EXECUTION COPY
PHH MORTGAGE TRUST, SERIES 2008-CIM2,
Issuer
CREDIT SUISSE FIRST BOSTON MORTGAGE ACCEPTANCE CORP.,
Depositor
CHIMERA INVESTMENT CORPORATION,
Seller
XXXXX FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Indenture Trustee
SALE AND SERVICING AGREEMENT
Dated as of July 1, 2008
__________________________________
PHH Mortgage Trust, Series 2008-CIM2
Mortgage-Backed Notes, Series 2008-CIM2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................4
Section 1.01. Defined Terms................................................................4
Section 1.02. Accounting..................................................................43
ARTICLE II CONVEYANCE OF MORTGAGE LOANS...........................................................43
Section 2.01. Conveyance of Mortgage Loans................................................43
Section 2.02. Acceptance of the Trust Estate..............................................46
Section 2.03. Xxxxx Xxxxxx................................................................46
Section 2.04. Repurchase or Substitution of Mortgage Loans by the Originator..............48
Section 2.05. Reserved....................................................................51
Section 2.06. Representations and Warranties of the Depositor.............................51
Section 2.07. Representations and Warranties of the Depositor with Respect to
Security Interest in the Mortgage Loans.....................................52
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS.....................................53
Section 3.01. Master Servicer to Service and Administer the Mortgage Loans................53
Section 3.02. [Reserved]..................................................................55
Section 3.03. Monitoring of Servicer......................................................55
Section 3.04. Fidelity Bond...............................................................57
Section 3.05. Power to Act; Procedures....................................................57
Section 3.06. Due-on-Sale Clauses; Assumption Agreements..................................58
Section 3.07. Release of Mortgage Files...................................................58
Section 3.08. Documents, Records and Funds in Possession of Master Servicer To Be
Held for Indenture Trustee..................................................58
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies......................59
Section 3.10. Presentment of Claims and Collection of Proceeds............................60
Section 3.11. Maintenance of the Primary Insurance Policies...............................60
Section 3.12. Indenture Trustee to Retain Possession of Certain Insurance Policies
and Documents...............................................................61
Section 3.13. Realization Upon Defaulted Mortgage Loans...................................61
Section 3.14. Compensation to the Master Servicer.........................................61
Section 3.15. REO Property................................................................62
Section 3.16. Assessments of Compliance and Attestation Reports...........................62
Section 3.17. Annual Compliance Statement.................................................65
Section 3.18. Annual Certification........................................................66
Section 3.19. Reports Filed with Securities and Exchange Commission.......................67
Section 3.20. Additional Information; Notice..............................................72
Section 3.21. Intention of the Parties and Interpretation.................................73
Section 3.22. Indemnification.............................................................73
Section 3.23. Special Foreclosure Provisions..............................................74
Section 3.24. Uniform Commercial Code.....................................................78
Section 3.25. Reserved....................................................................78
Section 3.26. Reserved....................................................................78
Section 3.27. Reserved....................................................................78
Section 3.28. Liabilities of the Master Servicer..........................................78
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Section 3.29. Merger or Consolidation of the Master Servicer..............................78
Section 3.30. Indemnification of the Seller, the Indenture Trustee, the Owner
Trustee, the Master Servicer and the Securities Administrator...............79
Section 3.31. Limitations on Liability of the Master Servicer and Others..................80
Section 3.32. Master Servicer Not to Resign...............................................81
Section 3.33. Reserved....................................................................81
Section 3.34. Sale and Assignment of Master Servicing.....................................81
ARTICLE IV ACCOUNTS...............................................................................82
Section 4.01. Custodial Accounts..........................................................82
Section 4.02. Distribution Account........................................................83
Section 4.03. Permitted Withdrawals and Transfers from the Distribution Account...........85
Section 4.04. Class A-X Reserve Fund......................................................88
Section 4.05. The Certificate Distribution Account........................................88
Section 4.06. The Reserve Fund............................................................88
Section 4.07. Reserved....................................................................90
Section 4.08. Control of the Trust Accounts...............................................90
ARTICLE V FLOW OF FUNDS..........................................................................92
Section 5.01. Payments....................................................................92
Section 5.02. Payments from the Class A-X Reserve Fund....................................96
Section 5.03. Allocation of Realized Losses...............................................96
Section 5.04. Statements..................................................................97
Section 5.05. Remittance Reports; Advances...............................................100
Section 5.06. Compensating Interest Payments.............................................101
Section 5.07. Derivative Contracts.......................................................101
Section 5.08. Limited Right to Repurchase Mortgage Loans.................................101
Section 5.09. Subsequent Recoveries......................................................102
ARTICLE VI [RESERVED]............................................................................102
ARTICLE VII DEFAULT...............................................................................102
Section 7.01. Event of Default...........................................................102
Section 7.02. Indenture Trustee to Act...................................................105
Section 7.03. Waiver of Event of Default.................................................106
Section 7.04. Notification to Securityholders............................................106
Section 7.05. Action Upon Master Servicer Event of Default...............................106
Section 7.06. Additional Remedies of Indenture Trustee Upon Event of Default.............107
ARTICLE VIII THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR................................107
Section 8.01. Duties of Indenture Trustee and Securities Administrator...................107
Section 8.02. Certain Matters Affecting the Indenture Trustee and the Securities
Administrator..............................................................109
Section 8.03. Indenture Trustee and the Securities Administrator Not Liable for
Securities, Mortgage Loans or Additional Collateral........................111
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Section 8.04. Owner Trustee, Master Servicer and Securities Administrator May Own
Notes......................................................................112
Section 8.05. Indenture Trustee's, Custodian's, Owner Trustee's and Securities
Administrator's Fees and Expenses..........................................112
Section 8.06. Eligibility Requirements for Indenture Trustee and Securities
Administrator..............................................................113
Section 8.07. Resignation or Removal of the Indenture Trustee or the Securities
Administrator..............................................................113
Section 8.08. Successor Securities Administrator.........................................115
Section 8.09. Merger or Consolidation of Indenture Trustee or Securities
Administrator..............................................................115
Section 8.10. [Reserved].................................................................116
Section 8.11. [Reserved].................................................................116
Section 8.12. Indenture Trustee May Enforce Claims Without Possession of Notes...........116
Section 8.13. Suits for Enforcement......................................................117
Section 8.14. Waiver of Bond Requirements................................................117
Section 8.15. Waiver of Inventory, Accounting and Appraisal Requirement..................117
ARTICLE IX [RESERVED]............................................................................117
ARTICLE X TERMINATION...........................................................................117
Section 10.01. Termination; Clean-Up Call.................................................117
ARTICLE XI [RESERVED]............................................................................119
ARTICLE XII MISCELLANEOUS PROVISIONS..............................................................119
Section 12.01. Amendment..................................................................119
Section 12.02. Recordation of Agreement; Counterparts.....................................120
Section 12.03. [Reserved].................................................................121
Section 12.04. Governing Law; Jurisdiction................................................121
Section 12.05. Notices....................................................................121
Section 12.06. Severability of Provisions.................................................122
Section 12.07. Article and Section References.............................................122
Section 12.08. Notice to the Rating Agencies..............................................122
Section 12.09. Further Assurances.........................................................123
Section 12.10. Benefits of Agreement......................................................123
Section 12.11. [Reserved].................................................................123
Section 12.12. Successors and Assigns.....................................................123
Section 12.13. [Reserved].................................................................123
Section 12.14. Execution by the Issuer....................................................123
Exhibit A.........Reserved
Exhibit B.........Reserved
Exhibit C.........Reserved
Exhibit D.........Reserved
Exhibit E.........Reserved
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Exhibit F.........Servicing Criteria
Exhibit G.........Additional Form 10-D Disclosure
Exhibit H.........Additional Form 10-K Disclosure
Exhibit I.........Form 8-K Disclosure Information
Exhibit J.........Form of Additional Disclosure Notification
Exhibit K.........Form of Back-up Certification
Exhibit L.........Loan Level Data Report
Exhibit M.........Qualified Appraisal Firms
Schedule I........Mortgage Loan Schedule
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This SALE AND SERVICING AGREEMENT, dated as of July 1, 2008 (the "Agreement"), is by and among PHH
MORTGAGE TRUST, SERIES 2008-CIM2, a Delaware statutory trust, as issuer (the "Issuer"), CHIMERA INVESTMENT
CORPORATION, a Maryland corporation, as seller (the "Seller"), CREDIT SUISSE FIRST BOSTON MORTGAGE ACCEPTANCE
CORP., a Delaware corporation, as depositor (the "Depositor"), XXXXX FARGO BANK, N.A., a national banking
association, as master servicer (in such capacity, the "Master Servicer") and as securities administrator (in
such capacity, the "Securities Administrator"), and HSBC BANK USA, NATIONAL ASSOCIATION, a national banking
association, as indenture trustee (the "Indenture Trustee").
PRELIMINARY STATEMENT:
WHEREAS, on or prior to the Closing Date the Depositor has acquired all of the rights, title and
interest of the Seller in and to certain residential mortgage loans identified in Schedule I hereto, the related
mortgages and other related assets (the "Mortgage Loans"), together with certain contractual rights under the
Mortgage Loan Flow Purchase, Sale & Servicing Agreement (the "Purchase and Servicing Agreement") dated as of
December 14, 2007 among PHH Mortgage Corporation, Xxxxxx'x Gate Residential Mortgage Trust and Chimera Investment
Corporation relating to the servicing of the Mortgage Loans (collectively, the "Contractual Rights") and rights
with respect to the enforcement of certain representations and warranties made by PHH Mortgage Corporation in the
Purchase and Servicing Agreement relating to the Mortgage Loans (the "Originator Contractual Rights"), and on or
prior to the Closing Date is the owner of the Mortgage Loans, the Contractual Rights and the Originator
Contractual Rights being conveyed by the Depositor to the Issuer for inclusion in the Trust Estate;
WHEREAS, the Depositor has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Issuer of the Mortgage Loans, the Contractual Rights, the Originator Contractual Rights and
certain other property constituting the Trust Estate, and to provide for master servicing of the Mortgage Loans
by the Master Servicer;
WHEREAS, on the Closing Date, the Depositor will acquire the Notes and the Owner Trust Certificates from
the Issuer as consideration for its transfer to the Issuer of the Mortgage Loans, the Contractual Rights, the
Originator Contractual Rights and certain other property constituting the Trust Estate;
WHEREAS, pursuant to the Indenture, the Issuer will pledge the Mortgage Loans, the Contractual Rights,
the Originator Contractual Rights and certain other property constituting the Trust Estate to the Indenture
Trustee as security for the Notes;
WHEREAS, the Master Servicer shall be obligated under this Agreement, among other things, to monitor the
servicing of the Mortgage Loans by the Servicer on behalf of the Issuer as provided herein;
WHEREAS, the Issuer desires to have the Securities Administrator perform certain duties consistent with
the terms of this Agreement; and
WHEREAS, the Securities Administrator has the capacity to provide the services required hereby and is
willing to perform such services on the terms set forth herein.
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NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as
follows:
The following table sets forth (or describes) the Group designation, the Class designation, Note
Interest Rate, Initial Class Principal Balance (or Class Notional Amount) and the minimum denomination for each
Class of Notes issued pursuant to the Indenture:
Initial
Class Class Principal Balance or Minimum
Designation Note Interest Rate Class Notional Amount Denominations
1-A-1 Variable(1) $ 22,814,000.00 $25,000
1-A-2 Variable(1) $ 1,425,000.00 $25,000
2-A-1 Variable(2) $ 37,797,000.00 $25,000
2-A-2 Variable(2) $ 2,360,000.00 $25,000
3-A-1 Variable(3) $ 20,631,000.00 $25,000
3-A-2 Variable(3) $ 1,288,000.00 $25,000
4-A-1 5.50% $ 8,954,000.00 $25,000
4-A-2 5.50% $ 566,000.00 $25,000
5-A-1 6.00% $ 43,777,000.00 $25,000
5-A-2 6.00% $ 2,752,000.00 $25,000
A-X Variable(4) $ 86,315,000.00(5) $100,000
4-A-X Variable(6) $ 10,191,941.04(7) $100,000
5-A-X Variable(8) $ 49,577,031.04(7) $100,000
A-PO N/A(9) $ 402,357.52 $100,000
B-1 Variable(10) $ 4,157,000.00 $100,000
B-2 Variable(10) $ 1,436,000.00 $100,000
B-3 Variable(10) $ 604,000.00 $100,000
B-4 Variable(10) $ 1,209,000.00 $100,000
B-5 Variable(10) $ 303,000.00 $100,000
B-6 Variable(10) $ 680,003.46 $100,000
_______________
(1) The Note Interest Rate with respect to the Class 1-A-1 and Class 1-A-2 Notes on each Payment Date on or
prior to the Payment Date in November 2012 will be a per annum rate equal to the lesser of (i) 4.75% and
(ii) the related Available Funds Rate. The Note Interest Rate with respect to the Class 1-A-1 and
Class 1-A-2 Notes on each Payment Date on or after the Payment Date in December 2012 will be a per annum
rate equal to the least of (i) One-Month LIBOR plus 2.25% and (ii) the related Available Funds Rate.
(2) The Note Interest Rate with respect to the Class 2-A-1 and Class 2-A-2 Notes on each Payment Date on or
prior to the Payment Date in May 2015 will be a per annum rate equal to the lesser of (i) 5.05% and
(ii) the related Available Funds Rate. The Note Interest Rate with respect to the Class 2-A-1 and
Class 2-A-2 Notes on each Payment Date on or after the Payment Date in June 2015 will be a per annum rate
equal to the least of (i) One-Month LIBOR plus 2.25% and (ii) the related Available Funds Rate.
(3) The Note Interest Rate with respect to the Class 3-A-1 and Class 3-A-2 Notes on each Payment Date on or
prior to the Payment Date in April 2018 will be a per annum rate equal to the lesser of (i) 5.30% and
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(ii) the related Available Funds Rate. The Note Interest Rate with respect to the Class 3-A-1 and
Class 3-A-2 Notes on each Payment Date on or after the Payment Date in May 2018 will be a per annum rate
equal to the least of (i) One-Month LIBOR plus 2.25% and (ii) the related Available Funds Rate.
(4) The Note Interest Rate with respect to the Class A-X Notes and any Payment Date will be a per annum rate
equal to the excess, if any, of (i) the weighted average of the Available Funds Rates for Loan Group 1,
Loan Group 2 and Loan Group 3, weighted based on the Class Principal Balances of the Offered Notes
related to such Loan Group, immediately prior to giving effect to distributions on such Payment Date,
over (ii) the weighted average of the Note Interest Rates on the Offered Notes related to such Loan
Group for such Payment Date, weighted based on Class Principal Balance, immediately prior to giving
effect to distributions on such Payment Date, minus the product of (x) the sum of (1) the Senior Note
Deferred Amounts for such Payment Date and (2) the Senior Note Available Funds Shortfalls for such
Payment Date and (y) 12, divided by the Class A-X Notional Amount for such Payment Date.
(5) The Class A-X Notes are interest only notes and will not be entitled to distributions in respect of
principal and will bear interest on the Class A-X Notional Amount.
(6) The Note Interest Rate with respect to the Class 4-A-X Notes and any Payment Date will be a per annum
rate equal to the excess, if any, of (x) the Group 4 Net WAC Rate (calculated excluding the Group 4
Discount Loans) for such Payment Date over (y) 5.50%.
(7) The Class 4-A-X Notes and Class 5-A-X Notes are interest-only notes and will not be entitled to
distributions in respect of principal and will bear interest on the Class 4-A-X Notional Amount and the
Class 5-A-X Notional Amount, respectively.
(8) The Note Interest Rate with respect to the Class 5-A-X Notes and any Payment Date will be a per annum
rate equal to the excess, if any, of (x) the Group 5 Net WAC Rate (calculated excluding the Group 5
Discount Loans) for such Payment Date over (y) 6.00%.
(9) The Class A-PO Notes are principal-only notes and are not entitled to any distributions of interest.
(10)The Note Interest Rate with respect to each class of Subordinate Notes and any Payment Date will equal a
per annum rate equal to (i) the sum of (a) the product of (x) the Available Funds Rate for the Group 1,
Mortgage Loans and (y) the Subordinate Component Balance relating to Loan Group 1 for that Payment Date,
(b) the product of (x) the Available Funds Rate for the Group 2 Mortgage Loans and (y) the Subordinate
Component Balance relating to Loan Group 2 for that Payment Date, (c) the product of (x) the Available
Funds Rate for the Group 3 Mortgage Loans and (y) the Subordinate Component Balance relating to Loan
Group 3 for that Payment Date, (d) the product of (x) 5.50% and (y) the Group 4 Subordinate Component
Balance relating to Loan Group 4 for that Payment Date and (e) the product of (x) 6.00% and (y) the
Group 5 Subordinate Component Balance relating to Loan Group 5 for that Payment Date, divided by
(ii) the aggregate Subordinate Component Balances for Loan Group 4 and Loan Group 5 for that Payment Date.
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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.
"10-K Filing Deadline": As defined in Section 3.19(b).
"1-Month LIBOR": The average of interbank offered rates for one month U.S. dollar deposits in the
London market based on quotations of major banks.
"1-Year LIBOR": With respect to the Mortgage Loans, the average of interbank offered rates for one-year
U.S. dollar deposits in the London market based on quotations of major banks.
"1-Year LIBOR Indexed": Indicates a Mortgage Loan that has an adjustable Mortgage Rate calculated on
the basis of 1-Year LIBOR.
"6-Month LIBOR": With respect to the Mortgage Loans, the average of interbank offered rates for
six-month U.S. dollar deposits in the London market based on quotations of major banks.
"6-Month LIBOR Indexed": Indicates a Mortgage Loan that has an adjustable Mortgage Rate calculated on
the basis of 6-Month LIBOR.
"Accepted Master Servicing Practices": With respect to any Mortgage Loan, as applicable, those
customary mortgage servicing practices of prudent mortgage servicing institutions that master service mortgage
loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is located, to the extent applicable to the Indenture Trustee (as successor Master Servicer) or the Master
Servicer (except in its capacity as the Servicer or as a successor to another Servicer).
"Accrual Period": With respect to each Payment Date and each Class of Notes (other than the Principal
Only Notes), the calendar month prior to the month of such Payment Date. Interest for such Classes will be
calculated based upon a 360-day year consisting of twelve 30-day months.
"Additional Collateral": With respect to any Additional Collateral Mortgage Loan, the marketable
securities or other assets subject to a security interest pursuant to the related pledge agreement.
"Additional Collateral Mortgage Loan": Each Mortgage Loan identified as such in the Mortgage Loan
Schedule and as to which Additional Collateral is then required to be provided as security therefor.
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"Additional Disclosure Notification": As defined in Section 3.19(a).
"Additional Form 10-D Disclosure": As defined in Section 3.19(a).
"Additional Form 10-K Disclosure": As defined in Section 3.19(b).
"Adjustment Date": With respect to each Mortgage Loan, each adjustment date on which the related
Mortgage Rate changes pursuant to the related Mortgage Note. The first Adjustment Date following the Cut-Off
Date as to each Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Administration Agreement": The Administration Agreement dated as of July 25, 2008 among the Issuer,
the Owner Trustee, the Depositor, the Indenture Trustee and the Securities Administrator.
"Administration Fee": With respect to each Mortgage Loan and any Payment Date, will be equal to the
product of one-twelfth of (x) the Administration Fee Rate for such Mortgage Loan multiplied by (y) the Scheduled
Principal Balance of that Mortgage Loan as of the first day of the related Due Period (or as of the Cut-Off Date
with respect to the first Payment Date).
"Administration Fee Rate": With respect to any Mortgage Loan, the sum of (i) the Servicing Fee Rate,
(ii) the Master Servicing Fee Rate and (iii) the Owner Trustee Fee Rate.
"Advance": As to any Mortgage Loan or REO Property, any advance made by the Master Servicer as
successor servicer (including the Indenture Trustee in its capacity as successor Master Servicer) in respect of
any Payment Date pursuant to Section 5.05.
"Affiliate": With respect to any Person, any other Person controlling, controlled by or under common
control with such Person. For purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or
otherwise and "controlling" and "controlled" shall have meanings correlative to the foregoing.
"Aggregate Subordinate Percentage": For any Payment Date and the Mortgage Loans, will equal the
percentage equivalent of a fraction, the numerator of which is the aggregate Class Principal Balance of the
Subordinate Notes immediately prior to such Payment Date and the denominator of which is aggregate Scheduled
Principal Balance of the Mortgage Loans, exclusive, with respect to Loan Group 4, of the related Group 4 Discount
Fraction of each Group 4 Discount Loan and, with respect to Loan Group 5, of the related Group 5 Discount
Fraction of each Group 5 Discount Loan as of the first day of the related Due Period plus amounts on deposit in
the Reserve Fund.
"Agreement": This Sale and Servicing Agreement, dated as of July 1, 2008, as amended, supplemented and
otherwise modified from time to time.
"Assignment": As to any Mortgage, an assignment of mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient, under the laws of the jurisdiction in which the related
Mortgaged Property is located, to reflect or record the sale of such Mortgage.
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"Assignment Agreement": The Assignment, Assumption and Recognition Agreement dated as of July 25, 2008,
among the Seller, the Servicer and the Depositor, and acknowledged and agreed to by the Master Servicer.
"Available Funds Rate": For any Payment Date, with respect to Loan Group 1, Loan Group 2 and Loan Group
3, a rate per annum equal to a fraction, expressed as a percentage, (i) the numerator of which is the product of
(A) 12 and (B) the total amount of interest paid or advanced on the Mortgage Loans in such Loan Group with
respect to the related Due Period, net of related Administration Fees and (ii) the denominator of which is the
sum of (A) the aggregate Class Principal Balance of the related Senior Notes and (B) the related Subordinate
Component Balance (in each case, prior to giving effect to distributions on such Payment Date).
"Available Distribution Amount": With respect to any Payment Date and any Loan Group, the sum of the
following amounts with respect to such Loan Group:
(1) the total amount of all cash received by or on behalf of the Servicer with respect to
the Mortgage Loans in such Loan Group during the related Due Period (including
Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, Subsequent Recoveries
and proceeds received in connection with the repurchase of a Mortgage Loan in such
Loan Group), except:
• all Monthly Payments collected on the Mortgage Loans in such Loan Group but due on a date
after the related Due Date;
• all partial Principal Prepayments received with respect to the Mortgage Loans in such Loan
Group after the related Prepayment Period, together with all interest paid by the
Mortgagors in connection with such partial Principal Prepayments;
• all Principal Prepayments in full received with respect to the Mortgage Loans in such Loan
Group after the related Prepayment Period, together with all interest paid by the
Mortgagors in connection with such Principal Prepayments in full;
• Liquidation Proceeds, Insurance Proceeds, condemnation proceeds, Subsequent Recoveries and
proceeds received in connection with the repurchase of a Mortgage Loan in such Loan Group
received after the related Prepayment Period;
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• all amounts reimbursable to the Servicer pursuant to the terms of the Purchase and
Servicing Agreement (including any Capitalization Reimbursement Amount, up to the Principal
Distribution Amount) or to the Master Servicer, the Securities Administrator, the Indenture
Trustee, the Owner Trustee or the Custodian pursuant to the terms of the Sale and Servicing
Agreement, the Indenture, the Trust Agreement or the Xxxxx Fargo Custodial Agreement
related to such Loan Group;
• reinvestment income on the balance of funds, if any, in the Custodial Account or
Distribution Account related to such Loan Group; and
• any fees payable to the Servicer and the Master Servicer with respect to the Mortgage Loans
in such Loan Group.
(2) all Advances made by the Servicer and/or the Master Servicer as successor servicer
with respect to the Mortgage Loans in such Loan Group for that Payment Date;
(3) any amounts paid as Compensating Interest on the Mortgage Loans in such Loan Group by
the Servicer and/or the Master Servicer for that Payment Date;
(4) the total amount of any cash related to the Mortgage Loans in such Loan Group
deposited in the Distribution Account in connection with the repurchase of any
Mortgage Loan in such Loan Group; and
(5) the total amount of any cash related to the Mortgage Loans in such Loan Group
deposited in the Distribution Account in connection with the optional termination of
the Trust Estate pursuant to Section 10.01 hereof related to such Loan Group.
"Back-Up Certification": As defined in Section 3.18.
"Book-Entry Notes": As defined in the Indenture.
"Business Day": Any day other than a Saturday, a Sunday, a day on which the New York Stock Exchange or
Federal Reserve Banks are closed or a day on which banking or savings institutions in the State of Maryland, the
State of Minnesota, the State of New York, teh State of New Jersey or in the city in which the Corporate Trust
Office of the Indenture Trustee is located are authorized or obligated by law or executive order to be closed.
"Capitalization Reimbursement Amount": For any Payment Date and the Mortgage Loans, the aggregate
amount added to the Scheduled Principal Balance of the Mortgage Loans during the related Due Period representing
amounts reimbursable to the Servicer on or prior to such Payment Date in connection with the modification of such
Mortgage Loans and reimbursed to the Servicer during the related Due Period.
"Certificateholder": The holder of Owner Trust Certificates.
7
"Certificate Distribution Account": The account maintained by or on behalf of the Securities
Administrator pursuant to Section 4.05 for the benefit of the Issuer and the Certificateholders.
"Certificate of Trust": The certificate of trust filed with the Delaware Secretary of State on July 24,
2008 in respect of the Issuer pursuant to Section 3810 of the Delaware Trust Statute.
"Certificate Register": As defined in the Trust Agreement.
"Certifying Person": As defined in Section 3.18.
"Class": Collectively, Notes that have the same priority of payment and bear the same class designation
and the form of which is identical except for variation in the Percentage Interest evidenced thereby.
"Class B-1 Note": Any of the Class B-1 Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-2
of the Indenture.
"Class B-2 Note": Any of the Class B-2 Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-2
of the Indenture.
"Class B-3 Note": Any of the Class B-3 Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-2
of the Indenture.
"Class B-4 Note": Any of the Class B-4 Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-2
of the Indenture.
"Class B-5 Note": Any of the Class B-5 Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-2
of the Indenture.
"Class B-6 Note": Any of the Class B-6 Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-2
of the Indenture.
"Class A-X Notional Amount": For any Payment Date will be the aggregate Class Principal Balance of the
Hybrid Notes immediately prior to giving effect to distributions on such Payment Date.
"Class A-X Reserve Fund Termination Date": The first Payment Date on which (i) the aggregate Class
Principal Balance of the Hybrid Notes has been reduced to zero and (ii) there are no Senior Note Available Funds
Shortfalls outstanding.
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"Class A-X Note": Any of the Class A-X Notes as designated on the face thereof, executed by the Issuer
and authenticated and delivered by the Securities Administrator, substantially in the form annexed as Exhibit A-1
of the Indenture.
"Class 1-A-1 Note": Any of the Class 1-A-1 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 1-A-2 Note": Any of the Class 1-A-2 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 2-A-1 Note": Any of the Class 2-A-1 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 2-A-2 Note": Any of the Class 2-A-2 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 3-A-1 Note": Any of the Class 3-A-1 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 3-A-2 Note": Any of the Class 3-A-2 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 4-A-1 Note": Any of the Class 4-A-1 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 4-A-2 Note": Any of the Class 4-A-2 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 4-A-X Note": Any of the Class 4-A-X Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-2 of the Indenture.
"Class 4-A-X Notional Amount": For each Payment Date will be the aggregate Scheduled Principal Balance
of the Group 4 Mortgage Loans, other than the Group 4 Discount Loans, as of the first day of the related Due
Period.
"Class 5-A-1 Note": Any of the Class 5-A-1 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
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"Class 5-A-2 Note": Any of the Class 5-A-2 Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-1 of the Indenture.
"Class 5-A-X Note": Any of the Class 5-A-X Notes as designated on the face thereof, executed by the
Issuer and authenticated and delivered by the Securities Administrator, substantially in the form annexed as
Exhibit A-2 of the Indenture.
"Class 5-A-X Notional Amount": For each Payment Date will be the aggregate Scheduled Principal Balance
of the Group 5 Mortgage Loans as of the first day of the related Due Period.
"Class Notional Amount": Any of the Class A-X Notional Amount, the Class 4-A-X Notional Amount or Class
5-A-X Notional Amount.
"Class Principal Balance": As to any Payment Date, with respect to any Class of Notes (other than the
Interest Only Notes), the initial Class Principal Balance as set forth in the table in the Preliminary Statement
hereto as reduced by the sum of (x) all amounts actually distributed in respect of principal of that Class on all
prior Payment Dates, (y) all Realized Losses, if any, actually allocated to that Class on all prior Payment Dates
and (z) any applicable Writedown Amount; provided, however, that pursuant to Section 5.09, the Class Principal
Balance of a Class of Notes may be increased up to the amount of Realized Losses previously allocated to such
Class in the event that there is a Subsequent Recovery on a Mortgage Loan, and the Note Principal Amount of any
individual Note of such Class will be increased by its pro rata share of the increase to such Class.
"Clean-Up Call Date": As defined in Section 10.01(a).
"Clean-Up Call Purchase Price": As defined in Section 10.01(a).
"Clean-Up Call Right": The option of the Servicer to call the Notes on the Clean-Up Call Date.
"Close of Business": As used herein, with respect to any Business Day and location, 5:00 p.m. at such
location.
"Closing Date": July 25, 2008.
"Code": The Internal Revenue Code of 1986, as amended.
"Commission": U.S. Securities and Exchange Commission.
"Compensating Interest Payment": With respect to any Payment Date, an amount equal to the amount, if
any, by which (x) the aggregate amount of any Prepayment Interest Shortfalls required to be paid by the Servicer
pursuant to the Purchase and Servicing Agreement with respect to such Payment Date, exceeds (y) the aggregate
amount actually paid by the Servicer in respect of such shortfalls; provided, that such amount, to the extent
payable by the Master Servicer, shall not exceed the portion of the Master Servicing Fee derived from amounts
described in clause (i) of the definition of Master Servicing Fee for such Payment Date.
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"Contractual Rights": As defined in the Preliminary Statement.
"Control": The meaning specified in Section 8-106 of the New York UCC.
"Cooperative Corporation": The entity that holds title (fee or an acceptable leasehold estate) to the
real property and improvements constituting the Cooperative Property and which governs the Cooperative Property,
which Cooperative Corporation must qualify as a Cooperative Housing Corporation under Section 216 of the Code.
"Cooperative Loan": Any Mortgage Loan secured by Cooperative Shares and a Proprietary Lease.
"Cooperative Loan Documents": As to any Cooperative Loan, (i) the Cooperative Shares, together with a
stock power in blank; (ii) the original or a copy of the executed Security Agreement and the assignment of the
Security Agreement in blank; (iii) the original or a copy of the executed Proprietary Lease and the original
assignment of the Proprietary Lease endorsed in blank; (iv) the original, if available, or a copy of the executed
Recognition Agreement and, if available, the original assignment of the Recognition Agreement (or a blanket
assignment of all Recognition Agreements) endorsed in blank; (v) UCC-1 financing statement with evidence of
recording thereon, which has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) UCC Amendments (or copies thereof) or other appropriate
UCC financing statements required by state law, evidencing a complete and unbroken line from the mortgagee to the
Indenture Trustee with evidence of recording thereon (or in a form suitable for recordation).
"Cooperative Property": The real property and improvements owned by the Cooperative Corporation, that
includes the allocation of individual dwelling units to the holders of the Cooperative Shares of the Cooperative
Corporation.
"Cooperative Shares": Shares issued by a Cooperative Corporation.
"Cooperative Unit": A single family dwelling located in a Cooperative Property.
"Corporate Trust Office": With respect to the Indenture Trustee, the principal corporate trust office
of the Indenture Trustee at which at any particular time its corporate trust business in connection with this
Agreement shall be administered, which office at the date of the execution of this instrument is located at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxx: XXXX - PHHMC 2008-CIM2, or at such other address as the Indenture
Trustee may designate from time to time by notice to the Noteholders and the Depositor. With respect to the
Securities Administrator and the Note Registrar and (i) presentment of Notes for registration of transfer,
exchange or final payment, Xxxxx Fargo Bank, National Association, Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust, PHH Mortgage Trust 2008-CIM2, and (ii) for all other
purposes, P.O. Box 98, Columbia, Maryland 21046 (or for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000), Attention: Corporate Trust, PHH Mortgage Trust 2008-CIM2.
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"Custodial Account": Any account established and maintained for the benefit of the Master Servicer or
the Trust by the Servicer with respect to the related Mortgage Loans and any REO Property, pursuant to the terms
of the Purchase and Servicing Agreement.
"Custodian": Xxxxx Fargo Bank, N.A. and its successors acting as custodian of the Mortgage Files.
"Cut-Off Date": With respect to any Mortgage Loan, other than a Qualified Substitute Mortgage Loan, the
Close of Business in New York City on July 1, 2008. With respect to any Qualified Substitute Mortgage Loan, the
date designated as such on the Mortgage Loan Schedule (as amended).
"Cut-Off Date Aggregate Principal Balance": The aggregate of the Cut-Off Date Principal Balances of the
Mortgage Loans which is $151,155,361.46.
"Cut-Off Date Principal Balance": With respect to any Mortgage Loan, the principal balance thereof
remaining to be paid, after application of all scheduled principal payments due on or before the Cut-Off Date
whether or not received as of the Cut-Off Date (or as of the applicable date of substitution with respect to a
Qualified Substitute Mortgage Loan).
"Credit Support Depletion Date": The Payment Date on which the Class Principal Balances of all of the
Subordinate Notes have been reduced to zero (prior to giving effect to distributions of principal and allocations
of Realized Losses on the Mortgage Loans on such Payment Date).
"Debt Service Reduction": Any reduction of the amount of the monthly payment on a Mortgage Loan made by
a bankruptcy court in connection with a personal bankruptcy of a mortgagor.
"Deficient Valuation": In connection with a personal bankruptcy of a mortgagor, the positive
difference, if any, resulting from the Principal Balance on a Mortgage Loan less a bankruptcy court's valuation
of the related Mortgaged Property.
"Definitive Notes": As defined in the Indenture.
"Delaware Trust Statute": Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et. seq.
as the same may be amended from time to time.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by one or more Qualified Substitute
Mortgage Loans pursuant to Section 2.04.
"Delinquent": Any Mortgage Loan with respect to which the Monthly Payment due on a Due Date is not made
by the succeeding Due Date.
"Depositor": Credit Suisse First Boston Mortgage Acceptance Corp., a Delaware corporation, or its
successor in interest.
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"Determination Date": For any Payment Date and each Mortgage Loan, the date each month, as set forth in
the Purchase and Servicing Agreement, on which the Servicer determines the amount of all funds required to be
remitted to the Master Servicer on the Servicer Remittance Date with respect to the Mortgage Loans it is
servicing.
"Distribution Account": The trust account or accounts created and maintained by the Securities
Administrator pursuant to Section 4.02 hereof which shall be entitled "Distribution Account, Xxxxx Fargo Bank,
N.A., as Securities Intermediary for HSBC Bank USA, National Association, as Indenture Trustee, in trust for the
registered Noteholders of PHH Mortgage Trust 2008-CIM2, Mortgage-Backed Notes, Series 2008-CIM2" and which must
be an Eligible Account.
"Due Date": With respect to each Mortgage Loan and any Payment Date, the first day of the calendar
month in which such Payment 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 Payment Date, the period commencing on the second day of the month
preceding the month in which such Payment Date occurs and ending on the first day of the month in which such
Payment Date occurs.
"Eligible Account": Any of
(i) an account or accounts maintained with a federal or state chartered depository institution or
trust company the short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured
debt obligations of such holding company) are rated in the highest short term rating category of each Rating
Agency at the time any amounts are held on deposit therein;
(ii)a trust account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company acting in its fiduciary
capacity; or
(iii) an account otherwise acceptable to each Rating Agency without reduction or withdrawal
of its then current ratings of the Notes as evidenced by a letter from such Rating Agency to the Securities
Administrator and the Indenture Trustee. Eligible Accounts may bear interest.
"Eligible Investments": Any one or more of the following obligations or securities payable on demand or
having a scheduled maturity on or before the Business Day preceding the following Payment Date (or, with respect
to the Distribution Account maintained with the Securities Administrator, having a scheduled maturity on or
before the following Payment Date; provided that, such Eligible Investments shall be managed by, or an obligation
of, the institution that maintains the Distribution Account if such Eligible Investments mature on the Payment
Date), regardless of whether any such obligation is issued by the Depositor, the Servicer, the Indenture Trustee,
the Master Servicer, the Securities Administrator or any of their respective Affiliates and having at the time of
purchase, or at such other time as may be specified, the required ratings, if any, provided for in this
definition:
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direct obligations of, or guaranteed as to full and timely payment of principal and interest by, the United
States or any agency or instrumentality thereof, provided, that such obligations are backed by the full faith and
credit of the United States of America;
direct obligations of, or guaranteed as to timely payment of principal and interest by, Freddie Mac, Xxxxxx Xxx
or the Federal Farm Credit System, provided, that any such obligation, at the time of purchase or contractual
commitment providing for the purchase thereof, is qualified by each Rating Agency as an investment of funds
backing securities rated "AAA" in the case of Fitch and "Aaa" in the case of Xxxxx'x (the initial rating of the
Senior Notes);
demand and time deposits in or certificates of deposit of, or bankers' acceptances issued by, any bank or trust
company, savings and loan association or savings bank, provided, that the short-term deposit ratings and/or
long-term unsecured debt obligations of such depository institution or trust company (or in the case of the
principal depository institutions in a holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company) have, in the case of commercial paper, the highest rating available for such
securities by each Rating Agency and, in the case of long-term unsecured debt obligations, one of the two highest
ratings available for such securities by each Rating Agency, or in each case such lower rating as will not result
in the downgrading or withdrawal of the rating or ratings then assigned to any Class of Notes by any Rating
Agency but in no event less than the initial rating of the Senior Notes;
commercial or finance company paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more than one year after the date of
issuance thereof) that is rated by each Rating Agency in its highest short-term unsecured rating category at the
time of such investment or contractual commitment providing for such investment, and is issued by a corporation
the outstanding senior long-term debt obligations of which are then rated by each Rating Agency in one of its two
highest long-term unsecured rating categories, or such lower rating as will not result in the downgrading or
withdrawal of the rating or ratings then assigned to any Class of Notes by any Rating Agency but in no event less
than the initial rating of the Senior Notes;
guaranteed reinvestment agreements issued by any bank, insurance company or other corporation rated in one of the
two highest rating levels available to such issuers by each Rating Agency at the time of such investment,
provided, that any such agreement must by its terms provide that it is terminable by the purchaser without
penalty in the event any such rating is at any time lower than such level;
repurchase obligations with respect to any security described in clause (a) or (b) above entered into with a
depository institution or trust company (acting as principal) meeting the rating standards described in (c) above;
securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws
of the United States of America or any State thereof and rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or contractual commitment providing for such
investment; provided, however, that securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount of securities issued by such
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corporation that are then held as part of the Distribution Account to exceed 20% of the aggregate principal
amount of all Eligible Investments then held in the Distribution Account;
units of taxable money market funds (including those for which the Indenture Trustee, the Securities
Administrator, the Master Servicer or any affiliate thereof receives compensation with respect to such
investment) which funds have been rated by each Rating Agency rating such fund in its highest rating category or
which have been designated in writing by each Rating Agency as Eligible Investments with respect to this
definition;
if previously confirmed in writing to the Indenture Trustee and the Securities Administrator, any other demand,
money market or time deposit, or any other obligation, security or investment, as may be acceptable to each
Rating Agency as a Eligible Investment of funds backing securities having ratings equivalent to the initial
rating of the Senior Notes; and
such other obligations as are acceptable as Eligible Investments to each Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow investment" pursuant to Code
Section 860G(a)(6) and that no instrument or security shall be an Eligible Investment if (i) such instrument or
security evidences a right to receive only interest payments or (ii) the right to receive principal and interest
payments derived from the underlying investment provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment.
