds of which were used to satisfy an
existing mortgage loan on the Mortgaged Property.
“Regular
Certificate”: Any of the Class A Certificates and Class B
Certificates.
“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 as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act, the amount by which (i) interest collectible
on
such Mortgage Loan during such Due Period is less than (ii) one month’s interest
on the Stated Principal Balance of such Mortgage Loan at the Loan Rate for
such
Mortgage Loan before giving effect to the application of the Relief
Act.
“REMIC”:
A “real estate mortgage investment conduit” within the meaning of Section 860D
of the Code.
“REMIC
I”: The segregated pool of assets, with respect to which a REMIC election is
to
be made, consisting of: (i) each Mortgage Loan (exclusive of payments of
principal and interest due on or before the Cut-off Date, if any, received
by
the Master Servicer which shall not constitute an asset of the Trust Fund)
as
from time to time are subject to this Agreement and all payments under and
proceeds of such Mortgage Loans (exclusive of any prepayment fees and late
payment charges received on the Mortgage Loans), together with all documents
included in the related Mortgage File, subject to Section 2.01; (ii) such funds
or assets as from time to time are deposited in the Collection Account or the
Distribution Account and belonging to the Trust Fund; (iii) any REO Property;
(iv) the Primary Hazard Insurance Policies, if any, the Primary Insurance
Policies, if any, and all other Insurance Policies with respect to the Mortgage
Loans; (v) the Depositor’s rights in respect of the Pledged Assets and the
Limited Purpose Surety Bond, including the assignment of the Depositor’s rights
under the Pledged Asset Servicing Agreement; and (vi) the Depositor’s interest
in respect of the representations and warranties made by the Sellers in the
Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to Section
2.04 hereof. The Trust Fund shall not include the Buydown Account.
“REMIC
I
Regular Interests”: The uncertificated partial undivided beneficial ownership
interests in REMIC I, designated as REMIC I Regular Interests A-0, X-0, X-0,
X-0, X-0, X-0, X-0, B-0, X-0, X-0, X-0 xnd R-II, with respect to which a REMIC
election is to be made.
“REMIC
II”: The segregated pool of assets consisting of the REMIC I Regular Interests
conveyed in trust to the Trustee for the benefit of the holders of the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5, Class B-6 and Class R-II Certificates
pursuant to Section 9.01, with respect to which a separate REMIC election is
to
be made pursuant to Section 9.01.
“REMIC
Provisions”: Provisions of the federal income tax law relating to real estate
mortgage investment conduits which appear at Section 860A through 860G of
Subchapter M of Chapter 1 of the Code, and related provisions, and regulations
and rulings promulgated thereunder, as the foregoing may be in effect from
time
to time.
“Remittance
Report”: A report prepared by the Master Servicer and delivered to the Trustee
pursuant to Section 4.03.
“Rents
from Real Property”: With respect to any REO Property, gross income of the
character described in Section 856(d) of the Code.
“REO
Account”: The account or accounts maintained by the Master Servicer in respect
of an REO Property pursuant to Section 3.23.
“REO
Disposition”: The sale or other disposition of an REO Property on behalf of the
Trust Fund.
“REO
Imputed Interest”: As to any REO Property, for any calendar month during which
such REO Property was at any time part of the Trust Fund, one month’s interest
at the applicable Net Mortgage Rate on the Stated Principal Balance of such
REO
Property (or, in the case of the first such calendar month, of the related
Mortgage Loan if appropriate) as of the close of business on the Distribution
Date in such calendar month.
“REO
Principal Amortization”: With respect to any REO Property, for any calendar
month, the excess, if any, of (a) the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form
of
rental income, sale proceeds (including, without limitation, that portion of
the
Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such
REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.
“REO
Property”: A Mortgaged Property acquired by the Master Servicer on behalf of the
Trust Fund through foreclosure or deed-in-lieu of foreclosure, as described
in
Section 3.23 hereto.
“Request
for Release”: A release signed by a Servicing Officer, in the form of Exhibit E
attached
“Required
Surety Payment”: With respect to any Pledged Asset Loan that becomes a
Liquidated Mortgage Loan, the lesser of (i) the principal portion of the
Realized Loss with respect to such Mortgage Loan and (ii) the excess, if any,
of
(a) the Original Pledged Asset Requirement with respect to such Mortgage Loan
over (b) the net proceeds realized by the Pledged Asset Servicer from the
related Pledged Assets as set forth in Section 3.16.
“Residential
Dwelling”: Any one of the following: (i) an attached or detached one-family
dwelling unit, (ii) two- to four-family dwelling unit, (iii) condominium, (iv)
townhouse, (v) row house, or (vi) individual unit in a planned unit
development.
“Residual
Certificate”: Any of the Class R Certificates.
“Residual
Interest”: The sole class of “residual interests” in a REMIC within the meaning
of Section 860G(a)(2) of the Code.
“Responsible
Officer”: When used with respect to the Trustee, any officer, 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.
“Restricted
Classes”: With respect to any Class of Certificates, any Classes of Certificates
with a lower priority of payment relative to such Class.
“S&P”:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc., and its
successors.
“Securities
Account”: With respect to any Pledged Asset Loans, the account, together with
the financial assets held therein, that is the subject of the related Mortgage
100K
Pledge
Agreement.
“Security
Agreement”: With respect to a Cooperative Loan, the agreement creating a
security interest in favor of the originator in the related Cooperative
Assets.
“Seller”:
Either of (i) PHH Mortgage Corporation, a New Jersey corporation, or any
successor in interest or (ii) Xxxxxx’x Gate Residential Mortgage Trust, a
Delaware business trust, or any successor in interest.
“Senior
Certificates”: The Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class A-5, Class
A-6 and Class R Certificates.
“Senior
Interest Distribution Amount”: With respect to each Distribution Date, the
aggregate amount of the Monthly Interest Distributable Amount to be distributed
to the Holders of the Senior Certificates for such Distribution
Date.
“Senior
Percentage”: As of any Distribution Date, the lesser of 100% and a fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of the Class A Certificates (other than the Class A-4
Certificates) and Class R Certificates immediately prior to such Distribution
Date and the denominator of which is the aggregate Stated Principal Balance
of
all of the Mortgage Loans or related REO Properties immediately prior to such
Distribution Date.
“Senior
Prepayment Percentage”: With respect to any Distribution Date, the percentage
indicated below:
|
Distribution
Date
|
Senior
Prepayment Percentage
|
|
|
May
2007
through April
2012
|
100%
|
|
|
May
2012 through
April
2013
|
Senior
Percentage, plus 70% of the Subordinate Percentage
|
|
|
May
2013 through
April
2014
|
Senior
Percentage, plus 60% of the Subordinate Percentage
|
|
|
May
2014
through April
2015
|
Senior
Percentage, plus 40% of the Subordinate Percentage
|
|
|
May
2015
through April
2016
|
Senior
Percentage, plus 20% of the Subordinate Percentage
|
|
|
May
2016
and thereafter
|
Senior
Percentage
|
provided,
however, (i) that any scheduled reduction to the Senior Prepayment Percentage
described above shall not occur as of any Distribution Date unless either
(a)(1)(x) the outstanding principal balance of Mortgage Loans Delinquent 60
days
or more (including Mortgage Loans in foreclosure and REO Property) averaged
over
the last six months as a percentage of the aggregate outstanding Certificate
Principal Balance of the Class B Certificates as of such Distribution Date,
is
less than 50%, or (y) the outstanding principal balance of Mortgage Loans
Delinquent 60 days or more (including Mortgage Loans in foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans as of such Distribution
Date, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if occurring during the sixth, seventh, eighth,
ninth
or tenth year (or any year thereafter) after the Closing Date are less than
30%,
35%, 40%, 45% or 50%, respectively, of the sum of the Initial Certificate
Principal Balances of the Class B Certificates or (b) (1) the aggregate
outstanding principal balance of the Mortgage Loans Delinquent 60 days or more
(including Mortgage Loans in foreclosure and REO Property) averaged over the
last six months, as a percentage of the aggregate outstanding principal balance
of all Mortgage Loans as of such Distribution Date, does not exceed 4% and
(2)
Realized Losses on the Mortgage Loans to date for such Distribution Date if
occurring during the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of the sum of the Initial Certificate Principal Balances of the
Class B Certificates and (ii) that for any Distribution Date on which the Senior
Percentage is greater than the Original Senior Percentage, the Senior Prepayment
Percentage for such Distribution Date shall be 100%. Notwithstanding the
foregoing, upon the reduction of the aggregate Certificate Principal Balance
of
the Senior Certificates to zero, the Senior Prepayment Percentage will equal
0%.
“Senior
Principal Distribution Amount”: As to any Distribution Date, the lesser of (a)
the balance of the Available Distribution Amount remaining after the
distribution of all amounts required to be distributed pursuant to Section
4.01(c)(i) and (b) the sum of the following:
(A)
the
Senior Percentage for such Distribution Date times the sum of the
following:
(1) the
principal portion of each Monthly Payment due during the related Due Period
on
each Outstanding Mortgage Loan whether or not received on or prior to the
related Determination Date, minus the principal portion of any Debt Service
Reduction, which together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the
Stated Principal Balance of any Mortgage Loan repurchased during the related
Prepayment Period pursuant to Section 2.02, 2.03, 3.15 or 3.16; and
(3) the
principal portion of all other unscheduled collections (other than Principal
Prepayments in Full and Curtailments and amounts received in connection with
a
Cash Liquidation or REO Disposition of a Mortgage Loan, including without
limitation Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and
REO Proceeds), received during the related Prepayment Period to the extent
applied by the Master Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.16;
(B) with
respect to each Mortgage Loan for which a Cash Liquidation or a REO Disposition
occurred during the related Prepayment Period and did not result in any Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser of (a) the Senior Percentage
for such Distribution Date times the Stated Principal Balance of such Mortgage
Loan and (b) the Senior Prepayment Percentage for such Distribution Date times
the related unscheduled collections (including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the
Master Servicer as recoveries of principal of the related Mortgage Loan pursuant
to Section 3.16;
(C) the
Senior Prepayment Percentage for such Distribution Date times the aggregate
of
all Principal Prepayments in Full and Curtailments received in the related
Prepayment Period with respect to the Mortgage Loans;
(D) any
Excess Subordinate Principal Amount for such Distribution Date; and
(E) any
amounts described in clauses (A), (B) or (C) of this definition, as determined
for any previous Distribution Date, which remain unpaid after application of
amounts previously distributed pursuant to this clause (E) to the extent that
such amounts are not attributable to Realized Losses which have been allocated
to the Class B Certificates;
“Servicing
Account”: The account or accounts created and maintained pursuant to Section
3.09.
“Servicer
Event of Termination”: One or more of the events described in Section
7.01.
“Servicing
Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the
Master Servicer in connection with a default, delinquency or other unanticipated
event by the Master Servicer in the performance of its servicing obligations,
including, but not limited to, (a) reasonable attorneys’ fees and (b) the cost
of (i) the preservation, restoration and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, in respect
of a particular Mortgage Loan, including any expenses incurred in relation
to
any such proceedings that result from the Mortgage Loan being registered on
the
MERS System, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property, and (iv) the performance of
its
obligations under Section 3.01, Section 3.09, Section 3.13, Section 3.14,
Section 3.16 and Section 3.23. The Master Servicer shall not be required to
make
any Servicing Advance in respect of a Mortgage Loan or REO Property that, in
the
good faith business judgment of the Master Servicer, would not be ultimately
recoverable from related Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
“Servicing
Officer”: Any officer of the Master Servicer involved in, or responsible for,
the administration and servicing of Mortgage Loans, whose name and specimen
signature appear on a list of servicing officers famished by the Master Servicer
to the Trustee and the Depositor on the Closing Date, as such list may from
time
to time be amended.
“Servicing
Fee”: With respect to each Mortgage Loan 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 applicable Servicing Fee Rate on the same principal amount
on
which interest on such Mortgage Loan accrues for such calendar
month.
“Servicing
Fee Rate”: With respect to each Mortgage Loan, a rate equal to 0.25% per
annum.
“Special
Hazard Amount”: As of any Distribution Date, an amount equal to
$1,007,611 minus
the
sum of (i) the aggregate amount of Special Hazard Losses allocated solely to
one
or more specific Classes of Certificates in accordance with Section 4.02 and
(ii) the Adjustment Amount (as defined below) as most recently calculated.
For
each anniversary of the Cut-off Date, the Adjustment Amount shall be equal
to
the amount, if any, by which the amount calculated in accordance with the
preceding sentence (without giving effect to the deduction of the Adjustment
Amount for such anniversary) exceeds the greater of (A) the greatest of (i)
twice the outstanding principal balance of the Mortgage Loan in the Trust Fund
which has the largest outstanding principal balance on the Distribution Date
immediately preceding such anniversary, (ii) the product of 1.00% multiplied
by
the outstanding principal balance of all Mortgage Loans on the Distribution
Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate principal balance as of such
anniversary and (B) the greater of (i) the product of 0.50% multiplied by the
outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary multiplied by a fraction, the numerator
of which is equal to the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans secured
by
Mortgaged Properties located in the State of California divided by the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans, expressed as a percentage, and the
denominator of which is equal to 27.89% (which percentage is equal to the
percentage of Mortgage Loans initially secured by Mortgaged Properties located
in the State of California) and (ii) the aggregate outstanding principal balance
(as of the immediately preceding Distribution Date) of the largest Mortgage
Loan
secured by a Mortgaged Property located in the State of California.
The
Special Hazard Amount may be further reduced by the Master Servicer (including
accelerating the manner in which coverage is reduced) provided that prior to
any
such reduction, the Master Servicer shall (i) obtain written confirmation from
the Rating Agency that such reduction shall not reduce the rating assigned
to
any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
confirmation to the Trustee.
“Special
Hazard Losses”: Realized Losses in respect of Special Hazard Mortgage
Loans.
“Special
Hazard Mortgage Loan”: A Liquidated Mortgage Loan as to which the ability to
recover the full amount due thereunder was substantially unpaired by a hazard
not insured against under a standard hazard insurance policy.
“Startup
Day”: As defined in Section 9.01(b) hereof.
“Stated
Principal Balance”: With respect to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date, as specified in
the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period), after giving effect to any previous partial prepayments and
Liquidation Proceeds received and to the payment of principal due on such Due
Date and irrespective of any delinquency in payment by the related
Mortgagor.
“Stayed
Funds”: If the Master Servicer is the subject of a proceeding under the federal
Bankruptcy Code and the mailing of a remittance by the Master Servicer pursuant
to this Agreement is prohibited by Section 362 of the federal Bankruptcy Code,
funds which are in the custody of the Master Servicer, a trustee in bankruptcy
or a federal bankruptcy court and should have been the subject of such
remittance absent such prohibition.
“Stepdown
Percentage”: With respect to any Distribution Date, the percentage indicated
below:
|
Distribution
Date
|
Stepdown
Percentage
|
|
|
May
2007
through April
2012
|
0%
|
|
|
May
2012 through
April
2013
|
30%
|
|
|
May
2013 through
April
2014
|
40%
|
|
|
May
2014
through April
2015
|
60%
|
|
|
May
2015
through April
2016
|
80%
|
|
|
May
2016
and thereafter
|
100%
|
“Subordinate
Certificates”: The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates.
“Subordinate
Percentage”: For any Distribution Date, the difference between 100% and the
Senior Percentage for such date.
“Subordinate
Prepayment Percentage”: With respect to any Distribution Date and each Class of
Subordinate Certificates, under the applicable circumstances set forth below,
the respective percentages set forth below:
(i)
For
any
Distribution Date prior to the Distribution Date in May 2012, 0%.
(ii) For
any
Distribution Date for which clause (i) does not apply, and on which any Class
of
Subordinate Certificates are outstanding:
(a) in
the
case of the Class of Subordinate Certificates then outstanding with the Highest
Priority and each other Class of Subordinate Certificates for which the related
Prepayment Distribution Trigger has been satisfied, a fraction, expressed as
a
percentage, the numerator of which is the Certificate Principal Balance of
such
Class immediately prior to such date and the denominator of which is the sum
of
the Certificate Principal Balances immediately prior to such date of (1) the
Class of Subordinate Certificates then outstanding with the Highest Priority
and
(2) all other Classes of Subordinate Certificates for which the respective
Prepayment Distribution Triggers have been satisfied; and
(b) in
the
case of each other Class of Subordinate Certificates for which the Prepayment
Distribution Triggers have not been satisfied, 0%; and
(iii) Notwithstanding
the foregoing, if the application of the foregoing percentages on any
Distribution Date as provided in Section 4.01(c) of this Agreement (determined
without regard to the proviso to the definition of “Subordinate Principal
Distribution Amount”) would result in a distribution in respect of principal of
any Class or Classes of Subordinate Certificates in an amount greater than
the
remaining Certificate Principal Balance thereof (any such class, a “Maturing
Class”), then: (a) the Subordinate Prepayment Percentage of each Maturing Class
shall be reduced to a level that, when applied as described above, would exactly
reduce the Certificate Principal Balance of such Class to zero; (b) the
Subordinate Prepayment Percentage of each other Class of Subordinate
Certificates (any such Class, a “Non-Maturing Class”) shall be recalculated in
accordance with the provisions in paragraph (ii) above, as if the Certificate
Principal Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the “Recalculated Percentage”); (c) the total amount
of the reductions in the Subordinate Prepayment Percentages of the Maturing
Class or Classes pursuant to clause (a) of this sentence, expressed as an
aggregate percentage, shall be allocated among the Non-Maturing Classes in
proportion to their respective Recalculated Percentages (the portion of such
aggregate reduction so allocated to any Non-Maturing Class, the “Adjustment
Percentage”); and (d) for purposes of such Distribution Date, the Subordinate
Prepayment Percentage of each Non-Maturing Class shall be equal to the sum
of
(1) the Subordinate Prepayment Percentage thereof, calculated in accordance
with
the provisions in paragraph (ii) above as if the Certificate Principal Balance
of each Maturing Class had not been reduced to zero, plus (2) the related
Adjustment Percentage.
“Subordinate
Principal Distribution Amount”: With respect to any Distribution Date and each
Class of Class B Certificates, the sum of the following:
(i) the
product of (x) the related Class B Percentage for such Class and (y) the
aggregate of the following amounts:
(1) the
principal portion of each Monthly Payment due during the related Due Period
on
each Outstanding Mortgage Loan, whether or not received on or prior to the
related Determination Date minus the principal portion of any Debt Service
Reduction, which together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the
Stated Principal Balance of any Mortgage Loan repurchased during the related
Prepayment Period pursuant to Section 2.02, 2.03, 3.15 or 3.16; and
(3) the
principal portion of all other unscheduled collections (other than Principal
Prepayments in Full and Curtailments and amounts received in connection with
a
Cash Liquidation or REO Disposition of a Mortgage Loan, including without
limitation Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and
REO Proceeds) received during the related Prepayment Period to the extent
applied by the Master Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.16;
(ii) such
Class’s pro rata share, based on the Certificate Principal Balance of each Class
of Class B Certificates then outstanding, of, with respect to each Mortgage
Loan, for which a Cash Liquidation or a REO Disposition occurred during the
related Prepayment Period and did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses,
an amount equal to the related unscheduled collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the
extent applied by the Master Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.16, to the extent such collections are
not
otherwise distributed to the Senior Certificates;
(iii) the
product of (x) the related Subordinate Prepayment Percentage for such
Distribution Date and (y) the aggregate of all Principal Prepayments in Full
and
Curtailments on the Mortgage Loans received in the related Prepayment Period,
to
the extent not payable to the Senior Certificates; and
(iv) if
such
Class is the Class of Class B Certificates then outstanding with the Highest
Priority, an amount equal to the Excess Subordinate Principal Amount;
and
(v) any
amounts described in clauses (i), (ii) and (iii) as determined for any previous
Distribution Date, that remain undistributed to the extent that such amounts
are
not attributable to Realized Losses which have been allocated to a Class of
Subordinate Certificates;
provided,
however, that such amount shall in no event exceed the outstanding Certificate
Principal Balance of such Class of Certificates immediately prior to such
date.
“Subsequent
Recoveries”: Any amount recovered by the Master Servicer (net of reimbursable
expenses) with respect to a Liquidated Mortgage Loan with respect to which
a
Realized Loss was incurred after the liquidation or disposition of such Mortgage
Loan.
“Sub-Servicer”:
Any Person with which the Master Servicer has entered into a Sub-Servicing
Agreement and which meets the qualifications of a Sub-Servicer pursuant to
Section 3.02.
“Sub-Servicing
Account”: An account established by a Sub-Servicer which meets the requirements
set forth in Section 3.08 and is otherwise acceptable to the Master
Servicer.
“Sub-Servicing
Agreement”: The written contract between the Master Servicer and a Sub-Servicer
relating to servicing and administration of certain Mortgage Loans as provided
in Section 3.02.
“Substitution
Shortfall Amount”: As defined in Section 2.03(c) hereof.
“Tax
Matters Person”: The tax matters person appointed pursuant to Section 9.01(c)
hereof.
“Tax
Returns”: The federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of the REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on
behalf of the Trust in its capacity as a REMIC under the REMIC Provisions,
together with any and all other information reports or returns that may be
required to be famished 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.
“Termination
Price”: As defined in Section 10.01(a) hereof.