"Entitlement Order": The meaning specified in Section 8-102(a)(8) of the New York UCC (i.e., generally,
orders directing the transfer or redemption of any Financial Asset).
"Event of Default": In respect of the Master Servicer, one or more of the events (howsoever described)
set forth in Section 7.01 hereof as an event or events upon the occurrence and continuation of which the Master
Servicer may be terminated.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Xxxxxx Xxx": The Federal National Mortgage Association or any successor thereto.
"FDIC": The Federal Deposit Insurance Corporation or any successor thereto.
"Final Recovery Determination": With respect to any defaulted Mortgage Loan or any REO Property, a
determination made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which it expects to be finally recoverable in respect thereof have been so recovered.
"Financial Asset": The meaning specified in Section 8-102(a) of the New York UCC.
"Fitch": Fitch Ratings or any successor thereto.
"Five-Year Hybrid Mortgage Loans": The Mortgage Loans identified as such and as set forth on Schedule I
hereto.
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"Form 8-K Disclosure Information": As defined in Section 3.19(c).
"Freddie Mac": The Federal Home Loan Mortgage Corporation or any successor thereto.
"Gross Margin": With respect to each Mortgage Loan, the fixed percentage set forth in the related
Mortgage Note that is added to the applicable Index on each Adjustment Date in accordance with the terms of the
related Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Group 1 Mortgage Loans": A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.
"Group 2 Mortgage Loans": A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.
"Group 3 Mortgage Loans": A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.
"Group 4 Discount Fraction": With respect to any Payment Date and a Group 4 Discount Loan, will be a
fraction, the numerator of which is 5.50% minus the Net Mortgage Rate as of the Cut-Off Date on such Group 4
Discount Loan, and the denominator of which is 5.50%.
"Group 4 Discount Fractional Principal Amount": For any Payment Date and the Group 4 Discount Mortgage
Loans will be the aggregate of the following with respect to each Group 4 Discount Loan: the Group 4 Discount
Fraction of the amounts described in the definition of Principal Distribution Amount, Principal Prepayment Amount
and Liquidation Principal, reduced by the Group 4 Discount Fraction of the related Capitalization Reimbursement
Amount on a Group 4 Discount Mortgage Loan.
"Group 4 Discount Fractional Principal Shortfall": (i) For any Payment Date prior to the related Credit
Support Depletion Date, an amount generally equal to the sum of the aggregate of the following with respect to
each Group 4 Discount Loan:
(1) the Group 4 Discount Fraction of any loss on such Group 4 Discount Loan; and
(2) the amounts described in clause (1) above for all prior Payment Dates to the extent not
previously distributed, and
(ii) for any Payment Date on or after the related Credit Support Depletion Date, zero.
"Group 4 Discount Loan": Any Group 4 Mortgage Loan with a Net Mortgage Rate as of the Cut-Off Date of
less than 5.50% per annum.
"Group 4 Mortgage Loans": A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.
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"Group 4 Net WAC Rate": For any Payment Date and the Group 4, a rate equal to the weighted average of
the Net Mortgage Rates on the Group 4 Mortgage Loans as of the beginning of the related Due Period.
"Group 4 Non-Discount Loan": Any Group 4 Mortgage Loan with a Net Mortgage Rate as of the Cut-Off Date
greater than or equal to 5.50% per annum.
"Group 5 Discount Fraction": With respect to any Payment Date and a Group 5 Discount Loan, will be a
fraction, the numerator of which is 6.00% minus the Net Mortgage Rate as of the Cut-Off Date on such Group 5
Discount Loan, and the denominator of which is 6.00%.
"Group 5 Discount Fractional Principal Amount": For any Payment Date and the Group 5 Discount Mortgage
Loans will be the aggregate of the following with respect to each Group 5 Discount Loan: the Group 5 Discount
Fraction of the amounts described in the definition of Principal Distribution Amount, Principal Prepayment Amount
and Liquidation Principal, reduced by the Group 5 Discount Fraction of the related Capitalization Reimbursement
Amount on a Group 5 Discount Mortgage Loan.
"Group 5 Discount Fractional Principal Shortfall": (i) For any Payment Date prior to the related Credit
Support Depletion Date, an amount generally equal to the sum of the aggregate of the following with respect to
each Group 5 Discount Loan:
(1) the Group 5 Discount Fraction of any loss on such Group 5 Discount Loan; and
(2) the amounts described in clause (1) above for all prior Payment Dates to the extent not
previously distributed, and
(ii) for any Payment Date on or after the related Credit Support Depletion Date, zero.
"Group 5 Discount Loan": Any Group 5 Mortgage Loan with a Net Mortgage Rate as of the Cut-Off Date of
less than 6.00% per annum.
"Group 5 Mortgage Loans": A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.
"Group 5 Net WAC Rate": For any Payment Date and the Group 5, a rate equal to the weighted average of
the Net Mortgage Rates on the Group 5 Mortgage Loans as of the beginning of the related Due Period.
"Group 5 Non-Discount Loan": Any Group 5 Mortgage Loan with a Net Mortgage Rate as of the Cut-Off Date
greater than or equal to 6.00% per annum.
"Holder" or "Securityholder": The registered holder of any Note or Owner Trust Certificates as recorded
on the books of the Note Registrar or the Certificate Registrar except that, solely for the purposes of taking
any action or giving any consent pursuant to this Agreement, any Notes or Owner Trust Certificates registered in
the name of the Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee or the Owner
Trustee or any Affiliate thereof (unless any such Person owns 100% of such Class or a 100% beneficial ownership
17
in the Owner Trust Certificates) shall be deemed not to be outstanding in determining whether the requisite
percentage necessary to effect any such consent has been obtained, except that, in determining whether the
Indenture Trustee and the Securities Administrator shall be protected in relying upon any such consent, only
Notes and Owner Trust Certificates which a Responsible Officer of the Indenture Trustee or the Securities
Administrator has actual knowledge to be so held shall be disregarded. The Indenture Trustee and the Securities
Administrator may request and conclusively rely on certifications by the Depositor in determining whether any
Notes or Owner Trust Certificates are registered to an Affiliate of the Depositor.
"Hybrid Notes": The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class 2-A-2, Class 3-A-1 and Class 3-A-2
Notes.
"Indemnified Persons": The Issuer, the Indenture Trustee (individually in its corporate capacity and in
its capacity as Indenture Trustee), the Custodian, the Owner Trustee (individually in its corporate capacity and
in its capacity as Owner Trustee), the Master Servicer, the Seller, the Depositor and the Securities
Administrator (in all capacities hereunder) and their officers, directors, agents and employees and, with respect
to the Indenture Trustee, any separate co-trustee and its officers, directors, agents and employees.
"Indenture": The Indenture dated as of July 25, 2008, among the Issuer, the Indenture Trustee and the
Securities Administrator, as such may be amended or supplemented from time to time.
"Indenture Trustee": HSBC Bank USA, National Association, not in its individual capacity but solely as
Indenture Trustee, or any successor in interest which accepts its appointment as Indenture Trustee hereunder and
agrees to act in such capacity in accordance herewith.
"Indenture Trustee Fee": The annual ongoing fee of the Indenture Trustee payable by the Master Servicer
on behalf of the Issuer as provided in Section 8.05.
"Independent": When used with respect to any accountants, a Person who is "independent" within the
meaning of Rule 2-01 of the Securities and Exchange Commission' Regulation S.X. When used with respect to any
other specified Person, any such Person who (a) is in fact independent of the Depositor and its Affiliates,
(b) does not have any direct financial interest in or any material indirect financial interest in the Depositor or
any Affiliate thereof, (c) is not connected with the Depositor or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar functions and (d) is not a member
of the immediate family of a Person defined in clause (b) or (c) above.
"Index": With respect to each Mortgage Loan and each Adjustment Date, the index specified in the
related Mortgage Note.
"Initial Note Principal Amount": With respect to any Notes (other than the Interest Only Notes), the
amount designated "Original Principal Amount of this Note" on the face thereof.
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"Initial Note Notional Amount": With respect to the Interest Only Notes, the amount designated
"Original Notional Amount of this Note" on the face thereof.
"Initial Loan Group 1 Balance": $25,663,329.49.
"Initial Loan Group 2 Balance": $42,516,382.26.
"Initial Loan Group 3 Balance": $23,206,677.15.
"Initial Loan Group 4 Balance": $10,191,941.04.
"Initial Loan Group 5 Balance": $49,577,031.04.
"Insurance Proceeds": With respect to any Mortgage Loan, proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan or related Mortgaged Property, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in
accordance with the Purchase and Servicing Agreement.
"Interest Distribution Amount": For each class of Notes (other than the Principal Only Notes) and any
Payment Date, will be the sum of (i) interest accrued on such class of Notes during the related Accrual Period at
the applicable Note Interest Rate, plus (ii) the amount of interest accrued but unpaid to such class from prior
Payment Dates together with interest thereon at the applicable Note Interest Rate.
"Interest Only Notes": The Class A-X Notes, the Class 4-A-X Notes and the Class 5-A-X Notes.
"Issuer": PHH Mortgage Trust, Series 2008-CIM2.
"LIBOR Business Day": Any day on which banks in London, England and the city of New York are open and
conducting transactions in foreign currency and exchange.
"LIBOR Determination Date": The second LIBOR Business Day immediately preceding the commencement of
each Accrual Period for each Class of Offered Notes.
"Liquidated Mortgage Loan": As to any Payment Date, any Mortgage Loan in respect of which the Servicer
or the Master Servicer has determined, in accordance with the servicing procedures specified in the Purchase and
Servicing Agreement, or this Agreement, as applicable, as of the end of the related Prepayment Period, that all
Liquidation Proceeds that it expects to recover with respect to the liquidation of such Mortgage Loan or
disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the following events: (i) such Mortgage
Loan is paid in full; (ii) a Final Recovery Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust Estate by reason of its being purchased, sold or replaced pursuant to or
as contemplated hereunder. With respect to any REO Property, either of the following events: (i) a Final
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Recovery Determination is made as to such REO Property; or (ii) such REO Property is removed from the Trust
Estate by reason of its being sold or purchased pursuant to Section 10.01 hereof or the applicable provisions of
the Purchase and Servicing Agreement.
"Liquidation Expenses": With respect to a Mortgage Loan in liquidation, unreimbursed expenses paid or
incurred by or for the account of the Master Servicer or the Servicer, such expenses including (a) property
protection expenses, (b) property sales expenses, (c) foreclosure and sale costs, including court costs and
reasonable attorneys' fees, and (d) similar expenses reasonably paid or incurred in connection with liquidation.
"Liquidation Principal": For any Payment Date and any Mortgage Loan, the principal portion of Net
Liquidation Proceeds received with respect to each such Mortgage Loan which became a Liquidated Mortgage Loan
(but not in excess of the Principal Balance thereof) during the related Prepayment Period.
"Liquidation Proceeds": With respect to any Mortgage Loan, the amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by the Servicer as proceeds from the
liquidation of such Mortgage Loan, as determined in accordance with the applicable provisions of the Purchase and
Servicing Agreement, other than Subsequent Recoveries; provided that (i) with respect to any Mortgage Loan or REO
Property repurchased, substituted or sold pursuant to or as contemplated hereunder, or pursuant to the applicable
provisions of the Purchase and Servicing Agreement, "Liquidation Proceeds" shall also include amounts realized in
connection with such repurchase, substitution or sale and (ii) with respect to a defaulted Additional Collateral
Mortgage Loan, "Liquidation Proceeds" shall also include the amount realized on the related Additional
Collateral, including any amounts paid under any Surety Bond.
"Loan Group": Any of Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4 or Loan Group 5, as the
context requires.
"Loan Group Balance": As to each Loan Group and any Payment Date, the aggregate of the Scheduled
Principal Balances, as of the Close of Business on the first day of the related Due Period, of the Mortgage Loans
in such Loan Group that were Outstanding Mortgage Loans on such date.
"Loan Group 1": At any time, the Group 1 Mortgage Loans in the aggregate and any REO Properties
acquired in respect thereof.
"Loan Group 2": At any time, the Group 2 Mortgage Loans in the aggregate and any REO Properties
acquired in respect thereof.
"Loan Group 3": At any time, the Group 3 Mortgage Loans in the aggregate and any REO Properties
acquired in respect thereof.
"Loan Group 4": At any time, the Group 4 Mortgage Loans in the aggregate and any REO Properties
acquired in respect thereof.
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"Loan Group 5": At any time, the Group 5 Mortgage Loans in the aggregate and any REO Properties
acquired in respect thereof.
"Loan-to-Value Ratio": With respect to each Mortgage Loan and any date of determination, a fraction,
expressed as a percentage, the numerator of which is the Principal Balance of the Mortgage Loan at such date of
determination and the denominator of which is the Value of the related Mortgaged Property.
"Majority Securityholders": Until such time as the sum of the Class Principal Balances of all Classes
of Notes has been reduced to zero, the holder or holders of in excess of 50% of the aggregate Class Principal
Balance of all Classes of Notes (accordingly, the holder of the Owner Trust Certificates shall be excluded from
any rights or actions of the Majority Securityholders during such period); and thereafter, the holder or holders
of in excess of 50% of the Percentage Interests of the Owner Trust Certificates.
"Master Servicer": Xxxxx Fargo Bank, N.A., or any successor Master Xxxxxxxx appointed as herein
provided.
"Master Servicing Fee": As to any Payment Date an amount equal to the sum of (i) with respect to each
Mortgage Loan, the product of the Master Servicing Fee Rate and the Scheduled Principal Balance of such Mortgage
Loan as of the first day of the related Due Period and (ii) all investment income on amounts on deposit in the
Distribution Accounts with respect to such Payment Date. The Master Servicing Fee described in clause (i) above
for any Mortgage Loan shall be payable in respect of any Payment Date solely from the interest portion of the
Monthly Payment or other payment or recovery with respect to such Mortgage Loan.
"Master Servicing Fee Rate": 0.0425% per annum. 0.0025% per annum of the Master Servicing Fee Rate is
payable to the Xxxxx Fargo Bank, N.A. for its duties as Custodian.
"Maximum Mortgage Rate": With respect to each Mortgage Loan, the percentage set forth in the related
Mortgage Note as the maximum Mortgage Rate thereunder.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the
laws of the State of Delaware, or any successor thereto.
"MERS Mortgage Loan": Any Mortgage Loan registered with MERS on the MERS System.
"MERS® System": The system of recording transfers of mortgages electronically maintained by MERS.
"MIN": The Mortgage Identification Number for any MERS Mortgage Loan.
"MOM Loan": Any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled monthly payment of principal and/or
interest on such Mortgage Loan that is payable by the related Mortgagor from time to time under the related
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Mortgage Note, determined, for the purposes of this Agreement: (a) after giving effect to any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief Act or similar state or local
law; (b) without giving effect to any extension granted or agreed to by the Servicer pursuant to the applicable
provisions of the Purchase and Servicing Agreement; and (c) on the assumption that all other amounts, if any, due
under such Mortgage Loan are paid when due.
"Mortgage Loans": A Mortgage Loan that is identified as such on the Mortgage Loan Schedule.
"Moody's": Xxxxx'x Investors Service, Inc. or any successor thereto.
"Mortgage": The mortgage, deed of trust or other instrument creating a first lien on, or first priority
security interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01 hereof pertaining to a particular
Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan (including Cooperative Loans) identified in the Mortgage Loan
Schedule.
"Mortgage 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.
"Mortgage Loan Schedule": As of any date, the list of mortgage loans attached hereto as Schedule I.
The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the following information with
respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property, including the state and five-digit ZIP
code;
(iv) a code indicating whether the Mortgaged Property was represented by the borrower, at
the time of origination, as being owner-occupied;
(v) a code indicating whether the Residential Dwelling constituting the Mortgaged Property
is (a) a detached single family dwelling, (b) a dwelling in a planned unit development, (c) a
condominium unit, (d) a two- to four-unit residential property, (e) a townhouse, (f) a cooperative or
(g) other type of Residential Dwelling;
(vi) if the related Mortgage Note permits the borrower to make Monthly Payments of interest
only for a specified period of time, (a) the original number of such specified Monthly Payments and
(b) the remaining number of such Monthly Payments as of the Cut-Off Date;
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(vii) the original months to maturity;
(viii) the stated remaining months to maturity from the Cut-Off Date based on the original
amortization schedule;
(ix) the Loan-to-Value Ratio at origination;
(x) the value of any Additional Collateral at origination;
(xi) the Mortgage Rate in effect immediately following the Cut-Off Date;
(xii) the date on which the first Monthly Payment is or was due on the Mortgage Loan;
(xiii) the stated maturity date;
(xiv) the Master Servicing Fee Rate and the Servicing Fee Rate, if any;
(xv) whether such loan is an Additional Collateral Mortgage Loan;
(xvi) the last Due Date on which a Monthly Payment was actually applied to the unpaid
Scheduled Principal Balance;
(xvii) the original principal balance of the Mortgage Loan;
(xviii) the Scheduled Principal Balance of the Mortgage Loan on the Cut-Off Date and a code
indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term refinancing, cash-out
refinancing);
(xix) the Index and Gross Margin specified in related Mortgage Note;
(xx) the next Adjustment Date, if applicable;
(xxi) the Maximum Mortgage Rate, if applicable;
(xxii) the Value of the Mortgaged Property;
(xxiii) the sale price of the Mortgaged Property, if applicable;
(xxiv) the product code;
(xxv) the Administration Fee Rate therefor; and
(xxvi) whether the Mortgage Loan is an Adjustable Rate Mortgage Loan, a Three-Year Hybrid
Mortgage Loan, a Five-Year Hybrid Mortgage Loan, a Seven-Year Hybrid Mortgage Loan or a Ten-Year Hybrid
Mortgage Loan.
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Information set forth in clauses (ii) and (iii) above regarding each Mortgagor and the related Mortgaged
Property shall be confidential and the Indenture Trustee (or the Master Servicer) shall not disclose such
information except to the extent disclosure may be required by any law or regulatory or administrative authority;
provided, however, that the Indenture Trustee may disclose on a confidential basis any such information to its
agents, attorneys and any auditors in connection with the performance of its responsibilities hereunder.
The Mortgage Loan Schedule, as in effect from time to time, shall also set forth the following
information with respect to the Mortgage Loans in the aggregate as of the Cut-Off Date: (1) the number of
Mortgage Loans; (2) the current Scheduled Principal Balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and (4) the weighted average remaining months to maturity of the Mortgage
Loans. The Mortgage Loan Schedule shall be amended from time to time by the Seller in accordance with the
provisions of this Agreement.
"Mortgage Note": The original executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgaged Property": Either of (x) the fee simple or leasehold interest in real property, together
with improvements thereto including any exterior improvements to be completed within 120 days of disbursement of
the related Mortgage Loan proceeds, or (y) in the case of a Cooperative Loan, the related Cooperative Shares and
Proprietary Lease, securing the indebtedness of the Mortgagor under the related Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan or any other disposition of
related Mortgaged Property (including REO Property), the related Liquidation Proceeds net of Advances, related
Servicing Advances, Master Servicing Fee, related Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan or Mortgaged Property.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related REO Property), as of any date of
determination, a per annum rate of interest equal to the then applicable Mortgage Rate for such Mortgage Loan
minus the related Servicing Fee Rate, Master Servicing Fee Rate and the Owner Trustee Fee Rate.
"Nonrecoverable": The determination by the Master Servicer (as successor servicer) or the Servicer in
respect of a delinquent Mortgage Loan that if it were to make an Advance in respect thereof, such amount would
not be recoverable from any collections or other recoveries (including Liquidation Proceeds) on such Mortgage
Loan.
"Note": Any of the Class 1-A-1, Class 1-A-2, Class 2-A-1, Class 2-A-2, Class 3-A-1, Class 3-A-2, Class
4-A-1, Class 4-A-2, Class 5-A-1, Class 5-A-2, Class A-X, Class 4-A-X, Class 5-A-X, Class A-PO, Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Notes.
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"Note Interest Rate": With respect to each Class of Notes and any Payment Date, the applicable per
annum rate described in the footnotes to the table in the Preliminary Statement hereto.
"Note Principal Amount": With respect to each Note of a given Class (other than a Notional Note) and
any date of determination, the product of (i) the Class Principal Balance of such Class and (ii) the applicable
Percentage Interest of such Note.
"Note Register" and "Note Registrar": As defined in the Indenture.
"Noteholder" or "Holder": As defined in the Indenture.
"Notional Note": Any of the Class A-X Note, the Class 4-A-X Note or the Class 5-A-X Note.
"Offered Notes": The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class 2-A-2, Class 3-A-1, Class 3-A-2,
Class 4-A-1, Class 4-A-2, Class 5-A-1 and Class 5-A-2 Notes.
"Offering Documents": The Prospectus Supplement and the Prospectus.
"Officer's Certificate": A certificate signed by the Chairman of the Board, the Vice Chairman of the
Board, the President or a vice president (however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Seller, the Master Servicer, the Securities Administrator or
the Depositor, as applicable.
"One-Month LIBOR": For the initial Accrual Period, the Securities Administrator will determine
One-Month LIBOR for such Accrual Period based on information available on the second LIBOR Business Day preceding
the Closing Date with respect to the Offered Notes, and for any Accrual Period thereafter, on the second LIBOR
Business Day preceding the related Accrual Period, the one month rate which appears on the Reuters Screen
LIBOR01, as of 11:00 a.m., London time on the LIBOR Determination Date. If such rate is not provided, One-Month
LIBOR shall mean the rate determined by the Securities Administrator (or a calculation agent on its behalf) in
accordance with the following procedure:
(i) The Securities Administrator on the LIBOR Determination Date will request the
principal London offices of each of four major Reference Banks in the London
interbank market, as selected by the Securities Administrator, to provide the
Securities Administrator with its offered quotation for deposits in United
States dollars for the upcoming one-month period, commencing on the second
LIBOR Business Day immediately following such LIBOR Determination Date, to
prime banks in the London interbank market at approximately 11:00 a.m. London
time on such LIBOR Determination Date and in a principal amount that is
representative for a single transaction in United States dollars in such
market at such time. If at least two such quotations are provided, One-Month
LIBOR determined on such LIBOR Determination Date will be the arithmetic mean
of such quotations (rounded upwards if necessary to the nearest whole multiple
of 0.0625%).
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(ii) If fewer than two quotations are provided, One-Month LIBOR determined on such
LIBOR Determination Date will be the higher of (x) One-Month LIBOR as
determined on the previous Interest Determination Date and (y) the arithmetic
mean of the rates quoted at approximately 11:00 a.m. in New York City on such
LIBOR Determination Date by three major banks in New York City selected by the
Securities Administrator for one-month United States dollar loans to lending
European banks, in a principal amount that is representative for a single
transaction in United States dollars in such market at such time (rounded
upwards if necessary to the nearest whole multiple of 0.0625%); provided,
however, that if the banks so selected by the Securities Administrator are not
quoting as mentioned in this sentence, One-Month LIBOR determined on such
LIBOR Determination Date will continue to be One-Month LIBOR as then currently
in effect on such LIBOR Determination Date.
(iii) The establishment of One-Month LIBOR and each Note Interest Rate by the
Securities Administrator shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of an Offered Note and the Securities
Administrator.
"Operative Agreements": The Trust Agreement, the Certificate of Trust, this Agreement, the Purchase and
Servicing Agreement, the Indenture, the Administration Agreement and each other document contemplated by any of
the foregoing to which the Depositor, the Owner Trustee, the Securities Administrator, the Master Servicer, the
Indenture Trustee or the Issuer is a party.
"Opinion of Counsel": A written opinion of counsel, who may, without limitation, be a salaried counsel
for the Depositor, the Originator, the Master Servicer, the Securities Administrator or the Indenture Trustee,
acceptable to the Indenture Trustee or the Securities Administrator, as applicable, but which must be Independent
outside counsel concerning federal income tax matters.
"Original Class Notional Amount": With respect to the Class A-X, the Class 4-A-X and the Class 5-A-X
Notes, the corresponding aggregate notional amount set forth opposite the Class designation of such Class in the
Preliminary Statement.
"Original Class Principal Balance": With respect to each Class of Notes other than the Notional Notes,
the corresponding aggregate amount set forth opposite the Class designation of such Class in the Preliminary
Statement.
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"Original Trust Agreement": The Interim Trust Agreement dated as of July 24, 2008 by and between the
Owner Trustee and the Depositor pursuant to which the Issuer was formed by filing of the Certificate of Trust.
"Originator": PHH Mortgage Corporation.
"Outstanding Mortgage Loan": As of any Due Date, a Mortgage Loan with a Scheduled Principal Balance
greater than zero, that was not the subject of a prepayment in full prior to such Due Date and that did not
become a Liquidated Mortgage Loan prior to such Due Date.
"Overcollateralized Group": If, on any Payment Date, any Loan Group is an Undercollateralized Group,
any Loan Group that is not an Undercollateralized Group.
"Owner Trustee": LaSalle National Trust Delaware, a national banking association, not in its individual
capacity, but solely as owner trustee under the Trust Agreement, or any successor in interest which accepts its
appointment as Owner Trustee and agrees to act in such capacity in accordance with the Trust Agreement.
"Owner Trustee Fee": The annual on-going fee payable on behalf of the Trust to the Owner Trustee
pursuant to Section 8.05 of this Agreement.
"Owner Trustee Fee Rate": For any Mortgage Loan, (i) on the Payment Date occurring in July of each
year, commencing in July 2009, a fraction, expressed as a percentage, the numerator of which is the portion of
the Owner Trustee Fee payable from the Available Distribution Amount calculated pursuant to Section 8.05 and the
denominator of which is the aggregate Scheduled Principal Balance of the Mortgage Loans and (ii) on any other
Payment Date, 0.00%.
"Owner Trust Certificate": A certificate representing an undivided beneficial ownership interest in the
Trust, substantially in the form attached as Exhibit A to the Trust Agreement.
"Paying Agent": Initially, the Securities Administrator, in its capacity as paying agent for the Notes
under the Indenture and paying agent for the Certificates under the Trust Agreement, or any successor to the
Securities Administrator in such capacity.
"Payment Date": The 25th day of the month, or, if such day is not a Business Day, the next Business Day
commencing in August 2008.
"Payment Date Statement": As defined in Section 5.04(a) hereof.
"PCAOB": The Public Company Accounting Oversight Board.
"Percentage Interest": With respect to any Note, a fraction, expressed as a percentage, the numerator
of which is the Initial Note Principal Amount or Initial Note Notional Amount, as applicable, represented by such
Note and the denominator of which is the Original Class Principal Balance or Original Class Notional Amount, as
applicable, of the related Class. With respect to any Owner Trust Certificate, the Percentage Interest noted on
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the face of such certificate.
"Person": Any individual, corporation, partnership, limited liability company, joint venture,
association, joint stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Prepayment Interest Shortfall": With respect to any Payment Date and each Mortgage Loan that during
the related Prepayment Period was the subject of a Principal Prepayment, an amount determined as follows:
(a) with respect to Principal Prepayments in part received during the relevant Prepayment
Period: the difference between (i) one month's interest at the applicable Net Mortgage Rate on the
amount of such prepayment and (ii) the amount of interest for the calendar month of such prepayment
(adjusted to the applicable Net Mortgage Rate) received at the time of such prepayment; and
(b) with respect to Principal Prepayments in full received during the relevant Prepayment
Period: the difference between (i) one month's interest at the applicable Net Mortgage Rate on the
Scheduled Principal Balance of such Mortgage Loan immediately prior to such prepayment and (ii) the
amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Mortgage
Rate) received at the time of such prepayment.
"Prepayment Period": With respect to any Payment Date, the calendar month preceding the month in which
such Payment Date occurs.
"Principal Balance": As to any Mortgage Loan, other than a Liquidated Mortgage Loan, and any day, the
related Cut-Off Date Principal Balance, minus all collections credited against the Principal Balance of such
Mortgage Loan after the Cut-Off Date. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan as of the final
recovery of related Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO
Property.
"Principal Distribution Amount": For any Payment Date and a Loan Group will be the sum of:
(1) scheduled Monthly Payments of principal on the Mortgage Loans in the related Loan Group due
during the related Due Period;
(2) the principal portion of the Purchase Price received with respect to the Mortgage Loans in the
related Loan Group, which were repurchased pursuant to Section 2.04 hereof during the related
Prepayment Period; and
(3) any other unscheduled payments of principal which were received on the Mortgage Loans in the
related Loan Group during the related Prepayment Period, other than Principal Prepayments in
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full, Principal Prepayments in part, Subsequent Recoveries or Liquidation Principal.
"Principal Only Notes": The Class A-PO Notes.
"Primary Insurance Policy": Mortgage guaranty insurance, if any, on an individual Mortgage Loan, as
evidenced by a policy or certificate.
"Principal Prepayment": Any payment of principal made by the Mortgagor on a Mortgage Loan that is
received in advance of its scheduled Due Date and that is not accompanied by an amount of interest representing
the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of
prepayment.
"Principal Prepayment Amount": For any Payment Date and a Loan Group, the sum of (i) all Principal
Prepayments in part and all Principal Prepayments in full with respect to the Mortgage Loans in that Loan Group
which were received during the related Prepayment Period and (ii) any Subsequent Recoveries with respect to
Mortgage Loans in that Loan Group received during the related Prepayment Period.
"Proprietary Lease": With respect to any Cooperative Unit, a lease or occupancy agreement between a
Cooperative Corporation and a holder of related Cooperative Shares.
"Prospectus": The Prospectus Supplement, together with the accompanying prospectus, dated March 1,
2007, relating to the Offered Notes.
"Prospectus Supplement": That certain Prospectus Supplement, dated July 25, 2008, relating to the
initial sale of the Offered Notes.
"Purchase and Servicing Agreement": The Mortgage Loan Flow Purchase, Sale & Servicing Agreement dated
as of December 14, 2007 among PHH Mortgage Corporation, Xxxxxx'x Gate Residential Mortgage Trust and Chimera
Investment Corporation, as modified by the Assignment Agreement.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as
contemplated by Section 2.04, Section 3.25, Section 5.08 or Section 10.01 hereof, and as confirmed by an
Officers' Certificate from the Originator to the Indenture Trustee, an amount equal to the sum of (i) 100% of the
Principal Balance thereof as of the date of purchase (or such other price as is provided in Section 10.01), plus
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at the applicable Mortgage
Rate from the Due Date as to which interest was last covered by a payment by the Mortgagor through the end of the
calendar month in which the purchase is to be effected, and (y) an REO Property, the sum of (1) accrued interest
on such Principal Balance at the applicable Mortgage Rate from the Due Date as to which interest was last covered
by a payment by the Mortgagor plus (2) REO Imputed Interest for such REO Property for each calendar month
commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in
which such purchase is to be effected, net of the total of all net rental income, Insurance Proceeds and
Liquidation Proceeds that as of the date of purchase had been distributed as or to cover REO Imputed Interest,
plus (iii) any unreimbursed Servicing Advances allocable to such Mortgage Loan or REO Property, plus (iv) in the
29
case of a Mortgage Loan required to be purchased pursuant to Section 2.04 hereof, any costs and damages incurred
by the Indenture Trustee in respect of a breach or defect giving rise to the purchase obligations or by the
Issuer in connection with any violation by such Mortgage Loan of any predatory- or abusive-lending laws.
"Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by the Originator for a Deleted
Mortgage Loan which must, on the date of such substitution, (i) have a Principal Balance, after deduction of all
Monthly Payments due and received in the month of substitution, not in excess of the Principal Balance of the
Deleted Mortgage Loan and not less than ninety percent (90%) of the Principal Balance of the Deleted Mortgage
Loan, (ii) have a remaining term to maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (iii) have a Mortgage Rate not less than (and not more than one percentage point greater
than) the Mortgage Rate of the Deleted Mortgage Loan, (iv) with respect to each Qualified Substituted Mortgage
Loan for Loan Group 1, Loan Group 2 and Loan Group 3, have a Minimum Rate not less than that of the Deleted
Mortgage Loan, (v) with respect to each Qualified Substituted Mortgage Loan for Loan Group 1, Loan Group 2 and
Loan Group 3, have a Maximum Rate not less than that of the Deleted Mortgage Loan and not more than one
(1) percentage points above that of the Deleted Mortgage Loan, (vi) with respect to each Qualified Substituted
Mortgage Loan for Loan Group 1, Loan Group 2 and Loan Group 3, have a gross margin not less than that of the
Deleted Mortgage Loan, (vii) with respect to each Qualified Substituted Mortgage Loan for Loan Group 1, Loan
Group 2 and Loan Group 3, have a periodic rate cap equal to that of the Deleted Mortgage Loan, (viii) have a
Loan-to-Value Ratio at the time of substitution equal to or less than the Loan-to-Value Ratio of the Deleted
Mortgage Loan at the time of substitution, (ix) with respect to each Qualified Substituted Mortgage Loan for Loan
Group 1, Loan Group 2 and Loan Group 3, have the same Adjustment Date as that of the Deleted Mortgage Loan,
(x) with respect to each Qualified Substituted Mortgage Loan for Loan Group 1, Loan Group 2 and Loan Group 3, have
the same index as that of the Deleted Mortgage Loan, (xi) comply as of the date of substitution with each
representation and warranty set forth in Sections 3.01, 3.02 and 3.03 of the Purchase and Servicing Agreement,
(xii) be in the same credit grade category as the Deleted Mortgage Loan and (xiii) have the same Due Date as the
Deleted Mortgage Loan; (xiv) be current as of the date of substitution (xv) have been underwritten or
reunderwritten in accordance with the same underwriting criteria and guidelines as the Deleted Mortgage Loan,
(xvi) have the same lien status as the Deleted Mortgage Loan; (xvii) have a credit score not less than that of
the Deleted Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate
principal balances, the terms described in clauses, (ii), (viii) and (xvii) hereof shall be determined on the
basis of weighted average remaining term to maturity, Loan-to-Value Ratio and credit score, except to the extent
otherwise provided in this sentence, the representations and warranties described in clause (x) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
"Rapid Prepayment Conditions": The situation that exists when:
• the aggregate Class Principal Balances of the Offered Notes related to a Loan Group have been
reduced to zero;
30
• the Payment Date is prior to the Credit Support Depletion Date; and
• either (i) the Aggregate Subordinate Percentage on that date is less than 200% of the Aggregate
Subordinate Percentage as of the Closing Date or (ii) the Principal Balance of the sum of
(a) all Mortgage Loans delinquent 60 days or more (including Mortgage Loans in foreclosure and
REO properties) and (b) all Mortgage Loans that have been modified for the purpose of loss
mitigation within 12 months of the related Payment Date, averaged over the last six months, as
a percentage of the aggregate Class Principal Balance of the Subordinate Notes, is greater than
or equal to 50%.
"Rating Agency": Each of Xxxxx'x and Fitch and any respective successors thereto. If Xxxxx'x, Fitch or
their respective successors shall no longer be in existence, "Rating Agency" shall include such nationally
recognized statistical rating agency or agencies, or other comparable Person or Persons, as shall have been
designated by the Depositor, notice of which designation shall be given to the Indenture Trustee, the Securities
Administrator and the Master Servicer.
"Realized Loss": For any Payment Date and (i) any Mortgage Loan which became a Liquidated Mortgage Loan
during the related Prepayment Period, the sum of (a) the Scheduled Principal Balance of such Mortgage Loan
remaining outstanding (after all recoveries of principal including Net Liquidation Proceeds have been applied
thereto) and the principal portion of Non-Recoverable Advances made by the Servicer and/or the Master Servicer
with respect to such Mortgage Loan which have been reimbursed from amounts received in respect of the Mortgage
Loans in such Loan Group other than the related Mortgage Loan, and (b) the accrued interest on such Mortgage Loan
remaining unpaid and the interest portion of Non-Recoverable Advances made by the Servicer and/or the Master
Servicer with respect to such Mortgage Loan which have been reimbursed from amounts received in respect of the
Mortgage Loans of the related Loan Group other than the related Mortgage Loan, (ii) a Mortgage Loan subject to a
Deficient Valuation, the excess of the Scheduled Principal Balance of that Mortgage Loan over the principal
amount as reduced in connection with the proceedings resulting in a Deficient Valuation, (iii) a Mortgage Loan
subject to a Debt Service Reduction, the present value of all monthly Debt Service Reductions, discounted monthly
at the applicable Mortgage Rate and (iv) any Mortgage Loan modified pursuant to the terms of the Purchase and
Servicing Agreement or this Agreement, the amount, if any, by which the Scheduled Principal Balance of such
Mortgage Loan has been reduced as a result of such modification.
"Recognition Agreement": With respect to any Cooperative Loan, an agreement between the related
Cooperative Corporation and the originator of such Mortgage Loan to establish the rights of such originator in
the related Cooperative Property.
"Record Date": With respect to each Payment Date and the Notes, the last Business Day of the calendar
month preceding the month in which such Payment Date occurs.
"Refinancing Mortgage Loan": Any Mortgage Loan originated in connection with the refinancing of an
existing mortgage loan.
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"Regulation AB": Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarifications and
interpretations as have been provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission,
or as may be provided by the Commission or its staff from time to time.
"Relevant Servicing Criteria": The Servicing Criteria applicable to each party, as set forth on Exhibit
F attached hereto and any similar exhibit set forth in the Purchase and Servicing Agreement in respect of the
Servicer. Multiple parties can have responsibility for the same Relevant Servicing Criteria. With respect to a
Servicing Function Participant engaged by the Master Servicer, the Securities Administrator or the Servicer, the
term "Relevant Servicing Criteria" may refer to a portion of the Relevant Servicing Criteria applicable to such
parties.