“Transition
Cost: Any documented fees, expenses and allocated costs reasonably incurred
by a
successor master servicer or the Trustee in connection with a transfer of
servicing from the Master Servicer to a successor master servicer, including
without limitation, any costs or expenses associated with the complete transfer
of all master servicing data and the completion, correction or manipulation
of
such master servicing data as may be required by the Trustee to correct any
errors or insufficiencies in the master servicing data or otherwise to enable
the Trustee to master service the Mortgage Loans properly and
effectively.
“Trustee
Fee”: With respect to each Mortgage Loan and for any calendar month, an amount
equal to one month’s interest at the applicable Trustee Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. Notwithstanding the foregoing, in no event shall the aggregate
Trustee Fee in a calendar year be less than $7,000.
“Trustee
Fee Rate”: With respect to any Mortgage Loan, a rate equal to 0.0125% per
annum.
“Trust
Fund”: REMIC I, REMIC II and the Buydown Account, if any.
“Uncertificated
Monthly Interest Distributable Amount”: An amount equal to the interest accrued
during the related Interest Accrual Period on the Uncertificated Principal
Balance of each Class of REMIC I Regular Interest at the then-applicable
Uncertificated Pass-Through Rate. The Uncertificated Monthly Interest
Distributable Amount on any Class of REMIC I Regular Interest will be reduced
by
the amount of (i) Prepayment Interest Shortfalls (to the extent not offset
by
the Master Servicer with a payment of Compensating Interest as provided in
Section 3.24), (ii) the interest portion (adjusted to the Net Mortgage Rate)
of
Realized Losses (including Excess Losses) not allocated solely to one or more
specific Classes of Certificates pursuant to Section 4.02, (iii) the interest
portion of Advances previously made with respect to a Mortgage Loan or REO
Property which remained unreimbursed following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property that were made with respect
to
delinquencies that were ultimately determined to be Excess Losses and (iv)
any
other interest shortfalls not covered by the subordination provided by the
Class
B Certificates, including Relief Act Shortfalls, with all such reductions
allocated among all of the REMIC I Regular Interests in proportion to their
respective amounts of Uncertificated Monthly Interest Distributable Amount
payable on such Distribution Date which would have resulted absent such
reductions.
“Uncertificated
Pass-Through Rate”: With respect to each REMIC I Regular Interest and any
Distribution Date, a per annum rate equal to the weighted average of the Net
Mortgage Rate on each mortgage loan as of the Due Date in the related Due
Period, weighted on the basis of the respective Stated Principal Balances of
such Mortgage Loans as of the day immediately preceding such Distribution Date
(or, with respect to the initial Distribution Date, at the close of business
on
the Cut-off Date).
“Uncertificated
Principal Balance”: The principal amount of any REMIC I Regular Interest
outstanding as of any date of determination. The Uncertificated Principal
Balance of each REMIC I Regular Interest initially shall be equal to the amount
set forth in the Preliminary Statement with respect to such REMIC I Regular
Interest, and thereafter shall be reduced by all distributions of principal
made
on such REMIC I Regular Interest and shall be further reduced by Realized Losses
allocated thereto. The Uncertificated Principal Balance of each REMIC I Regular
Interest shall never be less than zero.
“Underwriting
Guide”: The underwriting guide of the Master Servicer, as revised from time to
time.
“Uninsured
Cause” Any cause of damage to property subject to a Mortgage such that the
complete restoration of such property is not fully reimbursable by the hazard
insurance policies.
“United
States Person” or “U.S. Person”: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that
own
an interest in such partnership either directly or through any entity that
is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if (i) a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust or (ii) it is a trust which was in
existence on August 20, 1996, and was treated as a United States person, for
federal income tax purposes, on the previous day, and elected to continue to
be
so treated.
“Value”:
With respect to any Mortgaged Property, the value thereof as determined by
an
independent appraisal (or other collateral assessment, permitted by the
Underwriting Guide) made at the time of the origination of the related Mortgage
Loan; except that, with respect to any Mortgage Loan that is a purchase money
mortgage loan, the lesser of (i) the value thereof as determined by an
independent appraisal (or other collateral assessment, permitted by the
Underwriting Guide) made at the time of the origination of such Mortgage Loan,
if any, and (ii) the sales price of the related Mortgaged Property.
“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
such
Certificates outstanding shall be 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 then
outstanding. 98% of all Voting Rights will be allocated among all holders of
the
Certificates (other than the Class R Certificates and Class A-4 Certificates)
in
proportion to their then outstanding Certificate Principal Balances. 1.0% of
all
Voting Rights will be allocated to the holders of the Class A-4 Certificates.
0.50% and 0.50% of all Voting Rights will be allocated to the holders of the
Class R-I Certificates and Class R-II Certificates, respectively, in proportion
to the Percentage Interests evidenced by their respective Certificates;
provided, however, that any Certificate registered in the name of the Master
Servicer, the Depositor or the Trustee or any of their respective affiliates
shall not be included in the calculation of Voting Rights.
“Written
Order to Authenticate”: A written order by which the Depositor directs the
Trustee to issue 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 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 the Mortgage Loans identified on the Mortgage Loan
Schedule, the rights of the Depositor under the Mortgage Loan Purchase Agreement
(except Section 3.2 thereof), the interest in the Limited Purpose Surety
Bond
transferred to the Trustee pursuant to Section 2.03(e) and all other assets
included or to be included in the Trust Fund. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on
or
with respect to the Mortgage Loans (but excluding any payments of principal
and
interest due on or prior to the Cut-off Date). The Depositor herewith delivers
to the Trustee an executed copy of the Mortgage Loan Purchase
Agreement.
The
parties hereto agree that it is not intended that any mortgage loan be included
in the Trust that is (i) a “High-Cost Home Loan” as defined in the New Jersey
Home Ownership Act effective November 27, 2003, (ii) a “High-Cost Home Loan” as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004,
(iii) a “High Cost Home Mortgage Loan” as defined in the Massachusetts Predatory
Home Practices Act effective November 7, 2004 or (iv) a “High-Cost Home Loan” as
defined in the Indiana High Cost Home Loan Law effective January 1,
2005.
In
connection with the transactions contemplated by this Agreement, PHH Mortgage
Corporation and the Trustee shall enter into an Assignment, Assumption and
Recognition Agreement with MLCC, in the form of Exhibit K hereto, pursuant
to
which PHH Mortgage Corporation shall assign to the Trustee, for the benefit
of
the Certificateholders, all of its right, title and interest in and to the
Pledged Asset Servicing Agreement with respect to the Pledged Asset Loans,
and
the Trustee shall assume all of PHH Mortgage Corporation’s obligations under the
Pledged Asset Servicing Agreement with respect to the Pledged Asset Loans
from
and after the date hereof.
In
connection with the transfer and assignment described herein, the Master
Servicer on behalf of the Depositor, shall deliver to, and deposit with,
the
Trustee, the following documents or instruments:
(A)
with
respect to each Mortgage Loan, other than a Cooperative Loan:
(i)
the
original Mortgage Note endorsed “Pay to the order of Citibank, N.A., as Trustee
for the registered holders of the PHHMC Mortgage Pass-Through Certificates,
Series 2007-2, without recourse”, or endorsed “Pay to the order
of_____________________ without recourse,” and signed in the name of the last
named endorsee by an authorized officer, together with all prior and intervening
endorsements showing a complete chain of endorsement from the originator
to the
Person so endorsing to the last endorsee;
(ii) the
original Mortgage, noting the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the Mortgage
Loan is
a MOM Loan, with evidence of recording thereon which have been recorded,
with
evidence of recording thereon or a copy of the Mortgage certified by the
public
recording office in which such Mortgage has been recorded;
(iii) Unless
the Mortgage Loan is registered on the MERS® System, an original Assignment of
the Mortgage (A) executed in the following form “Citibank, N.A., as Trustee for
the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series
2007-2”, or (B) in blank, which assignment appears to be in form and substance
acceptable for recording;
(iv) the
original recorded Assignment or Assignments of the Mortgage showing a complete
chain of assignment from the originator to the Person assigning the Mortgage
to
the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System
and noting the presence of a MIN) as contemplated by the immediately preceding
clause (iii), if applicable and only to the extent available to the Depositor
with evidence of recording thereon;
(v) the
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon, if any;
(vi) a
copy of
any guarantee (other than Pledged Assets) executed in connection with the
Mortgage Note;
(vii) the
original of any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage;
(viii) the
original power of attorney, if applicable; and
(ix) if
such
Mortgage Loan is a Buydown Mortgage Loan (as shown in the Mortgage Loan
Schedule), the original Buydown Agreement or a copy thereof; and
(B) in
addition, with respect to each Mortgage Loan that is a Pledged Asset Loan
(as
indicated on the Mortgage Loan Schedule):
(i) a
copy of
the related Mortgage 100K
Pledge
Agreement or Parent Power Agreement, as applicable; and
(ii) a
copy of
the related UCC-1, to the extent that MLCC was required to deliver such UCC-1
to
the Master Servicer, and an original form UCC-3, if applicable, to the extent
that MLCC was required to deliver such UCC-3 to the Master Servicer;
or
(C) with
respect to each Mortgage Loan that is a Cooperative Loan (as indicated on
the
Mortgage Loan Schedule):
(i) the
original Mortgage Note endorsed “Pay to the order of Citibank, N.A., as Trustee
for the registered holders of the PHHMC Mortgage Pass-Through Certificates,
Series 2007-2, without recourse”, or endorsed “Pay to the order of
_____________________ without recourse,” and signed in the name of the last
named endorsee by an authorized officer, together with all prior and intervening
endorsements showing a complete chain of endorsement from the originator
to the
Person so endorsing to the last endorsee;
(ii) the
original duly executed assignment of Security Agreement to the
Trustee;
(iii) the
acknowledgment copy of the original executed Form UCC-1 (or certified copy
thereof) with respect to the Security Agreement, and any required continuation
statements;
(iv) the
acknowledgment copy of the original executed Form UCC-3 with respect to the
security agreement, indicating the Trustee as the assignee of the secured
party;
(v) the
stock
certificate representing the Cooperative Assets allocated to the cooperative
unit, with a stock power in blank attached;
(vi) the
original collateral assignment of the proprietary lease by Mortgagor to the
originator;
(vii) a
copy of
the recognition agreement;
(viii) if
applicable and to the extent available, the original intervening assignments,
including warehousing assignments, if any, showing, to the extent available,
an
unbroken chain of the related Mortgage Loan to the Trustee, together with
a copy
of the related Form UCC-3 with evidence of filing thereon; and
(ix) the
originals of each assumption, modification or substitution agreement, if
any,
relating to the Mortgage Loan;
provided,
however, that in lieu of the foregoing, the Depositor may deliver the following
documents, under the circumstances set forth below: (x) in lieu of the original
Mortgage, assignments to the Trustee or intervening assignments thereof which
have been delivered, are being delivered or will, upon receipt of recording
information relating to the Mortgage required to be included thereon, be
delivered to recording offices for recording and have not been returned to
the
Depositor within 270 days of the Closing Date, the Depositor may deliver
a true
copy thereof with an Officer’s Certificate certifying that such Mortgage,
assignment to the Trustee or intervening assignment has been delivered to
the
appropriate recording office for recording; and (y) in lieu of the Mortgage,
assignment to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Depositor or the Master Servicer, to such effect)
the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after
the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Trustee a certification to such effect
and shall deposit all amounts paid in respect of such Mortgage Loans in the
Distribution Account on the Closing Date. The Depositor shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the Trustee promptly after they
are
received.
The
Depositor may, in lieu of delivering the original of the documents set forth
in
Section 2.01(A), (B) and (C) (other than Section 2.01(A)(i) and Section
2.01(C)(i)) (or copies thereof as permitted by this Section 2.01) to the
Trustee, deliver such documents to the Master Servicer, and the Master Servicer
shall hold such documents in trust for the use and benefit of all present
and
future Certificateholders until such time as is set forth in the next sentence.
Within 60 days following the earlier of (i) the receipt of the original of
all
of the documents or instruments set forth in Section 2.01(A), (B) and (C)
(other
than Section 2.01(A)(i) and Section 2.01(C)(i)) (or copies thereof as permitted
by such Section) for any Mortgage Loan and (ii) a written request by the
Trustee
to deliver those documents with respect to any or all of the Mortgage Loans
then
being held by the Master Servicer, the Master Servicer shall deliver a complete
set of such documents to the Trustee.
The
Depositor shall, at its expense, cause the Assignment of the Mortgage to
the
Trustee to be recorded not later than 270 days after the Closing Date, unless
(a) such recordation is not required by the Rating Agency or an Opinion of
Counsel has been provided as set forth below in this Section 2.01 or (b)
MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record. With respect to the Cooperative Loans, the Depositor
will, promptly after the Closing Date, cause the related financing statements
(if not yet filed) and an assignment thereof from the Depositor to the Trustee
to be filed in the appropriate offices. The Depositor need not cause to be
recorded any assignment in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Depositor to the Trustee
and
the Rating Agency, the recordation of such assignment is not necessary to
protect the Trustee’s interest in the related Mortgage Loan; provided, however,
notwithstanding the delivery of any Opinion of Counsel, each assignment shall
be
submitted for recording by the Depositor in the manner described above, at
no
expense to the Trust Fund or the Trustee, upon the earliest to occur of:
(i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund, (ii)
the
occurrence of a Master Servicer Event of Termination, (iii) the occurrence
of a
bankruptcy, insolvency or foreclosure relating to the Depositor, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof and
(v)
with respect to any one assignment, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Depositor fails to pay the cost of
recording the assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust Fund in accordance
with Section 8.05.
In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Depositor further agrees that it will cause, at the Depositor’s own
expense, within 30 Business Days after the Closing Date, the MERS® System to
indicate that such Mortgage Loans have been assigned by the Depositor to
the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer
files
(a) the code in the field which identifies the specific Trustee and (b) the
code
in the field “Pool Field” which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that
it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and
until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
If
any
original Mortgage Note referred to in Section 2.01(A)(i) or 2.01(C)(i) above
cannot be located, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon delivery to the Trustee of a photocopy
of
such Mortgage Note, if available, with a Lost Note Affidavit. If any of the
original Mortgage Notes for which a Lost Note Affidavit was delivered to
the
Trustee is subsequently located, such original Mortgage Note shall be delivered
to the Trustee within three Business Days.
Section
2.02 Acceptance
of Trust Fund by the Trustee.
Subject
to the provisions of Section 2.01 and subject to any exceptions noted on
the
exception report described in the next paragraph below, the Trustee acknowledges
receipt of the documents referred to in Section 2.01 above and declares that
it
holds and will hold such documents and the other documents delivered to it
constituting the Mortgage File, and that it holds or will hold all such assets
and such other assets included in the definition of the “Trust Fund” and the
rights of the Sellers with respect to any Pledged Assets and the Limited
Purpose
Surety Bond assigned to the Trustee pursuant to Section 2.03(e) in trust
for the
exclusive use and benefit of all present and future
Certificateholders.
The
Trustee agrees, for the benefit of the Certificateholders, to review each
Mortgage File on or before the Closing Date and to certify on the Closing
Date
in substantially the form attached hereto as Exhibit I-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 constituting part of such Mortgage File required to be delivered
to it
pursuant to this Agreement are in its possession, provided that with respect
to
the documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix)
to
the extent the Trustee has actual knowledge that such documents exist, (ii)
such
documents have been reviewed by it and are not torn, mutilated, defaced or
otherwise altered (except if initialed by the obligor) and relate to such
Mortgage Loan, (iii) based on its examination and only as to the foregoing,
the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii) (except the ZIP Code), (ix) and (xv) of the definition
of
“Mortgage Loan Schedule” accurately reflects information set forth in the
Mortgage File. Notwithstanding anything to the contrary in this Agreement,
it is
herein acknowledged that, in conducting such review, the Trustee is under
no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose or whether they have
actually been recorded or that they are other than what they purport to be
on
their face, or to determine whether any Person executing any documents is
authorized to do so or whether any signature is genuine.
The
Trustee agrees, for the benefit of the Certificateholders, to review each
Mortgage File within 60 days following the Closing Date and to certify in
substantially the form attached hereto as Exhibit I-2 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
constituting part of such Mortgage File (other than such documents described
in
Section 2.01(A)(v)) required to be delivered to it pursuant to this Agreement
are in its possession, provided that with respect to the documents described
in
Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix) to the extent the Trustee
has
actual knowledge that such documents exist, (ii) such documents have been
reviewed by it and are not torn, mutilated, defaced or otherwise altered
(except
if initialed by the obligor) and appear regular on their face and relate
to such
Mortgage Loan, (iii) based on its examination and only as to the foregoing,
the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii)(except the ZIP code), (ix) and (xv) of the definition of
“Mortgage Loan Schedule” accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review,
the
Trustee is under no duty or obligation (i) to inspect, review or examine
any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose
or
whether they have actually been recorded or that they are other than what
they
purport to be on their face, or to determine whether any Person executing
any
documents is authorized to do so or whether any signature is
genuine.
Prior
to
the first anniversary date of this Agreement the Trustee shall deliver to
the
Depositor and the Master Servicer a final certification in the form annexed
hereto as Exhibit I-2 evidencing the completeness of the Mortgage Files,
with
any applicable exceptions noted thereon, except with respect to the documents
described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix), to the extent
the Trustee has actual knowledge that such documents exist.
If
in the
process of reviewing the Mortgage Files and making or preparing, as the case
may
be, the certifications referred to above, the Trustee finds any document
or
documents constituting a part of a Mortgage File to be missing or defective
in
any material respect, at the conclusion of its review the Trustee shall so
notify the Depositor and the Master Servicer. In addition, upon the discovery
by
the Depositor, the Master Servicer or the Trustee of a breach of any of the
representations and warranties made by the Sellers in the 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.
The
Trustee shall, at the written request and expense of any Certificateholder,
provide a written report to such Certificateholder of all Mortgage Files
released to the Master Servicer for servicing purposes.
Section
2.03 Repurchase
or Substitution of Mortgage Loans by the Sellers- Assignment of Interest
in
Pledged Assets.
(a) Upon
discovery or receipt of notice of any materially defective document in, or
that
a document is missing from, a Mortgage File or of the breach by a Seller
of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value
of
such Mortgage Loan or the interest therein of the Certificateholders, by
the
Trustee, the Master Servicer or the Depositor shall promptly notify such
Seller
and the Trustee, the Master Servicer and the Depositor of such defect, missing
document or breach and request that such Seller deliver such missing document
or
cure such defect or breach within 90 days from the date such Seller was notified
of such missing document, defect or breach, and if such Seller does not deliver
such missing document or cure such defect or breach in all material respects
during such period, the Master Servicer (or, in accordance with Section 3.02(b),
the Trustee) shall enforce the obligations of such Seller under the Mortgage
Loan Purchase Agreement to repurchase such Mortgage Loan from the Trust Fund
at
the Purchase Price within 90 days after the date on which such Seller was
notified (subject to Section 2.03(d)) of such missing document, defect or
breach, if and to the extent that such Seller is obligated to do so under
the
Mortgage Loan Purchase Agreement. If such defect or breach can ultimately
be
cured but is not reasonably expected to be cured within the 90-day period,
then
the applicable Seller shall have such additional time, if any, as is reasonable,
to cure such defect or breach, provided that the applicable Seller has commenced
curing or correcting such defect or breach and is diligently pursuing same.
The
Purchase Price for the repurchased Mortgage Loan shall be deposited in the
Collection Account, within three Business Days of expiration of the applicable
time period referred to above, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to
the
applicable Seller the related Mortgage File and shall execute and deliver
such
instruments of transfer or assignment, in each case without recourse, as
such
Seller shall furnish to it and as shall be necessary to vest in such Seller
any
Mortgage Loan released pursuant hereto, and the Trustee shall have no further
responsibility with regard to such Mortgage File. In lieu of repurchasing
any
such Mortgage Loan as provided above, if so provided in the related Mortgage
Loan Purchase Agreement, a 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). If the breach of
representation and warranty that gave rise to the obligation to repurchase
or
substitute a Mortgage Loan pursuant to Section 3.2 of the Mortgage Loan Purchase
Agreement was the representation and warranty set forth in clause (xlvi)
of
Section 3.1 thereof, then the Master Servicer shall request that PHH Mortgage
pay to the Trust Fund, concurrently with and in addition to the remedies
provided in the preceding four sentences, an amount equal to any liability,
penalty or expense that was actually incurred and paid out of or on behalf
of
the Trust Fund, and that directly resulted from such breach, or if incurred
and
paid by the Trust Fund thereafter, concurrently with such payment. In
furtherance of the foregoing, if the Seller that repurchases the Mortgage
Loan
is not a member of MERS and the Mortgage is registered on the MERS® System, the
Master Servicer, at its own expense and without any right of reimbursement,
shall cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to such Seller and shall
cause such Mortgage to be removed from registration on the MERS® System in
accordance with MERS’ rules and regulations. It is understood and agreed that
the obligation of a Seller to cure or to repurchase (or to substitute for)
any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and
is
continuing shall constitute the sole remedy respecting such omission, defect
or
breach available to the Depositor, the Master Servicer or the Trustee on
behalf
of the Certificateholders.
(b) Within
90
days of the earlier of discovery by the Master Servicer or receipt of notice
by
the Master Servicer of the breach of any representation, warranty or covenant
of
the Master Servicer set forth in Section 2.04 which materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the
Master
Servicer shall cure such breach in all material respects.
(c) Any
substitution of Eligible Substitute Mortgage Loans for Defective Mortgage
Loans
made pursuant to Section 2.03(a), in the case of a Seller, must be effected
prior to the date which is two years after the Closing Date.
As
to any
Defective Mortgage Loan for which a Seller substitutes a Eligible Substitute
Mortgage Loan or Loans, such substitution shall be effected by such Seller
delivering to the Trustee, 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 Shortfall Amount (as described below), if any,
in
connection with such substitution. The Trustee shall acknowledge receipt
of the
original Mortgage Note for such Eligible Substitute Mortgage Loan or Loans
and,
within ten Business Days thereafter, review such documents in the manner
specified in Section 2.02 and deliver to the Depositor and the Master Servicer,
with respect to such Eligible Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit I-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Depositor and the Master Servicer a certification
substantially in the form of Exhibit I-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
related Seller. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Defective
Mortgage Loan on or before the Due Date in the month of substitution, and
the
related Seller shall thereafter be entitled to retain all amounts subsequently
received in respect of such Defective Mortgage Loan. The Depositor 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 such 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 a Seller, the
Mortgage Loan Purchase Agreement, including, in the case of a substitution
effected by a Seller, all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement in each case as of the date
of
substitution.
For
any
month in which a Seller substitutes one or more Eligible Substitute Mortgage
Loans for one or more Defective Mortgage Loans, the Master Servicer will
determine the amount (the “Substitution Shortfall Amount”), if any, by which the
aggregate principal balance of all such Eligible Substitute Mortgage Loans
as of
the date of substitution is less than the aggregate Stated Principal Balance
of
all such Defective Mortgage Loans (in each case after application of the
principal portion of the Monthly Payments due in the month of substitution
that
are to be distributed to the Certificateholders in the month of substitution).
On the date of such substitution, the applicable Seller will deliver or cause
to
be delivered to the Master Servicer for deposit in the Collection Account
an
amount equal to the Substitution Shortfall Amount, if any, and the Trustee,
upon
receipt of the related Eligible Substitute Mortgage Loan or Loans and
certification by the Master Servicer of such deposit, shall release to the
applicable Seller the related Mortgage File or Files and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as such Seller shall deliver to it and as shall be necessary to
vest
therein any Defective Mortgage Loan released pursuant hereto.
In
addition, the applicable 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)(1) of the Code or on “contributions after the startup date” under
Section 860G(d)(1) of the Code, or (b) any REMIC to fail to qualify as a
REMIC
at any time that any Certificate is outstanding.
(d) Upon
discovery by the Depositor, a Seller, the Master 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 related Seller shall repurchase or, subject to
the
limitations set forth in Section 2.03(c), substitute one or more Eligible
Substitute Mortgage Loans for the affected Mortgage Loan within 60 days of
the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Such repurchase or substitution shall be made by the related
Seller, as the case may be, if the affected Mortgage Loan’s status as a
non-qualified mortgage is or results from a breach of any representation,
warranty or covenant made by the related Seller under the Mortgage Loan Purchase
Agreement. Any such repurchase or substitution shall be made in the same
manner
as set forth in Sections 2.03(a), if made by the related Seller. The Trustee
shall reconvey to the related 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.
(e) The
Depositor hereby assigns to the Trustee its security interest in and to any
Pledged Assets, its right to receive amounts due or to become due in respect
of
any Pledged Assets, all of its rights in each Pledged Asset Agreement, and
its
rights as beneficiary under the Limited Purpose Surety Bond in respect of
any
Pledged Asset Loans. With respect to any Pledged Asset Loan, the Pledged
Asset
Servicer shall cause to be filed in the appropriate recording office a Form
UCC-3 giving notice of the assignment of the related security interest to
the
Trust Fund and shall thereafter cause the timely filing of all necessary
continuation statements with regard to such financing statements.
Section
2.04 Representations,
Warranties and Covenants of the Master Servicer.
The
Master 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
Master Servicer is a corporation duly organized, validly existing and in
good
standing under the laws of the State of New Jersey and is duly authorized
and
qualified to transact any and all business contemplated by this Agreement
to be
conducted by the Master Servicer in any state in which a Mortgaged Property
is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws
of any such State, to the extent necessary to ensure its ability to enforce
each
Mortgage Loan and to service the Mortgage Loans in accordance with the terms
of
this Agreement;
(ii) The
Master Servicer has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Depositor
and the Trustee, constitutes a legal, valid and binding obligation of the
Master
Servicer, enforceable against the Master Servicer in accordance with its
terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors’ rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(iii) The
execution and delivery of this Agreement by the Master Servicer, the servicing
of the Mortgage Loans by the Master Servicer hereunder, the consummation
of any
other of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the
Master Servicer and will not (A) result in a breach of any term or provision
of
the charter or by-laws of the Master Servicer or (B) conflict with, result
in a
breach, violation or acceleration of, or result in a default under, the terms
of
any other material agreement or instrument to which the Master Servicer is
a
party or by which it may be bound, or any statute, order or regulation
applicable to the Master Servicer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Master Servicer;
and
the Master Servicer is not a party to, bound by, or in breach or violation
of
any indenture or other agreement or instrument, or subject to or in violation
of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which materially
and
adversely affects or, to the Master Servicer’s knowledge, would in the future
materially and adversely affect, (x) the ability of the Master Servicer to
perform its obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Master Servicer taken as
a
whole;
(iv) The
Master Servicer is an approved seller/servicer for Xxxxxx Xxx or Xxxxxxx
Mac in
good standing and is a HUD approved mortgagee pursuant to Section 203 of
the
National Housing Act;
(v) No
litigation is pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement
or
the ability of the Master Servicer to service the Mortgage Loans or to perform
any of its other obligations hereunder in accordance with the terms
hereof;
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Master
Servicer of, or compliance by the Master Servicer with, this Agreement or
the
consummation of the transactions contemplated by this Agreement, except for
such
consents, approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date; and
(vii) The
Master Servicer is a member of MERS in good standing, and will comply in
all
material respects with the rules and procedures of MERS in connection with
the
servicing of the Mortgage Loans that are registered with MERS.
It
is
understood and agreed that the representations, warranties and covenants
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 Trustee, the Depositor and
the
Certificateholders. Upon discovery by any of the Depositor, the Master Servicer
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 Trustee. Subject to Section
7.01,
the obligation of the Master Servicer set forth in Section 2.03(c) to cure
breaches shall constitute the sole remedies against the Master Servicer
available to the Certificateholders, the Depositor or the Trustee on behalf
of
the Certificateholders respecting a breach of the representations, warranties
and covenants contained in this Section 2.04.
Section
2.05 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 a Seller,
as set
forth in the Mortgage Loan Purchase Agreement) subject to no prior lien,
claim,
participation interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature;
(iii) As
of the
Closing Date, the Depositor has transferred all right, title and interest
in the
Mortgage Loans to the Trustee on behalf of the Trust;
(iv) The
Depositor has not transferred the Mortgage Loans to the Trustee on behalf
of the
Trust with any intent to hinder, delay or defraud any of its
creditors;
(v) The
Depositor has been duly formed and is validly existing as a limited liability
company in good standing under the laws of Delaware, with full corporate
power
and authority to own its assets and conduct its business as presently being
conducted;
(vi) The
Depositor is not in violation of its certificate of formation or limited
liability company agreement or in default in the performance or observance
of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Depositor is a party or by which it or its properties may be
bound,
which default might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which might
materially and adversely affect the properties or assets, taken as a whole,
of
the Depositor;
(vii) The
execution, delivery and performance of this Agreement by the Depositor, and
the
consummation of the transactions contemplated 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
formation or limited liability company agreement 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
2.06 Purpose
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(i) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(ii) to
issue
the Certificates to or at the direction of the Depositor in exchange for
the
Mortgage Loans;
(iii) to
make
payments on the Certificates;
(iv) to
engage
in those activities that are reasonably necessary, suitable or convenient
to
accomplish the foregoing or are incidental thereto or connected therewith;
and
(v) subject
to compliance with this Agreement, to engage in such other activities as
may be
required in connection with conservation of the Trust Fund and the making
of
distributions to the Certificateholders.
The
trust
is hereby authorized to engage in the foregoing activities. The Trustee shall
not cause the trust to engage in any activity other than in connection with
the
foregoing or other than as required or authorized by the terms of this Agreement
while any Certificate is outstanding.
Section
2.07 Issuance
of Certificates.
(a) The
Trustee acknowledges the assignment to it on behalf of the Trust Fund of
the
Mortgage Loans and the other assets comprising the Trust Fund and, concurrently
therewith, has signed, and authenticated and delivered to the Depositor,
in
exchange therefor, Certificates in such authorized denominations representing
such Percentage Interests as the Depositor has requested. The Trustee agrees
that it will hold the Mortgage Loans and such other assets as may from time
to
time be delivered to it segregated on the books of the Trustee in trust for
the
benefit of the Certificateholders.
(b) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the
assets
of REMIC I for the benefit of the holders of the REMIC I Regular Interests.
The
Trustee acknowledges receipt of the assets of REMIC I and declares that it
holds
and will hold the same in trust for the exclusive use and benefit of the
holders
of the REMIC I Regular Interests.
(c) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the
REMIC
I Regular Interests and the other assets of REMIC II for the benefit of the
Certificateholders. The Trustee acknowledges receipt of the REMIC I Regular
Interests (which are uncertificated) and the other assets of REMIC II and
declares that it holds and will hold the same in trust for the exclusive
use and
benefit of the Certificateholders.
ARTICLE
III
ADMINISTRATION
AND SERVICING OF THE TRUST FUND
Section
3.01 Master
Servicer to Act as Master Servicer.
The
Master Servicer shall service and administer the Mortgage Loans on behalf
of the
Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same
manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any
relationship that the Master Servicer, any Sub-Servicer or any Affiliate
of the
Master Servicer or any Sub-Servicer may have with the related
Mortgagor;
(ii) the
ownership of any Certificate by the Master Servicer or any Affiliate of the
Master Servicer;
(iii) the
Master Servicer’s obligation to make Advances or Servicing Advances;
or
(iv) the
Master Servicer’s or any Sub-Servicer’s right to receive compensation for its
services hereunder or with respect to any particular transaction.
To
the
extent consistent with the foregoing, the Master Servicer shall also seek
to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and
the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any
and all
things in connection with such servicing and administration which it may
deem
necessary or desirable. Without limiting the generality of the foregoing,
the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes
it
appropriate in its best judgment in accordance with the servicing standards
set
forth above, to execute and deliver, on behalf of the Certificateholders
and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu
of
foreclosure so as to convert the ownership of such properties, and to hold
or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement
with
all reasonable rules and requirements of each insurer under each Primary
Insurance Policy and any standard hazard insurance policy. Subject to Section
3.17, the Trustee shall execute, at the written request of the Master Servicer,
and furnish to the Master Servicer and any Sub-Servicer such documents as
are
necessary or appropriate to enable the Master Servicer or any Sub-Servicer
to
carry out their servicing and administrative duties hereunder, and the Trustee
hereby grants to the Master Servicer a power of attorney to carry out such
duties. The Trustee shall not be liable for the actions of the Master Servicer
or any Sub-Servicers under such powers of attorney.
In
accordance with the standards of the preceding paragraph, the Master Servicer
shall advance or cause to be advanced funds as necessary for the purpose
of
effecting the timely payment of taxes and assessments on the Mortgaged
Properties, which advances shall be Servicing Advances reimbursable in the
first
instance from related collections from the Mortgagors pursuant to Section
3.09,
and further as provided in Section 3.11. Any cost incurred by the Master
Servicer or by Sub-Servicers in effecting the timely payment of taxes and
assessments on a Mortgaged Property shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid principal balance
of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan
so permit.
The
Master Servicer further is authorized and empowered by the Trustee, on behalf
of
the Certificateholders and the Trustee, in its own name or in the name of
the
Sub-Servicer, when the Master Servicer or the Sub-Servicer, as the case may
be,
believes it is appropriate in its best judgment to register any Mortgage
Loan on
the MERS® System, or cause the removal from the registration of any Mortgage
Loan on the MERS® System, to execute and deliver, on behalf of the Trustee and
the Certificateholders or any of them, any and all instruments of assignment
and
other comparable instruments with respect to such assignment or re-recording
of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any expenses incurred in connection with the actions
described in the preceding sentence shall be borne by the Master Servicer
in
accordance with Section 3.18, with no right of reimbursement; provided, that
if,
as a result of MERS discontinuing or becoming unable to continue operations
in
connection with the MERS System, it becomes necessary to remove any Mortgage
Loan from registration on the MERS System and to arrange for the assignment
of
the related Mortgages to the Trustee, then any related expenses shall be
reimbursable to the Master Servicer.
Notwithstanding
anything in this Agreement to the contrary, the Master Servicer may not make
any
future advances with respect to a Mortgage Loan (except as provided in Section
4.06) and the Master Servicer shall not (i) permit any modification with
respect
to any Mortgage Loan that would change the Loan Rate, reduce or increase
the
principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such Mortgage Loan (unless,
as
provided in Section 3.07, the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable) or (ii) permit any modification, waiver or amendment
of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B)
cause
either 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 date” under the REMIC Provisions.
Notwithstanding
any other provision of this Agreement or the Pledged Asset Servicing Agreement
to the contrary, except as provided below, the Master Servicer shall have
no
duty or obligation to service and administer the Pledged Assets and the Master
Servicer shall not be deemed to be the Pledged Asset Servicer, unless and
until
MLCC’s obligations to administer the Pledged Assets under the Pledged Asset
Servicing Agreement have been terminated with respect to the Pledged Asset
Loans, in which case, the Master Servicer shall be bound to service and
administer the Pledged Assets and the Limited Purpose Surety Bond in accordance
with the provisions of this Agreement and the related Pledged Asset Agreements
from the date of such termination. The Trustee, as assignee of the Pledged
Asset
Servicing Agreement, shall enforce the obligations of MLCC to service and
administer the Pledged Assets as provided in the Pledged Asset Servicing
Agreement, and shall take appropriate action thereunder if MLCC fails to
substantially comply with its obligations to administer the Pledged Assets.
In
the event the Trustee receives an indemnification payment from MLCC under
Section 3 of the Pledged Asset Servicing Agreement that is attributable to
losses resulting from MLCC’s failure to administer the Pledged Assets in
accordance with the terms of the Pledged Asset Servicing Agreement in connection
with Pledged Asset Loans, the Trustee shall deposit such amount in the
Collection Account.
The
Master Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release the Master Servicer
from the responsibilities or liabilities arising under this
Agreement.
Section
3.02 Sub-Servicing
Agreements Between the Master Servicer and Sub-Servicers.
(a) The
Master Servicer may enter into Sub-Servicing Agreements (provided that such
agreements would not result in a withdrawal or a downgrading by the Rating
Agency of the rating on any Class of Certificates) with Sub-Servicers, for
the
servicing and administration of the Mortgage Loans. Notwithstanding any other
provision of this Agreement, the Master Servicer shall not be precluded from
selling all or part of the Servicing Fee relating to any Mortgage Loans to
any
Sub-Servicer, provided that with respect to any Mortgage Loan as to which
the
Master Servicer sells all or a part of the related Servicing Fee, the Master
Servicer shall retain full responsibility under this Agreement for the servicing
activities relating to such Mortgage Loan.
Each
Sub-Servicer 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 Sub-Servicer to perform
its obligations hereunder and under the Sub-Servicing Agreement, (ii) an
institution approved as a mortgage loan originator by the Federal Housing
Administration or an institution the deposit accounts of which are insured
by
the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer.
Each
Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of
the
Mortgage Loans consistent with the terms of this Agreement. The Master Servicer
will examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent
with
any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub-Servicing 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 Certificateholders, without
the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any variation without the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights from the provisions set forth
in
Section 3.08 relating to insurance or priority requirements of Sub-Servicing
Accounts, or credits and charges to the Sub-Servicing Accounts or the timing
and
amount of remittances by the Sub-Servicers to the Master Servicer, are
conclusively deemed to be inconsistent with this Agreement and therefore
prohibited. The Master Servicer shall deliver to the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer’s execution and delivery of such
instruments.
(b) As
part
of its servicing activities hereunder, the Master Servicer (except as otherwise
provided in the last sentence of this paragraph), for the benefit of the
Trustee
and the Certificateholders, shall enforce the obligations of each Sub-Servicer
under the related Sub-Servicing Agreement and of each Seller under the Mortgage
Loan Purchase Agreement, including, without limitation, any obligation to
make
advances in respect of delinquent payments as required by a Sub-Servicing
Agreement, or to purchase a Mortgage Loan on account of missing or defective
documentation or on account of a breach of a representation, warranty or
covenant, as described in Section 2.03(a). Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Sub-Servicing
Agreements, and the pursuit of other appropriate remedies, shall be in such
form
and carried out to such an extent and at such time as the Master Servicer,
in
its good faith business judgment, would require were it the owner of the
related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement
at
its own expense, 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. Enforcement of the obligations
under the Mortgage Loan Purchase Agreement against the Sellers shall be effected
by the Master Servicer, in accordance with the foregoing provisions of this
paragraph.
Section
3.03 Successor
Sub-Servicers.
The
Master Servicer shall be entitled to terminate any Sub-Servicing Agreement
and
the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement. In the event of termination of any Sub Servicer, all servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Master
Servicer without any act or deed on the part of such Sub-Servicer or the
Master
Servicer, and the Master Servicer either shall service directly the related
Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 3.02.
Any
Sub-Servicing Agreement shall include the provision that such agreement may
be
immediately terminated by the Trustee without fee, in accordance with the
terms
of this Agreement, in the event that the Master Servicer shall, for any reason,
no longer be the Master Servicer (including termination due to a Master Servicer
Event of Termination).
Section
3.04 Liability
of the Master Servicer.
Notwithstanding
any Sub-Servicing Agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between the Master Servicer and a Sub-Servicer
or
reference to actions taken through a Sub-Servicer or otherwise, the Master
Servicer shall remain obligated and primarily liable to the Trustee and the
Certificateholders 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 Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to
the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. The Master Servicer
shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section
3.05 No
Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders.
Any
Sub-Servicing Agreement that may be entered into and any transactions or
services relating to the Mortgage Loans involving a Sub-Servicer in its capacity
as such shall be deemed to be between the Sub-Servicer and the Master Servicer
alone, and the Trustee and Certificateholders shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the Sub-Servicer except as set forth in Section 3.06. The
Master
Servicer shall be solely liable for all fees owed by it to any Sub-Servicer,
irrespective of whether the Master Servicer’s compensation pursuant to this
Agreement is sufficient to pay such fees.
Section
3.06 Assumption
or Termination of Sub-Servicing Agreements by Trustee.
In
the
event the Master Servicer shall for any reason no longer be the master servicer
(including by reason of the occurrence of a Master Servicer Event of
Termination), the Trustee or its designee or the successor master servicer
as
appointed pursuant to Section 7.02 herein, shall thereupon assume all of
the
rights and obligations of the Master Servicer under each Sub-Servicing Agreement
that the Master Servicer may have entered into, unless the Trustee elects
to
terminate any Sub-Servicing Agreement in accordance with its terms as provided
in Section 3.03. Upon such assumption, the Trustee, its designee or the
successor servicer for the Trustee appointed pursuant to Section 7.02 shall
be
deemed, subject to Section 3.03, to have assumed all of the Master Servicer’s
interest therein and to have replaced the Master Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor master servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The
Master Servicer at its expense shall, upon request of the Trustee, deliver
to
the assuming party all documents and records relating to each Sub-Servicing
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 Sub-Servicing
Agreements to the assuming party.
Section
3.07 Collection
of Certain Mortgage Loan Payments.
The
Master Servicer shall make reasonable efforts to collect all payments called
for
under the terms and provisions of the Mortgage Loans, and shall, to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any related Primary Insurance Policy and any other applicable
insurance policies, follow such collection procedures as it would follow
with
respect to mortgage loans comparable to the Mortgage Loans and held for its
own
account. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or, if applicable, penalty
interest, only upon determining that the coverage of such Mortgage Loan by
the
related Primary Insurance Policy, if any, will not be affected, or (ii) extend
the due dates for Monthly Payments due on a Mortgage Note for a period of
not
greater than 180 days; provided that any extension pursuant to clause (ii)
above
shall not affect the amortization schedule of any Mortgage Loan for purposes
of
any computation hereunder, except as provided below. In the event of any
such
arrangement pursuant to clause (ii) above, the Master Servicer shall make
timely
advances on such Mortgage Loan during such extension pursuant to Section
4.06
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also,
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Loan Rate, forgive the payment of principal or interest
or
extend the final maturity date of such Mortgage Loan), accept payment from
the
related Mortgagor of an amount less than the Stated Principal Balance in
final
satisfaction of such Mortgage Loan (such payment, a “Short Pay-off”) or consent
to the postponement of strict compliance with any such term or otherwise
grant
indulgence to any Mortgagor.
Section
3.08 Sub-Servicing
Accounts.
In
those
cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a
Sub-Servicing Agreement, the Sub-Servicer will be required to establish and
maintain one or more accounts (collectively, the “Sub-Servicing Account”). The
Sub-Servicing Account shall be an Eligible Account and shall comply with
all
requirements of this Agreement relating to the Collection Account. The
Sub-Servicer shall deposit in the clearing account (which account must be
an
Eligible Account) in which it customarily deposits payments and collections
on
mortgage loans in connection with its mortgage loan servicing activities
on a
daily basis, and in no event more than one Business Day after the Sub-Servicer’s
receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event more than two Business Days after the deposit of such
funds
into the clearing account. The Sub-Servicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Master Servicer
for deposit in the Collection Account not later than two Business Days after
the
deposit of such amounts in the Sub-Servicing Account. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments
on the
Mortgage Loans when the Sub-Servicer receives such payments.