"Relief Act": The Servicemembers Civil Relief Act, as amended.
"Remittance Report": The Master Servicer's Remittance Report to the Securities Administrator providing
information with respect to each Mortgage Loan which is provided no later than the second Business Day following
each Determination Date and which shall contain such information as may be agreed upon by the Master Servicer and
the Securities Administrator and which shall be sufficient to enable the Securities Administrator to prepare the
related Payment Date Statement.
"REO Account": The account or accounts maintained by the Servicer in respect of an REO Property
pursuant to the Purchase and Servicing Agreement.
"REO Disposition": The sale or other disposition of an REO Property on behalf of the Trust.
"REO Imputed Interest": As to any REO Property, for any calendar month during which such REO Property
was at any time part of the Trust Estate, one month's interest at the applicable Net Mortgage Rate on the
Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage
Loan if appropriate) as of the Close of Business on the Due Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any calendar month, the excess, if
any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Clean-Up
Call Purchase Price, paid in connection with a purchase of all of the Mortgage Loans and REO Properties in the
related Loan Group pursuant to Section 10.01 hereof that is allocable to such REO Property) or otherwise, net of
any portion of such amounts (i) payable pursuant to the applicable provisions of the Purchase and Servicing
Agreement in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Servicer pursuant to the applicable provisions of the Purchase and Servicing Agreement for
unpaid Master Servicing Fees and Servicing Fees in respect of the related Mortgage Loan and unreimbursed
32
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 Servicer on behalf of the Issuer through
foreclosure or deed-in-lieu of foreclosure in accordance with the applicable provisions of the Purchase and
Servicing Agreement.
"Reportable Event": As defined in Section 3.19(c).
"Reporting Servicer": As defined in Section 3.19(b).
"Reserve Fund": The reserve fund created and maintained by the Securities Administrator pursuant to
Section 4.06 which shall be entitled "Reserve Fund, Xxxxx Fargo Bank, N.A., as Securities Intermediary for HSBC
Bank USA, National Association, as Indenture Trustee, in trust for the Holders of the PHH Mortgage Trust
2008-CIM2 Mortgage-Backed Notes Series 2008-CIM2", and which must be an Eligible Account.
"Residential Dwelling": Any one of the following: (i) a detached one-family dwelling, (ii) a two- to
four-family dwelling, (iii) a one-family dwelling unit in a condominium project, (iv) a manufactured home, (v) a
cooperative unit or (vi) a detached one-family dwelling in a planned unit development, none of which is a mobile
home.
"Responsible Officer": When used with respect to the Indenture Trustee, the Owner Trustee or the
Securities Administrator, any director, any vice president, any assistant vice president, any associate assigned
to the Corporate Trust Office (or similar group) or any other officer of the Indenture Trustee, Owner Trustee or
Securities Administrator, as applicable, customarily performing functions similar to those performed by any of
the above designated officers, in each case, having direct responsibilities for the administration of the
Operative Agreements to which the Indenture Trustee, the Securities Administrator, the Owner Trustee or the Trust
is a party and, with respect to a particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Xxxxxxxx-Xxxxx Act": The Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission
promulgated thereunder (including any interpretations thereof by the Commission's staff).
"Xxxxxxxx-Xxxxx Certification": A written certification covering the activities of all Servicing
Function Participants (excluding the Custodian) and the Servicer and signed by an officer of the Master Servicer
that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time, and (ii) Exchange Act Rules
13a-14(d) and 15d-14(d), as in effect from time to time; provided that if, after the Closing Date (a) the
Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any statement of a division thereof, or (c) any
future releases, rules and regulations are published by the Securities and Exchange Commission from time to time
pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the Closing Date, the Xxxxxxxx-Xxxxx
Certification shall be as agreed to by the Master Servicer, the Depositor and the Seller following a negotiation
in good faith to determine how to comply with any such new requirements.
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"Scheduled Principal Balance": With respect to any Mortgage Loan: (a) as of any date of determination
up to and including the Payment Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such Mortgage Loan as of the Cut-Off
Date, as shown in the Mortgage Loan Schedule plus any Capitalization Reimbursement Amounts for such Mortgage
Loan, if any, minus, in the case of each Mortgage Loan, the sum of (i) the principal portion of each Monthly
Payment due on a Due Date subsequent to the Cut-Off Date, whether or not received, (ii) all Principal Prepayments
received after the Cut-Off Date, to the extent distributed pursuant to Section 5.01 before such date of
determination and (iii) all Liquidation Proceeds and Insurance Proceeds applied by the Servicer as recoveries of
principal in accordance with the applicable provisions of the Purchase and Servicing Agreement, to the extent
distributed pursuant to Section 5.01 before such date of determination; and (b) as of any date of determination
subsequent to the Payment Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, zero. With respect to any REO Property: (x) as of any date of determination
up to and including the Payment Date on which the proceeds, if any, of a Liquidation Event with respect to such
REO Property would be distributed, an amount (not less than zero) equal to the Scheduled Principal Balance of the
related Mortgage Loan as of the date on which such REO Property was acquired on behalf of the Trust, minus the
aggregate amount of REO Principal Amortization in respect of such REO Property for all previously ended calendar
months, to the extent distributed pursuant to Section 5.01 before such date of determination; and (y) as of any
date of determination subsequent to the Payment Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, zero.
"Securities": Collectively, the Notes and the Owner Trust Certificates.
"Security": A Note or an Owner Trust Certificate.
"Securities Act": The Securities Act of 1933, as amended and the rules and regulations thereunder.
"Securities Administrator": Xxxxx Fargo Bank, N.A., or its successor in interest, or any successor
securities administrator appointed as herein provided.
"Securities Intermediary": The Person acting as Securities Intermediary under this Agreement (which is
Xxxxx Fargo Bank, N.A.), its successor in interest, and any successor Securities Intermediary appointed pursuant
to Section 4.08.
"Security Agreement": With respect to any Cooperative Loan, the agreement between the owner of the
related Cooperative Shares and the originator of the related Mortgage Note that defines the terms of the security
interest in such Cooperative Shares and the related Proprietary Lease.
"Security Entitlement": The meaning specified in Section 8-102(a)(17) of the New York UCC.
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"Seller": Chimera Investment Corporation.
"Senior Liquidation Amount": For any Payment Date and a Loan Group, is the aggregate, for each Mortgage
Loan which became a Liquidated Mortgage Loan during the prior Prepayment Period, of the lesser of:
(1) the related Senior Percentage of the Principal Balance of such Mortgage Loan (exclusive, with
respect to Loan Group 4, of the related Group 4 Discount Fraction of each Group 4 Discount Loan
and with respect to Loan Group 5, of the related Group 5 Discount Fraction of each Group 5
Discount Fraction Loan); and
(2) the related Senior Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan (exclusive, with respect to Loan Group 4, of the portion attributable to the
Group 4 Discount Fractional Principal Amount and with respect to Loan Group 5, of the portion
attributable to the Group 5 Discount Fractional Principal Amount).
"Senior Note Available Funds Shortfall": For any Payment Date and any Class of Hybrid Notes, the sum of
(i) the excess of the amount of interest that would have accrued on that class of Hybrid Notes for the related
Accrual Period had the Note Interest Rate for such Class been determined without regard to the applicable
Available Funds Rate over the amount of interest accrued on such Class of Hybrid Notes at its Note Interest Rate
for such Accrual Period, (ii) any amounts described in clause (i) above for prior Payment Dates that remain
unpaid, and (iii) interest on the amount described in clause (ii) at the Note Interest Rate for such Class
determined without regard to the applicable Available Funds Rate.
"Senior Note Deferred Amounts": For any Payment Date and for each class of Offered Notes, the excess of
(i) the aggregate of any Realized Losses on the Mortgage Loans previously applied in reduction of the Class
Principal Balance thereof over (ii) the sum of (a) the aggregate of amounts previously distributed to such class
in reimbursement thereof and (b) the amount by which the Class Principal Balance of such class has been increased
due to Subsequent Recoveries.
"Senior Notes": The Class 1-A-1, Class 1-A-2, Class 2-A-1, Class 2-A-2, Class 3-A-1, Class 3-A-2, Class
4-A-1, Class 4-A-2, Class 5-A-1, Class 5-A-2, Class A-X, Class 4-A-X, Class 5-A-X and Class A-PO Notes.
"Senior Percentage": For any Payment Date and the Offered Notes related to a Loan Group, will equal the
percentage equivalent of a fraction, the numerator of which is the aggregate Class Principal Balance of such
Offered Notes immediately prior to that Payment Date, and the denominator of which is the aggregate Scheduled
Principal Balance of the Mortgage Loans in such Loan Group as of the first day of the related Due Period
(exclusive, with respect to Loan Group 4, of the related Group 4 Discount Fraction of each Group 4 Discount Loan
and with respect to Loan Group 5, of the related Group 5 Discount Fraction of each Group 5 Discount Loan).
"Senior Prepayment Percentage": For any Loan Group and any Payment Date, the percentage indicated in
the following table:
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Payment Date Occurring In Senior Prepayment Percentage
____________________________________________________________________________________________________________________
August 2008 to July 2015 100%
August 2015 to July 2016 the related Senior Percentage + 70% of the related
Subordinate Percentage
August 2016 to July 2017 the related Senior Percentage + 60% of the related
Subordinate Percentage
August 2017 to July 2018 the related Senior Percentage + 40% of the related
Subordinate Percentage
August 2018 to July 2019 the related Senior Percentage + 20% of the related
Subordinate Percentage
August 2019 and thereafter the related Senior Percentage
Notwithstanding the foregoing:
• if on any Payment Date, the Senior Percentage for any Loan Group is greater than the
initial related Senior Percentage, the Senior Prepayment Percentage for each Loan Group for
that Payment Date will equal 100%;
• the Senior Prepayment Percentage for each Loan Group will not decrease on any Payment Date
on which (i) the sum of (a) the aggregate Scheduled Principal Balance of Mortgage Loans
(including Mortgage Loans in bankruptcy, foreclosure and REO Properties) which are 60 or
more days delinquent (averaged over the preceding six-month period) and (b) the aggregate
Scheduled Principal Balance of Mortgage Loans that have been modified for the purpose of
loss mitigation within 12 months of the related Payment Date, as a percentage of the
current aggregate Class Principal Balance of the Subordinate Notes, is equal to or greater
than 50% as of such Payment Date, or (ii) cumulative Realized Losses on the Mortgage Loans,
as a percentage of the original aggregate Class Principal Balance of the Subordinate Notes,
are greater than the applicable percentage for such Payment Date set forth in the table
below:
Percentage of the Aggregate Class Principal Balance
Payment Date Occurring In of Subordinate Notes as of the Cut-Off Date
___________________________________________________________________________________________________
August 2015 to July 2016 30%
August 2016 to July 2017 35%
August 2017 to July 2018 40%
August 2018 to July 2019 45%
August 2019 and thereafter 50%
; provided, however, if the Senior Prepayment Percentage for each Loan Group does not decrease
on any Payment Date because the conditions set forth in this paragraph are not satisfied, the
Senior Prepayment Percentage for each Loan Group will decrease to the applicable level on the
next Payment Date on which the conditions required for the decrease of the Senior Prepayment
Percentage for each Loan Group are satisfied;
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• (i) if the Two Times Test is met on any Payment Date on or prior to the Payment Date in
July 2011, the Senior Prepayment Percentage for each Loan Group will equal the related
Senior Percentage plus 50% of the related Subordinate Percentage for such Payment Date and
(ii) if the Two Times Test is met on any Payment Date on or after the Payment Date in
August 2011, the Senior Prepayment Percentage for each Loan Group will equal the related
Senior Percentage for such Payment Date.
"Senior Principal Distribution Amount": For any Payment Date and a Loan Group will be the sum of the
following for that Payment Date:
(1) the related Senior Percentage of the Principal Distribution Amount for that Loan Group
(exclusive, with respect to Loan Group 4, of the portion attributable to the Group 4 Discount
Fractional Principal Amount and with respect to Loan Group 5, of the portion attributable to
the Group 5 Discount Fractional Principal Amount);
(2) the related Senior Prepayment Percentage of the related Principal Prepayment Amount (exclusive,
with respect to Loan Group 4, of the portion attributable to the Group 4 Discount Fractional
Principal Amount and with respect to Loan Group 5, of the portion attributable to the Group 5
Discount Fractional Principal Amount); and
(3) the related Senior Liquidation Amount;
provided, however, that the Senior Principal Distribution Amount on any Payment Date will be reduced by
the extent to which the Capitalization Reimbursement Amount for such Payment Date (exclusive of the portion
thereof attributable to the reduction of the Group 4 Discount Fractional Principal Amount and Group 5 Discount
Fractional Principal Amount, if any) exceeds the amount thereof applied in reduction of the Subordinate Principal
Distribution Amount on such Payment Date due to the Subordinate Principal Distribution Amount being insufficient
to absorb all such amounts.
"Servicer": PHH Mortgage Corporation, in its capacity as servicer under the Purchase and Servicing
Agreement, as amended by the Assignment Agreement.
"Servicer Remittance Date": With respect to each Mortgage Loan, the 18th day of each month, or the next
Business Day if such 18th day is not a Business Day.
"Service(s)(ing)": In accordance with Regulation AB, the act of servicing and administering the
Mortgage Loans or any other assets of the Trust by an entity that meets the definition of "servicer' set forth in
Item 1101 of Regulation AB and is subject to the disclosure requirements set forth in 1108 of Regulation AB. Any
uncapitalized occurrence of this term shall have the meaning commonly understood by participants in the
residential mortgage-backed securitization market.
"Servicing Advances": With respect to the Servicer or the Master Servicer as successor servicer
(including the Indenture Trustee in its capacity as successor Master Servicer), all customary, reasonable and
necessary "out of pocket" costs and expenses (including reasonable attorneys' fees and expenses) incurred by the
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Servicer or the Master Servicer in the performance of its servicing obligations under the Purchase and Servicing
Agreement, or this Agreement, as applicable, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any enforcement or judicial proceedings,
including foreclosures and (iii) the management and liquidation of the REO Property.
"Servicing Criteria": The criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such
may be amended from time to time.
"Servicing Fee": With respect to the Servicer and each Mortgage Loan serviced by the Servicer and for
any calendar month, the fee payable to the Servicer determined pursuant to the Purchase and Servicing Agreement.
"Servicing Fee Rate": With respect to each Mortgage Loan, the per annum servicing fee rate set forth on
the Mortgage Loan Schedule.
"Servicing Function Participant": Any Sub-Servicer or Subcontractor, other than the Servicer, the
Master Servicer, the Indenture Trustee, the Custodian and the Securities Administrator, in each case that is
participating in the servicing function within the meaning of Regulation AB.
"Servicing Officer": Any officer of a Master Servicer or Servicer involved in, or responsible for, the
administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing
officers furnished by the Master Servicer to the Indenture Trustee, the Securities Administrator and the
Depositor on the Closing Date, as such list may from time to time be amended.
"Servicing Transfer Costs": All reasonable costs and expenses incurred by the Master Servicer in
connection with the appointment of a successor servicer and the transfer of servicing from a predecessor
servicer, including, without limitation, any reasonable costs or expenses associated with the identification and
engagement of a successor servicer, the documentation of the assumption of servicing by the successor servicer,
the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data
as may be required by the Master Servicer to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Master Servicer to service the Mortgage Loans properly and effectively.
"Seven-Year Hybrid Mortgage Loans": The Mortgage Loans identified as such on Schedule I hereto.
"Stated Maturity Date": As defined in the Indenture.
"Subcontractor": Any vendor, subcontractor or other Person that is not responsible for the overall
servicing of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the Servicer (or a Sub-Servicer of the
Servicer), the Master Servicer, the Indenture Trustee or the Securities Administrator.
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"Subordinate Component Balance": For Loan Group 1, Loan Group 2 and Loan Group 3 and any Payment Date
will equal the excess of the aggregate Scheduled Principal Balance of the Mortgage Loans in such Loan Group as of
the first day of the related Due Period (or the Cut-Off Date with respect to the first Payment Date) plus any
amounts on deposit in the Reserve Fund attributable to such Loan Group as of such Payment Date over the aggregate
Class Principal Balances of the Offered Notes relating to such Loan Group then outstanding; and with respect to
Loan Group 4 and Loan Group 5 and any Payment Date will equal the excess of the aggregate principal balance of
the Mortgage Loans in such Loan Group (exclusive, with respect to Loan Group 4 of the related Group 4 Discount
Fraction of the Scheduled Principal Balance of each Group 4 Discount Loan and with respect to Loan Group 5 of the
related Group 5 Discount Fraction of the Scheduled Principal Balance of each Group 5 Discount Loan) as of the
first day of the related Due Period (or the Cut-Off Date with respect to the first Payment Date) plus any amounts
on deposit in the Reserve Fund attributable to such Loan Group as of such Payment Date over the aggregate Class
Principal Balances of the Senior Notes relating to such Loan Group (other than the Interest Only Notes and
Principal Only Notes) then outstanding.
"Subordinate Liquidation Amount": For any Payment Date and a Loan Group will be the excess, if any, of
(i) the aggregate Liquidation Principal for all Mortgage Loans in that Loan Group which became Liquidated
Mortgage Loans during the related Prepayment Period minus (ii) the related Senior Liquidation Amount for such
Payment Date received during the related Prepayment Period and, with respect to Loan Group 4, of the portion
attributable to the Group 4 Discount Fractional Principal Amount and with respect to Loan Group 5, of the portion
attributable to the Group 4 Discount Fractional Principal Amount, received during the related Prepayment Period.
"Subordinate Notes": The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Notes.
"Subordinate Percentage": For any Payment Date and a Loan Group in will be 100% minus the related
Senior Percentage.
"Subordinate Prepayment Percentage": For any Payment Date and a Loan Group will be 100% minus the
related Senior Prepayment Percentage.
"Subordinate Principal Distribution Amount": For any Payment Date will be the sum of the following
amounts for each Loan Group for that Payment Date:
(1) the related Subordinate Percentage of the Principal Distribution Amount for that Loan Group
(exclusive, with respect to Loan Group 4, of the related Group 4 Discount Fraction of each
Group 4 Discount Loan and with respect to Loan Group 5, of the related Group 5 Discount
Fraction of each Group 5 Discount Loan);
(2) the related Subordinate Principal Prepayment Amount; and
(3) the related Subordinate Liquidation Amount;
39
provided, however, that the Subordinate Principal Distribution Amount will be reduced by (i) amounts distributed
to the Senior Notes pursuant to Section 5.01(f) hereof, if necessary and to the extent available and (ii) any
Capitalization Reimbursement Amount for such Payment Date (exclusive of the portion thereof attributable to the
reduction of the Group 4 Discount Fractional Principal Amount and Group 5 Discount Fractional Principal Amount,
if any). Any reduction in the Subordinate Principal Distribution Amount pursuant to the provision above shall
offset the amount calculated pursuant to clause (1), clause (3) and clause (2), in that order, of the definition
of Subordinate Principal Distribution Amount.
"Subordinate Principal Prepayment Amount": For any Payment Date and a Loan Group will be the related
Subordinate Prepayment Percentage of the Principal Prepayment Amount for that Loan Group (exclusive, with respect
to Loan Group 4, of the portion attributable to the Group 4 Discount Fractional Principal Amount and with respect
to Loan Group 5, of the portion attributable to the Group 5 Discount Fractional Principal Amount).
"Subordination Level": For any specified date with respect to any class of Subordinate Notes, the
percentage obtained by dividing:
(1) the sum of the Class Principal Balances of all Subordinate Notes which are subordinate in right
of payment to such Class as of such date before giving effect to distributions of principal or
allocations of Realized Losses on the Mortgage Loans on such date; by
(2) the sum of the Class Principal Balances of the Notes as of such date before giving effect to
distributions of principal or allocations of Realized Losses on the Mortgage Loans on such date.
"Sub-Servicer": Any Person that (i) services Mortgage Loans on behalf of the Servicer, the Master
Servicer, the Securities Administrator, the Indenture Trustee or the Custodian and (ii) is responsible for the
performance (whether directly or through sub-Servicer or Subcontractors) of Servicing functions required to be
performed under this Agreement, the Purchase and Servicing Agreement or any sub-servicing agreement that are
identified in Item 1122(d) of Regulation AB.
"Subsequent Recovery": With respect to any Payment Date and a Mortgage Loan that became a Liquidated
Mortgage Loan in a month preceding the related Prepayment Period to such Payment Date and with respect to which
the related Realized Loss was allocated to one or more Classes of Notes, an amount received in respect of such
Liquidated Mortgage Loan during the related Prepayment Period, net of any reimbursable expenses.
"Substitution Adjustment": As defined in Section 2.04(d) hereof.
"Surety Bond": The Limited Purpose Surety Bond (Policy No. AB0039BE), issued by Ambac Assurance
Corporation for the benefit of certain beneficiaries, including the Indenture Trustee for the benefit of the
Holders of the Notes, but only to the extent that such Limited Purpose Surety Bond covers any Additional
Collateral Mortgage Loans.
40
"Ten-Year Hybrid Mortgage Loans": The Mortgage Loans identified as such on Schedule I hereto.
"Three-Year Hybrid Mortgage Loans": The Mortgage Loans identified as such on Schedule I hereto.
"Trust": The Issuer.
"Trust Account": Each Distribution Account, each Custodial Account, the Reserve Fund, the Certificate
Distribution Account and the Class A-X Reserve Fund, as the context requires.
"Trust Account Property": The Trust Accounts, the Certificate Distribution Account, all amounts and
investments held from time to time in the Trust Accounts (whether in the form of deposit accounts, physical
property, book-entry securities, uncertificated securities, securities entitlements, investment property or
otherwise) and all proceeds of the foregoing.
"Trust Agreement": The Original Trust Agreement as amended and restated by the Amended and Restated
Trust Agreement dated July 25, 2008 by and among the Depositor, the Owner Trustee and the Securities
Administrator.
"Trust Estate": The assets subject to this Agreement and the Indenture (including those transferred by
the Depositor to the Issuer) and pledged by the Issuer to the Indenture Trustee, which assets consist of the
following: (i) such Mortgage Loans as from time to time are subject to this Agreement, together with the
Mortgage Files relating thereto, together with all collections thereon (including any Insurance Proceeds,
Liquidation Proceeds or other recoveries) and proceeds thereof, (ii) any REO Property, together with all
collections thereon (including any Insurance Proceeds, Liquidation Proceeds or other recoveries) and proceeds
thereof, (iii) the Issuer's rights with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) all right, title and interest of the
Depositor and the Issuer under the Purchase and Servicing Agreement and the Assignment Agreement (including any
security interest created thereby) with respect to the Mortgage Loans; (v) the Trust Accounts (subject to the
last sentence of this definition), any REO Account and such assets that are deposited therein from time to time
and any investments thereof, together with any and all income, proceeds and payments with respect thereto,
(vi) all right, title and interest of the Issuer in and to each security or pledge agreement or guarantee in
respect of Additional Collateral (including the Surety Bond supporting any Additional Collateral Mortgage Loan,
the Issuer's security interest in and to any Additional Collateral and the Issuer's rights to require payment in
any Additional Collateral Mortgage Loan pursuant to the Purchase and Servicing Agreement), (vii) all right, title
and interest of the Issuer under the Administration Agreement (viii) all accounts, chattel paper, deposit
accounts, documents, general intangibles, goods, instruments, investment property, letter-of-credit rights,
letters of credit, money, and oil, gas, and other minerals, consisting of, arising from, or relating to, any of
the foregoing, and (ix) all proceeds of the foregoing. Notwithstanding the foregoing, however, the Trust Estate
specifically excludes (1) all payments and other collections of interest and principal due on the Mortgage Loans
on or before the Cut-Off Date and principal received before the Cut-Off Date (except any principal collected as
part of a payment due after the Cut-Off Date) and (2) all income and gain realized from Eligible Investments of
funds on deposit in the Distribution Account.
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"Two Times Test": Will be met if (x) on or prior to the Payment Date in July 2011, (i) the Aggregate
Subordinate Percentage is at least two times the Aggregate Subordinate Percentage as of the Closing Date,
(ii) the condition described in clause (i) of the second bullet in the definition of "Senior Prepayment
Percentage" is satisfied and (iii) cumulative Realized Losses with respect to the Mortgage Loans do not exceed
20% of the aggregate Class Principal Balance of the Subordinate Notes as of the Closing Date or (y) on or after
the Payment Date in August 2011, (i) the Aggregate Subordinate Percentage is at least two times such Aggregate
Subordinate Percentage as of the Closing Date, (ii) the condition described in clause (i) of the second bullet in
the definition of "Senior Prepayment Percentage" is satisfied and (iii) cumulative Realized Losses with respect
to the Mortgage Loans do not exceed 30% of the aggregate Class Principal Balance of the Subordinate Notes as of
the Closing Date.
"Undercollateralized Group": A Loan Group for which the aggregate Class Principal Balance of the
Offered Notes related to such Loan Group (after giving effect to distributions of principal on that Payment Date
from amounts received or advanced with respect to the related Mortgage Loans in that Loan Group other than
payments made pursuant to Section 5.01(f)) is greater than the Scheduled Principal Balance of the related
Mortgage Loans in that Loan Group (exclusive, with respect to Loan Group 4 of the related Group 4 Discount
Fraction of the Scheduled Principal Balance of each Group 4 Discount Loan and with respect to Loan Group 5 of the
related Group 5 Discount Fraction of the Scheduled Principal Balance of each Group 5 Discount Loan) on such
Payment Date.
"Undercollateralization Payment": As defined in Section 5.01(f)(ii).
"Uniform Commercial Code": The Uniform Commercial Code as in effect in any applicable jurisdiction from
time to time.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such that the complete restoration of
such property is not fully reimbursable by the hazard insurance policies required to be maintained on such
Mortgaged Property.
"Value": With respect to any Mortgage Loan and the related Mortgaged Property, the lesser of:
(i) the value of such Mortgaged Property as determined by an appraisal, or an
automated valuation model (AVM) in lieu of an appraisal, made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser who met the
minimum requirements of Title XI of the Financial Institution Reform, Recovery and Enforcement
Act of 1989 and the regulations promulgated thereunder; and
(ii) the purchase price paid for the related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage Loan;
42
provided, however, that in the case of a Refinancing Mortgage Loan, such value of the Mortgaged Property is
generally based solely upon the value determined by an appraisal made for the originator of such Refinancing
Mortgage Loan at the time of origination by an appraiser who met the minimum requirements of Title XI of the
Financial Institution Reform, Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder.
"Voting Rights": The portion of the voting rights of all of the Notes which is allocated to such Note.
100% of the voting rights shall be allocated among the Classes of Notes, pro rata, based on a fraction, expressed
as a percentage, the numerator of which is the Class Principal Balance of such Class and the denominator of which
is the aggregate of the Class Principal Balances then outstanding. The voting rights allocated to a Class of
Notes shall be allocated among all Holders of such Class, pro rata, based on a fraction the numerator of which is
the Note Principal Amount of each Note of such Class and the denominator of which is the Class Principal Balance
of such Class; provided, however, that any Note registered in the name of the Depositor, the Master Servicer, the
Securities Administrator, the Indenture Trustee, the Owner Trustee or any of their respective affiliates shall
not be included in the calculation of Voting Rights. The Interest Only Notes shall not be entitled to any Voting
Rights.
"Xxxxx Fargo Custodial Agreement": The custodial agreement dated as of July 1, 2008, by and among the
Indenture Trustee, the Servicer and Xxxxx Fargo Bank, as custodian.
"Writedown Amount": As defined in Section 5.03(d).
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
SECTION 2.01. CONVEYANCE OF MORTGAGE LOANS.
In consideration of the Issuer's delivery of the Securities to the Depositor or its designee, and
concurrently with the execution and delivery of this Agreement, the Depositor does hereby sell, transfer, assign,
set over and otherwise convey to the Issuer without recourse, subject to Sections 2.02, 2.03, 2.04 and 2.05, all
of the right, title and interest of the Depositor in and to the Mortgage Loans and the assets constituting the
Trust Estate. To facilitate the pledge of the Trust Estate to the Indenture Trustee pursuant to the Indenture,
the Issuer hereby directs the Depositor to assign and deliver the Trust Estate directly to the Indenture
Trustee. The Indenture Trustee declares that, subject to the review provided for in the Xxxxx Fargo Custodial
Agreement, it has received and shall hold the Trust Estate, as Indenture Trustee, in trust, for the benefit and
use of the Securityholders and for the purposes and subject to the terms and conditions set forth in this
Agreement and the Indenture. Concurrently with such receipt, the Issuer has issued and delivered the Securities
to or upon the order of the Depositor, in exchange for the Trust Estate.
43
The foregoing sale, transfer, assignment, set-over, deposit and conveyance does not and is not intended
to result in creation or assumption by the Indenture Trustee of any obligation of the Depositor or any other
Person in connection with the Mortgage Loans or any other agreement or instrument relating thereto except as
specifically set forth herein.
For purposes of complying with the requirements of the Asset-Backed Securities Facilitation Act of the
State of Delaware, 6 Del. C. § 2701A, et seq. (the "Securitization Act"), each of the parties hereto xxxxxx
agrees that:
(i) any property, assets or rights purported to be transferred, in whole or in part, by
the Depositor pursuant to this Agreement shall be deemed to no longer be the property, assets or rights
of the Depositor;
(ii) none of the Depositor, its creditors or, in any insolvency proceeding with respect to
the Depositor or the Depositor's property, a bankruptcy trustee, receiver, debtor, debtor in possession
or similar person, to the extent the issue is governed by Delaware law, shall have any rights, legal or
equitable, whatsoever to reacquire (except pursuant to a provision of this Agreement), reclaim, recover,
repudiate, disaffirm, redeem or recharacterize as property of the Depositor any property, assets or
rights purported to be transferred, in whole or in part, by the Depositor pursuant to this Agreement
(including the Assignment Agreement);
(iii) in the event of a bankruptcy, receivership or other insolvency proceeding with respect
to the Depositor or the Depositor's property, to the extent the issue is governed by Delaware law, such
property, assets and rights shall not be deemed to be part of the Depositor's property, assets, rights
or estate; and
(iv) the transaction contemplated by this Agreement shall constitute a "securitization
transaction" as such term is used in the Securitization Act.
In connection with such transfer and assignment, the Seller, on behalf of the Depositor and the Issuer,
does hereby deliver on the Closing Date, unless otherwise specified in this Section 2.01, to, and deposit with
the Indenture Trustee, or the Custodian as its designated agent, the documents or instruments described in
Schedule B-1 of the Purchase and Servicing Agreement with respect to each Mortgage Loan (a "Mortgage File") so
transferred and assigned.
In connection with the assignment of any MERS Mortgage Loan, the Seller agrees that it will take (or
shall cause the Servicer to take), at the expense of the Seller (with the cooperation of the Depositor, the
Seller, the Issuer, the Indenture Trustee and the Master Servicer), such actions as are necessary to cause the
MERS® System to indicate that such Mortgage Loans have been assigned to the Indenture Trustee in accordance with
this Agreement for the benefit of the Securityholders by including (or deleting, in the case of Mortgage Loans
that are repurchased in accordance with this Agreement) in such computer files the information required by the
MERS® System to identify the series of the Notes issued in connection with the transfer of such Mortgage Loans to
the PHH Mortgage Trust, Series 2008-CIM2.
With respect to each Cooperative Loan the Seller, on behalf of the Depositor does hereby deliver to the
Indenture Trustee (or Custodian) the related Cooperative Loan Documents and the Seller will take (or shall cause
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the Servicer to take), at the expense of the Seller (with the cooperation of the Depositor, the Indenture Trustee
and the Master Servicer) such actions as are necessary under applicable law (including but not limited to the
Uniform Commercial Code) in order to perfect the interest of the Indenture Trustee in the related Mortgaged
Property.
Assignments of each Mortgage with respect to each Mortgage Loan that is not a MERS Mortgage Loan (other
than a Cooperative Loan) shall be recorded; provided, however, that such assignments need not be recorded if, in
the Opinion of Counsel (which must be from Independent Counsel and not at the expense of the Issuer or the
Indenture Trustee) acceptable to the Indenture Trustee, each Rating Agency and the Master Servicer, recording in
such states is not required to protect the Indenture Trustee's interest in the related Mortgage Loans; provided,
however, notwithstanding the delivery of any Opinion of Counsel, each assignment of Mortgage shall be submitted
for recording by the Seller (or the Seller will cause the Servicer to submit each such assignment for recording),
at the cost and expense of the Seller, in the manner described above, at no expense to the Issuer or Indenture
Trustee, upon the earliest to occur of (1) reasonable direction by the Majority Securityholders, (2) the
occurrence of a bankruptcy or insolvency relating to the Seller or the Depositor, or (3) with respect to any one
Assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under
the related Mortgage. Subject to the preceding sentence, as soon as practicable after the Closing Date (but in
no event more than three months thereafter except to the extent delays are caused by the applicable recording
office), the Seller shall properly record (or the Seller will cause the Servicer to properly record), at the
expense of the Seller (with the cooperation of the Depositor, the Indenture Trustee and the Master Servicer), in
each public recording office where the related Mortgages are recorded, each Assignment with respect to a Mortgage
Loan that is not a MERS Mortgage Loan.
The Seller shall deliver or cause to be delivered to the Custodian, on behalf of the Indenture Trustee,
promptly upon receipt thereof, any other documents constituting a part of a Mortgage File received with respect
to any Mortgage Loan sold to the Depositor by the Seller and required to be delivered to the Custodian pursuant
to the Xxxxx Fargo Custodial Agreement, on behalf of the Indenture Trustee, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage Loan.
For Mortgage Loans (if any) that have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Seller, in lieu of delivering the above documents, herewith delivers to the Indenture Trustee,
or to the Custodian on behalf of the Indenture Trustee, an Officer's Certificate which shall include a statement
to the effect that all amounts received in connection with such prepayment that are required to be deposited in
the Distribution Account have been so deposited. All original documents that are not delivered to the Indenture
Trustee on behalf of the Issuer shall be held by the Master Servicer or the Servicer in trust for the Indenture
Trustee, for the benefit of the Issuer and the Securityholders.
Upon discovery or receipt of notice of any materially defective document in, or that a document is
missing from, a Mortgage File, the Seller shall have 90 days to cure such defect or deliver such missing document
to the Indenture Trustee. If the Seller does not cure such defect or deliver such missing document within such
time period, the Seller shall either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.04 hereof.
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The Depositor herewith delivers to the Indenture Trustee an executed copy of the Purchase and Servicing
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.
SECTION 2.02. ACCEPTANCE OF THE TRUST ESTATE.
Subject to the provisions of Section 2.01, the Depositor hereby delivers the documents referred to in
Section 2.01 and all other assets included in the definition of "Trust Estate" to the Indenture Trustee (or the
Custodian on its behalf) on behalf of the Issuer and the Issuer acknowledges that such delivery will constitute
receipt by the Issuer.
The Indenture Trustee acknowledges receipt by it or by the Custodian on its behalf, subject to the
provisions of Section 2.01 and subject to the review set forth in the Xxxxx Fargo Custodial Agreement and any
exceptions noted on the exception report delivered pursuant to the Xxxxx Fargo Custodial Agreement, of the
documents referred to in Section 2.01 above and all other assets included in the definition of "Trust Estate" and
declares that, it, or the Custodian on its behalf, holds and will hold such documents and the other documents
delivered to it constituting a Mortgage File, and that it, or the Custodian on its behalf, holds or will hold all
such assets and such other assets included in the definition of "Trust Estate" in trust for the exclusive use and
benefit of all present and future Securityholders.
Nothing in this Agreement shall be construed to constitute an assumption by the Indenture Trustee, any
Custodian or the Securityholders of any unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that the
functions of the Indenture Trustee with respect to the custody, acceptance, inspection and release of Mortgage
Files, including but not limited to certain insurance policies and documents contemplated by this Agreement or
the Xxxxx Fargo Custodial Agreement, and the preparation and delivery of related certifications, shall be
performed by the Custodian.
SECTION 2.03. GRANT CLAUSE
(a) It is intended that the conveyance by the Depositor to the Issuer of the Mortgage Loans
and the assets in the Trust Estate, as provided for in Section 2.01, be construed as a sale by the
Depositor to the Issuer of the Mortgage Loans and the assets in the Trust Estate. Further, it is not
intended that any such conveyance be deemed to be a grant of a security interest in the Mortgage Loans
and the assets in the Trust Estate by the Depositor to the Issuer to secure a debt or other obligation
of the Depositor. However, in the event that the Mortgage Loans and the assets in the Trust Estate are
held to be property of the Depositor or if for any reason this Agreement is held or deemed to create a
46
security interest in the Mortgage Loans and the assets in the Trust Estate, then (a) this Agreement
shall be a security agreement within the meaning of Articles 9 of the New York UCC (or the Uniform
Commercial Code if not the New York UCC); (b) the conveyance provided for in Section 2.01 shall be
deemed to be a grant by the Depositor to the Issuer of, and the Depositor hereby grants to the Issuer,
to secure all of its obligations hereunder, a security interest in all of the Depositor's right, title
and interest, whether now owned or hereafter acquired, in and to (A) the Mortgage Loans, including the
Mortgage Notes, the Mortgages, any related insurance policies and all other documents in the related
Mortgage Files, (B) all amounts payable pursuant to the Mortgage Loans in accordance with the terms
thereof (C) all the assets of the Trust Estate, (D) all accounts, chattel paper, deposit accounts,
documents, general intangibles, goods, instruments, investment property, letter-of-credit rights,
letters of credit, money, and oil, gas, and other minerals, consisting of, arising from, or relating to,
any of the foregoing, (E) all proceeds of the conversion, voluntary or involuntary, of the foregoing
into cash, instruments, securities or other property, including without limitation all Liquidation
Proceeds, all Insurance Proceeds, all amounts from time to time held or invested in the Trust Accounts,
whether in the form of cash, instruments, securities or other property and (F) all proceeds of the
foregoing.
(b) The Depositor and, at the Depositor's direction, the Seller and the Issuer shall, to the
extent consistent with this Agreement, take such reasonable actions as may be necessary to ensure that,
if this Agreement were deemed to create a security interest in the Mortgage Loans and the property of
the Trust Estate, such security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term of this Agreement.
Without limiting the generality of the foregoing, the Depositor shall prepare and deliver to the Issuer,
and the Issuer shall forward for filing, or shall cause to be forwarded for filing, at the expense of
the Depositor, all filings necessary to maintain the effectiveness of any original filings necessary
under the Uniform Commercial Code to perfect the Issuer's security interest in the Mortgage Loans as
evidenced by an Officer's Certificate of the Depositor, including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by (1) any change of name of the
Depositor or the Issuer, (2) any change in the type or jurisdiction of organization of the Depositor or
(3) any transfer of any interest of the Depositor in any Mortgage Loan.
(c) Neither the Depositor nor the Issuer shall organize under the law of any jurisdiction
other than the State under which each is organized as of the Closing Date (whether changing its
jurisdiction of organization or organizing under an additional jurisdiction) without giving 30 days
prior written notice of such action to its immediate transferee, including the Indenture Trustee.
Before effecting such change, each of the Depositor or the Issuer proposing to change its jurisdiction
of organization shall prepare and file in the appropriate filing office any financing statements,
amendments or other statements necessary to continue the perfection of its transfer of the Mortgage
Loans. In connection with the transactions contemplated by this Agreement and the Indenture, each of
the Depositor and the Issuer authorizes its immediate transferee, including the Securities Administrator
acting on behalf of the Indenture Trustee, to file in any filing office any initial financing
statements, any amendments to financing statements, any continuation statements, or any other statements
or filings described in Section 2.03(b) and this Section 2.03(c).
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(d) The Depositor shall not take any action inconsistent with the sale by the Depositor of all
of its right, title and interest in and to the Trust Estate and shall indicate or shall cause to be
indicated in its records and records held on its behalf that ownership of each Mortgage Loan and the
other property of the Issuer is held by the Issuer. In addition, the Depositor shall respond to any
inquiries from third parties with respect to ownership of a Mortgage Loan or any property of the Trust
Estate by stating that it is not the owner of such Mortgage Loan and that ownership of such Mortgage
Loan or property of the Trust Estate is held by the Issuer on behalf of the Noteholders.
SECTION 2.04. REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE ORIGINATOR.
(a) Upon discovery or receipt of written notice that a document does not comply with the
requirements of Section 2.01 hereof, or that a document is missing from, a Mortgage File or of the
breach by the Originator of any representation, warranty or covenant under its Purchase and Servicing
Agreement which materially adversely affects the value of that Mortgage Loan or the interest therein of
the Securityholders, (i) in the case of Mortgage Loan documentation that is not in compliance with
Section 2.01 or is missing, the Indenture Trustee (or the Custodian as its designated agent) shall
promptly notify the Originator of such noncompliance or missing document and request that the Originator
deliver such missing document or cure such noncompliance within 60 days from the date that the
Originator was notified of such missing document or noncompliance, and if the Originator does not
deliver such missing document or cure such noncompliance in all material respects during such period,
the Indenture Trustee shall enforce the Originator's obligation under the Purchase and Servicing
Agreement and cause the Originator to repurchase that Mortgage Loan from the Trust Estate at the
Purchase Price on or prior to the Determination Date following the expiration of such 60 day period;
provided, however, if the Originator can ultimately deliver such missing document or cure such
noncompliance but is not reasonably expected to be cured within such 60 day period, the Indenture
Trustee shall permit the Originator an additional 30 days to deliver such missing document or cure such
noncompliance provided that the Originator has commenced curing or correcting such defect and is
diligently pursuing same or (ii) in the case of a breach of a representation, warranty or covenant with
respect to a Mortgage Loan under the Purchase and Servicing Agreement, the party discovering such breach
shall notify the Originator and the Indenture Trustee of such breach (with a copy of such notice
provided to the other parties hereto) of its representation, warranty or covenant made under the
Purchase and Servicing Agreement, and request that the Originator cure such breach within 60 days from
the date it was notified of the breach and if the Originator does not cure such breach in all material
respects during such period, the Indenture Trustee shall enforce the obligation of the Originator under
its Purchase and Servicing Agreement and cause it to repurchase the Mortgage Loans from the Trust Estate
at the Purchase Price on or prior to the Determination Date following the expiration of such 60 day
period; provided, however, that, in connection with any such breach that could not reasonably have been
cured within such 60 day period, if the Originator shall have commenced to cure such breach within such
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60 day period, the Originator shall be permitted an additional 30 days to proceed thereafter diligently
and expeditiously to cure the same; and, provided further, that, in the case of the breach of any
representation, warranty or covenant made by the Originator in the Purchase and Servicing Agreement, if
the Mortgage Loan or the related Mortgaged Property acquired with respect thereto has been sold, then
the Originator shall pay, in lieu of the Purchase Price, any excess of the Purchase Price over the Net
Liquidation Proceeds received upon such sale. The Purchase Price for the repurchased Mortgage Loan or
such other amount due shall be deposited in the Distribution Account on or prior to the next
Determination Date after the obligation of the Originator to repurchase such Mortgage Loan arises. The
Indenture Trustee, upon receipt of written certification from the Securities Administrator of the
related deposit in the Distribution Account, shall cause the Custodian to release to the Originator the
related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as the Originator shall furnish to it and as shall be necessary to vest in the
Originator any Mortgage Loan released pursuant hereto and the Indenture Trustee shall have no further
responsibility with regard to such Mortgage File (it being understood that the Indenture Trustee shall
have no responsibility for determining the sufficiency of such assignment for its intended purpose). In
lieu of repurchasing any such Mortgage Loan as provided above, the Originator may cause such Mortgage
Loan to be removed from the Trust Estate (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.04(d) below. It is understood and agreed that the obligation of the Originator
to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Originator respecting such omission, defect or
breach available to the Indenture Trustee on behalf of the Securityholders.
The Indenture Trustee on behalf of the Issuer shall enforce the obligations of the Originator under the
Purchase and Servicing Agreement including, without limitation, any obligation of the Originator to purchase a
Mortgage Loan on account of missing or defective documentation or any such obligation of the Originator on
account of a breach of a representation, warranty or covenant as described in this Section 2.04(a).
Any costs and expenses (including reasonable attorneys' fees and expenses) incurred by the Indenture
Trustee enforcing the obligations of the Originator under this Section 2.04(a) shall be reimbursable to the
Indenture Trustee from amounts on deposit in the Distribution Accounts.
(b) If pursuant to the provisions of Section 2.04(a), the Originator repurchases or otherwise
removes from the Trust Estate a Mortgage Loan that is a MERS Mortgage Loan, the Originator will take (or
shall cause the Servicer to take), at the expense of the Originator (with the cooperation of the
Depositor, the Indenture Trustee and the Master Servicer), such actions as are necessary to either
(i) cause MERS to execute and deliver an Assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Originator and shall cause such Mortgage to be removed from registration on
the MERS® System in accordance with MERS' rules and regulations or (ii) cause MERS to designate on the
MERS® System the Originator or its designee as the beneficial holder of such Mortgage Loan.
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(c) [Reserved].
(d) As to any Deleted Mortgage Loan for which the Originator substitutes a Qualified
Substitute Mortgage Loan or Mortgage Loans, such substitution shall be effected by the Originator
delivering to the Indenture Trustee, for such Qualified Substitute Mortgage Loan or Mortgage Loans, the
Mortgage Note, the Mortgage, the Assignment to the Indenture Trustee (or the Custodian on its behalf),
and such other documents and agreements, with all necessary endorsements thereon, as are required by the
Xxxxx Fargo Custodial Agreement (subject to the exceptions provided therein), together with an Officers'
Certificate stating that each such Qualified Substitute Mortgage Loan satisfies the definition thereof
and specifying the Substitution Adjustment (as described below), if any, in connection with such
substitution; provided, however, that, in the case of any Qualified Substitute Mortgage Loan that is a
MERS Mortgage Loan, the Originator shall provide such documents and take such other action with respect
to such Qualified Substitute Mortgage Loans as are required pursuant to the Xxxxx Fargo Custodial
Agreement. The Indenture Trustee (or the Custodian on its behalf) shall acknowledge receipt for such
Qualified Substitute Mortgage Loan or Loans and shall review such documents as specified in the Xxxxx
Fargo Custodial Agreement and deliver to the Servicer, with respect to such Qualified Substitute
Mortgage Loan or Loans, certifications substantially in the forms set forth in the Xxxxx Fargo Custodial
Agreement, with any exceptions noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust Estate and will be retained by the
Originator. For the month of substitution, payments to Securityholders will reflect the collections and
recoveries in respect of such Deleted Mortgage Loan in the Due Period preceding the month of
substitution and the Originator shall thereafter be entitled to retain all amounts subsequently received
in respect of such Deleted Mortgage Loan. The Indenture Trustee, or the Custodian on behalf of the
Indenture Trustee, shall give or cause to be given written notice to the Securityholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
constitute part of the Trust Estate and shall be subject in all respects to the terms of this Agreement
and, in the case of a substitution effected by the Originator the related Purchase and Servicing
Agreement, including, in the case of a substitution effected by the Originator all representations and
warranties thereof included in the related Purchase and Servicing Agreement, in each case as of the date
of substitution.
For any month in which the Originator substitutes one or more Qualified Substitute Mortgage Loans for
one or more Deleted Mortgage Loans, the Originator shall determine, and provide written certification to the
Indenture Trustee as to the amount (each, a "Substitution Adjustment"), if any, by which the aggregate Purchase
Price of all such Deleted Mortgage Loans exceeds the aggregate, as to each such Qualified Substitute Mortgage
Loan, of the principal balance thereof as of the date of substitution, together with one month's interest on such
principal balance at the applicable Net Mortgage Rate. On or prior to the next Determination Date after the
Originator's obligation to repurchase the related Deleted Mortgage Loan arises, the Originator will deliver or
50
cause to be delivered to the Securities Administrator for deposit in the Distribution Account an amount equal to
the related Substitution Adjustment, if any, and the Indenture Trustee, upon receipt of the related Qualified
Substitute Mortgage Loan or Loans and an acknowledgment from the Securities Administrator of its receipt of the
deposit to the Distribution Account, shall release to the Originator, the related Mortgage File or Files and
shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the
Originator shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released
pursuant hereto.
SECTION 2.05. RESERVED.
SECTION 2.06. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor represents and warrants to the Issuer, on behalf of the Certificateholders, the Indenture
Trustee on behalf of the Noteholders, the Securities Administrator and the Master Servicer 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 Indenture Trustee
on behalf of the Issuer of each Mortgage Loan, the Depositor had good and marketable title to each
Mortgage Loan (insofar as such title was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or other encumbrance or other
interest of any nature;
(iii) as of the Closing Date, the Depositor has transferred all right, title and interest in
the Mortgage Loans to the Issuer;
(iv) the Depositor has not transferred the Mortgage Loans to the Issuer with any intent to
hinder, delay or defraud any of its creditors;
(v) the Depositor has been duly incorporated and is validly existing as a corporation in
good standing under the laws of Delaware, with full corporate power and authority to own its assets and
conduct its business as presently being conducted;
(vi) the Depositor is not in violation of its certificate of incorporation or by-laws or in
default in the performance or observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be bound, which default might result in
any material adverse changes in the financial condition, earnings, affairs or business of the Depositor
or which might materially and adversely affect the properties or assets, taken as a whole, of the
Depositor;
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(vii) the execution, delivery and performance of this Agreement by the Depositor, and the
consummation of the transactions contemplated hereby, do not and will not result in a material breach or
violation of any of the terms or provisions of, or, to the knowledge of the Depositor, constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Depositor is a party or by which the Depositor is bound or to which any of the property or
assets of the Depositor is subject, nor will such actions result in any violation of the provisions of
the certificate of incorporation or by-laws of the Depositor or, to the best of the Depositor's
knowledge without independent investigation, any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Depositor or any of its properties or assets
(except for such conflicts, breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under this Agreement);
(viii) to the best of the Depositor's knowledge without any independent investigation, no
consent, approval, authorization, order, registration or qualification of or with any court or
governmental agency or body of the United States or any other jurisdiction is required for the
consummation by the Depositor of the transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) have been previously obtained or
(b) 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 Securities;
(c) seeking to prevent the issuance of the Securities or the consummation by the Depositor of any of the
transactions contemplated by this Agreement, as the case may be; or (d) which might materially and
adversely affect the performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 2.07. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR WITH RESPECT TO SECURITY INTEREST IN THE
MORTGAGE LOANS.
(a) With respect to the Mortgage Notes, the Depositor represents and warrants that:
(i) This Agreement creates a valid and continuing security interest (as defined in the
Uniform Commercial Code) in the Mortgage Notes in favor of the Issuer, which security interest is prior
to all other liens, and is enforceable as such against creditors of and purchasers from the Issuer;
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(ii) The Mortgage Notes constitute "instruments" within the meaning of the applicable
Uniform Commercial Code;
(iii) The Depositor owns and has good title to the Mortgage Notes free and clear of any
lien, claim or encumbrance of any Person;
(iv) The Depositor has received all consents and approvals required by the terms of the
Mortgage Notes to the pledge of the Mortgage Notes hereunder to the Issuer;
(v) All original executed copies of each Mortgage Note have been or will be delivered to
the Custodian, as set forth in this Agreement;
(vi) The Depositor has received a written acknowledgement from the Custodian that it is
holding the Mortgage Notes solely on behalf and for the benefit of the Indenture Trustee;
(vii) Other than the security interest granted to the Issuer pursuant to this Agreement, to
cover the possibility that the transfer of the Mortgage Loans is not deemed to be a sale, the Depositor
has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Notes. The Depositor has not authorized the filing of and is not aware of any financing
statements against the Depositor that include a description of the collateral covering the Mortgage
Notes other than a financing statement relating to the security interest granted to the Issuer hereunder
or that has been terminated. The Depositor is not aware of any judgment or tax lien filings against the
Depositor; and
(viii) None of the Mortgage Notes has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Issuer.
(b) The representations and warranties set forth in this Section 2.07 shall survive the
Closing Date and shall not be waived.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. MASTER SERVICER TO SERVICE AND ADMINISTER THE MORTGAGE LOANS.
The Master Servicer shall monitor and enforce the obligation of the Servicer to service and administer
the Mortgage Loans in accordance with the terms of the Purchase and Servicing Agreement and shall have full power
and authority to do any and all things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master Servicer shall consult with the
Servicer as necessary from time-to-time to carry out the Master Servicer's obligations hereunder, shall receive
and review all reports, information and other data provided to the Master Servicer by the Servicer and shall
enforce the obligation of the Servicer to perform and observe the covenants, obligations and conditions to be
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performed or observed by the Servicer under the Purchase and Servicing Agreement. The Master Servicer shall
independently and separately monitor the Servicer's servicing activities with respect to each Mortgage Loan in
respect of the provisions of the Purchase and Servicing Agreement, reconcile reports and other data provided to
the Master Servicer pursuant to the previous sentence on a monthly basis based on the Mortgage Loan data provided
to the Master Servicer by the Depositor on the Closing Date (upon which data the Master Servicer shall be
entitled to rely and shall have no obligation to confirm or verify) and coordinate corrective adjustments to the
Servicer's and Master Servicer's records, and based on such reconciled and corrected information, provide
information to the Securities Administrator to permit the Securities Administrator to prepare the statements
specified in Section 5.05 and any other information and statements required to be provided by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer to the Master Servicer for deposit in the Distribution Account pursuant to the
Purchase and Servicing Agreement.
Notwithstanding anything in this agreement to the contrary, the Master Servicer shall not be responsible
nor liable for the day-to-day servicing activities of the Servicer or for any unlawful act or omission, breach,
negligence, fraud, willful misconduct or bad faith of the Servicer. In addition, any information about any of
the Mortgage Loans acquired or obtained by Xxxxx Fargo Bank, National Association in any other capacity under
this Agreement or any related agreement (including but not limited to the Xxxxx Fargo Custodial Agreement) shall
not be attributable to Xxxxx Fargo Bank, National Association in its capacity as Master Servicer unless
communication of that information to Xxxxx Fargo Bank, National Association in its capacity as Master Servicer is
an express duty of such person under this Agreement or such related agreement.
The Indenture Trustee shall furnish the Servicer and the Master Servicer with any limited powers of
attorney and other documents in form reasonably acceptable to it necessary or appropriate to enable the Servicer
and the Master Servicer to service or master service and administer the related Mortgage Loans and REO Property.
The Indenture Trustee shall have no responsibility for any action of the Master Servicer or the Servicer pursuant
to any such limited power of attorney and shall be indemnified by the Master Servicer or the Servicer for any
cost, liability or expense arising from the misuse thereof by the Master Servicer or the Servicer.
The Indenture Trustee, the Custodian and the Master Servicer shall provide access to the records and
documentation in physical possession of the Indenture Trustee, the Custodian or the Master Servicer regarding the
related Mortgage Loans and REO Property and the servicing thereof to the Securityholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only upon reasonable prior written
request and during normal business hours at the office of the Indenture Trustee, the Custodian or the Master
Servicer; provided, however, that, unless otherwise required by law, none of the Indenture Trustee, the Custodian
or the Master Servicer shall be required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Indenture Trustee, the Custodian and the
Master Servicer shall allow representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that covers the Indenture Trustee's, the
Custodian's or the Master Servicer's actual costs.
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The Indenture Trustee shall execute and deliver to the Servicer or the Master Servicer upon request any
court pleadings, requests for trustee's sale or other documents necessary or desirable and, in each case,
provided to the Indenture Trustee by the Servicer or Master Servicer, as applicable, to (i) the foreclosure or
trustee's sale with respect to a Mortgaged Property; (ii) any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage; (iii) obtain a deficiency judgment against the Mortgagor; or
(iv) enforce any other rights or remedies provided by the Mortgage Note or Mortgage or otherwise available at law
or equity. The Indenture Trustee shall have no responsibility for the willful malfeasance or any wrongful or
negligent actions taken by the Master Servicer or the Servicer in respect of any document delivered by the
Indenture Trustee under this paragraph, and the Indenture Trustee shall be indemnified by the Master Servicer or
the Servicer, as applicable, for any cost, liability or expense arising from the misuse thereof by the Master
Servicer or the Servicer.
SECTION 3.02. [RESERVED].
SECTION 3.03. MONITORING OF SERVICER.
(a) The Master Servicer shall be responsible for reporting to the Indenture Trustee (on behalf
of the Issuer) and the Depositor the non-compliance by the Servicer with its duties under the Purchase
and Servicing Agreement. In the review of the Servicer's activities, the Master Servicer may rely upon
an officer's certificate of the Servicer and the Servicer's assessment of compliance and related
accountant's attestation, or other accountant's report provided to the Master Servicer pursuant to the
Purchase and Servicing Agreement, with regard to the Servicer's compliance with the terms of the
Purchase and Servicing Agreement. In the event that the Master Servicer, in its judgment, determines
that the Servicer should be terminated in accordance with the Purchase and Servicing Agreement, or that
a notice should be sent pursuant to the Purchase and Servicing Agreement with respect to the occurrence
of an event that, unless cured, would constitute grounds for such termination, the Master Servicer shall
notify the Indenture Trustee thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Indenture Trustee and the Securityholders,
shall enforce the obligations of the Servicer under the Purchase and Servicing Agreement, and shall, in
the event that the Servicer fails to perform its obligations in accordance with the Purchase and
Servicing Agreement, subject to the preceding paragraph, terminate the rights and obligations of the
Servicer thereunder with respect to the Mortgage Loans and act as servicer of the Mortgage Loans or to
cause the Indenture Trustee to enter in to a new servicing agreement with a successor servicer selected
by the Master Servicer; provided, that, it is understood and acknowledged by the parties hereto that
there will be a period of transition (not to exceed ninety (90) days) before the actual servicing
functions can be fully transferred to such successor servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of the Purchase and Servicing Agreement and the
pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at
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such time as the Master Servicer in its good faith business judgment, would require were it the owner of
the related Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or defend any legal action
except to the extent that the Master Servicer shall have received indemnity reasonably acceptable to it
for its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer or the Indenture Trustee,
if applicable, in connection with any alleged or actual default by the Servicer under the Purchase and
Servicing Agreement, any termination of the Servicer, any appointment of a successor servicer, and/or
any transfer and assumption of servicing by the Master Servicer with respect to the Purchase and
Servicing Agreement (including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with the investigation of any actual or alleged default by the
Servicer under the Purchase and Servicing Agreement, the evaluation of the potential termination and/or
the actual termination of the Servicer and the appointment of a successor Servicer and (ii) all
Servicing Transfer Costs are not fully and timely reimbursed by the terminated Servicer for whatever
reason (or are not required to be reimbursed by the terminated Servicer pursuant to the Purchase and
Servicing Agreement), the Master Servicer or the Indenture Trustee, if applicable, shall be entitled to
reimbursement of such costs and expenses from the Distribution Account.
(d) [Reserved]
(e) If the Master Servicer or another successor servicer acts as the Servicer, it will not
assume liability for the representations and warranties of the Servicer, if any, that it replaces and,
as successor servicer, it will not be accountable or liable for any unlawful act or omission, breach,
negligence, fraud, willful misconduct or bad faith of the predecessor servicer.
(f) With respect to Additional Collateral Mortgage Loans, the Master Servicer shall have no
duty or obligation to monitor or enforce the activities of the Servicer under the Purchase and Servicing
Agreement with respect to Additional Collateral, except (a) with respect to any instances where the
Servicer, in the course of fulfilling its obligations under the Purchase and Servicing Agreement seeks
directions, instructions, consents or waivers from the Master Servicer with respect to any item of
Additional Collateral, or (b) upon the occurrence of the following events (i) in the case of a final
liquidation of any Mortgaged Property secured by Additional Collateral, the Master Servicer shall
enforce the obligation of the Servicer under the Purchase and Servicing Agreement to liquidate such
Additional Collateral as required by the Purchase and Servicing Agreement, and (ii) if the Master
Servicer assumes the obligations of the Servicer as successor Servicer under the Purchase and Servicing
Agreement pursuant to this Section 3.03, as successor Servicer, it shall be bound to service and
administer the Additional Collateral in accordance with the provisions of the Purchase and Servicing
Agreement.
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(g) The Servicer may modify the terms of any Mortgage Loan as permitted under the Purchase and
Servicing Agreement. The Master Servicer shall not be under any obligation to consent to the
modification of any Mortgage Loan by the Servicer for which the consent of the Master Servicer is
required under the Purchase and Servicing Agreement. In no event shall the Master Servicer consent to
any modification of a Mortgage Loan that extends the remaining term to maturity of such Mortgage Loan to
a date after the Stated Maturity Date for any related Class of Notes.
(h) If the Purchase and Servicing Agreement requires the oversight and monitoring of loss
mitigation measures with respect to the related Mortgage Loans, the Master Servicer will monitor any
loss mitigation procedure or recovery action related to a defaulted Mortgage Loan (to the extent it
receives notice of such from the Servicer) and confirm that such loss mitigation procedure or recovery
action is initiated, conducted and concluded in accordance with any timeframes and any other
requirements set forth in the Purchase and Servicing Agreement, and the Master Servicer shall notify the
Depositor in any case in which the Master Servicer believes that the Servicer is not complying with such
timeframes and/or other requirements.
SECTION 3.04. FIDELITY BOND.
The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and
omissions insurance policy that would meet the requirements of Xxxxxx Xxx or Freddie Mac, affording coverage with
respect to all directors, officers, employees and other Persons acting on such Master Xxxxxxxx's behalf, and
covering errors and omissions in the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and amount generally acceptable for
entities serving as master servicers or trustees. Any such errors and omissions policy and fidelity bond may not
be cancelable without thirty (30) days' prior written notice to the Indenture Trustee.
SECTION 3.05. POWER TO ACT; PROCEDURES.
The Master Servicer shall master service the Mortgage Loans and shall have full power and authority to
do any and all things that it may deem necessary or desirable in connection with the master servicing and
administration of the Mortgage Loans, including but not limited to the power and authority (i) to execute and
deliver, on behalf of the Securityholders, the Issuer and the Indenture Trustee, customary consents or waivers
and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property and assumptions of
the Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds, Liquidation Proceeds and
Subsequent Recoveries and (iv) to effectuate, in its own name, on behalf of the Issuer or the Indenture Trustee,
as applicable, or in the name of the Issuer or the Indenture Trustee, as applicable, foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage Loan, in each case, in accordance
with the provisions of this Agreement and the Purchase and Servicing Agreement, as applicable. The Indenture
Trustee shall furnish the Master Servicer, upon written request from a Servicing Officer, with any limited powers
of attorney empowering the Master Servicer or the Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the Mortgage Loans or the Mortgaged
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Property, in accordance with the Purchase and Servicing Agreement and this Agreement, and the Indenture Trustee
shall execute and deliver such other documents, as the Master Servicer may request, to enable the Master Servicer
to master service and administer the Mortgage Loans and carry out its duties hereunder, in each case in
accordance with Accepted Master Servicing Practices (and the Indenture Trustee shall have no liability for misuse
of any such powers of attorney by the Master Servicer or the Servicer and shall be indemnified by the Master
Servicer or the Servicer for any costs, liabilities or expenses incurred by the Indenture Trustee in connection
with such misuse). If the Master Servicer or the Indenture Trustee has been advised that it is likely that the
laws of the state in which action is to be taken prohibit such action if taken in the name of the Issuer or the
Indenture Trustee on its behalf or that the Issuer or the Indenture Trustee, as applicable, would be adversely
affected under the "doing business" or tax laws of such state if such action is taken in its name, the Master
Servicer shall join with the Indenture Trustee, on behalf of the Issuer, in the appointment of a co-trustee
pursuant to Section 6.10 of the Indenture. In the performance of its duties hereunder, the Master Servicer shall
be an independent contractor and shall not, except in those instances where it is taking action in the name of
the Indenture Trustee, be deemed to be the agent of the Indenture Trustee on behalf of the Issuer.
SECTION 3.06. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
To the extent provided in the Purchase and Servicing Agreement and to the extent Mortgage Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicer to enforce such clauses in
accordance with the Purchase and Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with the Purchase and Servicing
Agreement, and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may be released from
liability in accordance with the Purchase and Servicing Agreement.
SECTION 3.07. RELEASE OF MORTGAGE FILES.
The procedures governing the release of Mortgage Files shall be as set forth in the Xxxxx Fargo
Custodial Agreement.
SECTION 3.08. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD FOR INDENTURE
TRUSTEE.
(a) The Master Servicer shall transmit and the Servicer (to the extent required by the
Purchase and Servicing Agreement) shall transmit to the Indenture Trustee (or Custodian) such documents
and instruments coming into the possession of the Master Servicer or the Servicer from time to time as
are required by the terms hereof, or in the case of the Servicer, the Purchase and Servicing Agreement,
to be delivered to the Indenture Trustee (or Custodian). Any funds received by the Master Servicer or
by the Servicer in respect of any Mortgage Loan or which otherwise are collected by the Master Servicer
or by the Servicer as Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of
any Mortgage Loan shall be held for the benefit of the Indenture Trustee and the Securityholders subject
to the Master Servicer's right to retain or withdraw from the Distribution Account the Master Servicing
Fee, any additional compensation pursuant to Section 3.14 and any other amounts provided in this
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Agreement, and to the right of the Servicer to retain its Servicing Fee and any other amounts as
provided in the Purchase and Servicing Agreement. The Master Servicer shall, and shall cause the
Servicer to (to the extent provided in the Purchase and Servicing Agreement), provide access to
information and documentation regarding the Mortgage Loans to the Indenture Trustee, its agents and
accountants at any time upon reasonable request and during normal business hours, and to Securityholders
that are savings and loan associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation or examiners of any
other federal or state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and during normal business hours at
the offices of the Master Servicer designated by it. In fulfilling such a request the Master Servicer
shall not be responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control of, the Master
Servicer, in respect of any Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries, shall be held by the
Master Servicer for and on behalf of the Indenture Trustee and the Securityholders and shall be and
remain the sole and exclusive property of the Issuer; provided, however, that the Master Servicer and
the Servicer shall be entitled to setoff against, and deduct from, any such funds any amounts that are
properly due and payable to the Master Servicer or the Servicer under this Agreement or the Purchase and
Servicing Agreement.
SECTION 3.09. STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
(a) For each Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicer
under the Purchase and Servicing Agreement to maintain or cause to be maintained standard fire and
casualty insurance and, where applicable, flood insurance, all in accordance with the provisions of the
Purchase and Servicing Agreement. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the Purchase and Servicing Agreement and that
no earthquake or other additional insurance is to be required of any Mortgagor or to be maintained on
property acquired in respect of a defaulted loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the Master Servicer or by the
Servicer, under any insurance policies (other than amounts to be applied to the restoration or repair of
the Mortgaged Property or released to the Mortgagor in accordance with the Purchase and Servicing
Agreement) shall be deposited into the Distribution Account, subject to withdrawal pursuant to
Section 4.02 and 4.03. Any cost incurred by the Master Servicer or the Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to the amount owing under
the Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however, that the addition
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of any such cost shall not be taken into account for purposes of calculating the payments to be made to
Securityholders and shall be recoverable by the Master Servicer or the Servicer pursuant to Section 4.02
and 4.03.
SECTION 3.10. PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The Master Servicer shall (to the extent provided in the Purchase and Servicing Agreement) cause the
Servicer to, prepare and present on behalf of the Indenture Trustee, the Issuer and the Securityholders all
claims under the Insurance Policies and take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the Master Servicer (or disbursed to the Servicer and remitted to the Master Servicer) in respect of
such policies, bonds or contracts shall be promptly deposited in the Distribution Account upon receipt, except
that any amounts realized that are to be applied to the repair or restoration of the related Mortgaged Property
as a condition precedent to the presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
SECTION 3.11. MAINTENANCE OF THE PRIMARY INSURANCE POLICIES.
(a) The Master Servicer shall not take, or permit the Servicer (to the extent such action is
prohibited under the Purchase and Servicing Agreement) to take, any action that would result in
noncoverage under any applicable Primary Insurance Policy of any loss which, but for the actions of such
Master Servicer or Servicer, would have been covered thereunder. The Master Servicer shall use its best
reasonable efforts to cause the Servicer (to the extent required under the Purchase and Servicing
Agreement) to keep in force and effect (to the extent that the Mortgage Loan requires the Mortgagor to
maintain such insurance), a Primary Insurance Policy applicable to each Mortgage Loan (including any
lender-paid Primary Insurance Policy) in accordance with the provisions of this Agreement and the
Purchase and Servicing Agreement, as applicable. The Master Servicer shall not, and shall not permit
the Servicer (to the extent required under the Purchase and Servicing Agreement) to, cancel or refuse to
renew any such Primary Insurance Policy that is in effect at the date of the initial issuance of the
Mortgage Note and is required to be kept in force hereunder except in accordance with the provisions of
this Agreement and the Purchase and Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Servicer (to the extent required under the
Purchase and Servicing Agreement) to present, on behalf of the Indenture Trustee, the Issuer and the
Securityholders, claims to the insurer under any Primary Insurance Policies and, in this regard, to take
such reasonable action as shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicer under any Primary Insurance Policies shall be deposited in the Distribution Account, subject to
withdrawal pursuant to Section 4.03.
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SECTION 3.12. INDENTURE TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS.
The Indenture Trustee (or the Custodian on its behalf) shall retain possession and custody of the
originals (to the extent available and delivered) of any Primary Insurance Policies, or certificate of insurance
if applicable and available, and any certificates of renewal as to the foregoing as may be issued from time to
time as contemplated by this Agreement and which come into its possession. Until all amounts distributable in
respect of the Notes have been distributed in full and the Master Servicer otherwise has fulfilled its
obligations under this Agreement, the Indenture Trustee (or the Custodian on its behalf) shall also retain
possession and custody of each Mortgage File in accordance with and subject to the terms and conditions of this
Agreement. The Master Servicer shall promptly deliver or cause to be delivered to the Indenture Trustee (or the
Custodian on its behalf), upon the execution or receipt thereof the originals of any Primary Insurance Policies,
any certificates of renewal, and such other documents or instruments that constitute portions of the Mortgage
File that come into the possession of the Master Servicer from time to time.
SECTION 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The Master Servicer shall cause the Servicer (to the extent required under the Purchase and Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the ownership of Mortgaged Properties
securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in accordance with the Purchase and Servicing
Agreement; provided, however, the Servicer may sell any such defaulted Mortgage Loan rather than converting the
ownership of the related Mortgaged Properties to the Issuer if, in the Servicer's judgment, such sale would
maximize the recovery of principal and interest on the related Mortgage Note.
SECTION 3.14. COMPENSATION TO THE MASTER SERVICER.
The Master Servicer shall be entitled to receive the Master Servicing Fee on each Payment Date pursuant
to Section 4.03(a)(viii). Pursuant to Section 4.02(c), certain income and gain realized from any investment of
funds in the Distribution Accounts shall be for the benefit of the Master Servicer as additional compensation.
Servicing compensation in the form of assumption fees, if any, late payment charges, as collected, if any, or
otherwise shall be retained by the Servicer, or the Master Servicer, and shall not be deposited in the related
Custodial Account. The Master Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor except as provided in this
Agreement. The Master Servicing Fee due to the Master Servicer in respect of any Payment Date shall be reduced
in accordance with Section 5.06. The Master Servicing Fee Rate may also be reduced by the portion of the Master
Servicing Fee Rate payable for duties as Custodian if the Master Servicer and the Custodian are no longer the
same Person.
SECTION 3.15. REO PROPERTY.
(a) In the event the Issuer (or the Indenture Trustee on its behalf) acquires ownership of any
REO Property in respect of any related Mortgage Loan, the deed or certificate of sale shall be issued to
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the Issuer, or to its nominee, on behalf of the Issuer. The Master Servicer shall, to the extent
provided in the Purchase and Servicing Agreement, cause the Servicer to sell, any REO Property as
expeditiously as possible and in accordance with the provisions of this Agreement and the Purchase and
Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall cause the Servicer to protect and conserve, such REO Property in the manner and to the
extent required by the Purchase and Servicing Agreement.
(b) The Master Servicer shall, to the extent required by the Purchase and Servicing Agreement,
cause the Servicer to deposit all funds collected and received in connection with the operation of any
REO Property in the Custodial Account.
(c) The Master Servicer and the Servicer, upon the final disposition of any REO Property,
shall be entitled to reimbursement for any related unreimbursed Advances and other unreimbursed advances
as well as any unpaid Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that any such unreimbursed Advances as well as any unpaid
Servicing Fees may be reimbursed or paid, as the case may be, prior to final disposition, out of any net
rental income or other net amounts derived from such REO Property.
(d) To the extent provided in the Purchase and Servicing Agreement, the Liquidation Proceeds
from the final disposition of the REO Property, net of any payment to the Master Servicer and the
Servicer as provided above shall be deposited in the Custodial Account on or prior to the applicable
Determination Date in the month following receipt thereof and be remitted by wire transfer in
immediately Available Distribution Amount to the Master Servicer for deposit into the Distribution
Account on the next succeeding Servicer Remittance Date.
SECTION 3.16. ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS.
(a) Assessments of Compliance.
(i) By March 15th of each year, commencing in March 2009, the Master Servicer and the
Securities Administrator, each at its own expense, shall furnish, and each such party shall cause any
Servicing Function Participant engaged by it to furnish, each at its own expense, to the Securities
Administrator and the Depositor, a report on an assessment of compliance with the Relevant Servicing
Criteria that contains (A) a statement by such party of its responsibility for assessing compliance with
the Relevant Servicing Criteria, (B) a statement that such party used the Relevant Servicing Criteria to
assess compliance with the Relevant Servicing Criteria, (C) such party's assessment of compliance with
the Relevant Servicing Criteria as of and for the fiscal year covered by the Form 10-K required to be
filed pursuant to Section 3.19(b) and for each fiscal year thereafter, whether or not a Form 10-K is
required to be filed, including, if there has been any material instance of noncompliance with the
Relevant Servicing Criteria, a discussion of each such failure and the nature and status thereof, and
(D) a statement that a registered public accounting firm has issued an attestation report on such party's
assessment of compliance with the Relevant Servicing Criteria as of and for such period.
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(ii) No later than the end of each fiscal year for the Issuer for which a Form 10-K is
required to be filed, the Master Servicer shall forward to the Securities Administrator the name of each
Servicing Function Participant engaged by it and what Relevant Servicing Criteria will be addressed in
the report on assessment of compliance prepared by such Servicing Function Participant (provided,
however, that the Master Servicer need not provide such information to the Securities Administrator so
long as the Master Servicer and the Securities Administrator are the same Person). When the Master
Servicer and the Securities Administrator (or any Servicing Function Participant engaged by them) submit
their assessments to the Securities Administrator, such parties will also at such time include the
assessment (and attestation pursuant to subsection (b) of this Section 3.16) of each Servicing Function
Participant engaged by it.
(iii) Promptly after receipt of each such report on assessment of compliance, (i) the
Depositor shall review each such report and each comparable report submitted by the Servicer pursuant to
the Purchase and Servicing Agreement and, if applicable, consult with the Master Servicer, the
Securities Administrator, the Servicer and any Servicing Function Participant engaged by such parties as
to the nature of any material instance of noncompliance with the Relevant Servicing Criteria by each
such party, and (ii) the Securities Administrator shall confirm that the assessments, taken as a whole,
address all of the Servicing Criteria and taken individually address the Relevant Servicing Criteria for
each party as set forth on Exhibit F and on any similar exhibit set forth in the Purchase and Servicing
Agreement and notify the Depositor of any exceptions. In the event that any Servicing Function
Participant engaged by any party is terminated, assigns its rights and obligations under, or resigns
pursuant to, the terms of this Agreement, or any applicable custodial agreement, the Purchase and
Servicing Agreement or sub-servicing agreement, as the case may be, such party shall provide or shall
cause such Servicing Function Participant to provide for the applicable period preceding such assignment
and termination a report on assessment of compliance pursuant to this Section 3.16(a) or to such other
applicable agreement, notwithstanding any such termination, assignment or resignation.
(iv) The Master Servicer shall enforce the obligation of the Servicer as set forth in the
Purchase and Servicing Agreement to deliver to the Master Servicer an annual report on assessment of
compliance within the time frame set forth in, and in such form and substance as may be required
pursuant to, the Purchase and Servicing Agreement. The Master Servicer shall include such annual
reports on assessment of compliance with its own assessment of compliance to be submitted to the
Securities Administrator pursuant to this Section.
(v) Failure of the Master Servicer to comply timely with Section 3.16(a)(i) shall be
deemed an Event of Default, automatically, without notice and without any cure period, and the Indenture
Trustee may, in addition to whatever rights the Indenture Trustee may have under this Agreement and at
law or in equity or to damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof without compensating the Master Servicer for the same. This paragraph shall
supersede any other provision in this Agreement or any other agreement to the contrary.
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(b) Attestation Reports.
(i) By March 15th of each year, commencing in March 2009, the Master Servicer and the
Securities Administrator, each at its own expense, shall cause, and each such party shall cause any
Servicing Function Participant engaged by it to cause, each at its own expense, a registered public
accounting firm (which may also render other services to the Master Servicer, the Securities
Administrator, or such other Servicing Function Participants, as the case may be) and that is a member
of the American Institute of Certified Public Accountants to furnish a report to the Securities
Administrator and the Depositor, to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion that such party has
complied with the Relevant Servicing Criteria, and (ii) on the basis of an examination conducted by such
firm in accordance with standards for attestation engagements issued or adopted by the PCAOB, it is
expressing an opinion as to whether such party's compliance with the Relevant Servicing Criteria was
fairly stated in all material respects, or it cannot express an overall opinion regarding such party's
assessment of compliance with the Relevant Servicing Criteria. In the event that an overall opinion
cannot be expressed, such registered public accounting firm shall state in such report why it was unable
to express such an opinion. Such report must be available for general use and not contain restricted
use language.