Section
3.09 Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
The
Master Servicer shall establish and maintain one or more accounts (the
“Servicing Accounts”), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of ground rents, taxes,
assessments, fire and hazard insurance premiums, Primary Insurance Policy
premiums, water charges, sewer rents and comparable items for the account
of the
Mortgagors (“Escrow Payments”) shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in
the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer’s receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more
than
two Business Days after the deposit of such funds in the clearing account,
for
the purpose of effecting the payment of any such items as required under
the
terms of this Agreement. Withdrawals of amounts from a Servicing Account
may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect
to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined
to
be overages; (iv) make Permitted Investments as provided in Section 3.12;
(v)
pay interest, to the Master Servicer or to the Mortgagor if required and
as
described below, on balances in the Servicing Account; (vi) clear and terminate
the Servicing Account at the termination of the Master Servicer’s obligations
and responsibilities in respect of the Mortgage Loans under this Agreement
in
accordance with Article IX; or (vii) recover amounts deposited in error.
As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to
the
Mortgagors interest on funds in Servicing Accounts, to the extent required
by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without
any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss
of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master 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 advances from its own funds to effect such payments. The Master
Servicer shall be entitled to retain any interest paid on funds deposited
in the
Servicing Account to effect Escrow Payments other than interest on escrowed
funds required by law to be paid to the Mortgagor.
Section
3.10 Collection
Account and Distribution Account.
(a) On
behalf
of the Trust Fund, the Master Servicer shall establish and maintain one or
more
accounts (such account or accounts, the “Collection Account”), held in trust for
the benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more
than
one Business Day after the Master Servicer’s receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the deposit of such funds into the clearing account, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other
than in
respect of principal or interest on the related Mortgage Loans due on or
before
the Cut-off Date), or payments (other than Principal Prepayments) received
by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest (net of the related Servicing Fee) on each
Mortgage Loan;
(iii) all
Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries (other
than
proceeds collected in respect of any particular REO Property and amounts
paid by
the Master Servicer in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01);
(iv) any
amounts required to be deposited pursuant to Section 3.12 in connection with
any
losses realized on Permitted Investments with respect to funds held in the
Collection Account;
(v) any
amounts required to be deposited by the Master Servicer pursuant to the second
paragraph of Section 3.14(a) in respect of any blanket policy
deductibles;
(vi) all
proceeds of any Mortgage Loan repurchased or purchased in accordance with
Section 2.03 or Section 9.01;
(vii) all
amounts required to be deposited in connection with shortfalls in principal
amount of Eligible Substitute Mortgage Loans pursuant to Section
2.03;
(viii) any
amounts required to be transferred from any Buydown Account pursuant to Section
3.25; and
(ix)
any
(x)
amounts realized by MLCC or (y) Required Surety Payments received by the
Trustee
or the Master Servicer in respect of any Pledged Assets.
For
purposes of the immediately preceding sentence, the Cut-off Date with respect
to
any Eligible Substitute Mortgage Loan shall be deemed to be the date of
substitution.
The
foregoing requirements for deposit in 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 or assumption fees
need not be deposited by the Master Servicer in the Collection Account and
shall
be retained by the Master Servicer as additional servicing compensation.
In the
event the Master 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.
(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 Master
Servicer shall deliver to the Trustee in immediately available funds for
deposit
in the Distribution Account on or before 5:00 p.m. New York time on the Master
Servicer Remittance Date, that portion of the Available Distribution Amount
for
the related Distribution Date then on deposit in the Collection
Account.
(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 3.12.
The
Master Servicer shall give notice to the Trustee and the Depositor 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 Master Servicer
and
the Depositor of the location of the Distribution Account when established
and
prior to any change thereof.
(d) Funds
held in the Collection Account at any time may be delivered by the Master
Servicer to the Trustee for deposit in an account (which may be the Distribution
Account and must satisfy the standards for the Distribution Account as set
forth
in the definition thereof) and for all purposes of this Agreement shall be
deemed to be a part of the Collection Account; provided, however, that the
Trustee shall have the sole authority to withdraw any funds held pursuant
to
this subsection (d). In the event the Master 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 that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In addition, the Master
Servicer shall deliver to the Trustee from time to time for deposit, and
upon
written notification from the Master Servicer, the Trustee shall so deposit,
in
the Distribution Account:
(i) any
Advances, as required pursuant to Section 4.06;
(ii) any
amounts required to be deposited pursuant to Section 3.23(d) or (f) in
connection with any REO Property;
(iii) any
amounts to be paid by the Master Servicer in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any
amounts required to be deposited pursuant to Section 3.24 in connection with
any
Prepayment Interest Shortfalls; and
(v) any
Stayed Funds, as soon as permitted by the federal bankruptcy court having
jurisdiction in such matters.
(e) Promptly
upon receipt of any Stayed Funds, whether from the Master Servicer, a trustee
in
bankruptcy, or federal bankruptcy court or other source, the Trustee shall
deposit such funds in the Distribution Account.
Section
3.11 Withdrawals
from the Collection Account and Distribution Account.
(a) The
Master Servicer shall, from time to time, make withdrawals from the Collection
Account for any of the following purposes or as described in Section
4.06:
(i) to
remit
to the Trustee for deposit in the Distribution Account the amounts required
to
be so remitted pursuant to Section 3.10(b) or permitted to be so remitted
pursuant to the first sentence of Section 3.10(d);
(ii) subject
to Section 3.16(d), to reimburse the Master Servicer for Advances;
(iii) subject
to Section 3.16(d), to pay the Master Servicer or any Sub-Servicer any unpaid
Servicing Fees and reimburse any unreimbursed Servicing Advances with respect
to
each Mortgage Loan, but only to the extent of any Liquidation Proceeds,
Insurance Proceeds or other amounts as may be collected by the Master
Servicer;
(iv) to
pay to
the Master Servicer as servicing compensation (in addition to the Servicing
Fee)
on the Master Servicer Remittance Date any interest or investment income
earned
on funds deposited in the Collection Account, any Foreclosure Profits and
any
prepayment penalties or premiums relating to any Principal Prepayments;
provided, however, that no such amounts shall be payable as servicing
compensation to the extent they relate to a Mortgage Loan with respect to
which
a default, breach, violation or event of acceleration exists or would exist
but
for the lapse of time, the giving of notice, or both;
(v) to
pay to
the Master Servicer, the Depositor or a Seller, as the case may be, with
respect
to each Mortgage Loan that has previously been purchased or replaced pursuant
to
Section 2.03 or Section 3.16(c) all amounts received thereon subsequent to
the
date of purchase or substitution, as the case may be;
(vi) to
reimburse the Master Servicer for any Advance previously made which the Master
Servicer has determined to be a Nonrecoverable Advance in accordance with
the
provisions of Section 4.06;
(vii) to
reimburse the Master Servicer or the Depositor for expenses incurred by or
reimbursable to the Master Servicer or the Depositor, as the case may be,
pursuant to Section 6.03;
(viii) to
reimburse the Master Servicer or the Trustee, as the case may be, for expenses
reasonably incurred in respect of the breach or defect giving rise to the
purchase obligation under Section 2.03 or Section 2.04 of this Agreement
that
were included in the Purchase Price of the Mortgage Loan, including any expenses
arising out of the enforcement of the purchase obligation;
(ix) to
pay,
or to reimburse the Master Servicer for advances in respect of, expenses
incurred in connection with any Mortgage Loan pursuant to Section 3.16(b);
and
(x) to
clear
and terminate the Collection Account pursuant to Section 10.01;
(xi) to
reimburse the Master Servicer for amounts deposited in error.
The
Master Servicer shall keep and maintain separate accounting, on a Mortgage
Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the
Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above. The Master
Servicer shall provide written notification to the Trustee, on or prior to
the
next succeeding Master Servicer Remittance Date, upon making any withdrawals
from the Collection Account pursuant to subclause (vii) above.
(b) The
Trustee shall, from time to time, make withdrawals from the Distribution
Account, for any of the following purposes, without priority:
(i) to
make
distributions to Certificateholders in accordance with Section
4.01;
(ii) to
pay to
itself amounts to which it is entitled pursuant to Section 8.05;
(iii) to
pay
itself any interest income earned on funds deposited in the Distribution
Account
pursuant to Section 3.12(c);
(iv) to
reimburse itself pursuant to Section 7.02 and 7.01(b);
(v) to
pay
any amounts in respect of taxes pursuant to 10.01(g)(iii); and
(vi) to
clear
and terminate the Distribution Account pursuant to Section 10.01.
Section
3.12 Investment
of Funds in the Collection Account, Servicing Accounts and the Distribution
Account.
(a) The
Master Servicer may direct any depository institution maintaining the Collection
Account or Servicing Accounts (for purposes of this Section 3.12, an “Investment
Account’), and the Trustee, in its individual capacity, may direct any
depository institution maintaining the Distribution Account (for purposes
of
this Section 3.12, also an “Investment Account’), to invest the funds in such
Investment 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. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds
in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) 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 or Servicing Accounts, as applicable,
and
any income and gain realized thereon) over each such investment, 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 an Investment Account are at
any
time invested in a Permitted Investment payable on demand, the Trustee
shall:
|
(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 Investment Account.
|
(b) All
income and gain realized from the investment of funds deposited in the
Collection Account or Servicing Accounts, as applicable, held by or on behalf
of
the Master Servicer, shall be for the benefit of the Master Servicer and
shall
be subject to its withdrawal in accordance with Section 3.11. The Master
Servicer shall deposit in the Collection Account or Servicing Accounts, as
applicable, the amount of any loss of principal incurred in respect of any
such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All
income and gain realized from the investment of funds deposited in the
Distribution Account held by or on behalf of the Trustee, shall be for the
benefit of the Trustee and shall be subject to its withdrawal at any time.
The
Trustee shall deposit in the Distribution Account, the amount of any loss
of
principal incurred in respect of any such Permitted Investment made with
funds
in such accounts immediately upon realization of such loss.
(d) Except
as
otherwise expressly provided in this Agreement, if any default occurs in
the
making of a payment due under any Permitted Investment, or if a default occurs
in any other performance required under any Permitted Investment, the 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.
Section
3.13 Maintenance
of the Primary Insurance Policies; Collections Thereunder.
The
Master Servicer will maintain or cause the related Sub-Servicer, if any,
to
maintain in full force and effect, if required under the Mortgage Loan Purchase
Agreement and to the extent available, a Primary Insurance Policy conforming
in
all respects to the description set forth in Section 2(vii) of the Mortgage
Loan
Purchase Agreement with respect to each Mortgage Loan so insured as of the
Closing Date (or, in the case of a Eligible Substitute Mortgage Loan, on
the
date of substitution). Such coverage will be maintained with respect to each
such Mortgage Loan for so long as it is outstanding, subject to any applicable
laws or until the related Loan-to-Value Ratio is reduced to less than or
equal
to 80% based on Mortgagor payments. The Master Servicer shall cause the premium
for each Primary Insurance Policy to be paid on a timely basis and shall
pay
such premium out of its own funds if it is not otherwise paid. The Master
Servicer or the related Sub-Servicer, if any, will not cancel or refuse to
renew
any such Primary Insurance Policy in effect on the Closing Date (or, in the
case
of a Eligible Substitute Mortgage Loan, on the date of substitution) that
is
required to be kept in force under this Agreement unless a replacement Primary
Insurance Policy for such canceled or non-renewed policy is obtained from
and
maintained with an insurer.
The
Master Servicer shall not take, or permit any Sub-Servicer to 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 Master Servicer or Sub-Servicer,
would have been covered thereunder. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements
of each
insurer under each Primary Insurance Policy. In connection with any assumption
and modification agreement or substitution of liability agreement entered
into
or to be entered into pursuant to Section 3.15, the Master Servicer shall
promptly notify the insurer under the related Primary Insurance Policy, if
any,
of such assumption in accordance with the terms of such policies 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 any such
Primary
Insurance Policy is terminated as a result of such assumption, the Master
Servicer or the related Sub-Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and the Certificateholders, 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. Any amounts collected by the Master Servicer under any Primary
Insurance Policy shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11; and any amounts collected by the Master
Servicer under any Primary Insurance Policy in respect of any REO Property
shall
be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.23. In those cases in which a Mortgage Loan is serviced by a
Sub-Servicer, the Sub-Servicer, on behalf of itself, the Trustee, and the
Certificateholders, will present claims to the insurer under any Primary
Insurance Policy and all collections thereunder shall be deposited initially
in
the Sub-Servicing Account.
Section
3.14 Maintenance
of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.
(a) The
Master Servicer shall cause to be maintained for each Mortgage Loan fire
insurance with extended coverage on the related Mortgaged Property in an
amount
which is at least equal to the least of (i) the current principal balance
of
such Mortgage Loan, (ii) the amount necessary to fully compensate for any
damage
or loss to the improvements that are a part of such property on a replacement
cost basis and (iii) the maximum insurable value of the improvements which
are a
part of such Mortgaged Property, in each case in an amount not less than
such
amount as is necessary to avoid the application of any coinsurance clause
contained in the related hazard insurance policy. The Master Servicer shall
also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and
(ii)
the outstanding principal balance of the related Mortgage Loan at the time
it
became an REO Property, plus accrued interest at the Loan Rate and related
Servicing Advances. The Master Servicer will comply in the performance of
this
Agreement with all reasonable rules and requirements of each insurer under
any
such hazard policies. Any amounts to be collected by the Master Servicer
under
any such policies (other than amounts to be applied to the restoration or
repair
of the property subject to the related Mortgage or amounts to be released
to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms
and
conditions of the related Mortgage and Mortgage Note) shall be deposited
in the
Collection Account, within two Business Days after receipt thereof, subject
to
withdrawal pursuant to Section 3.11, if received in respect of a Mortgage
Loan,
or in the REO Account, subject to withdrawal pursuant to Section 3.23, if
received in respect of an REO Property. Any cost incurred by the Master Servicer
in maintaining any such insurance shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid principal balance
of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan
so permit. It is understood and agreed that no earthquake, windstorm or other
additional insurance is to be required of any Mortgagor other than pursuant
to
such applicable laws and regulations as shall at any time be in force and
as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by
the
Federal Emergency Management Agency as having special flood hazards, the
Master
Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of
(i)
the unpaid principal balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under
the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
If
the
Master Servicer shall obtain and maintain a blanket fire insurance policy
with
extended coverage insuring against hazard losses on all of the Mortgage Loans,
it shall conclusively be deemed to have satisfied its obligations as set
forth
in the first two sentences of this Section 3.14, it being understood and
agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on
the
related Mortgaged Property or REO Property a policy complying with the first
two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees
to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with
the
terms of such policy.
(b) The
Master Servicer shall keep in force during the term of this Agreement a policy
or policies of insurance covering errors and omissions for failure in the
performance of the Master Servicer’s obligations under this Agreement, which
policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Xxxxxx Mae or Xxxxxxx Mac, unless the Master Servicer has obtained a waiver
of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer
shall
provide the Trustee (upon the Trustee’s reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer
has
such errors and omissions and fidelity bond coverage and, by the terms of
such
insurance policy or fidelity bond, the coverage afforded thereunder extends
to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days’ prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity
bond
which would meet such requirements.
Section
3.15 Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
The
Master Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether
by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under
the
“due-on-sale” clause, if any, applicable thereto; provided, however, that the
Master Servicer shall not exercise any such rights if prohibited by law from
doing so or if the exercise of such rights would impair or threaten to impair
any recovery under the related Primary Insurance Policy or Limited Purpose
Surety Bond, if any. If the Master Servicer reasonably believes it is unable
under applicable law to enforce such “due-on-sale” clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply,
the
Master Servicer will enter into an assumption and modification agreement
from or
with the person to whom such property has been conveyed or is proposed to
be
conveyed, pursuant to which such person becomes liable under the Mortgage
Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted
as
the Mortgagor and becomes liable under the Mortgage Note, provided that no
such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer and has a credit risk rating at least equal
to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards
and
follow such practices and procedures as shall be normal and usual in its
general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in
the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable Primary Insurance Policy or hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Master Servicer
as
additional servicing compensation. In connection with any such assumption,
no
material term of the Mortgage Note (including but not limited to the related
Loan Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement
has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding
the foregoing paragraph or any other provision of this Agreement, the Master
Servicer shall not be deemed to be in default, breach or any other violation
of
its obligations hereunder by reason of any assumption of a Mortgage Loan
by
operation of law or by the terms of the Mortgage Note or any assumption which
the Master Servicer may be restricted by law from preventing, for any reason
whatever. For purposes of this Section 3.15, the term “assumption” is deemed to
also include a sale (of the Mortgaged Property) subject to the Mortgage that
is
not accompanied by an assumption or substitution of liability
agreement.
Section
3.16 Realization
Upon Defaulted Mortgage Loans.
(a) The
Master Servicer shall, consistent with the servicing standard set forth in
Section 3.01, foreclose upon or otherwise comparably convert the ownership
of
properties securing such of the Mortgage Loans as come into and continue
in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.07. The Master Servicer shall
be
responsible for all costs and expenses incurred by it in any such proceedings;
provided, however, that such costs and expenses will be recoverable as Servicing
Advances by the Master Servicer as contemplated in Section 3.11 and Section
3.23. The foregoing is subject to the provision that, in any case in which
Mortgaged Property shall have suffered damage from an Uninsured Cause, the
Master Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion
that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding
the foregoing provisions of this Section 3.16 or any other provision of this
Agreement, with respect to any Mortgage Loan as to which the Master 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 Master Servicer
shall not, on behalf of the Trustee, 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 Trustee, the
Trust
Fund or the Certificateholders 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 Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:
(1) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Trust Fund to
take
such actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) 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 Trust Fund to take such actions with respect to
the
affected Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 3.23 shall
be
advanced by the Master Servicer, subject to the Master Servicer’s right to be
reimbursed therefor from the Collection Account as provided in Section
3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received
in
respect of the affected Mortgage Loan or other Mortgage Loans.
If
the
Master Servicer determines, as described above, that it is in the best economic
interest of the Trust Fund 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 Master Servicer
shall
take such action as it deems to be in the best economic interest of the Trust
Fund. The cost of any such compliance, containment, cleanup or remediation
shall
be advanced by the Master Servicer, subject to the Master Servicer’s right to be
reimbursed therefor from the Collection Account as provided in Section
3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received
in
respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The
Master Servicer may at its option purchase from the Trust Fund any Mortgage
Loan
that is 90 days or more Delinquent, which the Master Servicer determines
in good
faith will otherwise become subject to foreclosure proceedings (evidence
of such
determination to be delivered in writing to the Trustee prior to purchase),
at a
price equal to the sum of the outstanding Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest thereon at the Loan Rate through
the end of the Due Period preceding the last Distribution Date, less
unreimbursed Servicing Advances, Advances and any unpaid Servicing Fees
allocable to such Mortgage Loan. The purchase price for any Mortgage Loan
purchased hereunder shall be deposited in the Collection Account, and the
Trustee, upon receipt of written certification from the Master Servicer of
such
deposit, shall release or cause to be released to the Master Servicer the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Master Servicer shall
furnish and as shall be necessary to vest in the Master Servicer title to
any
Mortgage Loan released pursuant hereto.
(d) Proceeds
received in connection with any Final Recovery Determination, as well as
any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds, in respect of any Mortgage Loan, will be applied in
the
following order of priority: first, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances and Advances,
pursuant to Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid
interest on the Mortgage Loan, to the date of the Final Recovery Determination,
or to the Due Date prior to the Distribution Date on which such amounts are
to
be distributed if not in connection with a Final Recovery Determination;
third,
as a recovery of principal of the Mortgage Loan; and fourth, to Foreclosure
Profits. If the amount of the recovery so allocated to interest is less than
the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount
of such recovery will be allocated by the Master Servicer as follows: first,
to
unpaid Servicing Fees; and second, to the balance of the interest then due
and
owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
(e) In
addition to the foregoing, the Trustee, as assignee of the Pledged Asset
Servicing Agreement, shall enforce the obligations of the Pledged Asset Servicer
to use its best reasonable efforts to realize upon any Pledged Assets for
such
of the Pledged Asset Loans as come into and continue in default and as to
which
no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.11; provided that pursuant to the Pledged Asset Servicing
Agreement, the Pledged Asset Servicer shall not, on behalf of the Trustee,
obtain title to any such Pledged Assets as a result of or in lieu of the
disposition thereof or otherwise; and provided further that (i) the Pledged
Asset Servicer, pursuant to the Pledged Asset Servicing Agreement, shall
not
proceed with respect to such Pledged Assets in any manner that would impair
the
ability to recover against the related Mortgaged Property, and (ii) the Master
Servicer shall proceed with any acquisition of REO Property in a manner that
preserves the ability to apply the proceeds of such Pledged Assets against
amounts owed under the defaulted Mortgage Loan. Any proceeds realized from
such
Pledged Assets (other than amounts to be released to the Mortgagor or the
related guarantor in accordance with procedures that the Master Servicer
would
follow in servicing loans held for its own account, subject to the terms
and
conditions of the related Mortgage and Mortgage Note and to the terms and
conditions of any security agreement, guarantee agreement, mortgage or other
agreement governing the disposition of the proceeds of such Pledged Assets)
shall be deposited in the Distribution Account, subject to withdrawal pursuant
to Section 3.11; provided, that such proceeds shall not be so deposited if
the
Required Surety Payment in respect of such Pledged Asset Loan has been deposited
in the Collection Account (except to the extent of any such proceeds taken
into
account in calculating the amount of the Required Surety Payment). Any other
payment received by a Seller in respect of such Pledged Assets shall be
deposited in the Distribution Account subject to withdrawal pursuant to Section
3.11.