(ii) Promptly after receipt of such report from the Master Servicer, the Securities
Administrator or any Servicing Function Participant engaged by such parties, (i) the Depositor shall
review the report and each comparable report submitted by the Servicer pursuant to the Purchase and
Servicing Agreement and, if applicable, consult with such parties as to the nature of any defaults by
such parties, in the fulfillment of any of each such party's obligations hereunder or under any other
applicable agreement, and (ii) the Securities Administrator shall confirm that each assessment submitted
pursuant to subsection (a) of this Section 3.16 is coupled with an attestation meeting the requirements
of this Section and notify the Depositor of any exceptions.
(iii) The Master Servicer shall enforce the obligation of the Servicer as set forth in the
Purchase and Servicing Agreement to deliver to the Master Servicer an attestation within the time frame
set forth in, and in such form and substance as may be required pursuant to, the Purchase and Servicing
Agreement. The Master Servicer shall include each such attestation with its own attestation to be
submitted to the Securities Administrator pursuant to this Section. In the event any Servicing Function
Participant engaged by any such party is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of this Agreement, or any applicable custodial agreement, the Purchase and
Servicing Agreement or sub-servicing agreement, as the case may be, such party shall cause a registered
public accounting firm to provide an attestation pursuant to this Section 3.16(b) or to such other
applicable agreement, for the applicable period immediately preceding such termination, assignment or
resignation, notwithstanding any such termination, assignment or resignation.
(iv) Failure of the Master Servicer to comply timely with Section 3.16(b)(i) shall be
deemed an Event of Default, automatically, without notice and without any cure period, and the Indenture
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Trustee may, in addition to whatever rights the Indenture Trustee may have under this Agreement and at
law or in equity or to damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof without compensating the Master Servicer for the same. This paragraph shall
supersede any other provision in this Agreement or any other agreement to the contrary.
SECTION 3.17. ANNUAL COMPLIANCE STATEMENT.
(a) The Master Servicer and the Securities Administrator shall deliver (and the Master Servicer and
Securities Administrator shall cause any Servicing Function Participant engaged by it to deliver) to the
Depositor and the Securities Administrator on or before March 15th of each year, commencing in March 2009, an
Officer's Certificate stating, as to the signer thereof, that (A) a review of such party's activities during the
preceding calendar year or portion thereof and of such party's performance under this Agreement, or such other
applicable agreement in the case of any Servicing Function Participant, has been made under such officer's
supervision and (B) to the best of such officer's knowledge, based on such review, such party has fulfilled all
its obligations under this Agreement, or such other applicable agreement in the case of any Servicing Function
Participant, in all material respects throughout such year or portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such failure known to such officer and the
nature and status thereof. Promptly after receipt of each such Officer's Certificate, the Depositor shall review
such Officer's Certificate and, if applicable, consult with each such party, as applicable, as to the nature of
any failures by such party, in the fulfillment of any of such party's obligations hereunder or, in the case of
any Servicing Function Participant, under such other applicable agreement.
(b) The Master Servicer shall enforce the obligation of the Servicer as set forth in the Purchase
and Servicing Agreement to deliver to the Master Servicer an annual statement of compliance within the time frame
set forth in, and in such form and substance as may be required pursuant to, the Purchase and Servicing
Agreement The Master Servicer shall include such annual statements of compliance with its own annual statement
of compliance to be submitted to the Securities Administrator pursuant to this Section. In the event that any
Servicing Function Participant engaged by any party is terminated, assigns its rights and obligations under, or
resigns pursuant to, the terms of this Agreement, or any applicable custodial agreement, the Purchase and
Servicing Agreement or sub-servicing agreement, as the case may be, such party shall provide or shall cause such
Servicing Function Participant to provide for the applicable period preceding such assignment and termination an
annual compliance statement pursuant to this Section 3.17 or to such other applicable agreement, notwithstanding
any such termination, assignment or resignation.
(c) Failure of the Master Servicer to comply timely with this Section 3.17 shall be deemed an Event
of Default, automatically, without notice and without any cure period, and the Indenture Trustee may, in addition
to whatever rights the Indenture Trustee may have under this Agreement and at law or in equity or to damages,
including injunctive relief and specific performance, terminate all the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the
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Master Servicer for the same. This paragraph shall supersede any other provision in this Agreement or any other
agreement to the contrary.
(d) Unless available on the Securities Administrator's website, copies of such Master Servicer
annual statements of compliance shall be provided to any Securityholders upon request, by the Master Servicer or
by the Depositor at the Master Servicer's expense if the Master Servicer failed to provide such copies (unless
(i) the Master Servicer shall have failed to provide the Depositor with such statement or (ii) the Depositor shall
be unaware of the Master Servicer's failure to provide such statement).
SECTION 3.18. ANNUAL CERTIFICATION.
(a) Each Form 10-K required to be filed by the Issuer pursuant to Section 3.19 shall include a
Xxxxxxxx-Xxxxx Certification, required to be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. Each of the
Master Servicer and the Securities Administrator shall provide, and each such party shall cause any Servicing
Function Participant engaged by it to provide, to the Person who signs the Xxxxxxxx-Xxxxx Certification (the
"Certifying Person"), by March 15th of each year in which the Issuer is subject to the reporting requirements of
the Exchange Act and otherwise within a reasonable period of time upon request, a certification (each, a "Back-Up
Certification"), in the form attached hereto as Exhibit K, upon which the Certifying Person, the entity for which
the Certifying Person acts as an officer, and such entity's officers, directors and Affiliates (collectively with
the Certifying Person, "Certification Parties") can reasonably rely. The senior officer of the Master Servicer
in charge of the master servicing function shall serve as the Certifying Person on behalf of the Issuer. Such
officer of the Certifying Person can be contacted by e-mail at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by
facsimile at (000) 000-0000. In the event that the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by the parties is terminated or resigns pursuant to the terms of this
Agreement, or any applicable sub-servicing agreement, as the case may be, such party shall provide a Back-Up
Certification to the Certifying Person pursuant to this Section 3.18 with respect to the period of time it was
subject to this Agreement or any applicable sub-servicing agreement, as the case may be and a compliance
statement, an assessment of compliance and attestation pursuant to Sections 3.16, and 3.17, notwithstanding such
termination or resignation. Notwithstanding the foregoing, (i) the Master Servicer and the Securities
Administrator shall not be required to deliver a Back-Up Certification to each other if both are the same Person
and the Master Servicer is the Certifying Person and (ii) the Master Servicer shall not be obligated to sign the
Xxxxxxxx-Xxxxx Certification in the event that it does not receive any Back-Up Certification required to be
furnished to it pursuant to this section or the Purchase and Servicing Agreement or custodial agreement.
(b) The Master Servicer shall enforce the obligation of the Servicer as set forth in the Purchase
and Servicing Agreement to deliver to the Master Servicer a certification in the form of Exhibit K to the
Purchase and Servicing Agreement within the time frame set forth in, and in such form and substance as may be
required pursuant to, the Purchase and Servicing Agreement.
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SECTION 3.19. REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
(a) Reports Filed on Form 10-D.
(i) Within 15 days after each Payment Date (subject to permitted extensions under the
Exchange Act), the Securities Administrator shall prepare and file on behalf of the Issuer any Form 10-D
required by the Exchange Act, in form and substance as required by the Exchange Act. The Securities
Administrator shall file each Form 10-D with a copy of the related Payment Date Statement attached
thereto. Any disclosure in addition to the Payment Date Statement that is required to be included on
Form 10-D ("Additional Form 10-D Disclosure") shall be reported by the parties set forth on Exhibit G to
the Depositor and the Securities Administrator and directed and approved by the Depositor pursuant to
the following paragraph and the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except as set forth in the next
two paragraphs.
(ii) As set forth on Exhibit G hereto, within 5 calendar days after the related Payment
Date, (i) the parties to the PHH Mortgage Trust, Series 2008-CIM2 transaction shall be required to
provide to the Securities Administrator and the Depositor, to the extent known by a responsible officer
thereof, in XXXXX-compatible form, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form 10-D Disclosure, if
applicable, together with an Additional Disclosure Notification in the form of Exhibit J hereto (an
"Additional Disclosure Notification"), and (ii) the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Additional Form 10-D Disclosure in Form 10-D
pursuant to this paragraph.
(iii) After preparing the Form 10-D, the Securities Administrator shall forward upon request
electronically a copy of the Form 10-D to the Depositor (provided that such Form 10-D includes any
Additional Form 10-D Disclosure). Within two Business Days after receipt of such copy, but no later
than the 12th calendar day after the Payment Date, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes to or approval of such
Form 10-D. In the absence of receipt of any written changes or approval, or if the Depositor does not
request a copy of a Form 10-D, the Securities Administrator shall be entitled to assume that such Form
10-D is in final form and the Securities Administrator may proceed with the execution and filing of the
Form 10-D. A duly authorized representative of the Master Servicer shall sign each Form 10-D. If a
Form 10-D cannot be filed on time or if a previously filed Form 10-D needs to be amended, the Securities
Administrator will follow the procedures set forth in subsection (d)(ii) of this Section 3.19. Promptly
(but no later than 1 Business Day) after filing with the Commission, the Securities Administrator will
make available on its internet website a final executed copy of each Form 10-D filed by the Securities
Administrator. Each party to this Agreement acknowledges that the performance by the Master Servicer
and the Securities Administrator of their respective duties under this Section 3.19(a) related to the
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timely preparation, execution and filing of Form 10-D is contingent upon such parties strictly observing
all applicable deadlines in the performance of their duties under this Section 3.19(a). Neither the
Master Servicer nor the Securities Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, execute and/or timely file such
Form 10-D, where such failure results from the Securities Administrator's inability or failure to obtain
or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange
for execution or file such Form 10-D, not resulting from its own negligence, bad faith or willful
misconduct.
(iv) Form 10-D requires the registrant to indicate (by checking "yes" or "no") that it
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Securities Administrator, with respect to each Form 10-D, to check "yes" for each item
unless the Securities Administrator has received timely prior written notice from the Depositor that the
answer should be "no" for an item. The Depositor hereby represents to the Securities Administrator that
the Depositor has filed all such required reports during the preceding 12 months and that it has been
subject to such filing requirement for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than the fifth calendar day after the related Payment Date with
respect to the filing of a report on Form 10-D, if the answer to the questions should be "no" as a
result of filings that relate to other securitization transactions of the Depositor for which the
Securities Administrator does not have the obligation to prepare and file Exchange Act reports. The
Securities Administrator shall be entitled to rely on such representations in preparing, executing
and/or filing any such report.
(b) Reports Filed on Form 10-K.
(i) On or prior to the 90th day after the end of each fiscal year of the Issuer in which a
Form 10-K is required to be filed or such earlier date as may be required by the Exchange Act (the "10-K
Filing Deadline") (it being understood that the fiscal year for the Issuer ends on December 31st of each
year), commencing in March 2009, the Securities Administrator shall prepare and file on behalf of the
Issuer a Form 10-K, in form and substance as required by the Exchange Act. Each such Form 10-K shall
include the following items, in each case to the extent they have been delivered to the Securities
Administrator within the applicable time frames set forth in this Agreement and the Purchase and
Servicing Agreement, (i) an annual compliance statement for the Servicer, the Master Servicer, the
Securities Administrator and any Servicing Function Participant engaged by such parties (each, a
"Reporting Servicer") as described under the Purchase and Servicing Agreement and Section 3.17 and for
the Custodian as described in the Xxxxx Fargo Custodial Agreement, (ii)(A) the annual reports on
assessment of compliance with servicing criteria for each Reporting Servicer, as described under
Section 3.16(a) and for the Custodian as described in the Xxxxx Fargo Custodial Agreement, and (B) if
each Reporting Servicer's or the Custodian's report on assessment of compliance with servicing criteria
described in the Purchase and Servicing Agreement or Xxxxx Fargo Custodial Agreement or under and
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Section 3.16(a) identifies any material instance of noncompliance, disclosure identifying such instance
of noncompliance, or if any Reporting Servicer's or the Custodian's report on assessment of compliance
with servicing criteria described thereunder is not included as an exhibit to such Form 10-K, disclosure
that such report is not included and an explanation why such report is not included, (iii)(A) the
registered public accounting firm attestation report for each Reporting Servicer, as described in the
Purchase and Servicing Agreement or for the Custodian as described in the Xxxxx Fargo Custodial
Agreement or under Section 3.16(b), and (B) if any registered public accounting firm attestation report
described in the Purchase and Servicing Agreement, the Xxxxx Fargo Custodial Agreement or under
Section 3.16(b) identifies any material instance of noncompliance, disclosure identifying such instance
of noncompliance, or if any such registered public accounting firm attestation report is not included as
an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such
report is not included, and (iv) a Xxxxxxxx-Xxxxx Certification as described in Section 3.18 (provided,
however, that the Securities Administrator, at its discretion, may omit from the Form 10-K any annual
compliance statement, assessment of compliance or attestation report that is not required to be filed
with such Form 10-K pursuant to Regulation AB). Any disclosure or information in addition to (i)
through (iv) above that is required to be included on Form 10-K ("Additional Form 10-K Disclosure")
shall be determined and prepared by and at the direction of the Depositor pursuant to the following
paragraph and the Securities Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth in the next two paragraphs.
(ii) As set forth on Exhibit H hereto, the Purchase and Servicing Agreement and the Xxxxx
Fargo Custodial Agreement, as applicable, no later than March 15th of each year that the Issuer is
subject to the Exchange Act reporting requirements, commencing in 2009, (i) the parties hereto and
thereto shall be required to provide to the Securities Administrator and the Depositor, to the extent
known by a responsible officer thereof, in XXXXX-compatible form, or in such other form as otherwise
agreed upon by the Securities Administrator and such party, the form and substance of any Additional
Form 10-K Disclosure, if applicable, together with an Additional Disclosure Notification and (ii) the
Depositor will approve, as to form and substance, or disapprove, as the case may be, the inclusion of
the Additional Form 10-K Disclosure on Form 10-K. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in connection with including any
Additional Form 10-K Disclosure in Form 10-K pursuant to this paragraph.
(iii) After preparing the Form 10-K, the Securities Administrator shall forward upon request
electronically a copy of the Form 10-K to the Depositor. Within three Business Days after receipt of
such copy, but no later than March 25th, the Depositor shall notify the Securities Administrator in
writing (which may be furnished electronically) of any changes to or approval of such Form 10-K. In the
absence of receipt of any written changes or approval, the Securities Administrator shall be entitled to
assume that such Form 10-K is in final form and the Securities Administrator may proceed with the
execution and filing of the Form 10-K. A senior officer of the Master Servicer in charge of the master
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servicing function shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if a previously
filed Form 10-K needs to be amended, the Securities Administrator will follow the procedures set forth
in subsection (d)(ii) of this Section 3.19. Promptly (but no later than 1 Business Day) after filing
with the Commission, the Securities Administrator will make available on its internet website a final
executed copy of each Form 10-K filed by the Securities Administrator. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Securities Administrator of its duties
under this Section 3.19(b) related to the timely preparation, execution and filing of Form 10-K is
contingent upon such parties (and the Custodian, the Servicer and any Servicing Function Participant)
strictly observing all applicable deadlines in the performance of their duties under this
Section 3.19(b), Section 3.18, Section 3.17, Section 3.16(a), Section 3.16(b), the Xxxxx Fargo Custodial
Agreement and the Purchase and Servicing Agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form 10-K, where such
failure results from the Securities Administrator's inability or failure to obtain or receive, on a
timely basis, any information from any other party hereto needed to prepare, arrange for execution or
file such Form 10-K, not resulting from its own negligence, bad faith or willful misconduct.
(iv) Form 10-K requires the registrant to indicate (by checking "yes" or "no") that it
"(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Securities Administrator, with respect to each Form 10-K, to check "yes" for each item
unless the Securities Administrator has received timely prior written notice from the Depositor that the
answer should be "no" for an item. The Depositor hereby represents to the Securities Administrator that
the Depositor has filed all such required reports during the preceding 12 months and that it has been
subject to such filing requirement for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than March 15th with respect to the filing of a report on Form 10-K,
if the answer to the questions should be "no" as a result of filings that relate to other securitization
transactions of the Depositor for which the Securities Administrator does not have the obligation to
prepare and file Exchange Act reports. The Securities Administrator shall be entitled to rely on such
representations in preparing, executing and/or filing any such report.
(c) Reports Filed on Form 8-K.
(i) Within four (4) Business Days after the occurrence of an event requiring disclosure on
Form 8-K (each such event, a "Reportable Event"), and if requested by the Depositor, the Securities
Administrator shall prepare and file on behalf of the Issuer a Form 8-K, as required by the Exchange
Act, provided that the Depositor shall file the initial Form 8-K in connection with the issuance of the
Offered Notes. Any disclosure or information related to a Reportable Event or that is otherwise
required to be included in Form 8-K ("Form 8-K Disclosure Information") shall be reported by the parties
set forth on Exhibit I (either under this Agreement or under the Purchase and Servicing Agreement or the
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Xxxxx Fargo Custodial Agreement, as applicable) to the Depositor and the Securities Administrator and
directed and approved by the Depositor pursuant to the following paragraph and the Securities
Administrator will have no duty or liability for any failure hereunder to determine or prepare any Form
8-K Disclosure Information or any Form 8-K, except as set forth in the next two paragraphs.
(ii) As set forth on Exhibit I hereto, for so long as the Issuer is subject to the Exchange
Act reporting requirements, no later than close of business (New York City time) on the 2nd Business
Day after the occurrence of a Reportable Event (i) the parties hereto shall be required to provide to
the Securities Administrator and Depositor, to the extent known by a responsible officer thereof, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by the Securities Administrator
and such party, the form and substance of any Form 8-K Disclosure Information, if applicable, together
with an Additional Disclosure Notification and (ii) the Depositor will approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure Information. The
Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Form 8-K Disclosure Information in Form 8-K
pursuant to this paragraph.
(iii) After preparing the Form 8-K, the Securities Administrator shall forward upon request
electronically a copy of the Form 8-K to the Depositor. Promptly, but no later than the close of
business on the third Business Day after the Reportable Event, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes to or approval of such
Form 8-K. In the absence of receipt of any written changes or approval, the Securities Administrator
shall be entitled to assume that such Form 8-K is in final form and the Securities Administrator may
proceed with the execution and filing of the Form 8-K. A duly authorized representative of the Master
Servicer shall sign each Form 8-K filed by the Securities Administrator. If a Form 8-K cannot be filed
on time or if a previously filed Form 8-K needs to be amended, the Securities Administrator will follow
the procedures set forth in subsection (d)(ii) of this Section 3.19. Promptly (but no later than 1
Business Day) after filing with the Commission, the Securities Administrator will, make available on its
internet website a final executed copy of each Form 8-K filed by the Securities Administrator. The
parties to this Agreement acknowledge that the performance by the Master Servicer and the Securities
Administrator of their respective duties under this Section 3.19(c) related to the timely preparation,
execution and filing of Form 8-K is contingent upon such parties strictly observing all applicable
deadlines in the performance of their duties under this Section 3.19(c). Neither the Securities
Administrator nor the Master Servicer shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute and/or timely file such Form
8-K, where such failure results from the Securities Administrator's inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for
execution or file such Form 8-K, not resulting from its own negligence, bad faith or willful misconduct.
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(d) Delisting; Amendments; Late Filings.
(i) On or prior to January 30 of the first year in which the Securities Administrator is
able to do so under applicable law, unless otherwise directed by the Depositor, the Securities
Administrator shall prepare and file a Form 15 relating to the automatic suspension of reporting in
respect of the Issuer under the Exchange Act.
(ii) In the event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required to be filed by this
Agreement because required disclosure information was either not delivered to it or delivered to it
after the delivery deadlines set forth in this Agreement or for any other reason, the Securities
Administrator will promptly notify electronically the Depositor. In the case of Form 10-D and 10-K, the
parties to this Agreement and the Servicer will cooperate to prepare and file a Form 12b-25 and a 10-D/A
and 10-K/A, as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the
Securities Administrator will, upon receipt of all required Form 8-K Disclosure Information and upon the
approval and direction of the Depositor, include such disclosure information on the next Form 10-D. In
the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended, and such amendment
includes any Additional Form 10-D Disclosure, any Additional Form 10-K Disclosure or any Form 8-K
Disclosure Information or any amendment to such disclosure, the Securities Administrator will promptly
notify electronically the Depositor and such parties will cooperate to prepare any necessary 8-KA,
10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by
a duly authorized representative or a senior officer in charge of master servicing, as applicable, of
the Master Servicer. The parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their respective duties under this Section 3.19(d) related
to the timely preparation, execution and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K,
10-D or 10-K is contingent upon each such party performing its duties under this Section. Neither the
Master Servicer nor the Securities Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, execute and/or timely file any
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such failure results from
the Securities Administrator's inability or failure to obtain or receive, on a timely basis, any
information from any other party hereto needed to prepare, arrange for execution or file such Form 15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
SECTION 3.20. ADDITIONAL INFORMATION; NOTICE.
Each of the parties agrees to provide to the Securities Administrator such additional information
related to such party as the Securities Administrator may reasonably request, including evidence of the
authorization of the person signing any certification or statement, financial information and reports, and such
other information related to such party or its performance hereunder.
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Any notice or notification required to be delivered by the Securities Administrator to the Depositor
pursuant to this Article III may be delivered via facsimile to 000-000-0000, Attention: Xxxxx Xxxx.
SECTION 3.21. INTENTION OF THE PARTIES AND INTERPRETATION.
Each of the parties acknowledges and agrees that the purpose of Section 3.16 through Section 3.20 of
this Agreement is to facilitate compliance by the Securities Administrator and the Depositor with the provisions
of Regulation AB promulgated by the Commission under the Exchange Act, as such may be amended from time to time
and subject to such clarification and interpretive advice as may be issued by the staff of the Commission from
time to time. Therefore, each of the parties agrees that (a) the obligations of the parties hereunder shall be
interpreted in such a manner as to accomplish that purpose, (b) the parties' obligations hereunder will be
supplemented and modified as necessary to be consistent with any such amendments, interpretive advice or
guidance, convention or consensus among active participants in the asset-backed securities markets, advice of
counsel, or otherwise in respect of the requirements of Regulation AB, (c) the parties shall comply with the
reasonable requests made by the Securities Administrator or the Depositor for delivery of such additional or
different information as the Securities Administrator or the Depositor may determine in good faith is necessary
to comply with the provisions of Regulation AB, which information is available to such party without unreasonable
effort or expense and within such timeframe as may be reasonably requested, and (d) no amendment of this
Agreement shall be required to effect any such changes in the parties' obligations as are necessary to
accommodate evolving interpretations of the provisions of Regulation AB.
SECTION 3.22. INDEMNIFICATION.
Each of the Depositor, Master Servicer, Securities Administrator and any Servicing Function Participant
engaged by such party, respectively, shall indemnify and hold harmless the Master Servicer, the Securities
Administrator and the Depositor, respectively, and each of their directors, officers, employees, agents, and
affiliates from and against any and all claims, losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of or based upon (a) any breach by
such party of any of its obligations hereunder, including particularly its obligations to provide any Assessment
of Compliance, Attestation Report, Compliance Statement or any information, data or materials required to be
included in any 1934 Act report, (b) any material misstatement or omission in any information, data or materials
provided by such party (or, in the case of the Securities Administrator or Master Servicer, any material
misstatement or material omission in (i) any Compliance Statement, Assessment of Compliance or Attestation Report
delivered by it, or by any Servicing Function Participant engaged by it, pursuant to this Agreement, or (ii) any
Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure), (c) any claim arising
out of or with respect to any failure to properly prepare, execute and/or timely file such Form 10-D, where such
failure results from the Securities Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or willful misconduct or (d) the negligence, bad faith or willful
misconduct of such indemnifying party in connection with its performance hereunder. If the indemnification
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provided for herein is unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator or the Depositor, as the case may be, then each such party agrees that it shall contribute to the
amount paid or payable by the Master Servicer, the Securities Administrator or the Depositor, as applicable, as a
result of any claims, losses, damages or liabilities incurred by such party in such proportion as is appropriate
to reflect the relative fault of the indemnified party on the one hand and the indemnifying party on the other.
This indemnification shall survive the termination of this Agreement or the termination of any party to this
Agreement.
SECTION 3.23. SPECIAL FORECLOSURE PROVISIONS
Notwithstanding anything in this Agreement to the contrary:
(a) The Servicer shall not commence either (i) foreclosure proceedings with respect to a
Mortgage Loan or (ii) sell defaulted Mortgage Loans from the Issuer unless (1) no later than five
Business Days prior to such action, it notifies the holder of the Owner Trust Certificates of its
intention to do so, and (2) the holder of the Owner Trust Certificates, does not, within such period,
affirmatively object to such action.
(b) If the holder of the Owner Trust Certificates timely and affirmatively objects to such
action, then the Servicer shall hire, at the holder of the Owner Trust Certificates' sole cost and
expense, three appraisal firms, selected by the Servicer in its sole and absolute discretion from the
list of appraisal firms attached as Exhibit M, to compute the fair value of the Mortgaged Property
relating to the related Mortgage Loan utilizing the Xxxxxx Xxx Form 2055 Exterior-Only Inspection
Residential Appraisal Report (each such appraisal-firm computation, a "Fair Value Price"), in each case
no later than 30 days from the date of the holder of the Owner Trust Certificates' objection. If the
Servicer shall have received three Fair Value Prices by the end of such 30-day period, then the holder
of the Owner Trust Certificates shall, no later than 5 days after the expiration of such 30-day period,
purchase such Mortgage Loan and the related Mortgaged Property at an amount equal to the sum of
(i) accrued and unpaid interest on such Mortgage Loan as of such purchase date ("Accrued Interest") and
(ii) the average of such three Fair Value Prices respectively determined by such appraisal firms, and
shall promptly deliver such amount to the Servicer for deposit into the Collection Account. All costs
relating to the computation of the related Fair Value Prices shall be for the account of the holder of
the Owner Trust Certificates and shall be paid by the holder of the Owner Trust Certificates at the time
such Mortgage Loan and the related Mortgaged Property are purchased by the holder of the Owner Trust
Certificates. Any objection to such action shall be irrevocable by the holder of the Owner Trust
Certificates, and the holder of the Owner Trust Certificates will purchase the related Mortgage Loan
regardless of the Fair Value Price determined.
(c) In the event that the Servicer has not commenced foreclosure proceedings with respect to a
Mortgage Loan that is 180 days' or more delinquent (provided that the Mortgage Loan is not in
bankruptcy, is not subject to a court-ordered injunction with respect to the Mortgage Loan or the
related Mortgaged Property, or is not subject to federal, state or local law restriction on foreclosure)
the Servicer must promptly provide the holder of the Owner Trust Certificates with notice of such event
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(a "Delinquency Notice") and a description of such other action as it intends to take with respect to
such Mortgage Loan. The Servicer is not permitted to proceed with any such action unless the holder of
the Owner Trust Certificates, does not, within five Business Days following such notice, affirmatively
object to the Servicer taking such action.
(d) If the holder of the Owner Trust Certificates timely and affirmatively objects to the
Servicer's contemplated action, then the holder of the Owner Trust Certificates shall have the right to
direct the Servicer to commence foreclosure proceedings in accordance with prudent servicing standards.
Notwithstanding the foregoing, the Servicer shall not be obligated to foreclose on any Mortgage Loan if
the Servicer has notified the holder of the Owner Trust Certificates in the Delinquency Notice that
either (i) the related Mortgaged Property is located in a county designated as an individual assistance
disaster area by FEMA and foreclosure is not permitted under the Servicer's servicing policies with
respect to mortgage loans contained in such area or (ii) such Mortgage Loan is the subject of a lis
pendens notice and foreclosure is not permitted under the Servicer's servicing policies with respect to
mortgage loans subject to such legal proceedings. In such event, the Servicer will hire three of the
appraisal firms identified in Exhibit M to compute the fair value of the Mortgaged Property relating to
the related Mortgage Loan utilizing the Xxxxxx Xxx Form 2055 Exterior Only Inspection Residential
Appraisal Report, in each case no later than 30 days from the date of the holder of the Owner Trust
Certificate's objection and the holder of the Owner Trust Certificates will, no later than 5 days after
the expiration of such 30 day period, purchase such Mortgage Loan and the related Mortgaged Property at
an amount equal to the sum of (i) Accrued Interest and (ii) the average of such three Fair Value Prices
respectively determined by such appraisal firms, and shall promptly deliver such amount to the Servicer
for deposit into the Collection Account. All costs relating to the computation of the related Fair
Value Prices shall be for the account of the holder of the Owner Trust Certificates and shall be paid by
the holder of the Owner Trust Certificates at the time such Mortgage Loan and the related Mortgaged
Property are purchased by the holder of the Owner Trust Certificates. The holder of the Owner Trust
Certificates will purchase the Mortgage Loan regardless of the Fair Value Price determined.
(e) If the Servicer shall not have received three Fair Value Prices at the end of the 30-day
period set forth in (b) and (c) above, then:
(i) The Servicer shall obtain such three Fair Value Prices no later than 15 days after the
end of such 30-day period.
(ii) If the Servicer shall have only received two Fair Value Prices at the end of such
15-day extension period, then the Servicer will determine, in its sole and absolute discretion, the fair
value of the Mortgaged Property relating to such Mortgage Loan, related Insurance Proceeds and the
current delinquency status of such Mortgage Loan (such fair value, the "Servicer Fair Value Price"), and
the holder of the Owner Trust Certificates shall, no later than 5 days after the expiration of such
15-day extension period, purchase (and deliver to the Servicer the purchase price for) such Mortgage Loan
and the related Mortgaged Property at an amount equal to the sum of (i) Accrued Interest thereon and
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(ii) the highest of such two Fair Value Prices determined by such appraisal firms.
(iii) If the Servicer shall have received only one Fair Value Price at the end of such
15-day extension period, then the Servicer will determine, in its sole and absolute discretion, the
Servicer Fair Value Price of the Mortgaged Property related to such Mortgage Loan, and:
(A) if such Servicer Fair Value Price is equal to or greater than the unpaid
Principal Balance of the related Mortgage Loan as of such date (the "Unpaid Principal
Balance"), then the holder of the Owner Trust Certificates shall, no later than 5 days after
the expiration of such 15-day extension period, purchase (and deliver to the Servicer the
purchase price for) such Mortgage Loan and the related Mortgaged Property at an amount equal to
the sum of (1) Accrued Interest thereon and (2) the Unpaid Principal Balance of that Mortgage
Loan; and
(B) if such Servicer Fair Value Price is less than the related Unpaid Principal
Balance, then the holder of Owner Trust Certificates shall, no later than 5 days after the
expiration of such 15-day extension period, purchase (and deliver to the Servicer the purchase
price for) such Mortgage Loan and the related Mortgaged Property at an amount equal to the sum
of (1) Accrued Interest thereon and (2) the related Unpaid Principal Balance (such sum, the
"Preliminary Purchase Price"); provided, that the provisions of clause (d)(iv) shall thereafter
apply.
(iv) Following the payment by the holder of Owner Trust Certificates of the Preliminary
Purchase Price, the Servicer shall continue to hire appraisal firms at the holder of Owner Trust
Certificates' sole cost and expense to compute the Fair Value Price of the Mortgaged Property related to
such Mortgage Loan, and at such time as two such Fair Value Prices shall have been obtained:
(A) if such Servicer Fair Value Price is equal to or greater than the Unpaid
Principal Balance, then the holder of Owner Trust Certificates shall, no later than 5 days
after the expiration of such 15-day extension period, purchase (and deliver to the Servicer the
purchase price for) such Mortgage Loan and the related Mortgaged Property at an amount equal to
the sum of (1) Accrued Interest thereon and (2) the Unpaid Principal Balance of such Mortgage
Loan; and
(B) if the sum of (1) Accrued Interest on the related Mortgage Loan and (2) the
higher of (x) the highest of such two Fair Value Prices determined by such appraisal firms and
(y) the Servicer's Fair Value Price of the Mortgaged Property related to such Mortgage Loan
(such sum, the "Revised Fair Value Price") is greater than such Preliminary Purchase Price,
then the Servicer shall promptly notify the holder of Owner Trust Certificates of such
calculation, and the holder of Owner Trust Certificates shall, no later than 5 days after such
notice, remit to the Servicer, for deposit into the Certificate Account, the difference between
such Revised Fair Value Price and such Preliminary Purchase Price; and
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(C) if such Preliminary Purchase Price is greater than such Revised Fair Value
Price, then the Servicer shall promptly notify the holder of Owner Trust Certificates of such
calculation, and the Servicer shall, no later than 5 days after such notice, remit to the
holder of Owner Trust Certificates, from funds then on deposit in the Certificate Account, the
difference between such Preliminary Purchase Price and such Revised Fair Value Price.
(v) Notwithstanding anything herein to the contrary, the holder of the Owner Trust
Certificates shall not be entitled to any of its rights set forth herein with respect to a Mortgage Loan
following its failure to purchase such Mortgage Loan and the related Mortgaged Property (at the average
of the three Fair Value Prices respectively determined by such appraisal firms as set forth above)
during the time frame set forth above following its objection to the Servicer action.
(vi) Any notice, confirmation, instruction or objection pursuant to paragraphs (a), (b),
(c), (d) and (e) above may be delivered via facsimile or other written or electronic communication as
the parties hereto and the holder of Owner Trust Certificates may agree to from time to time.
(vii) For the avoidance of doubt, the holder of Owner Trust Certificates' rights set forth
in this Section 3.23 are intended to provide the holder of Owner Trust Certificates, for so long as it
has not forfeited its right under this Section 3.23 as set forth in clause (vi) above, with the
unilateral right to control foreclosure decisions in respect of delinquent and defaulted Mortgage Loans,
and certain exclusive purchase rights so as to maximize the recovery value on delinquent and defaulted
Mortgage Loans.
To the extent that the holder of the Owner Trust Certificates purchases any Mortgage Loan pursuant to
this Section 3.23, the servicing of such Mortgage Loan pursuant to this Agreement and the Purchase and Servicing
Agreement will terminate and the servicing of the related Mortgage Loan will be transferred to a successor
servicer at the direction of, and the expense of, the holder of the Owner Trust Certificate.
The Servicer, may also, in its discretion, as alternative to foreclosure, sell defaulted Mortgage Loans
at fair market value to third parties, if the Servicer reasonably believes that such sale would maximize proceeds
to the Trust in the aggregate (on a present value basis) with respect to that Mortgage Loan.
The Seller, so long as it is the holder of the Owner Trust Certificates, will indemnify and hold the
Servicer harmless against, any loss, liability or expense (including reasonable legal fees and disbursements of
counsel) incurred by the Servicer in connection with, arising out of, or relating to any foreclosure proceedings
instituted by the Servicer at the direction of the holder of the Owner Trust Certificates pursuant to this
Section 3.23. The Seller, so long as it is the holder of the Owner Trust Certificates, will reimburse the
Servicer for the cost of the appraisal firms set forth on Exhibit M selected by the Servicer and any other
reasonable out of pocket costs incurred in connection with this Section 3.23.
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SECTION 3.24. UNIFORM COMMERCIAL CODE.
The Securities Administrator agrees to file continuation statements for any Uniform Commercial Code
financing statements identifying the Issuer as debtor which the Depositor has informed the Securities
Administrator in writing were filed on the Closing Date in connection with the Issuer, provided that the
Securities Administrator receives the related filing information on a timely basis. The Depositor shall file any
financing statements or amendments thereto required by any change in the Uniform Commercial Code.
SECTION 3.25. RESERVED.
SECTION 3.26. RESERVED.
SECTION 3.27. RESERVED.
SECTION 3.28. LIABILITIES OF THE MASTER SERVICER.
The Master Servicer shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
SECTION 3.29. MERGER OR CONSOLIDATION OF THE MASTER SERVICER.
(a) The Master Servicer will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation, and will obtain and
preserve its qualification to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the
Securities or any of the Mortgage Loans and to perform its duties under this Agreement.
(b) The Master Servicer may be merged or consolidated with or into any Person, or transfer all
or substantially all of its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person succeeding to the business of
the Master Servicer, shall be the successor of the Master Servicer, 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, that the Rating Agencies' ratings of
the Notes in effect immediately prior to such merger or consolidation will not be qualified, reduced or
withdrawn as a result thereof (as evidenced by a letter to such effect from the Rating Agencies).
SECTION 3.30. INDEMNIFICATION OF THE SELLER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, THE MASTER
SERVICER AND THE SECURITIES ADMINISTRATOR.
(a) In addition to any indemnity required pursuant to Section 3.22 hereof, the Master Servicer
agrees to indemnify the Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (except as otherwise provided herein with respect to expenses) (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be sustained in connection with,
arising out of, or relating to this Agreement or the Securities (i) related to the Master Servicer's
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failure to perform its duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of the
Master Servicer's willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties hereunder, provided, in each
case, that with respect to any such claim or legal action (or pending or threatened claim or legal
action), an Indemnified Person shall have given the Master Servicer and the Depositor written notice
thereof promptly after such Indemnified Person shall have with respect to such claim or legal action
knowledge thereof. The Indemnified Person's failure to give such notice shall not affect the
Indemnified Person's right to indemnification hereunder. This indemnity shall survive the resignation
or removal of the Indenture Trustee, the Owner Trustee, the Master Servicer or the Securities
Administrator and the termination of this Agreement.
(b) The Issuer will indemnify any Indemnified Person for any loss, liability or expense of any
Indemnified Person not otherwise indemnified by the Master Servicer as referred to in Subsection (a)
above, other than any loss, liability or expense incurred by reason of such Indemnified Person's willful
misfeasance, bad faith or negligence (or, in the case of the Owner Trustee, gross negligence) in the
performance of duties hereunder or under any Operative Agreement or by reason of reckless disregard of
obligations and duties hereunder or under any Operative Agreement.