Section
3.17 Trustee
to Cooperate; Release of Mortgage Files.
(a) Upon
the
payment in full of any Mortgage Loan, or the receipt by the Master Servicer
of a
notification that payment in full shall be escrowed in a manner customary
for
such purposes, the Master Servicer will immediately notify the Trustee by
delivering a certification in duplicate (one of which will be returned to
the
Master Servicer with the Mortgage File) in the form of Exhibit E which shall
be
signed by a Servicing Officer or in a mutually agreeable electronic format
which
will in lieu of a signature be deemed to originate from a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required
to
be deposited in the Collection Account pursuant to Section 3.10 have been
or
will be so deposited) of a Servicing Officer and shall request delivery to
it of
the Mortgage File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Mortgage File to the Master Servicer.
No
expenses incurred in connection with any instrument of satisfaction or deed
of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, including, for this purpose, collection under any Primary Insurance
Policy
or any other insurance policy relating to the Mortgage Loans, the Trustee
shall,
upon request of the Master Servicer and delivery to the Trustee in duplicate
(one of which will be returned to the Master Servicer with the Mortgage File)
of
a Request for Release in the form of Exhibit E, which shall be signed by
a
Servicing Officer or in a mutually agreeable electronic format which will
in
lieu of a signature be deemed to originate from a Servicing Officer release
the
related Mortgage File to the Master Servicer, and the Trustee shall, at the
direction of the Master Servicer, and in the form provided by the Master
Servicer execute such documents as shall be necessary to the prosecution
of any
such proceedings. Such Request for Release shall obligate the Master Servicer
to
return each and every document previously requested from the Mortgage File
to
the Trustee when the need therefor by the Master Servicer no longer exists,
unless the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account
or
the Mortgage File or such document has been delivered to an attorney, or
to a
public trustee or other public official as required by law, for purposes
of
initiating or pursuing legal action or other proceedings for the foreclosure
of
the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage
File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has
become
an REO Property, the Master Servicer shall no longer be obligated to return
the
documents released by the Trustee pursuant to the related Request for Release
and a copy of the Request for Release shall be released by the Trustee to
the
Master Servicer.
(c) Upon
written certification of a Servicing Officer, the Trustee shall execute and
deliver to the Master Servicer any court pleadings, requests for trustee’s sale
or other documents reasonably necessary to the foreclosure or trustee’s sale in
respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain
a
deficiency judgment, or to enforce any other remedies or rights provided
by the
Mortgage Note or Mortgage or otherwise available at law or inequity. Each
such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except
for the termination of such a lien upon completion of the foreclosure or
trustee’s sale.
Section
3.18 Servicing
Compensation.
As
compensation for the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to the Servicing Fee with respect to each Mortgage
Loan payable solely from payments of interest and Buydown Funds in respect
of
such Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer
shall be entitled to recover unpaid Servicing Fees out of Insurance Proceeds
or
Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii) and
out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.23. The right to receive the Servicing Fee may not
be
transferred in whole or in part except in connection with the transfer of
all of
the Master Servicer’s responsibilities and obligations under this Agreement. In
the event that Liquidation Proceeds, Insurance Proceeds and proceeds from
any
REO Disposition (net of amounts reimbursable therefrom pursuant to Section
3.11(a)(iii)) in respect of a Cash Liquidation or REO Disposition exceed
the
unpaid principal balance of such Mortgage Loan plus unpaid interest accrued
thereon (including REO Imputed Interest) at a per annum rate equal to the
related Net Mortgage Rate, the Master Servicer shall be entitled to retain
therefrom and to pay to itself any Foreclosure Profits and any Servicing
Fee
considered to be accrued but unpaid.
Additional
servicing compensation in the form of assumption fees, late payment charges
and
other similar fees and charges shall be retained by the Master Servicer (subject
to Section 3.24) only to the extent such fees or charges are received by
the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account, and pursuant to Section
3.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 3.12
and
Section 3.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, to the extent such premiums are
not
paid by the related Mortgagors or by a Sub-Servicer, servicing compensation
of
each Sub-Servicer, and to the extent provided herein in Section 8.05, the
fees
and expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.
Section
3.19 Reports
to the Trustee; Collection Account Statements.
Upon
request from the Trustee, the Master Servicer shall forward to the Trustee
and
the Depositor a statement prepared by the Master Servicer setting forth the
status of the Collection Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement,
the
aggregate amount of deposits into and withdrawals from the Collection Account
of
each category of deposit specified in Section 3.10(a) and each category of
withdrawal specified in Section 3.11. Such statement may be in the form of
the
then current Xxxxxx Xxx Monthly Accounting Report for its Guaranteed Mortgage
Pass-Through Program with appropriate additions and changes, and shall also
include information as to the aggregate of the outstanding principal balances
of
all of the Mortgage Loans as of the last day of the calendar month immediately
preceding such Distribution Date. Copies of such statement shall be provided
by
the Trustee to any Certificateholder and to any Person identified to the
Trustee
as a prospective transferee of a Certificate, upon request at the expense
of the
requesting party, provided such statement is delivered by the Master Servicer
to
the Trustee.
Section
3.20 Annual
Statement as to Compliance.
The
Master Servicer will deliver to the Trustee and the Depositor, not later
than
February 28 of each calendar year beginning in 2008 (and
no
later than April 15 of any calendar year in which the Trust Fund is no longer
subject to the Exchange Act reporting requirements),
an
Officers’ Certificate (an “Annual Statement of Compliance”) stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement
has
been made under such officers’ supervision and (ii) to the best of such
officers’ knowledge, based on such review, the Master Servicer has fulfilled all
of its obligations under this Agreement or other applicable servicing 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 officer and the nature and status thereof. Such Annual
Statement of Compliance shall contain no restrictions or limitations on its
use.
In the event that the Master Servicer has delegated any servicing
responsibilities with respect to the Mortgage Loans to a Sub-Servicer, the
Master Servicer shall deliver a similar Annual Statement of Compliance by
that
Sub-Servicer to the Trustee and Depositor as described above as and when
required with respect to the Master Servicer.
If
the
Master Servicer cannot deliver the related Annual Statement of Compliance
by
February 28th of such year, the Trustee, at its sole option, may permit a
cure
period for the Master Servicer to deliver such Annual Statement of Compliance,
but in no event later than March 10th of such year.
Section
3.21 Assessments
of Compliance and Attestation Reports.
Pursuant
to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1123 of Regulation
AB,
the Master Servicer shall deliver to the Trustee on or before February 28
of
each calendar year beginning in 2008 (and no later than April 15 of any calendar
year in which the Trust Fund is no longer subject to the Exchange Act reporting
requirements), a report regarding the Master Servicer’s assessment of compliance
(an “Assessment of Compliance”) with the Servicing Criteria during the preceding
calendar year. The Assessment of Compliance must be as set forth in Regulation
AB, the Assessment of Compliance must contain the following:
(a) A
statement by such officer of its responsibility for assessing compliance
with
the Servicing Criteria applicable to the Master Servicer;
(b) A
statement by such officer that such officer used the Servicing Criteria attached
as Exhibit O hereto, and which will also be attached to the Assement of
Compliance, to assess compliance with the Servicing Criteria applicable to
the
Master Servicer;
(c) An
assessment by such officer of the Master Servicer’s compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based
on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Master Servicer, that are backed by the same
asset type as the Mortgage Loans;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the Master Servicer’s Assessment of Compliance for the period
consisting of the preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Master Servicer, which statement shall be based on the activities it
performs with respect to asset-backed securities transactions taken as a
whole
involving the Master Servicer, that are backed by the same asset type as
the
Mortgage Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit O hereto which are indicated as applicable to the Master
Servicer.
On
or
before February 28 of each calendar year beginning in 2008 (and no later
than
April 15 of any calendar year in which the Trust Fund is no longer subject
to
the Exchange Act reporting requirements), the Master Servicer shall furnish
to
the Trustee a report (an “Attestation Report”) by a registered public accounting
firm that attests to, and reports on, the Assessment of Compliance made by
the
Company, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122(b) of Regulation AB, which Attestation Report must be made in accordance
with standards for attestation reports issued or adopted by the Public Company
Accounting Oversight Board.
The
Master Servicer shall cause any Sub-Servicer, and each subcontractor determined
by the Master Servicer to be “participating in the servicing function” within
the meaning of Item 1122 of Regulation AB, to deliver to the Trustee and
the
Depositor an Assessment of Compliance and Attestation Report as and when
provided above.
Such
Assessment of Compliance, as to any Sub-Servicer, shall at a minimum address
each of the Servicing Criteria specified on Exhibit O hereto which are indicated
as applicable to any “primary servicer” to the extent they are applicable to
such Sub-servicer. Notwithstanding the foregoing, as to any subcontractor,
an
Assessment of Compliance is not required to be delivered unless it is required
as part of a Form 10-K with respect to the Trust Fund.
If
the
Master Servicer cannot deliver any Assessment of Compliance or Attestation
Report by February 28th of such year, the Trustee, at its sole option, may
permit a cure period for the Master Servicer to deliver such Assessment of
Compliance or Attestation Report, but in no event later than March 10th of
such
year.
On
or
before March 15th
of each
calendar year (unless a Form 15 Suspension Notice shall have been filed),
the
Trustee shall provide an Assessment of Compliance and Attestation Report,
as and
when provided above, which shall at a minimum address each of the Servicing
Criteria specified on Exhibit O hereto which are indicated as applicable
to the
“trustee.” The Trustee shall cause any subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB to deliver to the Depositor an Assessment of Compliance and
Attestation Report as and when provided above.
For
as
long as the Depositor is subject to Exchange Act reporting with respect to
the
Trust Fund, the Trustee shall notify the Depositor and the Master Servicer
within three (3) Business Days of the related Distribution Date (i) of any
legal
proceedings pending against the Trustee of the type described in Item 1117
(§
229.1117) of Regulation AB and (ii) if the Trustee shall become (but only
to the
extent not previously disclosed) at any time an affiliate of any of the parties
listed on Exhibit Q hereto, together with a description thereof. Should the
identification of any of the parties set forth on Exhibit Q change, the
Depositor shall promptly notify the Trustee.
Section
3.22 Access
to Certain Documentation.
The
Master Servicer shall provide to the Office of Thrift Supervision, the FDIC,
and
any other federal or state banking or insurance regulatory authority that
may
exercise authority over any Certificateholder, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations.
Such
access shall be afforded without charge, but only upon reasonable request
and
during normal business hours at the offices of the Master Servicer designated
by
it. In addition, access to the documentation regarding the Mortgage Loans
will
be provided to any Certificateholder, the Trustee and to any Person identified
to the Master Servicer as a prospective transferee of a Certificate, upon
reasonable request during normal business hours at the offices of the Master
Servicer designated by it at the expense of the Person requesting such
access.
Section
3.23 Title,
Management and Disposition of REO Property.
(a) The
deed
or certificate of sale of any REO Property shall be taken in the name of
the
Trustee, or its nominee, in trust for the benefit of the Certificateholders.
The
Master Servicer, on behalf of the Trust Fund, shall either sell any REO Property
within three years after the end of the calendar year in which the Trust
Fund
acquires ownership of such REO Property for purposes of Section 860G(a)(8)
of
the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire,
an
extension of the three-year grace period, unless the Master Servicer shall
have
delivered to the Trustee and the Depositor an Opinion of Counsel, addressed
to
the Trustee and the Depositor, to the effect that the holding by the Trust
Fund
of such REO Property subsequent to the three-year grace period after its
acquisition will not result in the imposition on the Trust Fund of taxes
on
“prohibited transactions” thereof, as defined in Section 860F of the Code, or
cause the Trust Fund to fail to qualify as a REMIC under Federal law at any
time
that any Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the Certificateholders
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
Trust Fund 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.
(b) The
Master Servicer shall segregate and hold all funds collected and received
in
connection with the operation of any REO Property separate and apart from
its
own funds and general assets and shall establish and maintain with respect
to
REO Properties an account held in trust for the Trustee for the benefit of
the
Certificateholders (the “REO Account”), which shall be an Eligible Account. The
Master Servicer shall be permitted to allow the Collection Account to serve
as
the REO Account, subject to separate ledgers for each REO Property. The Master
Servicer shall be entitled to retain or withdraw any interest income paid
on
funds deposited in the REO Account.
(c) The
Master Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with the manner
in
which the Master Servicer manages and operates similar property owned by
the
Master Servicer or any of its Affiliates, all on such terms and for such
period
as the Master Servicer deems to be in the best interests of Certificateholders.
In connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account)
in
which it customarily deposits payments and collections on mortgage loans
in
connection with its mortgage loan servicing activities on a daily basis,
and in
no event more than one Business Day after the Master Servicer’s receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account,
all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all
insurance premiums due and payable in respect of such REO Property;
(ii) all
real
estate taxes and assessments in respect of such REO Property that may result
in
the imposition of a lien thereon; and
(iii) all
costs
and expenses necessary to maintain such REO Property.
To
the
extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall
advance
from its own funds such amount as is necessary for such purposes if, but
only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer’s judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO
Property.
Notwithstanding
the foregoing, neither the Master Servicer nor the Trustee shall:
(i) authorize
the Trust Fund to enter into, renew or extend any New Lease with respect
to any
REO Property, if the New Lease by its terms will give rise to any income
that
does not constitute Rents from Real Property;
(ii) authorize
any amount to be received or accrued under any New Lease other than amounts
that
will constitute Rents from Real Property;
(iii) authorize
any construction on any REO Property, other than the completion of a building
or
other improvement thereon, and then only if more than ten percent of the
construction of such building or other improvement was completed before default
on the related Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(iv) authorize
any Person to Directly Operate any REO Property on any date more than 90
days
after its date of acquisition by the Trust Fund;
unless,
in any such case, the Master Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such
REO
Property to fail to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the Trust Fund,
in
which case the Master Servicer may take such actions as are specified in
such
Opinion of Counsel.
The
Master Servicer may contract with any Independent Contractor for the operation
and management of any REO Property, provided that:
(i) the
terms
and conditions of any such contract shall not be inconsistent
herewith;
(ii) any
such
contract shall require, or shall be administered to require, that the
Independent Contractor pay all costs and expenses incurred in connection
with
the operation and management of such REO Property, including those listed
above
and remit all related revenues (net of such costs and expenses) to the Master
Servicer as soon as practicable, but in no event later than thirty days
following the receipt thereof by such Independent Contractor;
(iii) none
of
the provisions of this Section 3.23(c) relating to any such contract or to
actions taken through any such Independent Contractor shall be deemed to
relieve
the Master Servicer of any of its duties and obligations to the Trustee on
behalf of the Certificateholders with respect to the operation and management
of
any such REO Property; and
(iv) the
Master Servicer shall be obligated with respect thereto to the same extent
as if
it alone were performing all duties and obligations in connection with the
operation and management of such REO Property.
The
Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to
limit
or modify such indemnification. The Master Servicer shall be solely liable
for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer’s compensation pursuant to Section 3.18 is sufficient to pay
such fees; provided that the fees of any Independent Contractor engaged to
manage, dispose, conserve and protect any REO Property shall be reimbursable
as
a Servicing Advance out of the proceeds of the related Mortgage Loan in
accordance with Section 3.11(a)(iii).
(d) In
addition to the withdrawals permitted under Section 3.23(c), the Master Servicer
may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and Advances made in respect of such
REO
Property or the related Mortgage Loan. On the Master Servicer Remittance
Date,
the Master Servicer shall withdraw from each REO Account maintained by it
and
deposit into the Distribution Account in accordance with Section 3.10(d)(ii),
far distribution on the related Distribution Date in accordance with Section
4.01, the income from the related REO Property received during the prior
calendar month, net of any withdrawals made pursuant to Section 3.23(c) or
this
Section 3.23(d).
(e) Subject
to the time constraints set forth in Section 3.23(a), and further subject
to
obtaining the approval of the insurer under any related Primary Insurance
Policy
(if and to the extent that such approvals are necessary to make claims under
such policies in respect of the affected REO Property), each REO Disposition
shall be carried out by the Master Servicer at such price and upon such terms
and conditions as the Master Servicer shall deem necessary or advisable,
as
shall be normal and usual in its general servicing activities for similar
properties.
(f) The
proceeds from the REO Disposition, net of any amount required by law to be
remitted to the Mortgagor under the related Mortgage Loan and net of any
payment
or reimbursement to the Master Servicer or any Sub-Servicer as provided above
including fees paid by the Master Servicer to any such Independent Contractor
engaged to manage, dispose, conserve and protect such REO Property by the
Master
Servicer, shall be deposited in the Distribution Account in accordance with
Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution
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).
(g) The
Master Servicer shall file information returns with respect to the receipt
of
mortgage interest received in a trade or business, reports of foreclosures
and
abandonments of any Mortgaged Property and cancellation of indebtedness income
with respect to any Mortgaged Property as required by Sections 6050H, 6050J
and
6050P of the Code, respectively. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section
3.24 Obligations
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
The
Master Servicer shall deliver to the Trustee for deposit into the Distribution
Account on or before 5:00 p.m. New York time on the Master Servicer Remittance
Date from its own funds an amount equal to the lesser of (i) the aggregate
of
the Prepayment Interest Shortfalls for the related Distribution Date resulting
from Principal Prepayments in Full or Curtailments during the related Prepayment
Period and (ii) the portion of its aggregate Servicing Fee which accrued
at a
Servicing Fee Rate for the most recently ended calendar month (“Compensating
Interest”).
Section
3.25 Administration
of Buydown Funds.
The
Buydown Account established and maintained by the Master Servicer with respect
to each Buydown Mortgage Loan shall be an Eligible Account. Upon receipt
from
the Mortgagor of the amount due on a Due Date for each Buydown Mortgage Loan,
the Master Servicer will withdraw from the related Buydown Account the
predetermined amount that, when added to the amount due on such date from
the
Mortgagor, equals the Monthly Payment and will deposit that amount together
with
the related payment made by the Mortgagor in the Collection Account. The
Buydown
Account shall not be an asset of any REMIC and for federal income tax purposes
shall be owned by the Master Servicer.
If
any
Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan in its entirety
during the Buydown Period, when Buydown Funds are required to be applied
to such
Buydown Mortgage Loan, the Master Servicer will withdraw from the related
Buydown Account and remit to such Mortgagor or any other Person in accordance
with the related Buydown Agreement any Buydown Funds remaining in the Buydown
Account. If a Principal Prepayment by a Mortgagor during the Buydown Period,
together with any Buydown Funds in the related Buydown Account, will result
in a
Principal Prepayment in Full, the Master Servicer will withdraw from the
related
Buydown Account for deposit in the Collection Account the Buydown Funds,
which
together with such Principal Prepayment, will result in a Principal Prepayment
in Full. If a Mortgagor defaults during the Buydown Period with respect to
a
Buydown Mortgage Loan and the Mortgaged Property is sold at foreclosure or
title
thereto is acquired on behalf of the Certificateholders, the Master Servicer
will withdraw from the Buydown Account the Buydown Funds (which shall thereupon
constitute “Liquidation Proceeds” for purposes of this Agreement) for deposit in
the Collection Account.
Section
3.26 Obligations
of the Master Servicer in Respect of Loan 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 a calculation of the principal
balance of a Mortgage Loan that was made by the Master Servicer in a manner
not
consistent with the terms of the related Mortgage Note and this Agreement,
the
Master 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 master servicer
in
respect of any such liability. Such indemnities shall survive the termination
or
discharge of this Agreement.
ARTICLE
IV
PAYMENTS
TO CERTIFICATEHOLDERS
Section
4.01 Distribution
Account; Distributions.
(a) The
Master Servicer shall remit to the Trustee for deposit into the Distribution
Account on or before 5:00 P.M. New York time on each Master Servicer Remittance
Date by wire transfer of immediately available funds an amount equal to the
sum
of (i) any Advance for the immediately succeeding Distribution Date, (ii)
any
amount required to be deposited in the Distribution Account pursuant to Sections
3.10, 3.11, 3.14 or 3.24 and (iii) all other amounts constituting the Available
Distribution Amount for the immediately succeeding Distribution
Date.
(b) [reserved]
(c) On
each
Distribution Date the Trustee shall distribute to each Certificateholder
of
record as of the next preceding Record Date (other than as provided in Section
10.01 respecting the final distribution) either in immediately available
funds
(by wire transfer or otherwise) to the account of such Certificateholder
at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder has so notified the Trustee at least five (5) Business
Days
prior to the related Record Date, or otherwise by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register, such Certificateholder’s share (based on the aggregate of the
Percentage Interests represented by Certificates of the applicable Class
held by
such Holder) of the following amounts, in the following order of
priority:
(i) to
the
Senior Certificates, on a pro rata basis based on the Monthly Interest
Distributable Amount payable on such Certificates with respect to such
Distribution Date, the Monthly Interest Distributable Amount on such Classes
of
Certificates for such Distribution Date, plus any Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date except
as
provided in the last paragraph of this Section 4.01(c) (the “Senior Interest
Distribution Amount”); provided that the Monthly Interest Distributable Amount
on the Class A-5 Certificates and Class A-6 Certificates shall be distributed
as
provided in Section 4.01 (j) and (k);
(ii) to
the
Senior Certificates (other than the Class A-4 Certificates) in the priorities
and amounts set forth in Section 4.01(d)(i) through (iv), the Senior Principal
Distribution Amount and the Accrual Distribution Amounts (applied to reduce
the
Certificate Principal Balances of such Senior Certificates, as
applicable);
(iii) if
the
Certificate Principal Balances of the Subordinate Certificates have not been
reduced to zero, to the Master Servicer, by remitting for deposit to the
Collection Account, to the extent of and in reimbursement for any Advances
previously made with respect to any Mortgage Loan or REO Property which remain
unreimbursed in whole or in part following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property, minus any such Advances
that
were made with respect to delinquencies that ultimately constituted Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses;
(iv) to
the
Holders of the Class B-1 Certificates, the Monthly Interest Distributable
Amount
thereon for such Distribution Date, plus any Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date, except
as
provided below;
(v) to
the
Holders of the Class B-1 Certificates, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date, applied in reduction of the Certificate Principal Balance
of
the Class B-1 Certificates;
(vi) to
the
Holders of the Class B-2 Certificates, the Monthly Interest Distributable
Amount
thereon for such Distribution Date, plus any Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date, except
as
provided below;
(vii) to
the
Holders of the Class B-2 Certificates, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date, applied in reduction of the Certificate Principal Balance
of
the Class B-2 Certificates;
(viii) to
the
Holders of the Class B-3 Certificates, the Monthly Interest Distributable
Amount
thereon for such Distribution Date, plus any Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date, except
as
provided below;
(ix) to
the
Holders of the Class B-3 Certificates, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date, applied in reduction of the Certificate Principal Balance
of
the Class B-3 Certificates;
(x) to
the
Holders of the Class B-4 Certificates, the Monthly Interest Distributable
Amount
thereon for such Distribution Date, plus any Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date, except
as
provided below;
(xi) to
the
Holders of the Class B-4 Certificates, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date, applied in reduction of the Certificate Principal Balance
of
the Class B-4 Certificates;
(xii) to
the
Holders of the Class B-5 Certificates, the Monthly Interest Distributable
Amount
thereon for such Distribution Date, plus any Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date, except
as
provided below;
(xiii) to
the
Holders of the Class B-5 Certificates, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date, applied in reduction of the Certificate Principal Balance
of
the Class B-5 Certificates;
(xiv) to
the
Holders of the Class B-6 Certificates, an amount equal to the Monthly Interest
Distributable Amount thereon for such Distribution Date, plus any Monthly
Interest Distributable Amount thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xv) to
the
Holders of the Class B-6 Certificates, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date, applied in reduction of the Certificate Principal Balance
of
the Class B-6 Certificates;
(xvi) to
the
Senior Certificates, in the priority set forth in Section 4.01(d) of this
Agreement, the portion, if any, of the Available Distribution Amount remaining
after the foregoing distributions, applied to reduce the Certificate Principal
Balances of such Senior Certificates, but in no event more than the aggregate
of
the outstanding Certificate Principal Balances of each such Class of Senior
Certificates, and thereafter, to each Class of Subordinate Certificates then
outstanding beginning with such Class with the Highest Priority, any portion
of
the Available Distribution Amount remaining after the Senior Certificates
have
been retired, applied to reduce the Certificate Principal Balance of each
such
Class of Subordinate Certificates, but in no event more than the outstanding
Certificate Principal Balance of each such Class of Subordinate Certificates;
and
(xvii) to
the
Class R-II Certificates, the balance, if any, of the Available Distribution
Amount.
Notwithstanding
the foregoing, on any Distribution Date, with respect to the Class of
Subordinate Certificates outstanding on such Distribution Date with the Lowest
Priority, or in the event the Subordinate Certificates are no longer
outstanding, the Senior Certificates, the Monthly Interest Distributable
Amount
thereon remaining unpaid from any previous Distribution Date will be
distributable only to the extent that such unpaid Monthly Interest Distributable
Amount was attributable to interest shortfalls relating to the failure of
the
Master Servicer to make any required Advance, or the determination by the
Master
Servicer that any proposed Advance would be a Nonrecoverable Advance with
respect to the related Mortgage Loan where such Mortgage Loan has not yet
been
the subject of a Cash Liquidation or REO Disposition or the related Liquidation
Proceeds, Insurance Proceeds and REO Proceeds have not yet been distributed
to
the Certificateholders.
(d) The
Senior Principal Distribution Amount and Accrual Distribution Amounts shall
be
distributed to the Senior Certificates (other than the Class A-4 Certificates)
as follows:
(i) an
amount
equal to the Class A-5 Accrual Distribution Amount shall be distributed to
the
Class A-3 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero;
(ii)
an amount equal to the Class A-6 Accrual Distribution Amount shall be
distributed to the Class A-1, Class A-2, Class A-3 and Class A-5 Certificates,
in accordance with the priorities set forth below in clause (vi)(B), in each
case until the Certificate Principal Balance thereof has been reduced to
zero;
(iii)
the Senior Principal Distribution Amount shall be distributed to the Class
R-I
Certificates and Class R-II Certificates, concurrently on a pro rata basis,
until the Certificate Principal Balances thereof have been reduced to
zero;
(iv)
the balance of the Senior Principal Distribution Amount remaining after the
distributions, if any, described in clause (iii) above shall be distributed
in
the following manner and priority:
(A)
first,
to the
Class A-6 Certificates, in reduction of the Certificate Principal Balance
thereof, until the Certificate Principal Balance thereof has been reduced
to
zero, in an amount equal to the sum of (a) the Lockout Scheduled Percentage
of
the aggregate of the collections described in clauses (A), (B) and (E) (to
the
extent clause (E) relates to clauses (A) and (B)) of the definition of Senior
Principal Distribution Amount and (b) the Lockout Prepayment Percentage of
the
aggregate of the collections described in clauses (C) and (E) (to the extent
clause (E) relates to clause (C)) of the definition of Senior Principal
Distribution Amount;
(B)
second,
concurrently as follows:
(1)
66.7680523735%
of the
Senior Principal Distribution Amount distributable under this clause (iv)(B)
in
the following manner and priority:
(a)
first,
to the
Class A-1 Certificates, until the Certificate Principal Balance thereof has
been
reduced to the Planned Principal Balance for such Distribution
Date;
(b)
second,
to the
Class A-2 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; and
(c)
third,
to the
Class A-1 Certificates, without regard to the Planned Principal Balance for
such
Distribution Date, until the Certificate Principal Balance thereof has been
reduced to zero; and
(2)
33.0000000000% of the Senior Principal Distribution Amount distributable
under
this clause (iv)(B) in the following manner and priority:
(a)
first,
to the
Class A-3 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; and
(b)
second,
to the
Class A-5 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; and
(C)
third,
to the
Class A-6 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero.
(e) [reserved]
(f) On
or
after the occurrence of the Credit Support Depletion Date, all priorities
relating to distributions as described in Section 4.01(d) above relating
to
principal among the Senior Certificates (other than the Class A-4 Certificates)
will be disregarded. Instead, the Senior Principal Distribution Amount will
be
distributed to the remaining Senior Certificates (other than the Class A-4
Certificates), pro rata in accordance with their respective outstanding
Certificate Principal Balances and the Senior Interest Distribution Amount
will
be distributed as described in Section 4.01(c)(i).
(g) After
the
reduction of the Certificate Principal Balances of the Senior Certificates
to
zero but prior to the Credit Support Depletion Date, the Senior Certificates
will be entitled to no further distributions of principal thereon and the
Available Distribution Amount will be paid solely to the holders of the Class
B
Certificates, as described herein.
(h) In
addition to the foregoing distributions, with respect to any Subsequent
Recoveries, the Master Servicer shall deposit such amounts into the Collection
Account pursuant to Section 3.10(a). If, after taking into account such
Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount
of
such Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Class B Certificates with the Highest Priority to
which
Realized Losses have been allocated, but not by more than the amount of Realized
Losses previously allocated to that Class of Class B Certificates pursuant
to
Section 4.04. The amount of any remaining Subsequent Recoveries will be applied
to increase the Certificate Principal Balance of the Class of Class B
Certificates with the next Highest Priority, up to the amount of such Realized
Losses previously allocated to that Class of Class B Certificates pursuant
to
Section 4.04, and so on. Subsequent Recoveries will be applied to increase,
from
zero, the Certificate Principal Balance of a Class of Class B Certificates
pursuant to the previous sentence if the Certificate Principal Balance of
such
Class was reduced to zero due to the application of Realized Losses. Holders
of
such Certificates will not be entitled to any payment in respect of Monthly
Interest Distributable Amount on the amount of such increases for any Interest
Accrual Period preceding the Distribution Date on which such increase occurs.
Any such increases shall be applied to the Certificate Principal Balance
of each
Certificate of such Class in accordance with its respective Percentage
Interest.
(i) Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, as Holder thereof, and the Depository shall be responsible for
crediting 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. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(j) On
each
Distribution Date prior to the Class A-5 Accretion Termination Date, an amount
equal to the Monthly Interest Distributable Amount that would otherwise be
distributed on the Class A-5 Certificates shall be added to Certificate
Principal Balance of the Class A-5 Certificates. On or after the related
Accretion Termination Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-5 Certificates for such Distribution Date shall be
payable
to the Class A-5 Certificateholders pursuant to Section 4.01(c)(i) of this
Agreement to the extent not required to reduce the Certificate Principal
Balance
of the Class A-3 Certificates to zero on such Class A-5 Accretion Termination
Date; provided that if the Class A-5 Accretion Termination Date is the Credit
Support Depletion Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-5 Certificates for such Distribution Date will be paid
to
the Class A-5 Certificateholders. Any such Monthly Interest Distributable
Amount
on the Class A-5 Certificates which is required to be paid to the holders
of the
Class A-3 Certificates on such Class A-5 Accretion Termination Date will
be
added to the Certificate Principal Balance of the Class A-5 Certificates
in the
manner described in the first sentence of this Section 4.01(j).
(k) On
each
Distribution Date prior to the Class A-6 Accretion Termination Date, an amount
equal to the Monthly Interest Distributable Amount that would otherwise be
distributed on the Class A-6 Certificates shall be added to Certificate
Principal Balance of the Class A-6 Certificates. On or after the related
Accretion Termination Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-6 Certificates for such Distribution Date shall be
payable
to the Class A-6 Certificateholders pursuant to Section 4.01(c)(i) of this
Agreement to the extent not required to reduce the aggregate Certificate
Principal Balance of the Class A-1, Class A-2, Class A-3 and Class A-5
Certificates to zero on such Class A-6 Accretion Termination Date; provided
that
if the Class A-6 Accretion Termination Date is the Credit Support Depletion
Date
or the Distribution Date occurring in May 2012, the entire amount of Monthly
Interest Distributable Amount on the Class A-6 Certificates for such
Distribution Date will be paid to the Class A-6 Certificateholders. Any such
Monthly Interest Distributable Amount on the Class A-6 Certificates which
is
required to be paid to the holders of the Class A-1, Class A-2, Class A-3
and
Class A-5 Certificates on such Class A-6 Accretion Termination Date will
be
added to the Certificate Principal Balance of the Class A-6 Certificates
in the
manner described in the first sentence of this Section 4.01(k).
(l) [reserved]
(m) [reserved]
(n) Except
as
otherwise provided in Section 10.01, if the Master Servicer anticipates that
a
final distribution with respect to any Class of Certificates will be made
on the
next Distribution Date, the Master Servicer shall, no later than the
Determination Date in the month of such final distribution, notify the Trustee
and the Trustee shall, no later than two (2) Business Days after such
Determination Date, mail on such date to each Holder of such Class of
Certificates a notice to the effect that: (i) the Trustee anticipates that
the
final distribution with respect to such Class of Certificates will be made
on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein,
and
(ii) no interest shall accrue on such Certificates from and after the end
of the
prior calendar month.
Any
funds
not distributed to any Holder or Holders of Certificates of such Class on
such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust and
credited to the account of the appropriate non-tendering Holder or Holders.
If
any Certificates as to which notice has been given pursuant to this Section
4.01(n) shall not have been surrendered for cancellation within six months
after
the time specified in such notice, the Trustee shall mail a second notice
to the
remaining non-tendering Certificateholders to surrender their Certificates
for
cancellation in order to receive the final distribution with respect thereto.
If
within six months after the second notice all such Certificates shall not
have
been surrendered for cancellation, the Trustee shall take reasonable steps
as
directed by the Depositor, or appoint an agent to take reasonable steps,
to
contact the remaining non-tendering Certificateholders concerning surrender
of
their Certificates. The costs and expenses of maintaining the fiends in trust
and of contacting such Certificateholders shall be paid out of the assets
remaining in the Trust Fund. If within nine months after the second notice
any
such 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. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust as a result of such
Certificateholder’s failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(n).
(o) Distributions
of interest shall be deemed to be made to each REMIC I Regular Interest in
an
amount equal to the related Uncertificated Monthly Interest Distributable
Amount. Distributions of principal shall be deemed to be made to each of
the
REMIC I Regular Interests in the same manner and priority as principal payments
are made to Corresponding Certificated Interests.
Section
4.02 Statements
to Certificateholders.
On
each
Distribution Date the Trustee shall make available to each Holder of a
Certificate and to the Depositor, the Master Servicer and the Rating Agency,
a
statement based on information contained in the Remittance Report:
(i) the
amount of the distribution made on such Distribution Date to the Holders
of each
Class of Certificates, separately identified, allocable to
principal;
(ii) the
amount of the distribution made on such Distribution Date to the Holders
of each
Class of Certificates allocable to interest, separately identified;
(iii) the
aggregate amount of servicing compensation received by the Master Servicer
during the related Due Period and such other customary information as the
Trustee deems necessary or desirable, or which a Certificateholder reasonably
requests, to enable Certificateholders to prepare their tax
returns;
(iv) the
aggregate amount of Advances for the related Due Period (including the general
purpose of such Advances), the aggregate amount of unreimbursed Advances
at the
close of business on the Distribution Date, and the general source of funds
for
reimbursements;
(v) the
aggregate Stated Principal Balance of the Mortgage Loans at the close of
business at the end of the related Due Period;
(vi) the
number, average balance, weighted average remaining term to maturity and
weighted average Loan Rate of the Mortgage Loans as of the related Due
Date;
(vii) the
number and Stated Principal Balance of the Mortgage Loans in respect of which
(A) one Monthly Payment is Delinquent, (B) two Monthly Payments are Delinquent,
(C) three or more Monthly Payments are Delinquent and (D) foreclosure
proceedings have been commenced, in each case as of the close of business
on the
last day of the calendar month preceding such Distribution Date;
(viii) with
respect to any Mortgage Loan that became an REO Property during the preceding
calendar month, the unpaid principal balance and the Stated Principal Balance
of
such Mortgage Loan as of the date it became an REO Property;
(ix) 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 due period;
(x) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period;
(xi) the
aggregate amount of Realized Losses incurred during the related Due Period
and
the cumulative amount of Realized Losses;
(xii) the
aggregate amount of Extraordinary Trust Fund Expenses withdrawn from the
Collection Account for such Distribution Date;
(xiii) the
Certificate Principal Balance or Notional Amount, as the case may be, of
each
Class of Certificates, after giving effect to the distributions made on such
Distribution Date;
(xiv) the
Pass-Through Rate for each Class of Certificates and the aggregate amount
of
interest accrued at the related Pass-Through Rate with respect to each Class
during the related Interest Accrual Period and the respective portions thereof,
if any, remaining unpaid following the distributions made in respect of such
Certificates on such Distribution Date;
(xv) the
aggregate amount of any Prepayment Interest Shortfalls for such Distribution
Date, to the extent not covered by payments of Compensating Interest by the
Master Servicer pursuant to Section 3.24;
(xvi) the
Available Distribution Amount;
(xvii) the
aggregate Stated Principal Balance of Mortgage Loans purchased by the Master
Servicer during the related Due Period and indicating the Section of this
Agreement requiring or allowing the purchase of each such Mortgage
Loan;
(xviii) the
applicable Record Dates, Interest Accrual Periods and Determination Date
for
calculating distributions and general Distribution Dates;
(xix) the
Servicing Fee paid to or retained by the Master Servicer and the Trustee
Fee
paid to the Trustee, in each case for the related Due Period;
(xx) the
total
cash flows received and the general sources thereof;
(xxi) the
cumulative amount of Realized Losses applied to the Certificates to
date;
(xxii) if
applicable, material modifications, extensions or waivers to Mortgage Loan
terms, fees, penalties or payments during the preceding calendar month or
that
have become material over time; and
(xxiii) information
about any additions of, substitutions for or removal of any Mortgage Loans
from
the Trust Fund, and any changes in the underwriting, acquisition or selection
criteria as to any Mortgage Loans added to the Trust Fund.
The
Trustee will make the monthly statements described above (and, at its option,
any additional files containing the same information in an alternative format)
available on each Distribution Date to Certificateholders, and other parties
to
the Pooling and Servicing Agreement via the Trustee’s internet website and its
fax-on-demand service. The Trustee’s internet website shall initially be located
at “xxx.xx.xxxxxxxxxx.xxx”. Assistance in using the website can be obtained by
calling the Trustee’s customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution options are entitled to have a paper
copy
mailed to them via first class mail by calling the customer service desk
and
indicating such. The Trustee shall have the right to change the way monthly
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.
On
each
Distribution Date, the Trustee shall provide Bloomberg Financial Markets,
L.P.
(“Bloomberg”) CUSIP level information for each Class of Certificates as of such
Distribution Date, using a format and media mutually acceptable to the Trustee
and Bloomberg.
In
addition, the Trustee will make available, as a convenience for interested
parties (and not in furtherance of the distribution of any related prospectus
or
prospectus supplement under the securities laws), this Agreement, the related
prospectus and prospectus supplement via the Trustee’s internet
website.
The
Trustee will make no representations or warranties as to the accuracy of
completeness of such documents and will assume no responsibility
therefor.
In
connection with providing access to the Trustee’s website, the Trustee may
require registration and the acceptance of a disclaimer. The Trustee shall
not
be liable for the dissemination of information in accordance with this Agreement
which is not due to an error on the part of the Trustee with respect to such
information.
In
the
case of information furnished pursuant to subclauses (i)-(iii) above, the
amounts shall also be expressed as a dollar amount per Single
Certificate.
The
Trustee shall provide to each Certificateholder any written reports or other
information required by the Code and regulations thereunder as from time
to time
are in force. In addition, upon written request, within a reasonable period
of
time after the end of each calendar year, the Trustee shall prepare and forward,
to each Person who at any time during the calendar year was a Certificateholder,
a statement containing the information set forth in subclauses (i) - (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder.
Section
4.03 Remittance
Reports; Advances by the Master Servicer.
(a) On
the
second Business Day following each Determination Date but in no event less
than
five Business Days prior to the related Distribution Date, the Master Servicer
shall deliver to the Trustee by telecopy (or by such other means as the Master
Servicer and the Trustee may agree from time to time) a Remittance Report,
and
other data mutually agreed upon, with respect to the related Distribution
Date.
On the same date, the Master Servicer shall make available to the Trustee
a
computer readable magnetic tape or diskette or in such other medium as may
be
agreed between the Master Servicer and the Trustee containing the information
set forth in such Remittance Report with respect to the related Distribution
Date. The Master Servicer shall deliver or cause to be delivered to the Trustee
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 require to perform the calculations necessary to make
the
distributions contemplated by Section 4.01 and 4.06 and to prepare the
statements to Certificateholders contemplated by Section 4.02. The Master
Servicer shall make a good faith effort to deliver any such additional
information to the Trustee within two Business Days of any such request,
provided that in no event shall the Master Servicer be required to provide
any
such additional information to the Trustee to the extent the Trustee makes
such
request prior to five Business Days prior to the Master Servicer Remittance
Date. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Master Servicer.
(b) The
amount of Advances to be made by the Master Servicer for any Distribution
Date
shall equal the sum of (i) the aggregate amount of Monthly Payments (net
of the
related Servicing Fee), due during the related Due Period in respect of the
Mortgage Loans, 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 Due Period and as to which REO Property an REO Disposition did not
occur
during the related Due Period, an amount equal to the excess, if any, of
the REO
Imputed Interest on such REO Property for the most recently ended calendar
month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 4.01 for distribution on such
Distribution Date, less amounts held for future distributions.
Before
the close of business New York time on the Master Servicer Remittance Date,
the
Master 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
Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.03, used by the Master 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 Master Servicer
with
respect to the Mortgage Loans and REO Properties. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer’s records and replaced by the Master Servicer by deposit in the
Collection Account on or before any future Master Servicer Remittance Date
to
the extent that the Available Distribution Amount for the related Distribution
Date (determined without regard to Advances to be made on the Master Servicer
Remittance Date) shall be less than the total amount that would be distributed
to the Classes of Certificateholders pursuant to Section 4.01 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 Master Servicer
by
telecopy on any Master Servicer Remittance Date or within one Business Day
in
the event that the amount remitted by the Master Servicer to the Trustee
on such
date is less than the Advances required to be made by the Master Servicer
for
the related Distribution Date, less amounts held for future distributions,
as
set forth in the related Remittance Report.
(c) The
obligation of the Master 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, shall continue until the Mortgage
Loan
is paid in full or until the recovery of all Liquidation Proceeds thereon;
provided, however, that such obligation will cease if title to the Mortgaged
Property is acquired by the Trust Fund in foreclosure or by deed in lieu
of
foreclosure.