(c) In addition to any indemnity required pursuant to Section 3.22 hereof, the Securities
Administrator agrees to indemnify the Indemnified Persons (other than the Securities Administrator) for,
and to hold them harmless against, any loss, liability or expense (except as otherwise provided herein
with respect to expenses) (including reasonable legal fees and disbursements of counsel) incurred on
their part (i) in connection with, arising out of, or relating to the Securities Administrator's failure
to file any Exchange Act report which the Securities Administrator is responsible for filing in
accordance with Section 3.19, (ii) by reason of the Securities Administrator's negligence or willful
misconduct in the performance of such obligations pursuant to Section 3.19 or (iii) by reason of the
Securities Administrator's reckless disregard of such obligations pursuant to Section 3.19, provided, in
each case, that with respect to any such claim or legal action (or pending or threatened claim or legal
action), an Indemnified Person shall have given the Securities Administrator written notice thereof
promptly after such Indemnified Person shall have with respect to such claim or legal action knowledge
thereof. The Indemnified Person's failure to give such notice shall not affect the Indemnified Person's
right to indemnification hereunder. This indemnity shall survive the resignation or removal of the
Indenture Trustee, the Owner Trustee, the Master Servicer or the Securities Administrator and the
termination of this Agreement.
SECTION 3.31. LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
Subject to the obligation of the Master Servicer to indemnify the Indemnified Persons pursuant to
Section 3.30:
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(a) Neither the Master Servicer nor any of the directors, officers, employees or agents of the
Master Servicer shall be under any liability to the Indemnified Persons, the Depositor, the Issuer or
the Securityholders for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not
protect the Master Servicer or any such Person against any breach of warranties or representations made
herein or any liability which would otherwise be imposed by reason of such Person's willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the Master Servicer
may rely in good faith on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
(c) The Master Servicer, the Owner Trustee (in its individual corporate capacity and as Owner
Trustee), the Indenture Trustee (in its individual corporate capacity and as Indenture Trustee), the
Custodian (including for such purpose, the Indenture Trustee acting in its capacity as Custodian) and
any director, officer, employee or agent of the Master Servicer, the Owner Trustee, the Indenture
Trustee or the Custodian shall be indemnified by the Issuer and held harmless thereby against any loss,
liability or expense (including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to, this Agreement, the
Securities or the Purchase and Servicing Agreement or the transactions contemplated hereby or thereby
(except, with respect to the Master Servicer, to the extent that the Master Servicer is indemnified by
the Servicer thereunder), other than (i) with respect to the Master Servicer only, any such loss,
liability or expense related to the Master Servicer's failure to perform its duties in compliance with
this Agreement or (ii) with respect to the Master Servicer or Custodian only, any such loss, liability
or expense incurred by reason of the Master Servicer's or the Custodian's willful misfeasance, bad faith
or gross negligence in the performance of its own duties hereunder or by reason of reckless disregard of
its own obligations and duties hereunder or under a custodial agreement.
(d) The Master Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect to this Agreement and
the rights and duties of the parties hereto and the interests of the Issuer and the Securityholders
hereunder. In such event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Issuer, and the Master Servicer shall be
entitled to be reimbursed therefor out of the Distribution Account or Accounts as provided by
Section 4.03. Nothing in this Subsection 3.31(d) shall affect the Master Servicer's obligation to
supervise, or to take such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Subsection 3.01(a).
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(e) In taking or recommending any course of action pursuant to this Agreement, unless
specifically required to do so pursuant to this Agreement, the Master Servicer shall not be required to
investigate or make recommendations concerning potential liabilities which the Issuer might incur as a
result of such course of action by reason of the condition of the Mortgaged Properties but shall give
notice to the Indenture Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of the Servicer, except
as otherwise expressly provided herein.
SECTION 3.32. MASTER SERVICER NOT TO RESIGN.
The Master Servicer shall not resign from the obligations and duties hereby imposed on it except upon
determination that its duties hereunder are no longer permissible under applicable law. Any such determination
pursuant to the preceding sentence permitting the resignation of the Master Servicer shall be evidenced by an
Independent Opinion of Counsel to such effect obtained at the expense of the Master Servicer and delivered to the
Indenture Trustee and the Rating Agencies. No resignation of the Master Servicer shall become effective until
the Indenture Trustee or a successor Master Servicer shall have assumed the Master Servicer's responsibilities,
duties, liabilities (other than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
SECTION 3.33. RESERVED.
SECTION 3.34. SALE AND ASSIGNMENT OF MASTER SERVICING.
The Master Servicer may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement; provided, however, that: (i) the purchaser or transferee
accepting such assignment and delegation (a) shall be a Person which shall be qualified to service mortgage loans
for Xxxxxx Xxx or Freddie Mac; (b) shall have a net worth of not less than $25,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the Indenture
Trustee (as evidenced in a writing signed by the Indenture Trustee); and (d) shall execute and deliver to the
Indenture Trustee an agreement, in form and substance reasonably satisfactory to the Indenture Trustee, which
contains an assumption by such Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this Agreement, any custodial agreement from
and after the effective date of such agreement; (ii) each Rating Agency shall be given prior written notice of
the identity of the proposed successor to the Master Servicer and each Rating Agency's rating of the Notes in
effect immediately prior to such assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to such effect delivered to the
Master Servicer and the Indenture Trustee; and (iii) the Master Servicer assigning and selling the master
servicing shall deliver to the Indenture Trustee an officer's certificate and an Independent Opinion of Counsel,
each stating that all conditions precedent to such action under this Agreement have been completed and such
action is permitted by and complies with the terms of this Agreement. No such assignment or delegation shall
affect any liability of the Master Servicer arising prior to the effective date thereof.
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ARTICLE IV
ACCOUNTS
SECTION 4.01. CUSTODIAL ACCOUNTS.
(a) The Master Servicer shall enforce the obligation of the Servicer to establish and maintain
one or more custodial accounts (the "Custodial Accounts") in accordance with the Purchase and Servicing
Agreement, with records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into
which accounts shall be deposited within 48 hours (or as of such other time specified in the Purchase
and Servicing Agreement) of receipt all collections of principal and interest on any Mortgage Loan and
with respect to any REO Property received by the Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances made from the Servicer's own funds
(less, in the case of the Servicer, the applicable servicing compensation, in whatever form and amounts
as permitted by the Purchase and Servicing Agreement) and all other amounts to be deposited in each such
Custodial Account. The Servicer is hereby authorized to make withdrawals from and deposits to the
related Custodial Account for purposes required or permitted by this Agreement and the Purchase and
Servicing Agreement. For the purposes of this Agreement, Custodial Accounts shall also include such
other accounts as the Servicer maintains for the escrow of certain payments, such as taxes and
insurance, with respect to certain Mortgaged Properties. The Purchase and Servicing Agreement sets
forth the criteria for the segregation, maintenance and investment of each related Custodial Account,
the contents of which are acceptable to the parties hereto as of the date hereof and changes to which
shall not be made unless such changes are made in accordance with the provisions of Section 12.01 hereof.
(b) [Reserved];
(c) To the extent provided in the Purchase and Servicing Agreement and subject to this Article
IV, on or before the Servicer Remittance Date, the Servicer shall withdraw or shall cause to be
withdrawn from the related Custodial Accounts and shall immediately deposit or cause to be deposited in
the Distribution Account amounts representing the following collections and payments (other than with
respect to principal of or interest on the Mortgage Loans due on or before the Cut-off Date) with
respect to each of the Mortgage Loans:
(i) Monthly Payments on the Mortgage Loans received or any related portion thereof
advanced by the Servicer pursuant to the Purchase and Servicing Agreement which were due on or before
the related Due Date but net of the amount thereof comprising the Servicing Fees;
(ii) Principal Prepayments in full and any Liquidation Proceeds received by the Servicer
with respect to such Mortgage Loans in the related Prepayment Period, with interest to the date of
prepayment or liquidation, net of the amount thereof comprising the Servicing Fees and any Subsequent
Recoveries received in the related Prepayment Period;
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(iii) Principal Prepayments in part received by the Servicer for such Mortgage Loans in the
related Prepayment Period;
(iv) [reserved]; and
(v) any amount to be used as a delinquency advance or to pay any Prepayment Interest
Shortfalls, in each case, as required to be paid under the Purchase and Servicing Agreement.
(d) Withdrawals may be made from a Custodial Account only to make remittances as provided in
Section 4.01(c) and 4.02; to reimburse the Master Servicer or the Servicer for Advances which have been
recovered by subsequent collection from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to clear and terminate the
account at the termination of this Agreement in accordance with Section 10.01. As provided in
Sections 4.01(c), certain amounts otherwise due to the Servicer may be retained by them and need not be
deposited in the Distribution Account.
SECTION 4.02. DISTRIBUTION ACCOUNT.
(a) The Securities Administrator shall establish and maintain in the name of the Securities
Intermediary for the benefit of the Indenture Trustee and the Securityholders, the Distribution Account
as a segregated account, which shall be an Eligible Account. If the Distribution Account ceases to be
an Eligible Account, the Securities Administrator shall establish a new Distribution Account that is an
Eligible Account within ten (10) days and transfer all funds and investment property on deposit in the
existing Distribution Account into the new Distribution Account. The Distribution Account shall
constitute an account of the Indenture Trustee segregated on the books of the Securities Intermediary
and held by the Securities Administrator in trust in its Corporate Trust Office, and the Distribution
Accounts and the funds deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Issuer, the Indenture Trustee, the
Securities Administrator, the Securities Intermediary or the Master Servicer (whether made directly, or
indirectly through a liquidator or receiver of the Issuer, the Indenture Trustee, the Securities
Administrator, the Securities Intermediary or the Master Servicer). The amount at any time credited to
the Distribution Account shall be (i) fully insured by the FDIC to the maximum coverage provided thereby
or (ii) invested by the Securities Administrator, in Eligible Investments, in accordance with
Section 4.02(c). All Eligible Investments shall mature or be subject to redemption or withdrawal on or
before, and shall be held until, the immediately succeeding Payment Date. With respect to the
Distribution Account and the funds deposited therein, the Securities Administrator shall take such
action as may be necessary to ensure that the Issuer and the Securityholders shall be entitled to the
priorities afforded to such an account (in addition to a claim against the estate of the Securities
Administrator, the Securities Intermediary or the Indenture Trustee) as provided by 12 U.S.C. § 92a(e),
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and applicable regulations pursuant thereto, if applicable, or any applicable comparable state statute
applicable to state chartered banking corporations, if applicable. The Securities Administrator, the
Indenture Trustee or their affiliates are permitted to receive additional compensation that could be
deemed to be in the their economic self-interest for (i) serving as investment adviser, administrator,
servicing agent, custodian or sub-custodian with respect to certain of the Eligible Investments,
(ii) using affiliates to effect transactions in certain Eligible Investments and (iii) effecting
transactions in certain Eligible Investments. The Master Servicer and the Securities Administrator will
deposit in the Distribution Account as received by the Master Servicer or the Securities Administrator,
the following amounts:
(i) any amounts withdrawn from a Custodial Account pursuant to Section 4.01(c) in respect
of the related Mortgage Loans;
(ii) any Advance and any Compensating Interest Payments required to be made by the Master
Servicer (as successor servicer with respect to any Advance) to the extent required but not made by the
Servicer in respect of the related Mortgage Loans;
(iii) any Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries received by or
on behalf of the Master Servicer or which were not deposited in a Custodial Account in respect of the
related Mortgage Loans;
(iv) the Purchase Price with respect to any related Mortgage Loans purchased by the
Originator pursuant to Section 2.04 of this Agreement, any Substitution Adjustments pursuant to
Section 2.04 of this Agreement and all proceeds of any Mortgage Loans or property acquired with respect
thereto repurchased by the Servicer (or its assignee) pursuant to Section 10.01;
(v) any amounts required to be deposited with respect to losses on investments of deposits
in the Distribution Account; and
(vi) any other amounts received by or on behalf of the Master Servicer or the Securities
Administrator and required to be deposited in such Distribution Account pursuant to this Agreement.
(b) All amounts deposited to the Distribution Account shall be held by the Securities
Intermediary in the name of the Indenture Trustee in trust for the benefit of the Indenture Trustee and
the Securityholders in accordance with the terms and provisions of this Agreement. The requirements for
crediting the Distribution Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of (i) late payment charges or
assumption, tax service, statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.03(a)(i), (ii), (iii), (iv), (vi),
(vii), (ix) and (x) and with respect to the Securities Administrator item (xi), need not be credited by
the Master Servicer or the Servicer to the Distribution Account. In the event that the Master Servicer
shall deposit or cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Securities Intermediary, upon receipt of a written request therefor signed by a
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Servicing Officer of the Master Servicer, shall promptly transfer such amount to the Master Servicer,
any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Distribution Account shall be invested, in the name
of the Securities Intermediary, or its nominee, for the benefit of the Indenture Trustee and the
Securityholders, in Eligible Investments as follows. All net earnings on Eligible Investments shall be
for the benefit of the Master Servicer. All Eligible Investments made for the benefit of Master
Servicer may be made at the direction of Master Servicer to the Securities Administrator (or, if no such
direction is received, such funds shall be invested in the Xxxxx Fargo Advantage Prime Investment Money
Market Fund so long as it meets the definition of an Eligible Investment; provided, however, that if
such money market fund is not an Eligible Investment, such funds shall remain uninvested).
Notwithstanding the foregoing, funds received after the earlier of 1:00 p.m. EST and 1 hour before the
fund closing deadline shall be invested on the next Business Day), shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the Business Day prior to the next
succeeding Payment Date (or if the Master Servicer in its commercial capacity is the obligor of such
Eligible Investments, such Eligible Investments shall mature not later than the next Payment Date). Any
and all investment earnings from such Eligible Investments shall be paid to Master Servicer, and the
risk of loss of moneys resulting from such investments shall be borne by and be the risk of the Master
Servicer. The Master Servicer shall deposit the amount of any such loss in the Distribution Account
within two Business Days of receipt of notification of such loss but not later than the next succeeding
Payment Date.
SECTION 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT.
(a) The Securities Administrator will, from time to time on demand of the Servicer, the Master
Servicer, or for its own account as set forth below, make or cause to be made such withdrawals or
transfers from the Distribution Account, in the case of a demand by the Servicer, as the Servicer has
designated for such transfer or withdrawal pursuant to the Purchase and Servicing Agreement, or in the
case of the Master Servicer as set forth below in this Section 4.03, or as the Securities Administrator
has determined to be appropriate in accordance herewith, for the following purposes:
(i) to reimburse the Master Servicer or the Servicer for any Advance of its own funds or
of the Servicer's own funds, the right of the Master Servicer or the Servicer to reimbursement pursuant
to this subclause (i) being limited to amounts received on a particular Mortgage Loan (including, for
this purpose, the Purchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent
late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such
Advance was made;
(ii) to reimburse the Master Servicer or the Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended by the Master Servicer
or the Servicer in good faith in connection with the restoration of the related Mortgaged Property which
was damaged by an Uninsured Cause or in connection with the liquidation of such Mortgage Loan;
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(iii) to reimburse the Master Servicer or the Servicer from Insurance Proceeds relating to a
particular Mortgage Loan for insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer or the Servicer from Liquidation Proceeds from a particular Mortgage Loan
for Liquidation Expenses incurred with respect to such Mortgage Loan;
(iv) to pay the Master Servicer or the Servicer, as appropriate, from Liquidation Proceeds
or Insurance Proceeds received in connection with the liquidation of any Mortgage Loan, the amount which
it or the Servicer would have been entitled to receive under subclause (viii) of this Subsection 4.03(a)
as servicing compensation on account of each defaulted Monthly Payment on such Mortgage Loan if paid in
a timely manner by the related Mortgagor;
(v) to pay the Master Servicer or the Servicer from the Purchase Price for any Mortgage
Loan, the amount which it or the Servicer would have been entitled to receive under subclause (viii) of
this Subsection (a) as servicing compensation;
(vi) to reimburse the Master Servicer or the Servicer for servicing related advances of
funds, the right to reimbursement pursuant to this subclause being limited to amounts received on the
related Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments for which such servicing advances
were made;
(vii) to reimburse the Master Servicer or the Servicer for any Advance or advance, after a
Realized Loss has been allocated with respect to the related Mortgage Loan if the Advance or advance has
not been reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer its monthly Master Servicing Fee and any investment income
and other additional servicing compensation payable pursuant to Section 3.14;
(ix) to reimburse the Master Servicer or the Securities Administrator for any expenses
recoverable by the Master Servicer or the Securities Administrator pursuant to Sections 3.03 and 3.31;
(x) to reimburse or pay the Servicer any such amounts as are due thereto under the
Purchase and Servicing Agreement and have not been retained by or paid to the Servicer, to the extent
provided in the Purchase and Servicing Agreement;
(xi) to reimburse the Indenture Trustee, the Owner Trustee, the Custodian and the
Securities Administrator for expenses, costs and liabilities incurred by or reimbursable to it from
funds of the Issuer pursuant to Sections 3.30, 3.31 or 8.05, and to reimburse the Indenture Trustee for
any fees, costs and expenses costs incurred by or reimbursable to it pursuant to Section 7.01(b), 8.02,
8.05 or 8.07, to the extent not otherwise reimbursed to it;
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(xii) to reimburse the Servicer or the Master Servicer, as successor servicer, as
applicable, for any Capitalization Reimbursement Amounts, in an amount not to exceed the Principal
Distribution Amount;
(xiii) to pay to itself (in its capacity as the Master Servicer) all investment earnings on
amounts on deposit in such Distribution Account to which it is entitled under Section 4.02(c);
(xiv) to pay the Owner Trustee the Owner Trustee Fee pursuant to Section 8.05;
(xv) to remove amounts deposited in error; and
(xvi) to clear and terminate the Distribution Account pursuant to Section 10.01.
(b) In addition, on or before the Business Day immediately preceding each Payment Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the Securities Administrator for
deposit therein) any Advances or Compensating Interest Payments with respect to the related Mortgage
Loans, to the extent required but not made by the Servicer and required to be made by the Master
Servicer (in its capacity as successor servicer with respect to Advances) with respect to the Mortgage
Loans.
(c) The Securities Administrator or the Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any payments or
reimbursements from the Distribution Account pursuant to subclauses (i) through (vii), inclusive, (ix)
and (x) or with respect to any such amounts which would have been covered by such subclauses had the
amounts not been retained by the Master Servicer without being deposited in the Distribution Account
under Section 4.02(b).
(d) In order to comply with its duties under the USA PATRIOT Act of 2001, the Securities
Administrator shall obtain and verify certain information and documentation from the other parties
hereto, including, but not limited to, each such party's name, address and other identifying information.
SECTION 4.04. CLASS A-X RESERVE FUND.
The Securities Administrator shall establish and maintain in the name of the Securities Intermediary for
the benefit of the Indenture Trustee and the Senior Noteholders, the Class A-X Reserve Fund which shall be an
Eligible Account. If the Class A-X Reserve Fund ceases to be an Eligible Account, the Securities Administrator
shall establish a new Class A-X Reserve Fund that is an Eligible Account within 10 days and transfer all funds
and investment property on deposit in the existing Class A-X Reserve Fund into such new Class A-X Reserve Fund.
Amounts on deposit in the Class A-X Reserve Fund shall remain uninvested. Amounts on deposit in the Class A-X
Reserve Fund will be applied in accordance with Section 5.01(a)(iv).
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SECTION 4.05. THE CERTIFICATE DISTRIBUTION ACCOUNT
The Securities Administrator, for the benefit of the Certificateholders, shall establish and maintain in
the name of the Issuer an account (the "Certificate Distribution Account") entitled "Certificate Distribution
Account, Xxxxx Fargo Bank, N.A., as Securities Administrator, in trust for the holders of the PHH Mortgage Trust
2008-CIM2 Owner Trust Certificates. The Certificate Distribution Account shall be an Eligible Account. If an
existing Certificate Distribution Account ceases to be an Eligible Account, the Securities Administrator shall
establish a new Certificate Distribution Account that is an Eligible Account within 10 days and transfer all
funds and investment property on deposit in such existing Certificate Distribution Account into such new
Certificate Distribution Account.
On each Payment Date, the Securities Administrator shall withdraw from the Distribution Account all
amounts required to be deposited in the Certificate Distribution Account pursuant to Section 5.01(a)(xi) and
deposit such amounts into the Certificate Distribution Account. On each Payment Date, the Securities
Administrator, on behalf of the Issuer, shall distribute all amounts on deposit in the Certificate Distribution
Account in accordance with the provisions of the Trust Agreement. On the Payment Date on which the aggregate
Class Principal Balance of the Notes is reduced to zero, the Securities Administrator shall distribute all
amounts remaining on deposit in the Certificate Distribution Account in accordance with the provisions of the
Trust Agreement in order to clear and terminate the Certificate Distribution Account in connection with the
termination of this Agreement.
SECTION 4.06. THE RESERVE FUND
The Securities Administrator shall establish and maintain in the name of the Securities Intermediary for
the benefit of the Indenture Trustee and the Senior Noteholders, the Reserve Fund which shall be an Eligible
Account. If the Reserve Fund ceases to be an Eligible Account, the Securities Administrator shall establish a
new Reserve Fund that is an Eligible Account within 10 days and transfer all funds and investment property on
deposit in the existing Reserve Fund into such new Reserve Fund. Amounts on deposit in the Reserve Fund shall
remain uninvested. The Securities Administrator will keep records by Loan Group of the source of deposits made
into the Reserve Fund pursuant to Section 5.01(f)(i). Amounts on deposit in the Reserve Fund will be withdrawn
by the Securities Administrator on each Payment Date and applied in accordance with Section 5.01(f)(ii) prior to
giving effect to amounts otherwise distributable as principal on the Notes in accordance with
Section 5.01(f)(ii). The Reserve Fund may be a sub-account of the Class I-A-X Reserve Fund.
SECTION 4.07. RESERVED.
SECTION 4.08. CONTROL OF THE TRUST ACCOUNTS
(a) The Indenture Trustee is hereby directed to and does hereby appoint Xxxxx Fargo Bank,
N.A., as Securities Intermediary with respect to each of the Trust Accounts, and the Issuer has,
pursuant to the Indenture, granted to the Indenture Trustee, for the benefit of the Noteholders, a
security interest to secure all amounts due Noteholders hereunder in and to the Trust Accounts and the
Security Entitlements to all Financial Assets credited to the Trust Accounts, including without
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limitation all amounts, securities, investments, Financial Assets, investment property and other
property from time to time deposited in or credited to the Trust Accounts and all proceeds thereof.
Amounts held from time to time in the Trust Accounts will continue to be held by the Securities
Intermediary for the benefit of the Indenture Trustee for the benefit of the Noteholders. Upon the
termination of the Issuer or the discharge of the Indenture, the Securities Administrator on behalf of
the Indenture Trustee shall inform the Securities Intermediary of such termination. Xxxxx Fargo Bank
N.A. xxxxxx accepts such appointment as Securities Intermediary;
(b) With respect to the Trust Account Property credited to the Trust Accounts, the Securities
Intermediary agrees that:
(i) with respect to any Trust Account Property that is held in deposit accounts, each such
deposit account shall be subject to the exclusive custody and control of the Securities Intermediary,
and the Securities Intermediary shall have sole signature authority with respect thereto;
(ii) all assets in the Trust Accounts are agreed by the Securities Intermediary to be
treated as Financial Assets; and
(iii) any such Trust Account Property that is, or is treated as, a Financial Asset shall be
physically delivered (accompanied by any required endorsements) to, or credited to an account in the
name of, the Securities Intermediary or other eligible institution maintaining any Trust Accounts in
accordance with the Securities Intermediary's customary procedures such that the Securities Intermediary
or such other institution establishes a Security Entitlement in favor of the Indenture Trustee with
respect thereto over which the Securities Intermediary or such other institution has Control,
(c) The Securities Intermediary hereby confirms that (A) each Trust Account is an account to
which Financial Assets are or may be credited, and the Securities Intermediary shall, subject to the
terms of this Agreement, treat the Indenture Trustee, as collateral agent, and the Securities
Administrator on behalf of the Indenture Trustee as entitled to exercise the rights that comprise any
Financial Asset credited to any Trust Account, (B) all Trust Account Property in respect of any Trust
Account will be promptly credited by the Securities Intermediary to the applicable account, and (C) all
securities or other property underlying any Financial Assets credited to any Trust Account shall be
registered in the name of the Securities Intermediary, endorsed to the Securities Intermediary or in
blank or credited to another securities account maintained in the name of the Securities Intermediary
and in no case will any Financial Asset credited to any Trust Account be registered in the name of the
Issuer, payable to the order of the Issuer or specially endorsed to the Issuer, except to the extent the
foregoing have been specially endorsed to the Securities Intermediary or in blank.
(d) The Securities Intermediary hereby agrees that each item of property (whether investment
property, Financial Asset, security, instrument or cash) credited to any Trust Account shall be treated
as a Financial Asset.
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(e) If at any time the Securities Intermediary shall receive an Entitlement Order from the
Indenture Trustee or from the Securities Administrator on its behalf directing transfer or redemption of
any Financial Asset relating to any Trust Account, the Securities Intermediary shall comply with such
Entitlement Order without further consent by the Issuer, the Securities Administrator or any other
Person. If at any time the Indenture Trustee or Securities Administrator on its behalf notifies the
Securities Intermediary in writing that the Issuer has been terminated or the Indenture discharged in
accordance herewith and with the Trust Agreement or the Indenture, as applicable, and the security
interest granted pursuant to the Indenture has been released, then thereafter if the Securities
Intermediary shall receive any order from the Issuer directing transfer or redemption of any Financial
Asset relating to any Trust Account, the Securities Intermediary shall comply with such Entitlement
Order without further consent by the Indenture Trustee or any other Person.
(f) In the event that the Securities Intermediary has or subsequently obtains by agreement,
operation of law or otherwise a security interest in any Trust Account or any Financial Asset credited
thereto, the Securities Intermediary hereby agrees that such security interest shall be subordinate to
the security interest of the Indenture Trustee. The Financial Assets credited to the Trust Accounts
will not be subject to deduction, set-off, banker's lien, or any other right in favor of any Person
other than the Indenture Trustee (except that the Securities Intermediary may set-off the face amount of
any checks which have been credited to any Trust Account but are subsequently returned unpaid because of
uncollected or insufficient funds).
(g) There are no other agreements entered into between the Securities Intermediary in such
capacity and the Depositor or the Issuer with respect to any Trust Account. In the event of any
conflict between this Agreement (or any provision of this Agreement) and any other agreement now
existing or hereafter entered into, the terms of this Agreement shall prevail.
(h) The rights and powers granted under the Indenture and herein to the Indenture Trustee and
the Securities Administrator on behalf of the Indenture Trustee have been granted in order to perfect
its security interest in the Trust Accounts and the Security Entitlements to the Financial Assets
credited thereto, and are powers coupled with an interest and will neither be affected by the bankruptcy
of the Issuer nor by the lapse of time. The obligations of the Securities Intermediary hereunder shall
continue in effect until the security interest of the Indenture Trustee in the Trust Accounts, and in
such Security Entitlements, has been terminated pursuant to the terms of this Agreement and the
Securities Administrator on behalf of the Indenture Trustee has notified the Securities Intermediary of
such termination in writing.
(i) Notwithstanding anything else contained herein, the Issuer agrees that the Trust Accounts
will be established only with the Securities Intermediary or another institution meeting the
requirements of this Section, which by acceptance of its appointment as Securities Intermediary agrees
substantially as follows: (1) it will comply with Entitlement Orders related to the Trust Accounts
issued by the Securities Administrator on behalf of the Indenture Trustee, without further consent by
the Issuer; (2) until termination of the Issuer or discharge of the Indenture, it will not enter into
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any other agreement related to such accounts pursuant to which it agrees to comply with Entitlement
Orders of any Person other than the Securities Administrator acting on the Indenture Trustee's behalf;
and (3) all assets delivered or credited to it in connection with such Trust Accounts and all
investments thereof will be promptly credited to the applicable account.
(j) Notwithstanding the foregoing, the Issuer shall have the power to instruct the Securities
Administrator to make withdrawals and distributions from the Trust Accounts for the purpose of
permitting the Securities Administrator to carry out its duties under the Indenture.
(k) The Issuer agrees to take or cause to be taken such further actions, to execute, deliver
and file or cause to be executed, delivered and filed such further documents and instruments (including,
without limitation, any financing statements under the Uniform Commercial Code or this Agreement) as may
be necessary to perfect the interests created by this Section in favor of the Indenture Trustee and
otherwise fully to effectuate the purposes, terms and conditions of this Section. The Issuer shall
promptly execute and deliver to the Securities Administrator for filing any financing statements,
amendments, continuation statements, assignments, certificates and other documents with respect to such
interests and perform all such other acts as may be necessary in order to perfect or to maintain the
perfection of the Indenture Trustee's security interest in the Trust Account Property.
In connection with the transactions contemplated by the Operative Agreements relating to the Trust
Account Property, the Issuer authorizes the Securities Administrator on behalf of the Indenture Trustee, to file
in any filing office any initial financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this Section 4.08.
None of the Securities Intermediary or any director, officer, employee or agent of the Securities
Intermediary shall be under any liability to the Indenture Trustee or the Noteholders or any other person or for
any action taken, or not taken, in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Securities Intermediary against any liability to the Indenture
Trustee, the Issuer or the Noteholders which would otherwise be imposed by reason of the Securities
Intermediary's willful misconduct, bad faith or negligence in the performance of its obligations or duties
hereunder. The Securities Intermediary and any director, officer, employee or agent of the Securities
Intermediary may rely in good faith on any document of any kind which, prima facie, is properly executed and
submitted by any Person respecting any matters arising hereunder. The Securities Intermediary shall be under no
duty to inquire into or investigate the validity, accuracy or content of such document. The Issuer shall
indemnify the Securities Intermediary for and hold it harmless against any loss, liability or expense arising out
of or in connection with this Agreement and carrying out its duties hereunder, including the costs and expenses
of defending itself against any claim of liability, except in those cases where the Securities Intermediary has
been guilty of bad faith, negligence or willful misconduct. The foregoing indemnification shall survive any
termination of this Agreement or the resignation or removal of the Securities Intermediary.
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The Securities Intermediary shall be entitled to all of the protections, immunities, benefits and
indemnities afforded to the Indenture Trustee under Articles VII and VIII of the Indenture.
ARTICLE V
FLOW OF FUNDS
SECTION 5.01. PAYMENTS.
(a) On each Payment Date, the Securities Administrator shall withdraw funds on deposit in the
Distribution Account to the extent of the Available Distribution Amount for such Payment Date and, based
on the Payment Date Statement, make the following disbursements and transfers in the following order of
priority:
(i) From the Available Distribution Amount for Loan Group 4 and the Available Distribution
Amount for Loan Group 5, to the Class A-PO Notes, the Group 4 Discount Fractional Principal Amount and
the Group 5 Discount Fractional Principal Amount, respectively, until the Class Principal Balance of the
Class A-PO Notes has been reduced to zero;
(ii) To the Offered Notes, the related Interest Distribution Amount on a pro rata basis
based on the related Interest Distribution Amount with respect to each such Class;
(iii) To the Offered Notes, as principal, concurrently, as follows:
(A) From the Available Distribution Amount for Loan Group 1, to the Class 1-A-1
and Class 1-A-2 Notes, the related Senior Principal Distribution Amount on a pro rata basis
based on Class Principal Balance, until the Class Principal Balance of each such class has been
reduced to zero;
(B) From the Available Distribution Amount for Loan Group 2, to the Class 2-A-1
and Class 2-A-2 Notes, the related Senior Principal Distribution Amount on a pro rata basis
based on Class Principal Balance, until the Class Principal Balance of each such class has been
reduced to zero; and
(C) From the Available Distribution Amount for Loan Group 3, to the Class 3-A-1
and Class 3-A-2 Notes, the related Senior Principal Distribution Amount on a pro rata basis
based on Class Principal Balance, until the Class Principal Balance of each such class has been
reduced to zero;
(D) From the Available Distribution Amount for Loan Group 4, to the Class 4-A-1
and Class 4-A-2 Notes, the related Senior Principal Distribution Amount on a pro rata basis
based on Class Principal Balance, until the Class Principal Balance of each such class has been
reduced to zero;
(E) From the Available Distribution Amount for Loan Group 5, to the Class 5-A-1
and Class 5-A-2 Notes, the related Senior Principal Distribution Amount on a pro rata basis
based on Class Principal Balance, until the Class Principal Balance of each such class has been
reduced to zero; and
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(iv) From the remaining Available Distribution Amount for Loan Group 4 and Available
Distribution Amount for Loan Group 5, to the Class A-PO Notes, the Group 4 Discount Fractional Principal
Shortfall and Group 5 Discount Fractional Principal Shortfall;
(v) From the Available Distribution Amount from Loan Group 1, Loan Group 2 and Loan Group
3 remaining after distributions pursuant to clauses (i) through (iv) above, to the Class A-X Notes the
Interest Distribution Amount payable to the Class A-X Notes; provided, however, on any Payment Date
prior to the Class A-X Reserve Fund Termination Date, amounts otherwise distributable to the Class A-X
Notes pursuant to this clause (v) will be deposited to the Class A-X Reserve Fund;
(vi) From the Available Distribution Amount from Loan Group 4 and Loan Group 5,
respectively, remaining after distributions pursuant to clauses (i) through (iv) above, to the
Class 4-A-X and Class 5-A-X Notes, respectively, the related Interest Distribution Amount payable to
such Class;
(vii) From the Available Distribution Amount for Loan Group 1, the Available Distribution Amount
for Loan Group 2 and the Available Distribution Amount for Loan Group 3, remaining after payments pursuant
to clauses (ii), (iii) and (v) above to the Offered Notes in respect of any Senior Note Available Funds
Shortfalls remaining unpaid after taking into account any withdrawals made from the Class A-X Reserve Fund
on such Payment Date pursuant to Section 5.02 hereof, to make such payments pro rata in proportion to
their entitlements to such Senior Note Available Funds Shortfalls;
(viii) From the Available Distribution Amount remaining, to the Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 and Class B-6 Notes, sequentially, in that order, an amount equal to their
respective Interest Distribution Amounts for such Payment Date and their pro rata share, based on the
outstanding Class Principal Balance of each such Class, of the aggregate Subordinate Principal
Distribution Amount; provided, however, that on any Payment Date on which the Subordination Level for
any class of Subordinate Notes is less than the Subordination Level as of the Closing Date, the portion
of the aggregate Subordinate Principal Prepayment Amount otherwise payable to the Class or Classes of
the Subordinate Notes junior to such class will be distributed to the most senior class of Subordinate
Notes for which the Subordination Level is less than such percentage as of the Closing Date, and to the
Class or Classes of Subordinate Notes senior thereto, pro rata based on the Class Principal Balance of
each such Class;
(ix) From the Available Distribution Amount remaining, to the Offered Notes, the Senior
Note Deferred Amounts, pro rata, according to the entitlement of each such Class;
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(x) From the Available Distribution Amount remaining, to each Class of Subordinate Notes,
in the order of their seniority, the excess of (x) the amount of any Realized Losses previously
allocated to such Class of Subordinate Notes over (y) the sum of (a) the aggregate of the amount
previously distributed to such Class in reimbursement thereof pursuant to this Section 5.01(a)(x) and
(b) the amount by which the Class Principal Balance of such Class has been increased due to Subsequent
Recoveries pursuant to Section 5.09; and
(xi) To the Owner Trust Certificates, any remaining Available Distribution Amount.
(b) [Reserved].
(c) Amounts to be paid to the Holders of a Class of Notes shall be payable with respect to all
Notes of that Class, pro rata, based on Percentage Interest of each Note of that Class.
(d) The Available Funds distributed pursuant to Section 5.01(a)(iii) will be applied to the
Offered Notes as follows: (i) amounts distributed to the Class 1-A-1 and Class 1-A-2 Notes will first
reduce the Available Distribution Amount for Loan Group 1, (ii) amounts distributed to the Class 2-A-1
and Class 2-A-2 Notes will first reduce the Available Distribution Amount for Loan Group 2,
(iii) amounts distributed to the Class 3-A-1 and Class 3-A-2 Notes will first reduce the Available
Distribution Amount for Loan Group 3, (iv) amounts distributed to the Class 4-A-1 and Class 4-A-2 Notes
will first reduce the Available Distribution Amount for Loan Group 4 and (v) amounts distributed to the
Class 5-A-1 and Class 5-A-2 Notes will first reduce the Available Distribution Amount for Loan Group 5.
If the Available Distribution Amount for a Loan Group is insufficient, additional amounts will reduce
the remaining Available Distribution Amount of the other Loan Groups after giving effect to the
foregoing allocations.
(e) [Reserved].
(f) (i) Notwithstanding the priority and allocation set forth in Section 5.01(a) above, on
each Payment Date on which Rapid Prepayment Conditions exist, 100% of the amounts otherwise payable as
principal under clauses (2) and (3) of the definition of Subordinate Principal Distribution Amount to
the Subordinate Notes pursuant to Section 5.01(a)(viii), in reverse order of priority, shall instead be
deposited into the Reserve Fund. Amounts on deposit in the Reserve Fund (including all net investment
earnings from amounts invested in Eligible Investments) will be applied on future Payment Dates to make
principal payments on the Offered Notes related to an Undercollateralized Group in accordance with
Section 4.06. If any amounts remain in the Reserve Fund after the Class Principal Balances of all of
the Offered Notes have been reduced to zero, such amounts shall be allocated to the Subordinate Notes in
the same priorities that the Subordinate Principal Distribution Amount is distributed to such Classes
pursuant to Section 5.01(a)(viii) above.
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(ii) On any Payment Date on which any of the Senior Notes related to a Loan Group
constitutes a Undercollateralized Group (or Groups), all amounts otherwise distributable as principal on
the Subordinate Notes, in reverse order of priority (or, following the Credit Support Depletion Date,
such other amounts described in the immediately following sentence), will be paid as principal to the
Offered Notes of such Undercollateralized Group pursuant to Section 5.01(a) first, until the total Class
Principal Balances of those Offered Notes equals the Scheduled Principal Balance of the Mortgage Loans
in the related Loan Group as of the last day of the related Due Period plus any amounts on deposit in
the Reserve Fund with respect to an Overcollateralized Group (such distribution, a
"Undercollateralization Payment") and second, to pay to the Subordinate Notes and the Owner Trust
Certificates in the same order and priority as provided in Section 5.01(a). In the event that any of
the Senior Notes constitutes an Undercollateralized Group (or Groups) on any Payment Date following the
Credit Support Depletion Date, an Undercollateralization Payment will be made from the excess of the
Available Distribution Amount from the Overcollateralized Group (or Groups) remaining after all required
amounts have been paid to the related Class or Classes of Offered Notes of such Overcollateralized
Group. In the event there are two Undercollateralized Groups, any amounts paid from the
Overcollateralized Group will be allocated in proportion to the amount of undercollateralization for
each such Undercollateralized Group. All such payments shall be made in accordance with the priorities
set forth in Section 5.01(a) above.
SECTION 5.02. PAYMENTS FROM THE CLASS A-X RESERVE FUND.