(d) Notwithstanding
anything herein to the contrary, no Advance shall be required to be made
hereunder by the Master Servicer if such Advance would, if made, constitute
a
Nonrecoverable Advance. The determination by the Master 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 Officers’
Certificate of the Master Servicer delivered to the Depositor and the
Trustee.
Section
4.04 Allocation
of Realized Losses.
Prior
to
each Distribution Date, the Master Servicer shall determine the total amount
of
Realized Losses, if any, that resulted from any Cash Liquidation, Debt Service
Reduction, Deficient Valuation or REO Disposition that occurred during the
related Prepayment Period. The amount of each Realized Loss shall be evidenced
by an Officers’ Certificate. All Realized Losses, other than Excess Special
Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or Excess Fraud
Losses, shall be allocated as follows: first, to the Class B-6 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Certificate Principal Balance
thereof has been reduced to zero; third, to the Class B-4 Certificates until
the
Certificate Principal Balance thereof has been reduced to zero; fourth, to
the
Class B-3 Certificates until the Certificate Principal Balance thereof has
been
reduced to zero; fifth, to the Class B-2 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; sixth, to the Class B-1
Certificates until the Certificate Principal Balance thereof has been reduced
to
zero; and thereafter such Realized Losses will be allocated among all the
Senior
Certificates on a pro rata basis, as described below. Any Excess Special
Hazard
Losses, Excess Bankruptcy Losses, Excess Fraud Losses, Extraordinary Losses
on
the Mortgage Loans will be allocated among the Senior Certificates and
Subordinate Certificates, on a pro rata basis, as described below.
As
used
herein, an allocation of a Realized Loss on a “pro rata basis” among two or more
specified Classes of Certificates means an allocation on a pro rata basis,
among
the various Classes so specified, to each such Class of Certificates on the
basis of their then outstanding Certificate Principal Balances prior to giving
effect to distributions to be made on such Distribution Date in the case
of the
principal portion of a Realized Loss or based on the Monthly Interest
Distributable Amount thereon payable on such Distribution Date (without regard
to any Compensating Interest for such Distribution Date) in the case of an
interest portion of a Realized Loss. Any allocation of the principal portion
of
Realized Losses (other than Debt Service Reductions) to the Class B Certificates
then outstanding with the highest numerical designation shall be made by
operation of the definition of “Certificate Principal Balance” and by operation
of the provisions of Section 4.01. Allocations of the interest portions of
Realized Losses shall be made by operation of the definition of “Monthly
Interest Distributable Amount” and by operation of the provisions of Section
4.01. Allocations of the principal portion of Debt Service Reductions shall
be
made by operation of the provisions of Section 4.01. All Realized Losses
and all
other losses allocated to a Class of Certificates hereunder will be allocated
among the Certificates of such Class in proportion to the Percentage Interests
evidenced thereby. Realized Losses allocated to the Regular Certificates
shall
be deemed allocated to the REMIC I Regular Interests in the same amount and
priority allocated to Corresponding Certificated Interests.
Section
4.05 Information
Reports to Be Filed by the Master Servicer.
The
Master Servicer or the Sub-Servicers shall file information reports with
respect
to the receipt of mortgage interest received in a trade or business,
foreclosures and abandonments of any Mortgaged Property and the information
returns relating to cancellation of indebtedness income with respect to any
Mortgaged Property required by Sections 6050H, 6050J and 6050P of the Code,
respectively, and deliver to the Trustee an Officers’ Certificate stating that
such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.
Section
4.06 Compliance
with Withholding Requirements.
Notwithstanding
any other provision of this Agreement, the Trustee shall comply with all
federal
withholding requirements respecting payments to Certificateholders of interest
or original issue discount on the Mortgage Loans, that the Trustee reasonably
believes are applicable under the Code. The consent of Certificateholders
shall
not be required for such withholding. In the event the Trustee withholds
any
amount from interest or original issue discount payments or advances thereof
to
any Certificateholder pursuant to federal withholding requirements, the Trustee
shall, together with its monthly report to such Certificateholders pursuant
to
Section 4.03 hereof, indicate such amount withheld.
Section
4.07 [Reserved].
Section
4.08 Limited
Purpose Surety Bond.
If
a
Required Surety Payment is payable pursuant to the Limited Purpose Surety
Bond
with respect to any Pledged Asset Loans, as determined by the Master Servicer
and the Pledged Asset Servicer, the Master Servicer shall so notify the Trustee
as soon as reasonably practicable and the Trustee shall promptly complete
the
notice in the form of Attachment 1 to the Limited Purpose Surety Bond and
shall
promptly submit such notice to the surety as a claim for a Required Surety
Payment. The Master Servicer shall upon request assist the Trustee in completing
such notice and shall provide any information requested by the Trustee in
connection therewith.
Upon
receipt of a Required Surety Payment from the surety on behalf of the
Certificateholders, the Trustee shall deposit such Required Surety Payment
in
the Distribution Account and shall distribute such Required Surety Payment,
or
the proceeds thereof, in accordance with the provisions of Section
4.01.
The
Trustee shall (i) receive as attorney-in-fact of each Holder of a Certificate
any Required Surety Payment from the surety and (ii) disburse the same to
the
Holders of such Certificates as set forth in Section 4.01.
ARTICLE
V
THE
CERTIFICATES
Section
5.01 The
Certificates.
Each
of
the Class A, Class B and Class R Certificates shall be substantially in the
forms annexed hereto as exhibits, and shall, on original issue, be executed,
authenticated and delivered by the Trustee 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 Certificates
(other than the Class R Certificates) shall be initially evidenced by one
or
more Certificates representing a Percentage Interest with a minimum dollar
denomination of $25,000 and integral dollar multiples of $1 in excess thereof.
Each Class of Residual Certificates will be issued in registered, certificated
form in minimum denominations of a 20% Percentage Interest except in the
case of
one of each of the Class R-I Certificates and Class R-II Certificates. Provided
however, that one Certificate of each such Class of Certificates may be in
a
different denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Certificate Principal Balance
or
Notional Amount of such Class on the Closing Date.
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 Trustee 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 Certificates, other than the Class R, Class
B-4,
Class B-5 and Class B-6 Certificates, shall be Book-Entry
Certificates.
Section
5.02 Registration
of Transfer and Exchange of Certificates.
(a) The
Certificate Registrar shall cause to be kept at the Corporate Trust Office
a
Certificate Register in which, subject to such reasonable regulations as
it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Trustee shall initially serve as Certificate Registrar for the purpose
of
registering Certificates and transfers and exchanges of Certificates as herein
provided.
Upon
surrender for registration of transfer of any Certificate at any office or
agency of the Certificate Registrar maintained for such purpose pursuant
to the
foregoing paragraph and, in the case of a Class R Certificate, upon satisfaction
of the conditions set forth below, the Trustee on behalf of the Trust shall
execute, authenticate and deliver, in the name of the designated transferee
or
transferees, one or more new Certificates of the same aggregate Percentage
Interest.
At
the
option of the Certificateholders, Certificates may be exchanged for other
Certificates in authorized denominations and the same aggregate Percentage
Interests, upon surrender of the Certificates to be exchanged at any such
office
or agency. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute on behalf of the Trust and authenticate and deliver
the
Certificates which the Certificateholder making the exchange is entitled
to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the 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) Except
as
provided in paragraphs (c) and (d) below, the Book-Entry Certificates shall
at
all times remain registered in the name of the Depository or its nominee
and at
all times: (i) registration of such Certificates may not be transferred by
the
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 its agents, employees, officers
and
directors as the absolute owner of the Certificates for all purposes
whatsoever.
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 Letters of Representations with the Depository or take such other
action
as may be necessary or desirable to register a Book-Entry Certificate to
the
Depository. In the event of any conflict between the terms of any such Letter
of
Representation and this Agreement, the terms of this Agreement shall
control.
(c) If
(i)(x)
the Depository or the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to discharge properly its
responsibilities as Depository and (y) the Trustee or the Depositor is unable
to
locate a qualified successor, (ii) the Depositor, at its sole option, with
the
consent of the Depository Participants and the Trustee, elects to terminate
the
book-entry system through the Depository (with respect to some or all of
the
Book-Entry Certificates) or (iii) after the occurrence of a Master Servicer
Event of Termination, the Certificate Owners of each Class of Book-Entry
Certificates representing Percentage Interests of such Classes aggregating
not
less than 51% advises the Trustee and the Depository Participants in writing
that the continuation of a book-entry system through the Depository to the
exclusion of definitive, fully registered certificates (the “Definitive
Certificates”) to Certificate Owners is no longer in the best interests of the
Certificate Owners. 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
Depositor’s expense, in the case of (ii) above, or the related Seller’s expense,
in the case of (i) and (iii) above, execute on behalf of the Trust and
authenticate the Definitive Certificates.
In
addition, if a Master Servicer Event of Termination has occurred and is
continuing, each Certificate Owner materially adversely affected thereby
may at
its option request a Definitive Certificate evidencing such Certificate Owner’s
Percentage Interest in the related Class of Certificates. In order to make
such
request, such Certificate Owner shall, subject to the rules and procedures
of
the Depository, provide the Depository or the related Depository Participant
with directions for the Trustee to exchange or cause the exchange of the
Certificate Owner’s interest in such Class of Certificates for an equivalent
Percentage Interest in fully registered definitive form. Upon receipt by
the
Trustee of instruction from the Depository directing the Trustee to effect
such
exchange (such instructions to contain information regarding the Class of
Certificates and the Certificate Principal Balance being exchanged, the
Depository Participant account to be debited with the decrease, the registered
holder of and delivery instructions for the Definitive Certificates and any
other information reasonable required by the Trustee), (i) the Trustee shall
instruct the Depository to reduce the related Depository Participant’s account
by the aggregate Certificate Principal Balance of the Definitive Certificates,
(ii) the Trustee shall execute, authenticate and deliver, in accordance with
the
registration and delivery instructions provided by the Depository, a Definitive
Certificate evidencing such Certificate Owner’s Percentage Interest in such
Class of Certificates and (iii) the Trustee shall execute and authenticate
a new
Book-Entry Certificate reflecting the reduction in the aggregate Certificate
Principal Balance of such Class of Certificates by the amount of the Definitive
Certificates.
Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of
any
instruction required under this section 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 Master 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.
(i) In
the
event of any such transfer, (A) if such transfer is made in reliance upon
Rule
144A under the 1933 Act, the Trustee shall require the transferor to execute
a
transferor certificate in substantially the form attached hereto as Exhibit
F-2
and the transferee to execute an investment letter in substantially the form
attached hereto as Exhibit F-1, or (B) (1) (x) if such transfer is made to
an
institutional “accredited investor” within the meaning of within the meaning of
Rule 501(a)(1), (2), (3) or (7) promulgated pursuant to the 1933 Act (in
the
case of a Class A-5, Class A-6, Class B-1, Class B-4 or Class B-5 Certificate)
or (y) if such transfer is made to an “accredited investor” within the meaning
of Rule 501(a) promulgated pursuant to the 1933 Act (in the case of a Class
B-6
Certificate), the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached hereto as Exhibit F-2) and
the
transferee to execute an investment letter (in substantially the form attached
hereto as Exhibit F-3) acceptable to and in form and substance reasonably
satisfactory to the Depositor and the Trustee certifying to the Depositor
and
the Trustee the facts surrounding such transfer, which investment letter
shall
not be an expense of the Trustee or the Depositor and (2) the Trustee and
the
Depositor shall require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory
to the
Trustee 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 Trustee or the Depositor. The Holder of a
Private
Certificate desiring to effect such transfer shall, and does hereby agree
to,
indemnify the Trustee 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.
(ii) If
any
such transfer of a Private Certificate held by the related transferor and
also
to be held by the related transferee in the form of a Book-Entry Certificate
is
to be made without registration under the Securities Act, the transferor
will be
deemed to have made as of the transfer date each of the representations and
warranties set forth on Exhibit F-2 hereto in respect of such Private
Certificate and the transferee will be deemed to have made as of the transfer
date each of the representations and warranties set forth on Exhibit F-1
hereto
in respect of such Private Certificate.
(iii) No
transfer of any Private Certificate that is a Book-Entry Certificate or interest
therein shall be made by any related Certificate Owner except (A) in the
manner
set forth in clause (ii) above and in reliance on Rule 144A under the 1933
Act
to a “qualified institutional buyer” that is acquiring such Book-Entry
Certificate for its own account or for the account of another “qualified
institutional buyer” or (B) in the manner set forth in clause (i) above and in
the form of a Definitive Certificate.
If
any
Certificate Owner that is required under this Section 5.02(d) to transfer
its
Book-Entry Certificates in the form of Definitive Certificates, (i) notifies
the
Trustee of such transfer or exchange and (ii) transfers such Book-Entry
Certificates to the Trustee, in its capacity as such, through the book-entry
facilities of the Depository, then the Trustee shall decrease the balance
of
such Book-Entry Certificates or, the Trustee shall use reasonable efforts
to
cause the surrender to the Certificate Registrar of such Book-Entry Certificates
by the Depository, and thereupon, the Trustee shall execute, authenticate
and
deliver to such Certificate Owner or its designee one or more Definitive
Certificates in authorized denominations and with a like aggregate principal
amount.
Subject
to the provisions of this Section 5.02(d) governing registration of transfer
and
exchange, Private Certificates (i) held as Definitive Certificates may be
transferred in the form of Book-Entry Certificates in reliance on Rule 144A
under the 1933 Act to one or more “qualified institutional buyers” that are
acquiring such Definitive Certificates for their own accounts or for the
accounts of other “qualified institutional buyers” and (ii) held as Definitive
Certificates by a “qualified institutional buyer” for its own account or for the
account of another “qualified institutional buyer” may be exchanged for
Book-Entry Certificates, in each case upon surrender of such Private
Certificates for registration of transfer or exchange at the offices of the
Trustee maintained for such purpose. Whenever any such Private Certificates
are
so surrendered for transfer or exchange, either the Trustee shall increase
the
balance of the related Book-Entry Certificates or the Trustee shall execute,
authenticate and deliver the Book-Entry Certificates for which such Private
Certificates were transferred or exchanged, as necessary and appropriate.
No
Holder of Definitive Certificates other than a “qualified institutional buyer”
holding such Certificates for its own account or for the account of another
“qualified institutional buyer” may exchange such Private Certificates for
Book-Entry Certificates. Further, any Certificate Owner of a Book-Entry
Certificate other than any such “qualified institutional buyers” shall notify
the Trustee of its status as such and shall transfer such Book-Entry Certificate
to the Trustee, through the book-entry facilities of the Depository, whereupon,
and also upon surrender to the Trustee of such Book-Entry Certificate by
the
Depository, (which surrender the Trustee shall use reasonable efforts to
cause
to occur), the Trustee shall execute, authenticate and deliver to such
Certificate Owner or such Certificate Owner’s nominee one or more Definitive
Certificates in authorized denominations and with a like aggregate principal
amount.
(e) No
purchase or transfer of an ERISA-Restricted Certificate shall be made unless
the
Trustee shall have received (i) 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 Trustee’s receipt
of a representation letter from the transferee (in the case of a Class B-4,
Class B-5 or Class B-6 Certificate) substantially in the form of Exhibit
G-1
hereto or receipt of a representation from the transferee (in the case of
a
Class R Certificate) substantially in the form of paragraph (xvii) of Exhibit
F-4, as appropriate), to the effect that either (a) such transferee is not
an
employee benefit plan subject to Section 406 of ERISA or a plan or arrangement
subject to Section 4975 of the Code, nor a person acting on behalf of any
such
plan or arrangement nor using the assets of any such plan or arrangement
to
effect such transfer (each, a “Plan Investor”) or (b) in the case of a Class
B-4, Class B-5 or Class B-6 Certificate, the purchase of such Certificate
by or
on behalf of such Plan Investor is permissible under applicable law, will
not
subject the Depositor, the Trustee or the Master Servicer to any obligation
in
addition to those undertaken in the Agreement and the following conditions
are
satisfied: (I) the transferee is an insurance company, (II) the source of
funds
used to purchase such Certificates is an “insurance company general account” (as
such term is defined in Prohibited Transaction Class Exemption (“PTCE”) 95-60)
and (III) the conditions set forth in Section III of PTCE 95-60 and all other
applicable conditions of PTCE 95-60 have been satisfied and as a result the
acquisition and holding of such Certificates will not constitute or result
in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code
or
(ii) in the case of any such ERISA-Restricted Certificate presented for
registration in the name of a Plan Investor, an Opinion of Counsel addressed
to
the Depositor, the Trustee and the Master Servicer, satisfactory to such
entities, which Opinion of Counsel shall not be an expense of such entities,
to
the effect that the purchase or holding of such ERISA-Restricted Certificate
is
permissible under applicable law, will not result in a non-exempt prohibited
transaction provisions of ERISA or Section 4975 of the Code and will not
subject
the Trustee, the Master Servicer or the Depositor to any obligation or liability
in addition to those expressly undertaken in this Agreement. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject
to ERISA or to Section 4975 of the Code without the delivery to the Trustee
of
either a representation in the form of Exhibit G-1 (in the case of a Class
B-4,
Class B-5 or Class B-6 Certificate) or paragraph (xvii) of Exhibit F-4 (in
the
case of a Class R Certificate) hereto or an Opinion of Counsel as described
above shall be void and of no effect.
Any
Holder of a Class
A,
Class B-1, Class B-2 or Class B-3 Certificate or
any
interest therein that is a Definitive Certificate shall represent in the
form of
Exhibit G-2 with respect to such Certificates, that either (i) such Holder
is
not a Plan Investor or (ii) such Holder is an “accredited investor” within the
meaning of Rule 501(a) promulgated pursuant to the 1933 Act. Any Holder of
a
Class A, Class B-1, Class B-2 or Class B-3 Certificate or any interest therein
that is a Book-Entry Certificate shall be deemed to have made the
representations described in the preceding sentence.
If
any
Book-Entry Certificate (or any interest therein) is acquired or held in
violation of the provisions of Section 5.02(e) above, then the last preceding
Transferee that either (i) is not a Plan Investor or (ii) is in compliance
with
Section 5.02(e)(i)(b) shall be restored, to the extent permitted by law,
to all
rights and obligations as Certificate Owner thereof retroactive to the date
of
such Transfer of such Certificate. The Trustee shall be under no liability
to
any Person for making any payments due on such Certificate to such preceding
Transferee.
Any
purported Certificate Owner whose acquisition or holding of any Book-Entry
Certificate (or interest therein) was effected in violation of the restrictions
in this Section 5.02(e) shall indemnify and hold harmless the Depositor,
the
Trustee, the Master Servicer and the Trust Fund from and against any and
all
liabilities, claims, costs or expenses incurred by such parties as a result
of
such acquisition or holding.
(f) Each
Person who has or who acquires any Ownership Interest in a Class R Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest
to
have agreed to be bound by the following provisions and to have irrevocably
appointed the Depositor or its designee as its attorney-in-fact to negotiate
the
terms of any mandatory sale under clause (v) below and to execute all
instruments of transfer and to do all other things necessary in connection
with
any such sale, and the rights of each Person acquiring any Ownership Interest
in
a Class R Certificate are expressly subject to the following
provisions:
(i) Each
Person holding or acquiring any Ownership Interest in a Class R Certificate
shall be a Permitted Transferee and shall promptly notify the Trustee of
any
change or impending change in its status as a Permitted Transferee.
(ii) No
Person
shall acquire an Ownership Interest in a Class R Certificate unless such
Ownership Interest is a pro rata undivided interest.
(iii) In
connection with any proposed transfer of any Ownership Interest in a Class
R
Certificate, the Trustee 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 F-4 hereto from the proposed transferee
to the
effect that such transferee is a Permitted Transferee and that it is not
acquiring its Ownership Interest in the Class R 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. 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 Class
R
Certificates.
(iv) Any
attempted or purported transfer of any Ownership Interest in a Class R
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 Class R Certificate, then the prior Holder of such Class
R
Certificate that is a Permitted Transferee shall, upon discovery that the
registration of transfer of such Class R 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 Class R Certificate. The Trustee
shall
be under no liability to any Person for any registration of transfer of a
Class
R Certificate that is in fact not permitted by this Section or for malting
any
distributions due on such Class R Certificate to the Holder thereof or tatting
any other action with respect to such Holder under the provisions of this
Agreement so long as the Trustee received the documents specified in clause
(iii). The Trustee shall be entitled to recover from any Holder of a Class
R
Certificate that was in fact not a Permitted Transferee at the time such
distributions were made all distributions made on such Class R Certificate.
Any
such distributions so recovered by the Trustee shall be distributed and
delivered by the Trustee to the prior Holder of such Class R Certificate
that is
a Permitted Transferee.
(v) If
any
Person other than a Permitted Transferee acquires any Ownership Interest
in a
Class R Certificate in violation of the restrictions in this Section, then
the
Trustee shall have the right but not the obligation, without notice to the
Holder of such Class R Certificate or any other Person having an Ownership
Interest therein, to notify the Depositor to arrange for the sale of such
Class
R 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 Class R Certificate that is a Permitted Transferee,
except that in the event that the Trustee determines that the Holder of such
Class R 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 Class R Certificate as a result of its exercise of such
discretion.
(vi) If
any
Person other than a Permitted Transferee acquires any Ownership Interest
in a
Class R Certificate in violation of the restrictions in this Section, then
the
Trustee upon receipt of reasonable compensation will provide to the Internal
Revenue Service, and to the persons specified in Sections 860E(e)(3) and
(6) of
the Code, information needed to compute the tax imposed under Section 860E(e)(5)
of the Code on transfers of residual interests to disqualified
organizations.