(a) On each Payment Date prior to the Class A-X Reserve Fund Termination Date, the Securities
Administrator will withdraw from amounts on deposit in the Class A-X Reserve Fund, an amount up to the
aggregate unpaid Senior Note Available Funds Shortfalls for such Payment Date and make payments of such
Senior Note Available Funds Shortfalls to the Hybrid Notes, pro rata, based on the entitlement of each
such Class. On any Payment Date, payments from the Class A-X Reserve Fund to the Hybrid Notes will be
made before taking into account any payments made in respect of Senior Note Available Funds Shortfalls
from the Available Distribution Amount pursuant to Section 5.01(a)(v). On the Class A-X Reserve Fund
Termination Date, any amounts remaining on deposit in the Class A-X Reserve Fund will be paid to the
Class A-X Notes.
SECTION 5.03. ALLOCATION OF REALIZED LOSSES.
(a) On or prior to each Determination Date, the Securities Administrator shall aggregate the
loan-level information provided by the Master Servicer with respect to the total amount of Realized
Losses, if any, with respect to the Mortgage Loans in each Loan Group for the related Payment Date and
include such information in the Payment Date Statement.
(b) Realized Losses on Mortgage Loans will be allocated among the Notes as follows:
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first, sequentially, to the Class B-6, Class B-5, Class B-4, Class B-3, Class B-2 and Class B-1 Notes,
in that order, until the Class Principal Balance of each such Class has been reduced to zero, provided,
however, that (i) if any loss is incurred with respect to a Group 4 Discount Loan, the Group 4 Discount
Fraction of such loss will first be allocated to the Class A-PO Notes and the remainder of such loss
will be allocated to the Subordinate Notes as described in this clause first and (ii) if any loss is
incurred with respect to a Group 5 Discount Loan, the Group 5 Discount Fraction of such loss will first
be allocated to the Class A-PO Notes and the remainder of such loss will be allocated to the Subordinate
Notes as described in this clause first; and
second, but only to the extent that any Realized Losses on the Mortgage Loans remaining after the
allocations in clause first exceeds amounts then on deposit in the Reserve Fund for such Payment Date,
(a) with respect to Realized Losses related to the Group 1 Mortgage Loans, sequentially, to the Class
1-A-2 Notes and Class 1-A-1 Notes, in that order, until their respective Class Principal Balances have
been reduced to zero; (b) with respect to Realized Losses related to the Group 2 Mortgage Loans,
sequentially, to the Class 2-A-2 Notes and Class 2-A-1 Notes, in that order, until their respective
Class Principal Balances have been reduced to zero; (c) with respect to Realized Losses related to the
Group 3 Mortgage Loans, sequentially, to the Class 3-A-2 Notes and Class 3-A-1 Notes, in that order,
until their respective Class Principal Balances have been reduced to zero; (d) with respect to Realized
Losses related to the Group 4 Mortgage Loans, sequentially, to the Class 4-A-2 Notes and Class 4-A-1
Notes, in that order, until their respective Class Principal Balances have been reduced to zero,
provided, however, that if any loss is incurred with respect to a Group 4 Discount Loan, the Group 4
Discount Fraction of such loss will first be allocated to the Class A-PO Notes and the remainder of such
loss will be allocated as described above in clause first; and (e) with respect to Realized Losses
related to the Group 5 Mortgage Loans, sequentially, to the Class 5-A-2 Notes and Class 5-A-1 Notes, in
that order, until their respective Class Principal Balances have been reduced to zero, provided,
however, that if any loss is incurred with respect to a Group 5 Discount Loan, the Group 5 Discount
Fraction of such loss will first be allocated to the Class A-PO Notes and the remainder of such loss
will be allocated as described above in clause first.
(c) [Reserved].
(d) The Class Principal Balance of the Class of Subordinate Notes then outstanding with the
highest numerical Class designation shall be reduced on each Payment Date by the amount, if any, by
which the aggregate of the Class Principal Balances of all outstanding Classes of any Notes (after
giving effect to the payments of principal and the allocation of Realized Losses on such Payment Date)
exceeds the aggregate of the sum of (i) the Scheduled Principal Balances of all the Mortgage Loans for
the following Payment Date and (ii) amounts then on deposit in the Reserve Fund (the "Writedown Amount").
(e) Any Realized Loss allocated to a Class of Notes or any reduction in the Class Principal
Balance of a Class of Notes pursuant to Section 5.03 shall be allocated among the Notes of such Class,
pro rata, in proportion to their respective Note Principal Amounts.
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(f) Any allocation of Realized Losses to a Note or any reduction in the Note Principal Amount
of a Note pursuant to Section 5.03 shall be accomplished by reducing the Note Principal Amount thereof
immediately following the payments made on the related Payment Date in accordance with the definition of
"Class Principal Balance."
SECTION 5.04. STATEMENTS.
(a) Concurrently with each payment to Noteholders, the Securities Administrator shall make
available to each Noteholder, the Seller, the Master Servicer, the Indenture Trustee, the Depositor and
the Rating Agencies, a statement based, as applicable, on loan-level information provided to it by the
Master Servicer and the Servicer (the "Payment Date Statement") as to the payments to be made or made,
as applicable, on such Payment Date. The Payment Date Statement shall include the following:
the applicable Accrual Periods and general Payment Dates;
the total cash flows received and the general sources thereof for any Loan Group;
the amount, if any, of fees or expenses accrued and paid, with an identification of the payee
and the general purpose of such fees;
the amount of the related payment to holders of the Notes (by Class) allocable to principal,
separately identifying (A) the aggregate amount of any Principal Prepayments included therein and
(B) the aggregate of all Monthly Payments of principal included therein;
the amount of such distribution to holders of the Notes (by Class) allocable to interest;
the Class Principal Balance of the Notes before and after giving effect to the distribution of
principal and allocation of Realized Losses on such Payment Date;
the number and Scheduled Principal Balance of all the Mortgage Loans for the following Payment
Date;
the Note Interest Rate for each class of Notes for such Payment Date;
the aggregate amount of Advances included in the payments on the Payment Date (including the
general purpose of such Advances);
the number and aggregate Scheduled Principal Balance of any Mortgage Loans (A) that were
delinquent (exclusive of Mortgage Loans in foreclosure) using the "OTS" method (1) one scheduled
payment, (2) two scheduled payments and (3) three scheduled payments and (B) as to which foreclosure
proceedings have been commenced, and loss information for the period;
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with respect to any Mortgage Loan that was liquidated during the preceding calendar month, the
loan number and Scheduled Principal Balance of, and Realized Loss on, such Mortgage Loan as of the end
of the related Prepayment Period;
the total number and Principal Balance of any REO Properties included in the Loan Groups as of
the end of the related Prepayment Period;
the Senior Note Available Funds Shortfalls for the Offered Notes, if any and the amount on
deposit in the Class A-X Reserve Fund;
the cumulative Realized Losses for the Loan Groups through the end of the preceding month;
(a) the number of Mortgage Loans in each Loan Group that have been modified during the related
Due Period and the percentage (by Scheduled Principal Balance) of Mortgage Loans modified in each Loan
Group during the related Due Period, (b) the type of modification with respect to any Mortgage Loans
modified during the related Due Period in each Loan Group, the number of Mortgage Loans subject to each
type of modification during the related Due Period in each Loan Group and the percentage (by Scheduled
Principal Balance) of Mortgage Loans in each Loan Group subject to each type of modification during the
related Due Period, (c) the number of Mortgage Loans in each Loan Group that have been modified since
the Cut-off Date and the percentage (by Scheduled Principal Balance) of Mortgage Loans in each Loan
Group modified in each Loan Group since the Cut-off Date, (d) the type of modification with respect to
any Mortgage Loans modified since the Cut-off Date, the number of Mortgage Loans in each Loan Group
subject to each type of modification since the Cut-off Date and the percentage (by Scheduled Principal
Balance) of Mortgage Loans in each Loan Group subject to each type of modification since the Cut-off
Date, (e) the aggregate of the portion of the Scheduled Principal Balance of the Mortgage Loans in each
Loan Group forgiven during the related Due Period and aggregate of the portion of the Scheduled
Principal Balance of the Mortgage Loans in each Loan Group forgiven since the Cut-off Date, (f) the
delinquency status of each Mortgage Loan modified since the Cut-off Date, (g) the number of times any
Mortgage Loan has been subject to a modification, (h) the date of the most recent modification of any
Mortgage Loan in each Loan Group, (i) the number of modifications made on the Mortgage Loans in each
Loan Group during the prior twelve months, (j) the percentage of Mortgage Loans in each Loan Group that
have been modified that are Delinquent and (k) the Mortgage Rate of each Mortgage Loan that has been
modified prior to and subsequent to such modification; and
the three-month rolling average of the percent equivalent of a fraction, the numerator of which
is the aggregate Scheduled Principal Balance of the Mortgage Loans that are 60 days or more delinquent
or are in bankruptcy or foreclosure or are REO Properties, and the denominator of which is the Scheduled
Principal Balances of all of the Mortgage Loans.
The Securities Administrator will make the Payment Date Statement (and, at its option, any additional
files containing the same information in an alternative format) available each month to Securityholders and the
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other parties to this Agreement via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at "xxx.xxxxxxx.xxx." Assistance in using the
website can be obtained by calling the Securities Administrator's customer service desk at 0-000-000-0000.
Parties that are unable to use the above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The Securities Administrator shall
have the right to change the way such reports are distributed in order to make such distribution more convenient
and/or more accessible to the parties, and the Securities Administrator shall provide timely and adequate
notification to all parties regarding any such change.
In the case of information furnished pursuant above, the amounts shall be expressed in a separate
section of the report as a dollar amount for each Class for each $1,000 original dollar amount as of the Cut-Off
Date.
(b) Within a reasonable period of time after the end of each calendar year, the Securities
Administrator shall, upon written request, furnish to each Person who at any time during the calendar
year was a Noteholder, if requested in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the information set forth in subclauses (i)
and (ii) above, aggregated for such calendar year or applicable portion thereof during which such Person
was a Noteholder and such other customary information which a Securityholder reasonably requests to
prepare its tax returns. Such obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be prepared and furnished by the
Securities Administrator to Securityholders pursuant to any requirements of the Code as are in force
from time to time.
(c) On each Payment Date, the Securities Administrator shall supply an electronic tape to
Bloomberg Financial Markets, Inc. in a format acceptable to Bloomberg Financial Markets, Inc. on a
monthly basis, and shall supply an electronic tape to Loan Performance and Intex Solutions in a format
acceptable to Loan Performance and Intex Solutions on a monthly basis.
In addition to the above, the Master Servicer shall provide a monthly loan level data file, or the
Master Servicer shall make available on the Master Servicer's internet website, a monthly loan level data file
(based solely on information provided by the Servicer) containing data provided to the Master Servicer by the
Servicer, available to those who are permitted to access the website, including the Rating Agencies. The file
shall contain the fields referenced in Exhibit L. If the Servicer is no longer going to make that information
available to the Master Servicer, Rating Agencies should be notified and be informed as to how this data will be
made available to the Rating Agencies in the future.
SECTION 5.05. REMITTANCE REPORTS; ADVANCES.
(a) No later than the second Business Day following each Determination Date, the Master
Servicer shall deliver to the Securities Administrator by telecopy or electronic mail (or by such other
means as the Master Servicer and the Securities Administrator may agree from time to time) the
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Remittance Report with respect to the related Payment Date. Not later than the Close of Business New
York time three Business Days prior to the related Payment Date, the Master Servicer shall deliver or
cause to be delivered to the Securities Administrator in addition to the information provided on the
Remittance Report, such other loan-level information reasonably available to it with respect to the
Mortgage Loans as the Securities Administrator may reasonably require to perform the calculations
necessary to make the payments contemplated by Section 5.01.
(b) If the Monthly Payment on a Mortgage Loan that was due on a related Due Date and is
delinquent, other than as a result of application of the Relief Act or similar state or local law, and
for which the Servicer was required to make an advance pursuant to the Purchase and Servicing Agreement
exceeds the amount deposited in the Distribution Account which will be used for an advance with respect
to such Mortgage Loan, the Master Servicer, as successor servicer, will deposit in the Distribution
Account not later than the Business Day immediately preceding the related Payment Date an amount equal
to such deficiency, net of the Servicing Fee and the Master Servicing Fee, for such Mortgage Loan except
to the extent the Master Servicer determines any such Advance to be Nonrecoverable from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which such Advance was made.
Subject to the foregoing, the Master Servicer, as successor servicer, shall continue to make such
Advances through the date that the Servicer is required to do so under the Purchase and Servicing
Agreement. If applicable, on the Business Day immediately preceding the related Payment Date, the
Master Servicer shall present an Officer's Certificate to the Securities Administrator and the Indenture
Trustee (i) stating that the Master Servicer elects not to make a Advance in a stated amount and
(ii) detailing the reason it deems the advance to be Nonrecoverable.
SECTION 5.06. COMPENSATING INTEREST PAYMENTS.
The portion of the Master Servicing Fee (exclusive of investment income on amounts on deposit in the
Distribution Account) payable to the Master Servicer in respect of any Payment Date shall be reduced (but not
below zero) by the amount of any Compensating Interest Payment for such Payment Date, but only to the extent that
Prepayment Interest Shortfalls relating to such Payment Date are required to be paid but are not actually paid by
the Servicer on the Servicer Remittance Date. Such amount shall not be treated as an Advance and shall not be
reimbursable to the Master Servicer.
SECTION 5.07. DERIVATIVE CONTRACTS.
At any time on or after the Closing Date, the Depositor may deposit into the Trust, solely for the
benefit of the Non-Offered Notes, a derivative contract or comparable instrument. Any such instrument shall
constitute a fully prepaid agreement. All collections, proceeds and other amounts in respect of such an
instrument shall be distributed by the Securities Administrator pursuant to the terms of such derivative contract
to the Non-Offered Notes on the related Payment Date. In the event any such instrument is deposited, the Issuer
shall be deemed to be divided into two separate and discrete sub-trusts. The assets of one such sub-trust shall
consist of all the assets of the Issuer other than the instrument and the assets of the other sub-trust shall
consist solely of such instrument.
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SECTION 5.08. LIMITED RIGHT TO REPURCHASE MORTGAGE LOANS.
The Seller will have the option at any time to purchase any of the Mortgage Loans from the Trust at the
Purchase Price, up to a maximum of five Mortgage Loans. The Seller shall provide notice of such purchase to the
Master Servicer by the 15th calendar day of the month in which the Seller plans to consummate such purchase;
provided, however, that if such day is not a Business Day, such notice must be provided by the Business Day that
immediately follows the 15th calendar day of the month. In the event that this option is exercised as to any
five Mortgage Loans in the aggregate, this option will thereupon terminate. The Seller will also have the
ability to irrevocably revoke the option at any time, in which case the option will thereupon terminate. Upon
payment by the Seller of the Purchase Price for such a Mortgage Loan, the Securities Administrator (on behalf of
the Trust) shall execute the assignment of such Mortgage Loan at the request of the Seller without recourse to
the Seller which shall succeed to all the Trust's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment outright and not for security.
The Seller will thereupon own such Mortgage, and all such security and documents, free of any further obligation
to the Trust or the Noteholders with respect thereto.
SECTION 5.09. SUBSEQUENT RECOVERIES.
(a) The Class Principal Balance of any Class of any Notes to which a Realized Loss has been
allocated (including any such Class for which the related Class Principal Balance has been reduced to
zero) will be increased up to the amount of Subsequent Recoveries in any Loan Group for such Payment
Date as follows:
(i) first, to increase the Class Principal Balance of each such Class of Offered Notes of
the related Loan Group, pro rata, up to the amount of Realized Losses previously allocated to reduce the
Class Principal Balance for each such Class, and
(ii) second, to increase the Class Principal Balance of each such Class of Subordinate
Notes, in order of seniority, up to the amount of Realized Losses previously allocated to reduce the
Class Principal Balance for each such Class.
(b) Any increase to the Class Principal Balance of a Class of Notes shall increase the Note
Principal Amount of each Note of the related Class pro rata in accordance with the applicable Percentage
Interest.
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ARTICLE VI
[RESERVED]
ARTICLE VII
DEFAULT
SECTION 7.01. EVENT OF DEFAULT.
(a) If any one of the following events (each, an "Event of Default") shall occur and be
continuing:
(i) the failure by the Master Servicer to (A) make any Advance on the Business Day
immediately preceding the related Payment Date or (B) to deposit in the Distribution Account any deposit
required to be made under the terms of this Agreement, and in either case such failure continues
unremedied for a period of three Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master Servicer (or, if applicable, such
shorter time period as is provided in the penultimate sentence of Section 7.01(c)); or
(ii) the failure by the Master Servicer duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the Master Servicer as set forth in this
Agreement, which failure continues unremedied for a period of 60 days, in each case after the date
(A) on which written notice of such failure, requiring the same to be remedied, shall have been given to
the Master Servicer by the Indenture Trustee or to the Master Servicer and the Indenture Trustee by
Noteholders evidencing at least 25% of the Voting Rights or (B) on which a Servicing Officer of the
Master Servicer has actual knowledge of such failure (or, in the case of a breach of its obligation
beyond any applicable cure period to provide an assessment of compliance, an attestation report or a
Xxxxxxxx-Xxxxx Certification pursuant to Sections 3.16 and 3.18, respectively); or
(iii) the entry against the Master Servicer of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of a trustee, conservator,
receiver or liquidator in any insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the winding up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60
days; or
(iv) the Master Servicer shall voluntarily go into liquidation, consent to the appointment
of a conservator or receiver or liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to the Master Servicer or of
or relating to all or substantially all of its property; or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have
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been entered against the Master Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the Master Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations;
(b) then, and in each and every such case, so long as an Event of Default shall not have been
remedied within the applicable grace period, the Indenture Trustee shall, at the written direction of
the Majority Securityholders, by notice then given in writing to the Master Servicer, terminate all of
the rights and obligations of the Master Servicer as master servicer under this Agreement. Any such
notice to the Master Servicer shall also be given to each Rating Agency, the Depositor, the Owner
Trustee and the Seller. On or after the receipt by the Master Servicer (and by the Indenture 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 Notes or the Mortgage Loans or otherwise,
shall pass to and be vested in the Indenture Trustee and the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether to complete the transfer
and endorsement of each Mortgage Loan and related documents or otherwise. The Master Servicer agrees to
cooperate with the Indenture Trustee in effecting the termination of the responsibilities and rights of
the Master Servicer hereunder, including, without limitation, the delivery to the Indenture Trustee of
all documents and records requested by it to enable it to assume the Master Servicer's functions under
this Agreement within ten Business Days subsequent to such notice and the transfer within one Business
Day subsequent to such notice to the Indenture Trustee for the administration by it of all cash amounts
that shall at the time be held by the Master Servicer and to be deposited by it in any Distribution
Account, any REO Account or any Custodial Account or that have been deposited by the Master Servicer in
such accounts or thereafter received by the Master Servicer with respect to the Mortgage Loans or any
REO Property received by the Master Servicer. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Master Servicer's duties and the Mortgage Files to
the successor Master Servicer and amending this Agreement to reflect such succession as Master Servicer
pursuant to this Section shall be paid by the predecessor Master Servicer (or if the predecessor Master
Servicer is the Indenture Trustee, the initial Master Servicer) upon presentation of reasonable
documentation of such costs and expenses. The termination of the rights and obligations of the Master
Servicer shall not affect any liability it may have incurred prior to such termination. To the extent
that such costs and expenses of the Indenture Trustee are not fully and timely reimbursed by the
predecessor Master Servicer, the Indenture Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Accounts.
(c) The Securities Administrator shall not later than the close of business on the Business
Day immediately preceding the related Payment Date notify the Indenture Trustee in writing of the Master
Servicer's failure to make any Advance required to be made under this Agreement on such date and the
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amount of such Advance. By no later than 10:00 A.M. (Chicago time) on the relevant Payment Date, the
Securities Administrator shall notify the Indenture Trustee of the continuance of such failure or that
the Master Servicer has made the Advance, as the case may be. Notwithstanding the terms of the Event of
Default described in clause (i)(A) of Section 7.01(a), the Indenture Trustee, upon receipt of written
notice on the Payment Date from the Securities Administrator of the continuance of the failure of the
Master Servicer to make an Advance, shall, by notice in writing to the Master Servicer, which may be
delivered by telecopy, immediately suspend all of the rights and obligations of the Master Servicer
thereafter arising under this Agreement, but without prejudice to any rights it may have as a
Securityholder or to reimbursement of outstanding Advances or other amounts for which the Master
Servicer was entitled to reimbursement as of the date of suspension, and the Indenture Trustee, subject
to the cure provided for in this paragraph, if available, shall act as provided in Section 7.02 to carry
out the duties of the Master Servicer, including the obligation to make any Advance as successor
servicer, the nonpayment of which is described in clause (i)(A) of Section 7.01(a). Any such action
taken by the Indenture Trustee must be prior to the payment on the relevant Payment Date, and shall have
all of the rights incidental thereto. If the Master Servicer shall within two Business Days following
such suspension remit to the Indenture Trustee the amount of any Advance the nonpayment of which by the
Master Servicer is described in clause (i)(A) of Section 7.01(a), together with all other amounts
necessary to reimburse the Indenture Trustee for actual, necessary and reasonable costs incurred by the
Indenture Trustee because of action taken pursuant to this subsection (including interest on any Advance
or other amounts paid by the Indenture Trustee (from and including the respective dates thereof) at a
per annum rate equal to the prime rate for U.S. money center commercial banks as published in the Wall
Street Journal), then the Indenture Trustee, subject to the last two sentences of this paragraph, shall
permit the Master Servicer to resume its rights and obligations as Master Servicer hereunder. If the
Master Servicer shall fail to remit such amounts to the Indenture Trustee within such two Business Days
after the Payment Date, then an Event of Default shall occur and such notice of suspension shall be
deemed to be a notice of termination without any further action on the part of the Indenture Trustee.
The Master Servicer agrees that if it fails to make a required Advance by 10:00 A.M. (Chicago time) on
the related Payment Date on more than two occasions in any 12 month period, the Indenture Trustee shall
be under no obligation to permit the Master Servicer to resume its rights and obligations as Master
Servicer hereunder, and notwithstanding the cure period provided in Section 7.01(a)(i)(A), an Event of
Default shall be deemed to have occurred on the relevant Payment Date.
SECTION 7.02. INDENTURE TRUSTEE TO ACT.
(a) From and after the date the Master Servicer (and the Indenture Trustee, if notice is sent
by the Holders) receives a notice of termination pursuant to Section 7.01, the Indenture Trustee shall
be the successor in all respects to the Master Servicer in its capacity as master servicer under this
Agreement and the transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof arising on and after its succession. As compensation therefor, the Indenture Trustee
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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 Indenture Trustee
is unwilling to act as successor Master Servicer or (ii) if the Indenture Trustee is legally unable so
to act, the Indenture 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 $10,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the
Master Servicer hereunder; provided, that the appointment of any such successor Master Servicer shall
not result in the qualification, reduction or withdrawal of the ratings assigned to the Notes by each
Rating Agency as evidenced by a letter to such effect from each Rating Agency (which letter shall not be
an expense of the Indenture Trustee). Pending appointment of a successor to the Master Servicer
hereunder, unless the Indenture Trustee is prohibited by law from so acting, the Indenture Trustee shall
act in such capacity as hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage Loans in an amount equal
to the compensation which the Master Servicer would otherwise have received pursuant to Section 3.14.
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
indemnify the Indenture 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 Indenture 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 Indenture Trustee, to the Master Servicer as Master Servicer
shall during the term of its service as Master Servicer continue to service and administer the Mortgage
Loans for the benefit of Securityholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same extent as the Master Servicer
is so required pursuant to Section 3.04.
(c) Notwithstanding anything else herein to the contrary, in no event shall the Indenture
Trustee be liable for any servicing fee or for any differential in the amount of the servicing fee paid
hereunder and the amount necessary to induce any successor Master Servicer to act as successor Master
Servicer under this Agreement and the transactions set forth or provided for herein.
SECTION 7.03. WAIVER OF EVENT OF DEFAULT.
The Majority Securityholders may, on behalf of all Securityholders, by notice in writing to the
Indenture Trustee, direct the Indenture Trustee to waive any events permitting removal of any Master Servicer
under this Agreement, provided, however, that the Majority Securityholders may not waive an event that results in
a failure to make any required payment on a Note without the consent of the Holder of such Note. Upon any waiver
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of an Event of Default, such event shall cease to exist and any Event of Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent
or other event or impair any right consequent thereto except to the extent expressly so waived. Notice of any
such waiver shall be given by the Indenture Trustee to each Rating Agency.
SECTION 7.04. NOTIFICATION TO SECURITYHOLDERS.
(a) Upon any termination or appointment of a successor to any Master Servicer pursuant to this
Article VII or Section 3.34, the Note Registrar or the Indenture Trustee, if the Master Servicer is also
the Note Registrar and Securities Administrator, shall give prompt written notice thereof to the
Noteholders at their respective addresses appearing in the Note Register and to each Rating Agency.
(b) No later than 60 days after the occurrence of any event which constitutes or which, with
notice or a lapse of time or both, would constitute an Event of Default of which a Responsible Officer
of the Indenture Trustee becomes aware of the occurrence of such an event, the Indenture Trustee shall
transmit by mail to all Noteholders notice of such occurrence unless such Event of Default shall have
been waived or cured.
SECTION 7.05. ACTION UPON MASTER SERVICER EVENT OF DEFAULT.
If an Event of Default has occurred (which has not been cured or waived) of which a Responsible Officer
has actual knowledge, the Indenture Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs, unless the Indenture Trustee is acting as successor
Master Servicer, in which case it shall use the same degree of care and skill as the Master Servicer hereunder
with respect to the exercise of the rights and powers of the Master Servicer hereunder; provided, however, the
Indenture Trustee shall not be charged with knowledge of any Event of Default or any other event or matter that
may require it to take action or omit to take action hereunder unless a Responsible Officer of the Indenture
Trustee at the Corporate Trust Office obtains actual knowledge of such failure or the Indenture Trustee receives
written notice of such Event of Default.
SECTION 7.06. ADDITIONAL REMEDIES OF INDENTURE TRUSTEE UPON EVENT OF DEFAULT.
In case an Event of Default or a default by the Depositor hereunder shall occur and be continuing, the
Indenture Trustee may proceed to protect and enforce its rights and the rights of the Noteholders under this
Agreement, as the case may be, by a suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or in aid of the execution of any
power granted in this Agreement or for the enforcement of any other legal, equitable or other remedy, as the
Indenture Trustee, being advised by counsel, and subject to the foregoing, shall deem most effectual to protect
and enforce any of the rights of the Indenture Trustee and the Noteholders.
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ARTICLE VIII
THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION 8.01. DUTIES OF INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR.
The Indenture Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of
all Events of Default which may have occurred, and the Securities Administrator each undertake to perform such
duties and only such duties as are specifically set forth in this Agreement as duties of the Indenture Trustee
and the Securities Administrator, respectively. During the continuance of an Event of Default, the Indenture
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 its exercise as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. Any permissive right of the Indenture Trustee enumerated in this Agreement shall
not be construed as a duty.
The Indenture Trustee and the Securities Administrator, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished to the Indenture Trustee and the
Securities Administrator, which are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform to the requirements of this Agreement provided,
however, that neither the Indenture Trustee nor the Securities Administrator will be responsible for the accuracy
or content of any such resolutions, certificates, statements, opinions, reports, documents or other instruments.
If any such instrument is found not to conform to the requirements of this Agreement in a material manner, the
Indenture Trustee or the Securities Administrator, as the case may be, shall take such action as it deems
appropriate to have the instrument corrected and if the instrument is not corrected to its satisfaction, the
Securities Administrator shall provide notice to the Indenture Trustee thereof (or the Indenture Trustee shall
take note thereof) and the Indenture Trustee shall provide notice to the Securityholders.
On each Payment Date, the Securities Administrator shall make monthly payments to the Noteholders from
funds in the Distribution Account and to the Certificateholders from funds in the Certificate Distribution
Account, in each case as provided in Sections 5.01, 5.09 and 10.01 hereof based on the report of the Securities
Administrator.
No provision of this Agreement shall be construed to relieve the Indenture Trustee or the Securities
Administrator from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the curing of all such
Events of Default which may have occurred, the duties and obligations of the Indenture Trustee and the
Securities Administrator shall be determined solely by the express provisions of this Agreement and the
Indenture, in the case of the Indenture Trustee, and this Agreement, the Indenture, the Trust Agreement
and the Administration Agreement, in the case of the Securities Administrator, neither the Indenture
Trustee nor the Securities Administrator shall be liable except for the performance of such of its
duties and obligations as are specifically set forth in this those agreements, no implied covenants or
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obligations shall be read into such agreements against the Indenture Trustee or the Securities
Administrator and, in the absence of bad faith on the part of the Indenture Trustee or the Securities
Administrator, respectively, the Indenture Trustee or the Securities Administrator may conclusively
rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Indenture Trustee or the Securities Administrator,
respectively, and conforming to the requirements of this Agreement or such other agreements, as
applicable;
(ii) neither the Indenture Trustee nor the Securities Administrator shall be liable for an
error of judgment made in good faith by a Responsible Officer of the Indenture Trustee or an officer of
the Securities Administrator, respectively, unless it shall be proved that the Indenture Trustee or the
Securities Administrator, respectively, was negligent in ascertaining or investigating the facts related
thereto; and
(iii) neither the Indenture Trustee nor the Securities Administrator shall be personally
liable with respect to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the consent or at the direction of Securityholders as provided herein relating to the
time, method and place of conducting any remedy pursuant to this Agreement, or exercising or omitting to
exercise any trust or power conferred upon the Indenture Trustee or the Securities Administrator,
respectively, under this Agreement;
The Securities Administrator shall pay any and all tax related expenses (not including taxes) of the
Issuer, including but not limited to any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to the Issuer that involve the Internal Revenue Service or state tax
authorities, but only to the extent that (i) such expenses are ordinary or routine expenses, including expenses
of a routine audit but not expenses of litigation (except as described in (ii)); or (ii) such expenses or
liabilities (including taxes and penalties) are attributable to the negligence or willful misconduct of the
Securities Administrator in fulfilling its duties hereunder (including the Securities Administrator's duties as
tax return preparer). Notwithstanding the foregoing the Securities Administrator will be reimbursed for any
expenses relating to a tax audit of the Issuer.
The Securities Administrator shall prepare and file, and the Owner Trustee shall sign the tax returns of
the Issuer, to the extent that a tax return is required to be filed by the Issuer. The expenses of preparing and
filing such tax returns shall be borne by the Securities Administrator. Notwithstanding the foregoing, the
Securities Administrator shall have no obligation to prepare, file or otherwise deal with partnership tax
information or returns. In the event that partnership tax information or returns are required by the Internal
Revenue Service, the Seller, at its own cost and expense, will prepare and file all necessary returns.
The Securities Administrator shall perform on behalf of the Issuer all reporting and other tax
compliance duties that are the responsibility of the Issuer under the Code or other compliance guidance issued by
the Internal Revenue Service or any state or local taxing authority. Among its other duties, if required by the
Code or other such guidance, the Securities Administrator shall provide to the Securityholders such information
or reports as are required by the Code.
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Neither the Indenture Trustee nor the Securities Administrator shall be required to expend or risk its
own funds or otherwise incur financial or other liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of
such funds or indemnity satisfactory to it against such risk or liability is not assured to it, and none of the
provisions contained in this Agreement shall in any event require the Indenture Trustee or the Securities
Administrator to perform, or be responsible for the manner of performance of, any of the obligations of the
Master Servicer under this Agreement, except during such time, if any, as the Indenture Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
SECTION 8.02. CERTAIN MATTERS AFFECTING THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR.
Except as otherwise provided in Section 8.01 hereof:
(i) before taking any action pursuant to this Agreement, the Indenture Trustee and the
Securities Administrator may request and conclusively rely upon and shall be fully protected in acting
or refraining from acting upon any resolution, Officers' Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Indenture Trustee and the Securities Administrator may consult with counsel and
any advice of its counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) neither the Indenture Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the request, order or direction of
any of the Securityholders, pursuant to the provisions of this Agreement, unless such Securityholders
shall have offered to the Indenture Trustee or the Securities Administrator, as the case may be,
reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however, relieve the Indenture
Trustee of the obligation, upon the occurrence of an Event of Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this Agreement, and to 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;
(iv) neither the Indenture Trustee nor the Securities Administrator shall be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
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(v) prior to the occurrence of an Event of Default hereunder and after the curing or
waiver of all Events of Default which may have occurred, neither the Indenture Trustee nor the
Securities Administrator shall 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 Holders of the Notes
representing not less than 25% of the Outstanding Balance (as defined in the Indenture) of the Notes;
provided, however, that if the payment within a reasonable time to the Indenture Trustee or the
Securities Administrator of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Indenture Trustee or the Securities Administrator, as
applicable, not reasonably assured to the Indenture Trustee or the Securities Administrator by such
Holders, the Indenture Trustee or the Securities Administrator, as applicable, may require reasonable
indemnity satisfactory to it against such expense, or liability from such Holders as a condition to
taking any such action;
(vi) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;
(vii) Neither the Indenture Trustee nor the Securities Administrator shall be liable for any
action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by this Agreement;
(viii) The Indenture Trustee shall not be deemed to have notice of any default or Event of
Default unless a Responsible Officer of the Indenture Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the Indenture Trustee at the
Corporate Trust Office of the Indenture Trustee, and such notice references the Certificates and this
Agreement;
(ix) The rights, privileges, protections, immunities and benefits given to the Indenture
Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, each agent, custodian and other Person employed to act hereunder.
(x) In no event shall the Indenture Trustee be liable, directly or indirectly, for any
special, indirect or consequential damages, even if the Indenture Trustee has been advised of the
possibility of such damages;
(xi) No provision of this Agreement shall require the Indenture Trustee to expend or risk
its own funds (regardless of the capacity in which it is acting) or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate
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indemnity against such risk or liability is not reasonably assured to it; and
(xii) The Indenture Trustee shall not have any duty to conduct any affirmative investigation
(including, but not limited to, reviewing any reports delivered to the Indenture Trustee in connection
with the review of the Mortgage Files) as to the occurrence of any condition requiring the repurchase of
any Mortgage Loan by the Originator pursuant to the Purchase and Servicing Agreement or this Agreement
or the eligibility of any Mortgage Loan for purposes of this Agreement.
SECTION 8.03. INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR NOT LIABLE FOR SECURITIES, MORTGAGE
LOANS OR ADDITIONAL COLLATERAL.
The recitals contained herein and in the Securities (other than the authentication of the Securities
Administrator on the Securities, the acknowledgments of the Indenture Trustee and the representations and
warranties of the Indenture Trustee) shall be taken as the statements of the Seller, and the neither the
Indenture Trustee nor the Securities Administrator assumes responsibility for the correctness of the same.
Neither the Indenture Trustee nor the Securities Administrator makes representations or warranties hereunder as
to the validity or sufficiency of this Agreement or of the Securities (other than the signature and
authentication of the Securities Administrator on the Securities) or of any Mortgage Loan or related document or
of MERS or the MERS System. The Indenture Trustee shall not be accountable for the use or application by the
Master Servicer, or for the use or application of any funds paid to the Master Servicer in respect of related
Mortgage Loans or deposited in or withdrawn from the Distribution Accounts by the Master Servicer or the
Securities Administrator. Neither the Indenture Trustee nor the Securities Administrator shall at any time have
any responsibility or liability for or with respect to the legality, validity and enforceability of any Mortgage
or any Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance of any such perfection
and priority, or for or with respect to the sufficiency of the Issuer or its ability to generate the payments to
be paid to Securityholders 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 Indenture Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02 hereof); the
validity of the assignment of any Mortgage Loan to the Indenture Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other than if the
Indenture Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02 hereof); the compliance
by the Depositor or the Seller with any warranty or representation made under this Agreement or in any related
document or the accuracy of any such warranty or representation prior to the Indenture Trustee's receipt of
notice or other discovery of any non-compliance therewith or any breach thereof; any investment of monies by or
at the direction of the Master Servicer or in the case of the Indenture Trustee the Securities Administrator or
any loss resulting therefrom, it being understood that the Indenture Trustee shall remain responsible for any
Issuer property that it may hold in its individual capacity and the Securities Administrator shall remain
responsible for any Issuer property that it may hold in its individual capacity; the acts or omissions of the
Master Servicer (other than as to the Securities Administrator, if it is also the Master Servicer, and as to the
Indenture Trustee, if the Indenture Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02 hereof, and then only for the acts or omissions of the Indenture Trustee as the successor Master
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Servicer), or any acts or omissions of the Servicer or any Mortgagor; any action of the Master Servicer (other
than as to the Securities Administrator, if it is also the Master Servicer, and as to the Indenture Trustee, if
the Indenture Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02 hereof), or in the
case of the Indenture Trustee the Securities Administrator or the Servicer taken in the name of the Indenture
Trustee; the failure of the Master Servicer or the Servicer to act or perform any duties required of it as agent
or on behalf of the Indenture Trustee or the Issuer hereunder; or any action by the Indenture Trustee taken at
the instruction of the Master Servicer (other than if the Indenture Trustee shall assume the duties of the Master
Servicer pursuant to Section 7.02 hereof, and then only for the actions of the Indenture Trustee as the successor
Master Servicer); provided, however, that the foregoing shall not relieve the Indenture Trustee of its obligation
to perform its duties under this Agreement.
SECTION 8.04. OWNER TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY OWN NOTES.
The Owner Trustee, the Master Servicer and the Securities Administrator in their respective individual
capacities, or in any capacity other than as Owner Trustee, Master Servicer or Securities Administrator
hereunder, may become the owner or pledgee of any Notes with the same rights they would have if they were not
Owner Trustee, Master Servicer or Securities Administrator, as applicable, and may otherwise deal with the
parties hereto.
SECTION 8.05. INDENTURE TRUSTEE'S, CUSTODIAN'S, OWNER TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
EXPENSES.
The Owner Trustee shall be paid an annual fee of $2,500 on the Payment Date occurring in July of each
year, commencing in July 2009, from amounts on deposit in the Distribution Account. The Indenture Trustee, the
Securities Administrator and the Custodian shall be compensated by the Master Servicer for their services
hereunder and under the Xxxxx Fargo Custodial Agreement from a portion of the Master Servicing Fee. In addition,
the Indenture Trustee (as Indenture Trustee and in its individual corporate capacity), the Custodian, the Owner
Trustee and the Securities Administrator will be entitled to recover from the Distribution Account, pursuant to
Section 4.03(a) all reasonable out-of-pocket expenses, disbursements and advances and the expenses (including,
but not limited to, legal fees and expenses) of the Indenture Trustee, the Owner Trustee, and the Securities
Administrator, respectively, including without limitation, in connection with any Event of Default, any breach of
this Agreement or any claim or legal action (including any pending or threatened claim or legal action) incurred
or made by or against the Owner Trustee, the Indenture Trustee, the Custodian or the Securities Administrator,
respectively, in the performance of its duties or the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except any such expense, disbursement or
advance as may arise from its negligence (or in the case of the Owner Trustee, gross negligence) or intentional
misconduct or which is specifically designated herein as the responsibility of the Depositor, the Seller, the
Master Servicer, the Securityholders, the Owner Trustee or the Issuer hereunder or thereunder. If funds in the
Distribution Accounts are insufficient therefor, the Indenture Trustee, the Owner Trustee, the Custodian and the
Securities Administrator shall recover such expenses from future collections on the Mortgage Loans or as
otherwise agreed by such parties and the Securityholders. Such compensation and reimbursement obligation shall
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not be limited by any provision of law in regard to the compensation of a trustee of an express trust.