The
foregoing provisions of this Section shall cease to apply to transfers occurring
on or after the date on which there shall have been delivered to the Trustee,
in
form and substance satisfactory to the Trustee, (i) written notification
from
the 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 hereunder to fail to qualify as a REMIC.
(g) 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, 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.
Section
5.04 Persons
Deemed Owners.
The
Master Servicer, the Depositor, the Trustee, the Certificate Registrar, any
Paying Agent and any agent of the Master 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 for all other purposes whatsoever, and none of the Master
Servicer, the Trust, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
To
the
extent the Trustee, Certificate Registrar or any Paying Agent is required
pursuant to this Agreement to determine the identity of the beneficial owner
of
a Book-Entry Certificate, any costs assessed by the Depository in making
such
determination shall be an expense of the party making such request, but in
no
event shall such cost be an expense of the Trust Fund.
Section
5.05 Appointment
of Paying Agent.
(a) The
Paying Agent shall make distributions to Certificateholders from the
Distribution Account pursuant to Section 4.01 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 Distribution Account pursuant
to
Sections 3.10 and 3.11 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
Agency.
(b) The
Trustee shall cause the Paying Agent (if other than the Trustee) to execute
and
deliver to the Trustee an instrument in which such Paying Agent shall agree
with
the Trustee that such Paying Agent shall hold all sums, if any, held by it
for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree that it shall comply with all requirements
of
the Code regarding the withholding of payments in respect of Federal income
taxes due from Certificate Owners and otherwise comply with the provisions
of
this Agreement applicable to it.
ARTICLE
VI
THE
MASTER SERVICER AND THE DEPOSITOR
Section
6.01 Liability
of the Master Servicer and the Depositor.
The
Master Servicer shall be liable in accordance herewith only to the extent
of the
obligations specifically imposed upon and undertaken by the Master 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 Master Servicer
or
the Depositor.
Any
entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party,
or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master 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 master servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor master servicer. In addition, the Master Servicer
may assign the servicing rights with respect to any Mortgage Loans to a third
party, provided that any such third party shall be an entity that satisfies
all
the requirements of Section 7.02 that would be applicable to a successor
master
servicer.
Section
6.03 Limitation
on Liability of the Master Servicer and Others.
Neither
the Master Servicer nor any of the directors or officers or employees or
agents
of the Master 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 Master Servicer in good faith pursuant to this Agreement, or
for
errors in judgment; provided, however, that this provision shall not protect
the
Master Servicer or any such Person against any liability which would otherwise
be imposed by reason of its willful misfeasance, bad faith or negligence
in the
performance of duties of the Master Servicer or by reason of its reckless
disregard of its obligations and duties of the Master Servicer hereunder;
provided, further, that this provision shall not be construed to entitle
the
Master Servicer to indemnity in the event that amounts advanced by the Master
Servicer to retire any senior lien exceed Liquidation Proceeds (in excess
of
related liquidation expenses) realized with respect to the related Mortgage
Loan. The Master Servicer and any director or officer or employee or agent
of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master 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 related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of 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 Master 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 Master Servicer shall be entitled
to
be reimbursed therefor only pursuant to Section 3.11. The Master Servicer’s
right to indemnity or reimbursement pursuant to this Section shall survive
any
resignation or termination of the Master 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 Master
Servicer solely in its capacity as Master Servicer hereunder and in no other
capacities.
Section
6.04 Master
Servicer Not to Resign.
Subject
to the provisions of Section 7.01 and Section 6.02, the Master 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 Master Servicer so causing such a
conflict being of a type and nature carried on by the Master Servicer or
its
subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following condition: the Rating Agency shall have delivered
a letter to the Trustee prior to the appointment of the successor master
servicer stating that the proposed appointment of such successor master servicer
as Master Servicer hereunder will not result in the reduction or withdrawal
of
the then current rating of the Regular Certificates or the ratings that are
in
effect; provided, however, that no such resignation by the Master Servicer
shall
become effective until such successor master servicer or, in the case of
(i)
above, the Trustee shall have assumed the Master Servicer’s responsibilities and
obligations hereunder or the Trustee shall have designated a successor master
servicer in accordance with Section 7.02. Any such resignation shall not
relieve
the Master 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 Master Servicer. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee.
Section
6.05 Delegation
of Duties.
In
the
ordinary course of business, the Master Servicer at any time may delegate
any of
its duties hereunder to any Person, including any of its Affiliates, who
agrees
to conduct such duties in accordance with standards comparable to those set
forth in Section 3.01, including entering into Sub-Servicing Agreements with
Sub-Servicers, for the servicing and administration of the Mortgage Loans,
in
accordance with the provisions of Section 3.02. Such delegation shall not
relieve the Master Servicer of its liabilities and responsibilities with
respect
to such duties and shall not constitute a resignation within the meaning
of
Section 6.04. The Master Servicer shall provide the Trustee and the Rating
Agency with 60 days prior written notice prior to the delegation of any of
its
duties to any Person other than any of the Master Servicer’s Affiliates or their
respective successors and assigns.
ARTICLE
VII
DEFAULT
Section
7.01 Master
Servicer Events of Termination.
(a)
If
any
one of the following events (“Master Servicer Events of Termination”) shall
occur and be continuing:
(i) (A)
The failure by the Master Servicer to make any Advance (other than a
Nonrecoverable Advance); or (B) any other failure by the Master 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 (i) one Business Day in the case of any such Advance that was required
to be remitted to the Trustee or (ii) five Business Days in the case of any
such
deposit that was required to be remitted to the Trustee, provided, that,
if the
Master Servicer cures such failure within the applicable grace period, the
amounts remitted shall include interest calculated at the applicable federal
funds rate; or
(ii) The
failure by the Master Servicer duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the Master Servicer
as set forth in this Agreement, which failure continues unremedied for a
period
of 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 Master Servicer
by the Trustee or by any Holder of a Regular Certificate evidencing at least
25%
of the Voting Rights or (B) actual knowledge of such failure by a Servicing
Officer of the Master Servicer; or
(iii) The
entry
against the Master Servicer of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the appointment
of
a trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings, or for the winding up or liquidation
of its
affairs, and the continuance of any such decree or order unstayed and in
effect
for a period of 60 days; or
(iv) The
Master Servicer shall voluntarily go into liquidation, consent to the
appointment of a conservator or receiver or liquidator or similar person
in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or of or relating
to
all or substantially all of its property; or a decree or order of a court
or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall
have been entered against the Master Servicer and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period of
60
days; or the Master Servicer shall admit in writing its inability to pay
its
debts generally as they become due, file a petition to take advantage of
any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its
obligations;
(b) then,
and
in each and every such case, so long as a Master 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
A.M., New York time, on the Business Day immediately following the Master
Servicer Remittance Date (provided the Trustee shall give the Master Servicer,
and the Master Servicer shall have received, notice of such failure to above
by
5:00 P.M. New York time on the Master Servicer Remittance Date), the Trustee
shall terminate all of the rights and obligations of the Master Servicer
under
this Agreement and the Trustee, or a successor master servicer appointed
in
accordance with Section 7.02, shall immediately make such Advance and assume,
pursuant to the terms of Section 7.02, the duties of a successor master servicer
and (y) in the case of (i)(B), (ii), (iii) and (iv) above, the Trustee shall,
at
the direction of the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51%, by notice then given
in
writing to the Master Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Master
Servicer as servicer under this Agreement, to the extent permitted by law,
and
in and to the Mortgage Loans and the proceeds thereof. Any such notice to
the
Master Servicer shall also be given to the Rating Agency and the Depositor.
On
or after the receipt by the Master Servicer (and by the Trustee if such notice
is given by the Holders) of such written notice, all authority and power
of the
Master Servicer under this Agreement, whether with respect to the Certificates
or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
or duly appointed successor master servicer pursuant to and under this Section;
and, without limitation, the Trustee or duly appointed successor master servicer
is hereby authorized and empowered to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, any and all documents
and
other instruments, and to do or accomplish all other acts or things necessary
or
appropriate to effect the purposes of such notice of termination, whether
to
complete the transfer and endorsement of each Mortgage Loan and Related
Documents or otherwise. The Master Servicer agrees to cooperate with the
Trustee
(or the applicable successor master servicer) in effecting the termination
of
the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the delivery to the Trustee of all documents and records
requested by it to enable it to assume the Master Servicer’s functions under
this Agreement within ten Business Days subsequent to such notice, the transfer
within one Business Day subsequent to such notice to the Trustee (or the
applicable successor master servicer) for the administration by it of all
cash
amounts that shall at the time be held by the Master Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any
REO
Account or any Servicing Account or that have been deposited by the Master
Servicer in such accounts or thereafter received by the Master Servicer with
respect to the Mortgage Loans or any REO Property received by the Master
Servicer. All Transition Costs incurred in connection with transferring the
Mortgage Files to the successor master servicer and amending this Agreement
to
reflect such succession as Master Servicer pursuant to this Section shall
be
paid by the predecessor Master Servicer (or if the predecessor Master Servicer
is the Trustee, the initial Master Servicer) or by the Trust pursuant to
Section
3.11(b)(iv) herein if the Master Servicer does not fulfill its obligations
hereunder within 45 days of presentation of reasonable documentation of such
costs and expenses. For purposes of this Section 7.01, the Trustee shall
not be
deemed to have knowledge of a Master Servicer Event of Termination unless
a
Responsible Officer of the Trustee assigned to and working in the Trustee’s
Corporate Trust Office has actual knowledge thereof or unless written notice
of
any event which is in fact such a Master Servicer Event of Termination is
received by the Trustee and such notice references the Certificates, the
Trust
Fund or this Agreement.
Section
7.02 Trustee
to Act; Appointment of Successor.
(a) Within
90
days of the time the Master 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 master servicer as is approved in accordance
with this Agreement) shall be the successor in all respects to the Master
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof arising on and after its succession;
provided, however, that if the Trustee is prohibited by law or regulation
from
obligating itself to make advances regarding delinquent mortgage loans, then
the
Trustee shall not be obligated to make Advances pursuant to Section 4.06;
and
provided further, it is understood and acknowledged that by the parties hereto
that there will be a period of transition (not to exceed 90 days) before
the
transfer of servicing obligations is fully effected and that the Trustee
(i)
shall be under no obligation to purchase any Mortgage Loan, and (ii) shall
have
no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer
at
or prior to the time of termination. As compensation therefor, the Trustee
(or
such other successor master servicer) shall be entitled to such compensation
as
the Master Servicer would have been entitled to hereunder if no such notice
of
termination had been given. Notwithstanding the above, (i) if the Trustee
is
unwilling to act as successor master servicer or (ii) if the Trustee is legally
unable so to act, or if the Holders of Certificates entitled to at least
51% of
the Voting Rights so request in writing to the Trustee, 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 Master Servicer hereunder in the assumption of all or any
part
of the responsibilities, duties or liabilities of the Master Servicer hereunder,
provided, that the appointment of any such successor master servicer 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 Agency as
evidenced by a letter to such effect from the Rating Agency. Pending appointment
of a successor to the Master Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity
as
herein above provided. In connection with such appointment and assumption,
the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation
as
the Trustee and such successor shall agree, not to exceed the Servicing Fee).
The appointment of a successor master servicer shall not affect any liability
of
the predecessor Master Servicer which may have arisen under this Agreement
prior
to its termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.13 or to indemnify the Trustee pursuant to Section
8.05, nor shall any successor master servicer be liable for any acts or
omissions of the predecessor Master Servicer or for any breach by such Master
Servicer of any of its representations or warranties contained herein or
in any
related document or agreement. The Trustee and such successor shall take
such
action, consistent with this Agreement, as shall be necessary to effectuate
any
such succession.
(b) Any
successor, including the Trustee, to the Master Servicer as servicer shall
during the term of its service as master servicer continue to master service
and
administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Master Servicer hereunder
and
a Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section
3.14.
(c) In
connection with the termination or resignation of the Master Servicer hereunder,
either (i) the successor Master Servicer, including the Trustee if the Trustee
is acting as successor Master Servicer, shall represent and warrant that
it is a
member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing
to
the successor Master Servicer as necessary under MERS’ rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage
in
recordable form to transfer the Mortgage from MERS to the Trustee and to
execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS® System to the successor Master Servicer. The
predecessor Master Servicer shall file or cause to be filed any such assignment
in the appropriate recording office. The predecessor Master Servicer shall
bear
any and all fees of MERS, costs of preparing any assignments of Mortgage,
and
fees and costs of filing any assignments of Mortgage that may be required
under
this subsection (c). The successor Master Servicer shall cause such assignment
to be delivered to the Trustee promptly upon receipt of the original with
evidence of recording thereon or a copy certified by the public recording
office
in which such assignment was recorded.
Section
7.03 Waiver
of Master Servicer Events of Termination.
The
Majority Certificateholders may, on behalf of all Certificateholders, waive
any
events permuting removal of the Master Servicer as servicer pursuant to this
Article VII, provided, however, that the Majority Certificateholders may
not
waive such events or a Master Servicer Event of Termination 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 Master 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 Agency.
Section
7.04 Notification
to Certificateholders.
(a) Upon
any
termination or appointment of a successor the Master 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 Master Servicer Event
of
Termination the Trustee shall be deemed to have actual knowledge of such
Master
Servicer Event of Termination five Business Days after a Responsible Officer
of
the Trustee becomes aware of the occurrence of such an event and the Trustee
shall transmit by mail to all Certificateholders notice of such occurrence
unless such default or Master Servicer Event of Termination shall have been
waived or cured. Such notice shall be given to the Rating Agency promptly
after
any such occurrence.
Section
7.05 Survivability
of Master Servicer Liabilities.
Notwithstanding
anything herein to the contrary, upon termination of the Master Servicer
hereunder, any liabilities of the Master 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 Master Servicer Event of Termination
of
which a Responsible Officer of the Trustee shall have actual knowledge and
after
the curing of all Master 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 Master 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.
As
provided in Section 4.02 hereof, on each Distribution Date, the Trustee shall
provide Bloomberg Financial Markets, L.P. (“Bloomberg”) CUSIP level information
for each Class of Certificates as of such Distribution Date, using a format
and
media mutually acceptable to the Trustee and Bloomberg.
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 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
Master Servicer, the Pledged Asset Servicer 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.
The
Trustee shall prepare and file or cause to be filed on behalf of the Trust
Fund
any tax return that is required with respect to the Trust Fund pursuant to
applicable federal, state or local tax laws.
The
Trustee covenants and agrees that it shall perform its obligations hereunder
in
a manner so as to maintain the status of the Trust Fund as two REMICs under
the
REMIC Provisions and to prevent the imposition of any federal, state or local
income, prohibited transaction, contribution or other tax on the Trust Fund
to
the extent that maintaining such status and avoiding such taxes are within
the
control of the Trustee and are within the commercially reasonable scope of
specific responsibilities under this Agreement.
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 Master Servicer Event of Termination, and after the curing
of all such Master 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 personally liable for an error of judgment made in good
faith by a Responsible Officer of the Trustee, unless it shall be proved
by a
court of competent jurisdiction that the Trustee was negligent in ascertaining
or investigating the facts related thereto;
(iii) the
Trustee shall not be personally 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 Master
Servicer to comply with the obligations of the Master Servicer referred to
in
clauses (i) and (ii) of Section 7.01 or any Master Servicer Event of Termination
unless a Responsible Officer of the Trustee at the Corporate Trust Office
obtains actual knowledge of such failure or the Trustee receives written
notice
of such failure from the Master Servicer or the Majority Certificateholders.
In
the absence of such receipt of such notice, the Trustee may conclusively
assume
that there is no Master 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 Master Servicer or Pledged Asset Servicer under this Agreement, except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer
in
accordance with the terms of this Agreement.
The
Trustee shall not complete foreclosure proceedings, or accept a deed in lieu
of
foreclosure, with respect to any Mortgage Loan, unless the Trustee has been
supplied with an Opinion of Counsel to the effect that if the related Mortgaged
Property is acquired by the Trust, such Mortgaged Property from such Mortgage
will qualify as “foreclosure property” within the meaning of Section 860G(a)(8)
of the Code. In the event that the Trustee acquires possession of any Mortgaged
Property in spite of the foregoing, the Trustee shall dispose of the acquired
Mortgaged Property as expeditiously as possible.
The
Trustee shall have no 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 to confirm or verify the contents of any reports
or
certificates of the Master Servicer or the Pledged Asset Servicer delivered
to
the Trustee pursuant to this Agreement believed by the Trustee to be genuine
and
to have been signed or presented by the proper party or parties.
Section
8.02 Certain
Matters Affecting the Trustee.
(a) Except
as
otherwise provided in Section 8.01:
(i) the
Trustee may request and conclusively rely upon, and shall be fully protected
in
acting or refraining from acting upon, any resolution, Officer’s Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper
or document 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 be under no 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 personally liable for any action taken, suffered or
omitted
by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement;
(v) prior
to
the occurrence of a Master Servicer Event of Termination and after the curing
of
all Master Servicer Events of Termination which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated
in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or 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 Master Servicer or, if paid by the Trustee,
shall be reimbursed by the Master Servicer upon demand. Nothing in this clause
(v) shall derogate from the obligation of the Master Servicer to observe
any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
(vi) the
Trustee shall not be accountable, shall have no liability and makes no
representation as to any acts or omissions hereunder of the Master Servicer
until such time as the Trustee may be required to act as Master Servicer
pursuant to Section 7.02;
(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 any such agent, attorney or custodian appointed by the Trustee 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
Master Servicer, and the Trustee assumes no 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, or of MERS or the MERS® System. The Trustee shall not be
accountable for the use or application by the Master Servicer, or for the
use or
application of any funds paid to the Master Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account by the Master
Servicer. The Trustee shall at no time have any responsibility or liability
for
or with respect to the legality, validity and enforceability of any Mortgage
or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to
the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than
if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the validity of the assignment of any Mortgage Loan to the Trustee
or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee
shall
assume the duties of the Master Servicer pursuant to Section 7.02); the
compliance by the Depositor or the Master 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 noncompliance therewith or any breach
thereof, any investment of monies by or at the direction of the Master Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Master Servicer (other than
if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02), any Sub-Servicer or any Mortgagor, any action of the Master Servicer
(other than if the Trustee shall assume the duties of the Master Servicer
pursuant to Section 7.02), or any Sub-Servicer taken in the name of the Trustee;
the failure of the Master Servicer or any Sub-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 Master Servicer (other than if the
Trustee shall assume the duties of the Master 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
have no 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 (unless the Trustee
shall
have become the successor master servicer).
Section
8.04 Trustee
May Own Certificates.
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates with the same rights as it would have if it were not Trustee
and
may transact any banking and trust business with the Master Servicer, the
Depositor or their Affiliates.
Section
8.05 Master
Servicer to Pay Trustee Expenses; Trustee Fees.
On
each
Distribution Date, the Trustee shall be entitled to withdraw from the
Distribution Account as compensation hereunder the Trustee Fees. The Master
Servicer will pay or reimburse the Trustee (or, if the Master Servicer does
not
fulfill its obligations hereunder, the Trust Fund will reimburse pursuant
to
Section 3.11(b)(ii) herein) within 30 days upon its 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 its negligence or bad faith or which is the
responsibility of the Trustee hereunder. In addition, the Master Servicer
covenants and agrees to indemnify the Trustee (or, if the Master Servicer
does
not fulfill its obligations hereunder within 30 days upon the Trustee’s request,
the Trust Fund will indemnify pursuant to Section 3.11(b)(ii) herein) and
its
officers, directors, employees and agents from, and hold it harmless against,
any and all losses, liabilities, damages, claims or expenses 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 willful
misfeasance, bad faith or negligence of the Trustee in the performance of
its
duties hereunder or by reason of the Trustee’s reckless disregard of obligations
and duties hereunder. 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,
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,
including the compensation and the expenses and disbursements of its agents
and
its counsel, in the ordinary course of the Trustee’s performance of its regular
duties 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.
Section
8.06 Eligibility
Requirements for Trustee.
The
Trustee hereunder shall be a corporation or a national banking association,
and
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 Baa3 by Xxxxx’x and a short-term rating of at
least A-1 by S&P and A by Fitch, 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 Master Servicer and
the
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 60 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 Master 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.
The
Majority Certificateholders may at any time remove the Trustee by written
instrument or instruments delivered to the Master 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 Agency, the Master 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 Master 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 Regular Certificates by
the
Rating Agency, as evidenced by a letter from the 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 the 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 anytime, 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
Master 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
Master Servicer. If the Master 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 Master Servicer Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment.
No
co-trustee or separate trustee hereunder shall be required to meet the terms
of
eligibility as a successor Trustee under Section 8.06, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Master Servicer shall be responsible
for the fees of any co-trustee or separate trustee appointed
hereunder.
Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) all
rights, powers, duties and obligations conferred or imposed upon the Trustee
shall be conferred or imposed upon and exercised or performed by the Trustee
and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without
the
Trustee joining in such act), except to the extent that under any law of
any
jurisdiction in which any particular act or acts are to be performed (whether
as
Trustee hereunder or as successor to the Master Servicer hereunder), the
Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event
such rights, powers, duties and obligations (including the holding of title
to
the Trust or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at
the
direction of the Trustee;
(ii) no
trustee hereunder shall be held personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the
Master 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 Master Servicer Event of Termination, the Trustee
acting alone may accept the resignation or remove any separate trustee or
co-trustee.