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR.
The eligibility requirements for the Indenture Trustee are set forth in Section 6.11 of the Indenture.
The Securities Administrator hereunder shall at all times be an entity duly organized and validly existing under
the laws of the United States of America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and a minimum long-term debt rating
in the third highest rating category by each Rating Agency and in each Rating Agency's two highest short-term
rating categories, and subject to supervision or examination by federal or state authority. If such entity
publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06, the combined capital and surplus
of such entity shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 8.06, the Securities Administrator shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof.
SECTION 8.07. RESIGNATION OR REMOVAL OF THE INDENTURE TRUSTEE OR THE SECURITIES ADMINISTRATOR.
The circumstances causing resignation and removal of the Indenture Trustee are set forth in Sections
6.08 and 6.09 of the Indenture. The Securities Administrator 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 each Rating
Agency. Upon receiving such notice of resignation of the Securities Administrator, the Indenture Trustee or the
Depositor shall promptly appoint a successor Securities Administrator that meets the requirements in Section 8.06
by written instrument, in duplicate, one copy of which instrument shall be delivered to each of the resigning
Securities Administrator and one copy to the successor Securities Administrator. If no successor Securities
Administrator shall have been so appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Securities Administrator may petition any court of competent
jurisdiction for the appointment of a successor Securities Administrator.
If at any time the Securities Administrator shall cease to be eligible in accordance with the provisions
of Section 8.06 hereof or if at any time the Securities Administrator shall be legally unable to act, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Securities Administrator or of its property shall be
appointed, or any public officer shall take charge or control of the Securities Administrator or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation, or if the Securities Administrator
fails to provide an assessment of compliance or an attestation report required under Section 3.16 within 15
calendar days of March 1 of each calendar year in which Exchange Act reports are required then the Indenture
Trustee may remove the Securities Administrator. If the Indenture Trustee removes the Securities Administrator,
under the authority of the immediately preceding sentence, the Seller or the Indenture Trustee shall promptly
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appoint a successor Securities Administrator that meets the requirements of Section 8.06 by written instrument,
in triplicate, one copy of which instrument shall be delivered to the Securities Administrator so removed, one
copy to the successor Securities Administrator and one copy to the Master Servicer.
The Majority Securityholders may at any time remove the Securities Administrator by written instrument
or instruments delivered to the Indenture Trustee; the Depositor or Indenture Trustee shall thereupon use its
best efforts to appoint a successor Securities Administrator in accordance with this Section.
Any resignation or removal of the Securities Administrator and appointment of a successor Securities
Administrator, pursuant to any of the provisions of this Section 8.07 shall not become effective until acceptance
of appointment by the successor Securities Administrator as provided in Section 8.08 hereof. If the Securities
Administrator is removed pursuant to this Section 8.07, it shall be reimbursed any outstanding and unpaid fees
and expenses, and if removed under the authority of the immediately preceding paragraph, the Securities
Administrator shall also be reimbursed any outstanding and unpaid costs and expenses.
Notwithstanding anything to the contrary contained herein, in the event that the Master Servicer resigns
or is removed as Master Servicer hereunder, the Securities Administrator shall have the right to resign
immediately as Securities Administrator by giving written notice to the Seller and the Indenture Trustee, with a
copy to each Rating Agency; provided that such resignation shall not become effective until acceptance of
appointment by a successor Securities Administrator. Notwithstanding anything to the contrary herein, in the
event that the Securities Administrator resigns or is removed as Securities Administrator hereunder, the Master
Servicer shall have the right to resign immediately as Master Servicer by giving written notice to the Seller and
the Indenture Trustee, with a copy to each Rating Agency; provided that such resignation shall not become
effective until acceptance of appointment by a successor Master Servicer.
SECTION 8.08. SUCCESSOR SECURITIES ADMINISTRATOR.
Any successor Securities Administrator appointed as provided in Section 8.07 hereof shall execute,
acknowledge and deliver to the Depositor and the Master Servicer and to its predecessor Securities Administrator
an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the Securities
Administrator shall become effective, and such successor Securities Administrator, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named Securities Administrator. The predecessor Securities
Administrator shall deliver to the successor Securities Administrator all moneys held in any Trust Account
hereunder, as well as all moneys, held by it hereunder and the Depositor, the Master Servicer and the predecessor
Securities Administrator shall execute and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Securities Administrator, as applicable,
all such rights, powers, duties and obligations.
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No successor Securities Administrator shall accept appointment as provided in this Section 8.08 unless
at the time of such acceptance such successor Securities Administrator shall be eligible under the provisions of
Section 8.06 hereof and the appointment of such successor Securities Administrator shall not result in a
downgrading of the Offered Notes by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Securities Administrator as provided in this Section 8.08,
the successor Securities Administrator shall mail notice of the appointment of a successor Securities
Administrator hereunder to all Securityholders at their addresses as shown in the Certificate Register or the
Note Register, as applicable, and to each Rating Agency.
SECTION 8.09. MERGER OR CONSOLIDATION OF INDENTURE TRUSTEE OR SECURITIES ADMINISTRATOR.
The consequences of merger or consolidation of the Indenture Trustee are set forth in Section 6.09 of
the Indenture. Any entity into which the Securities Administrator may be merged or converted or with which it
may be consolidated, or any entity resulting from any merger, conversion or consolidation to which the Securities
Administrator shall be a party, or any entity succeeding to the corporate trust business of the Securities
Administrator, shall be the successor of the Securities Administrator, as applicable, hereunder, provided such
entity shall be eligible under the provisions of Section 8.06 and 8.08 hereof, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. [RESERVED].
SECTION 8.11. [RESERVED].
SECTION 8.12. INDENTURE TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
(a) All rights of action and claims under this Agreement or the Notes may be prosecuted and
enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof
in any proceeding relating thereto, and such proceeding instituted by the Indenture Trustee shall be
brought in its own name or in its capacity as Indenture Trustee for the benefit of all Holders of such
Notes, subject to the provisions of this Agreement and the Indenture. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses, disbursement and advances of
the Indenture Trustee (for the avoidance of doubt, in its individual capacity and as Indenture Trustee
on behalf of the Issuer), its agents and counsel, be for the ratable benefit or the Noteholders in
respect of which such judgment has been recovered.
(b) The Indenture Trustee shall afford the Seller, the Depositor and each Securityholder upon
reasonable notice during normal business hours at its Corporate Trust Office or other office designated
by the Indenture Trustee, access to all records maintained and physically held by the Indenture Trustee
in respect of its duties hereunder and access to officers of the Indenture Trustee responsible for
performing such duties. The Indenture Trustee shall cooperate fully with the Seller, the Depositor and
such Securityholder and shall, subject to the first sentence of this Section 8.12(b), make available to
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the Seller, the Depositor and such Securityholder for review and copying such books, documents or
records as may be requested with respect to the Indenture Trustee's duties hereunder. The Seller, the
Depositor and the Securityholders shall not have any responsibility or liability for any action or
failure to act by the Indenture Trustee and are not obligated to supervise the performance of the
Indenture Trustee under this Agreement or otherwise.
(c) The Securities Administrator shall afford the Seller, the Depositor, the Indenture Trustee
and each Securityholder upon reasonable notice during normal business hours at its offices at 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 or other office designated by the Securities Administrator,
access to all records maintained by the Securities Administrator in respect of its duties hereunder and
access to officers of the Securities Administrator responsible for performing such duties. Upon
request, the Securities Administrator shall furnish the Depositor and any requesting Securityholder with
its most recent audited financial statements. The Securities Administrator shall cooperate fully with
the Seller, the Depositor, the Indenture Trustee and such Securityholder and shall, subject to the first
sentence of this Section 8.12(c), make available to the Seller, the Depositor and such Securityholder
for review and copying such books, documents or records as may be requested with respect to the
Securities Administrator's duties hereunder. The Seller, the Depositor, the Indenture Trustee and the
Securityholders shall not have any responsibility or liability for any action or failure to act by the
Securities Administrator and are not obligated to supervise the performance of the Securities
Administrator under this Agreement or otherwise.
SECTION 8.13. SUITS FOR ENFORCEMENT.
In case an Event of Default or a default by the Depositor hereunder shall occur and be continuing, the
Indenture Trustee may proceed to protect and enforce its rights and the rights of the Securityholders under this
Agreement, as the case may be, by a suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or in aid of the execution of any
power granted in this Agreement or for the enforcement of any other legal, equitable or other remedy, as the
Indenture Trustee, being advised by counsel, and subject to the foregoing, shall deem most effectual to protect
and enforce any of the rights of the Indenture Trustee and the Securityholders.
SECTION 8.14. WAIVER OF BOND REQUIREMENTS.
The Indenture Trustee shall be relieved of, and each Securityholder hereby waives, any requirement of
any jurisdiction in which the Trust Estate, or any part thereof, may be located that the Indenture Trustee post a
bond or other surety with any court, agency or body whatsoever.
SECTION 8.15. WAIVER OF INVENTORY, ACCOUNTING AND APPRAISAL REQUIREMENT.
The Owner Trustee shall be relieved of, and each Securityholder hereby waives, any requirement of any
jurisdiction in which the Issuer, or any part thereof, may be located that the Owner Trustee file any inventory,
accounting or appraisal of the Issuer with any court, agency or body at any time or in any manner whatsoever.
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ARTICLE IX
[RESERVED]
ARTICLE X
TERMINATION
SECTION 10.01. TERMINATION; CLEAN-UP CALL.
(a) The respective obligations and responsibilities of the Seller, the Depositor, the Master
Servicer, the Securities Administrator, the Owner Trustee and the Indenture Trustee created hereby with
respect to the Mortgage Loans (other than the obligation of the Securities Administrator to make certain
payments to Noteholders after the final Payment Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the Indenture Trustee and the
Securities Administrator upon the earliest of (i) the Payment Date on which the Class Principal Balance
(or Class Notional Amount in the case of the Interest Only Notes) of each Class of Notes has been
reduced to zero, (ii) the final payment or other liquidation of the last Mortgage Loan, (iii) the
optional purchase of the Mortgage Loans as described in the following paragraphs and (iv) the Stated
Maturity Date.
The Servicer may, at its option, terminate this Agreement with respect to the Notes on any Payment Date
on which the aggregate amount of the Scheduled Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period is equal to or less than 10% of the Cut-Off Date Aggregate Principal Balance of
the Mortgage Loans (such Payment Date, the "Clean-Up Call Date"), by purchasing, on such Payment Date, all of the
outstanding Mortgage Loans and REO Properties at a price equal to the sum of (i) the outstanding Scheduled
Principal Balances of the Mortgage Loans (other than in respect of REO Properties), (ii) the fair market value
of any REO Property as determined by the higher of two appraisals completed by two independent appraisers
approved by the Depositor and at the expense of the Person exercising the Clean-Up Call Option less the good
faith estimate of the Master Servicer or the Servicer, as applicable, of Liquidation Expenses to be incurred in
connection with its disposal and (iii) in all cases, accrued and unpaid interest on the Mortgage Loans at the
applicable Mortgage Rate through the end of the Due Period preceding the final Payment Date, plus unreimbursed
Servicing Advances and Advances and any unpaid Master Servicing Fees and Servicing Fees allocable to such
Mortgage Loans and REO Properties, plus all amounts, if any, then due and owing to the Indenture Trustee, the
Master Servicer, the Owner Trustee, the Custodian and the Securities Administrator with respect to the Mortgage
Loans (the "Clean-Up Call Purchase Price").
(b) [Reserved].
(c) Notice of any termination pursuant to Section 10.01(a), specifying the Clean-Up Call Date,
(which shall be a date that would otherwise be a Payment Date) upon which the applicable Noteholders may
surrender their Notes to the Securities Administrator for payment of the final distribution and
cancellation, shall be given by the Securities Administrator to the Noteholders pursuant to
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Section 10.02 of the Indenture and to the Owner Trustee promptly upon the Securities Administrator
receiving notice of such Clean-Up Call Date from the Servicer.
(d) Upon presentation and surrender of the Notes, the Securities Administrator shall cause to
be distributed to the Holders of such Notes on the Payment Date for such final distribution, in
proportion to the Percentage Interests of their respective Class and to the extent that funds are
available for such purpose, an amount equal to the amount required to be distributed to such Holders in
accordance with the provisions of Section 5.01 hereof for such Payment Date.
(e) In the event that all Noteholders shall not surrender their Notes for final payment and
cancellation on or before such final Payment Date, the Securities Administrator shall promptly following
such date cause all funds in the Distribution Account to which Noteholders are entitled and not
distributed in final distribution to Noteholders to be withdrawn therefrom and credited to the remaining
Noteholders by depositing such funds in a separate account for the benefit of such Noteholders, and the
Securities Administrator shall give a second written notice to the remaining Noteholders to surrender
their Notes for cancellation and receive the final distribution with respect thereto. If within nine
months after the second notice all the Notes shall not have been surrendered for cancellation, the
Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject
hereto, and the Securities Administrator upon transfer of such funds to the Certificate Distribution
Account for payment to the Certificateholders in accordance with the provisions of the Trust Agreement
shall be discharged of any responsibility for such funds.
ARTICLE XI
[RESERVED]
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. AMENDMENT.
This Agreement may be amended from time to time by the Seller, the Depositor, the Master Servicer, the
Securities Administrator, the Owner Trustee and the Indenture Trustee, and without the consent of any of the
Securityholders (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be
defective or inconsistent with any other provisions herein, (iii) to make any other provisions with respect to
matters or questions arising under this Agreement, which shall not be inconsistent with the provisions of this
Agreement or (iv) to cause the provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Securities, the Issuer or this Agreement in any Offering Document, or to
correct or supplement any provision herein which may be inconsistent with any other provisions herein or in any
other Operative Agreement; provided, however, that any such action shall not adversely affect in any material
respect the interest of any Noteholder; provided, further, that any such action listed in clauses (i) through
118
(iv) above shall be deemed not to adversely affect in any material respect the interests of any Securityholder, if
evidenced by (i) written notice to the Indenture Trustee from each Rating Agency that such action will not result
in the reduction or withdrawal of the rating of any outstanding Class of Notes with respect to which it is a
Rating Agency or (ii) an Opinion of Counsel stating that such amendment shall not adversely affect in any
material respect the interests of any Securityholder, is permitted by the Agreement and all the conditions
precedent, if any have been complied with, delivered to the Master Servicer, the Securities Administrator and the
Indenture Trustee.
In addition, this Agreement may be amended from time to time by the Seller, the Depositor, the Master
Servicer, the Securities Administrator, the Owner Trustee and the Indenture Trustee and with the consent of a
majority in interest of the Certificateholders and a majority in interest of each Class of Notes affected by
such amendment for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the Holders of Securities; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the amount of, or delay the timing of,
payments on the Notes or Owner Trust Certificates that are required to be made on any such Note or Owner Trust
Certificate without the consent of the Holder of such Security, (y) adversely affect in any material respect the
interests of the Holders of any Class of Notes or Owner Trust Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Notes of such Class or Owner Trust Certificates
evidencing at least a 66?% Percentage Interest in such Class of Notes or the Owner Trust Certificates, or
(z) reduce the percentage of Voting Rights required by clause (y) above without the consent of the Holders of all
Notes of such Class then outstanding. Upon approval of an amendment, a copy of such amendment shall be sent to
each Rating Agency.
Notwithstanding the foregoing, no amendment to Section 3.03(g) of this Agreement may be made prior to
each Rating Agency receiving written notification of such amendment.
Notwithstanding any provision of this Agreement to the contrary, neither the Indenture Trustee nor the
Securities Administrator shall consent to any amendment to this Agreement unless it shall have first received an
Opinion of Counsel, delivered by and at the expense of the Person seeking such Amendment (unless such Person is
the Indenture Trustee or the Securities Administrator, in which case the Indenture Trustee or the Securities
Administrator shall be entitled to be reimbursed for such expenses by the Issuer pursuant to Section 8.05
hereof), to the effect that such amendment will not result in the imposition of federal income tax on the Issuer
and that the amendment is being made in accordance with the terms hereof, such amendment is permitted by this
Agreement and all conditions precedent, if any, have been complied with.
Promptly after the execution of any such amendment the Securities Administrator shall furnish, at the
expense of the Person that requested the amendment, otherwise at the expense of the Issuer, a copy of such
amendment and the Opinion of Counsel referred to in the immediately preceding paragraph to the Master Servicer
and each Rating Agency.
It shall not be necessary for the consent of Securityholders under this Section 12.01 to approve the
particular form of any proposed amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution
119
thereof by Securityholders shall be subject to such reasonable regulations as the Securities Administrator may
prescribe.
The Indenture Trustee and Securities Administrator may, but shall not be obligated to, enter into any
amendment pursuant to this Section 12.01 that affects its rights, duties and immunities under this Agreement or
otherwise.
SECTION 12.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Securities Administrator at the expense of the Issuer, but only upon
direction of Noteholders accompanied by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Noteholders.
For the purpose of facilitating the recordation of this Agreement as herein provided and for other
purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and such counterparts shall together constitute but one and the same
instrument.
SECTION 12.03. [RESERVED].
SECTION 12.04. GOVERNING LAW; JURISDICTION.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW),
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 12.05. NOTICES.
All directions, demands and notices hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered at or mailed by first class mail, postage prepaid, or by express delivery service
or delivered via telecopy, to (a) in the case of the Seller, to Chimera Investment Corporation, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or such other address or telecopy number as may hereafter
be furnished to the Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee and the
Owner Trustee in writing by the Seller, (b) in the case of the Indenture Trustee, to the Corporate Trust Office
or such other address or telecopy number as may hereafter be furnished to the Seller, the Depositor, the Master
Servicer, the Securities Administrator and the Owner Trustee in writing by the Indenture Trustee, (c) in the case
of the Depositor, to Credit Suisse First Boston Mortgage Acceptance Corp., 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other address or telecopy number as may be furnished to the Seller, the Master
Servicer, the Owner Trustee and the Indenture Trustee in writing by the Depositor, (d) in the case of the Owner
120
Trustee and the Issuer, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, XX 00000, Facsimile No. (000) 000-0000
or such other address or telecopy number as may hereinafter be furnished to the Seller, the Depositor, the Master
Servicer, the Securities Administrator, and the Indenture Trustee in writing by the Owner Trustee; and (e) in the
case of the Master Servicer or Securities Administrator, for certificate transfer purposes, at its Corporate
Trust Office and for all other purposes at P.O. Box 98, Columbia, Maryland 21046, or for overnight delivery, at
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (Attention: PHHMC 2008-CIM2), Facsimile no: (000) 000-0000, or
such other address or telecopy number as may be furnished to the Depositor, the Seller, the Owner Trustee and the
Indenture Trustee in writing by the Master Servicer or the Securities Administrator. Any notice required or
permitted to be mailed to a Securityholder shall be given by first class mail, postage prepaid, at the address of
such Holder as shown in the Note Register or Certificate Register, as applicable. Notice of any Event of Default
shall be given by telecopy and by certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed, whether or not the Securityholder
receives such notice. A copy of any notice required to be telecopied hereunder shall also be mailed to the
appropriate party in the manner set forth above.
SECTION 12.06. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the Notes or the Owner Trust
Certificate or the rights of the Noteholders or the Certificateholders.
SECTION 12.07. ARTICLE AND SECTION REFERENCES.
All article and section references used in this Agreement, unless otherwise provided, are to articles
and sections in this Agreement.
SECTION 12.08. NOTICE TO THE RATING AGENCIES.
(a) The Securities Administrator shall be obligated to use its best reasonable efforts
promptly to provide notice to the Rating Agencies with respect to each of the following of which a
Responsible Officer of the Securities Administrator has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been cured or waived;
(iii) the resignation or termination of the Master Servicer, the Securities Administrator or
the Indenture Trustee;
(iv) the final payment to Holders of the Notes of any Class; and
(v) any change in the location of any Account.
121
(b) In addition, the Securities Administrator shall promptly furnish to the Rating Agencies
copies of each Statement to Securityholders described in Section 5.04 hereof; if the Indenture Trustee
is acting as a successor Master Servicer pursuant to Section 7.02 hereof, the Indenture Trustee shall
notify the Rating Agencies of any event that would result in the inability of the Indenture Trustee to
make Advances and the Master Servicer shall promptly furnish to each Rating Agency copies of the
following:
(i) each annual statement as to compliance described in Section 3.17 hereof;
(ii) each annual assessment of compliance and attestation report described in Section 3.16
hereof; and
(iii) each notice delivered pursuant to Section 5.05(b) hereof which relates to the fact
that the Master Servicer has not made an Advance.
(c) All notices to the Rating Agencies provided for in this Agreement shall be in writing and
sent by first class mail, telecopy or overnight courier, as follows:
If to Moody's, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
If to Fitch, to:
Xxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
SECTION 12.09. FURTHER ASSURANCES.
Notwithstanding any other provision of this Agreement, neither the Securityholders nor the Indenture
Trustee shall have any obligation to consent to any amendment or modification of this Agreement unless they have
been provided reasonable security or indemnity against their out-of-pocket expenses (including reasonable
attorneys' fees) to be incurred in connection therewith.
SECTION 12.10. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Securities, expressed or implied, shall give to any Person, other
than the Securityholders and the parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
122
SECTION 12.11. [RESERVED].
SECTION 12.12. SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
SECTION 12.13. [RESERVED].
SECTION 12.14. EXECUTION BY THE ISSUER.
It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and
delivered by LaSalle National Trust Delaware, not individually or personally but solely as Owner Trustee of the
Issuer, in the exercise of the powers and authority conferred and vested in it as trustee, (b) each of the
representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by LaSalle National Trust Delaware but is made and intended
for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any
liability on LaSalle National Trust Delaware, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto
and by any person claiming by, through or under the parties hereto and (d) under no circumstances shall LaSalle
National Trust Delaware be personally liable for the payment of any indebtedness or expenses of the Issuer or be
liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by
the Issuer under this Agreement or any other document.
123
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year first above written.
PHH MORTGAGE TRUST, SERIES 2008-CIM2
By: LASALLE NATIONAL TRUST
DELAWARE, not in its individual capacity but
solely as Owner Trustee
By:______________________________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON MORTGAGE ACCEPTANCE CORP., as
Depositor
By:______________________________________________________
Name:
Title:
HSBC BANK USA, NATIONAL ASSOCIATION,
as Indenture Trustee
By:______________________________________________________
Name:
Title:
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:______________________________________________________
Name:
Title:
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:______________________________________________________
Name:
Title:
CHIMERA INVESTMENT CORPORATION,
as Seller
By:______________________________________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of _____________ 2008, before me, a notary public in and for said State, personally
appeared _____________, known to me to be a _____________ of Credit Suisse First Boston Mortgage Acceptance
Corp., a Delaware corporation, that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
____________________________________________________
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF [ ] )
On the ___ day of _____________ 2008, before me, a notary public in and for said State, personally
appeared _____________ known to me to be a _____________ of Chimera Investment Corporation, a Maryland
corporation, that executed the within instrument, and also known to me to be the person who executed it on behalf
of said corporation, and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
____________________________________________________
Notary Public
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the ___ day of _____________ 2008, before me, a notary public in and for said State, personally
appeared ____________ known to me to be ______________ of HSBC Bank USA, National Association that executed the
within instrument, and also known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
____________________________________________________
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On the ___ day of _____________ 2008, before me, a notary public in and for said State, personally
appeared ______________, known to me to be ______________ of LaSalle National Trust Delaware, a national banking
association that executed the within instrument, and also known to me to be the person who executed it on behalf
of said corporation, and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
____________________________________________________
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the ___ day of _____________ 2008, before me, a notary public in and for said State, personally
appeared __________________, known to me to be a _______________ of Xxxxx Fargo Bank, N.A., and also known to me
to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
____________________________________________________
Notary Public
EXHIBIT A
[RESERVED]
A-1
EXHIBIT B
[RESERVED]
B-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
[RESERVED]
D-1
EXHIBIT E
[RESERVED]
E-1
EXHIBIT F
SERVICING CRITERIA
The assessment of compliance to be delivered by Xxxxx Fargo Bank, N.A. ("Xxxxx Fargo"), in its
capacities as Master Servicer, Securities Administrator and as Custodian, shall address, at a minimum, the
criteria identified below as "Applicable Servicing Criteria":
___________________________________________________________________________________________________
Applicable
Servicing
Criteria for
Servicing Criteria Xxxxx Fargo
___________________________________________________________________________________________________
Reference Criteria
___________________________________________________________________________________________________
General Servicing Considerations
___________________________________________________________________________________________________
___________________________________________________________________________________________________
1122(d)(1)(i) Policies and procedures are instituted to monitor any X
performance or other triggers and events of default in
accordance with the transaction agreements.
___________________________________________________________________________________________________
1122(d)(1)(ii) X
If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
such servicing activities.
___________________________________________________________________________________________________
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain
a back-up servicer for the mortgage loans are maintained.
___________________________________________________________________________________________________
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
1122(d)(1)(iv) function throughout the reporting period in the amount of X
coverage required by and otherwise in accordance with the
terms of the transaction agreements.
___________________________________________________________________________________________________
Cash Collection and Administration
___________________________________________________________________________________________________
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
1122(d)(2)(i) clearing accounts no more than two business days following X
receipt, or such other number of days specified in the
transaction agreements.
___________________________________________________________________________________________________
Disbursements made via wire transfer on behalf of an
1122(d)(2)(ii) obligor or to an investor are made only by authorized X
personnel.
___________________________________________________________________________________________________
Advances of funds or guarantees regarding collections,
1122(d)(2)(iii) cash flows or distributions, and any interest or other X
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
___________________________________________________________________________________________________
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
1122(d)(2)(iv) overcollateralization, are separately maintained (e.g., X
with respect to commingling of cash) as set forth in the
transaction agreements.
___________________________________________________________________________________________________
F-1
___________________________________________________________________________________________________
Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
1122(d)(2)(v) "federally insured depository institution" with respect to X
a foreign financial institution means a foreign financial
institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
___________________________________________________________________________________________________
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
___________________________________________________________________________________________________
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements; (C) reviewed and approved by X
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements.
___________________________________________________________________________________________________
Investor Remittances and Reporting
___________________________________________________________________________________________________
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
1122(d)(3)(i) the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the X
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans
serviced by the Servicer.
___________________________________________________________________________________________________
Amounts due to investors are allocated and remitted in
1122(d)(3)(ii) accordance with timeframes, distribution priority and X
other terms set forth in the transaction agreements.
___________________________________________________________________________________________________
Disbursements made to an investor are posted within two
1122(d)(3)(iii) business days to the Servicer's investor records, or such
other number of days specified in the transaction X
agreements.
___________________________________________________________________________________________________
Amounts remitted to investors per the investor reports
1122(d)(3)(iv) agree with cancelled checks, or other form of payment, or X
custodial bank statements.
___________________________________________________________________________________________________
Pool Asset Administration
___________________________________________________________________________________________________
F-2
___________________________________________________________________________________________________
1122(d)(4)(i)
Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
loan documents. X
___________________________________________________________________________________________________
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as
required by the transaction agreements. X
___________________________________________________________________________________________________
Any additions, removals or substitutions to the asset pool
1122(d)(4)(iii) are made, reviewed and approved in accordance with any X
conditions or requirements in the transaction agreements.
___________________________________________________________________________________________________
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no
1122(d)(4)(iv) more than two business days after receipt, or such other
number of days specified in the transaction agreements,
and allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage loan
documents.
___________________________________________________________________________________________________
The Servicer's records regarding the mortgage loans agree
1122(d)(4)(v) with the Servicer's records with respect to an obligor's
unpaid principal balance.
___________________________________________________________________________________________________
Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
1122(d)(4)(vi) re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
and related pool asset documents.
___________________________________________________________________________________________________
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
1122(d)(4)(vii) foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
transaction agreements.
___________________________________________________________________________________________________
1122(d)(4)(viii)
Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
___________________________________________________________________________________________________
Adjustments to interest rates or rates of return for
1122(d)(4)(ix) mortgage loans with variable rates are computed based on
the related mortgage loan documents.
___________________________________________________________________________________________________
1122(d)(4)(x)
Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents, on
at least an annual basis, or such other period specified
in the transaction agreements; (B) interest on such funds
F-3
is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C)
such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or
such other number of days specified in the transaction
agreements.
___________________________________________________________________________________________________
1122(d)(4)(xi)
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
number of days specified in the transaction agreements.
___________________________________________________________________________________________________
Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
1122(d)(4)(xii) servicer's funds and not charged to the obligor, unless
the late payment was due to the obligor's error or
omission.
___________________________________________________________________________________________________
Disbursements made on behalf of an obligor are posted
1122(d)(4)(xiii) within two business days to the obligor's records
maintained by the servicer, or such other number of days
specified in the transaction agreements.
___________________________________________________________________________________________________
Delinquencies, charge-offs and uncollectible accounts are
1122(d)(4)(xiv) recognized and recorded in accordance with the transaction X
agreements.
___________________________________________________________________________________________________
1122(d)(4)(xv) X
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
is maintained as set forth in the transaction agreements.
___________________________________________________________________________________________________
___________________________________________________________________________________________________
F-4
EXHIBIT G
ADDITIONAL FORM 10-D DISCLOSURE
___________________________________________________________________________________________________________________
ADDITIONAL FORM 10-D DISCLOSURE
___________________________________________________________________________________________________________________
Item on Form 10-D Party Responsible
___________________________________________________________________________________________________________________
Item 1: Distribution and Pool Performance Information
___________________________________________________________________________________________________________________
Information included in the Payment Date Statement Servicer
Master Servicer
Securities Administrator
___________________________________________________________________________________________________________________
Any information required by 1121 which is NOT included on Depositor
the Payment Date Statement
___________________________________________________________________________________________________________________
Item 2: Legal Proceedings
Any legal proceeding pending against the following entities
or their respective property, that is material to
Noteholders, including any proceeding known to be
contemplated by governmental authorities:
___________________________________________________________________________________________________________________
? Issuing Entity (Trust) Indenture Trustee, Master Servicer, Securities
Administrator and Depositor
___________________________________________________________________________________________________________________
? Sponsor (Seller) Sponsor (Seller)
___________________________________________________________________________________________________________________
? Depositor Depositor
___________________________________________________________________________________________________________________
? Indenture Trustee Indenture Trustee
___________________________________________________________________________________________________________________
? Securities Administrator Securities Administrator
___________________________________________________________________________________________________________________
? Master Servicer Master Servicer
___________________________________________________________________________________________________________________
? Custodian Custodian
___________________________________________________________________________________________________________________
? 1110(b) Originator Depositor
___________________________________________________________________________________________________________________
? Any 1108(a)(2) Servicer (other than the Master Servicer Servicer
or Securities Administrator)
___________________________________________________________________________________________________________________
? Any other party contemplated by 1100(d)(1) Depositor
___________________________________________________________________________________________________________________
Item 3: Sale of Securities and Use of Proceeds Depositor
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing entity,
whether or not registered, provide the sales and use of
proceeds information in Item 701 of Regulation S-K.
Pricing information can be omitted if securities were not
registered.
___________________________________________________________________________________________________________________
Item 4: Defaults Upon Senior Notes Securities Administrator
Indenture Trustee (in the event of the
G-1
Master Servicer's termination)
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
___________________________________________________________________________________________________________________
Item 5: Submission of Matters to a Vote of Security Holders Securities Administrator
Indenture Trustee
Information from Item 4 of Part II of Form 10-Q
___________________________________________________________________________________________________________________
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial Information*
___________________________________________________________________________________________________________________
*This information need only be reported on the Form 10-D
for the payment period in which updated information is
required pursuant to the Item.
___________________________________________________________________________________________________________________
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
___________________________________________________________________________________________________________________
? Determining applicable disclosure threshold Depositor
___________________________________________________________________________________________________________________
? Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or
effecting incorporation by reference
___________________________________________________________________________________________________________________
Item 1115(b) - Derivative Counterparty Financial
Information*
___________________________________________________________________________________________________________________
? Determining current maximum probable exposure Depositor
___________________________________________________________________________________________________________________
? Determining current significance percentage Depositor
___________________________________________________________________________________________________________________
? Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or
effecting incorporation by reference
___________________________________________________________________________________________________________________
*This information need only be reported on the Form 10-D
for the payment period in which updated information is
required pursuant to the Items.
___________________________________________________________________________________________________________________
Item 8: Other Information Any party responsible for the applicable Form 8-K
Disclosure item
Disclose any information required to be reported on Form
8-K during the period covered by the Form 10-D but not
reported
___________________________________________________________________________________________________________________
Item 9: Exhibits
Payment Date Statement to Noteholders Securities Administrator
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
___________________________________________________________________________________________________________________
G-2
EXHIBIT H
ADDITIONAL FORM 10-K DISCLOSURE
___________________________________________________________________________________________________________________
ADDITIONAL FORM 10-K DISCLOSURE
___________________________________________________________________________________________________________________
Item on Form 10-K Party Responsible
___________________________________________________________________________________________________________________
Item 1B: Unresolved Staff Comments Depositor
___________________________________________________________________________________________________________________
Item 9B: Other Information Any party responsible for disclosure items on Form 8-K
Disclose any information required to be reported on Form
8-K during the fourth quarter covered by the Form 10-K
but not reported
___________________________________________________________________________________________________________________
Item 15: Exhibits, Financial Statement Schedules Securities Administrator
Depositor
___________________________________________________________________________________________________________________
Reg AB Item 1112(b): Significant Obligors of Pool Assets
___________________________________________________________________________________________________________________
Significant Obligor Financial Information* Depositor
___________________________________________________________________________________________________________________
*This information need only be reported on the Form 10-D
for the payment period in which updated information is
required pursuant to the Item.
___________________________________________________________________________________________________________________
Reg AB Item 1114(b)(2): Credit Enhancement Provider
Financial Information
___________________________________________________________________________________________________________________
• Determining applicable disclosure threshold Depositor
___________________________________________________________________________________________________________________
• Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
___________________________________________________________________________________________________________________
*This information need only be reported on the Form 10-D
for the payment period in which updated information is
required pursuant to the Items.
___________________________________________________________________________________________________________________
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
___________________________________________________________________________________________________________________
• Determining current maximum probable exposure Depositor
___________________________________________________________________________________________________________________
• Determining current significance percentage Depositor
___________________________________________________________________________________________________________________
• Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
___________________________________________________________________________________________________________________
*This information need only be reported on the Form 10-D
for the payment period in which updated information is
required pursuant to the Items.
___________________________________________________________________________________________________________________
H-1
___________________________________________________________________________________________________________________
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Noteholders, including any proceeding known to be
contemplated by governmental authorities:
___________________________________________________________________________________________________________________
• Issuing Entity (Trust) Indenture Trustee, Master Servicer, Securities
Administrator and Depositor
___________________________________________________________________________________________________________________
• Sponsor/Seller Sponsor/Seller
___________________________________________________________________________________________________________________
• Depositor Depositor
___________________________________________________________________________________________________________________
• Indenture Trustee Indenture Trustee
___________________________________________________________________________________________________________________
• Securities Administrator Securities Administrator
___________________________________________________________________________________________________________________
• Master Servicer Master Servicer
___________________________________________________________________________________________________________________
• Custodian Custodian
___________________________________________________________________________________________________________________
• 1110(b) Originator Depositor
___________________________________________________________________________________________________________________
• Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
___________________________________________________________________________________________________________________
• Any other party contemplated by 1100(d)(1) Depositor
___________________________________________________________________________________________________________________
Reg AB Item 1119: Affiliations and Relationships
___________________________________________________________________________________________________________________
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to Depositor and Issuing Entity (a)
Entity is an affiliate of the following parties, and (b) Sponsor/ Seller as to Sponsor/Seller (a)
to the extent known and material, any of the following
parties are affiliated with one another:
___________________________________________________________________________________________________________________
• Master Servicer Master Servicer
___________________________________________________________________________________________________________________
• Securities Administrator Securities Administrator
___________________________________________________________________________________________________________________
• Indenture Trustee Indenture Trustee
___________________________________________________________________________________________________________________
• Any other 1108(a)(3) servicer Servicer
___________________________________________________________________________________________________________________
• Any 1110 Originator Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1112(b) Significant Obligor Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1114 Credit Enhancement Provider Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1115 Derivate Counterparty Provider Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any other 1101(d)(1) material party Depositor/Sponsor
___________________________________________________________________________________________________________________
Whether there are any "outside the ordinary course Depositor as to Depositor and Issuing Entity (a)
business arrangements" other than would be obtained in Sponsor/Seller as to Sponsor/Seller (a)
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Noteholder's understanding of the Notes:
___________________________________________________________________________________________________________________
H-2
___________________________________________________________________________________________________________________
• Master Servicer Master Servicer
___________________________________________________________________________________________________________________
• Securities Administrator Securities Administrator
___________________________________________________________________________________________________________________
• Indenture Trustee Depositor
___________________________________________________________________________________________________________________
• Any other 1108(a)(3) servicer Servicer
___________________________________________________________________________________________________________________
• Any 1110 Originator Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1112(b) Significant Obligor Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1114 Credit Enhancement Provider Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1115 Derivate Counterparty Provider Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any other 1101(d)(1) material party Depositor/Sponsor
___________________________________________________________________________________________________________________
Whether there are any specific relationships involving Depositor as to Depositor and Issuing Entity
the transaction or the pool assets between (a) the Sponsor/Seller/Seller as to Sponsor/Seller
Sponsor (Seller), Depositor or Issuing Entity on the one
hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
___________________________________________________________________________________________________________________
• Master Servicer Master Servicer
___________________________________________________________________________________________________________________
• Securities Administrator Securities Administrator
___________________________________________________________________________________________________________________
• Indenture Trustee Depositor
___________________________________________________________________________________________________________________
• Any other 1108(a)(3) servicer Servicer
___________________________________________________________________________________________________________________
• Any 1110 Originator Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1112(b) Significant Obligor Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1114 Credit Enhancement Provider Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any 1115 Derivate Counterparty Provider Depositor/Sponsor
___________________________________________________________________________________________________________________
• Any other 1101(d)(1) material party Depositor/Sponsor
___________________________________________________________________________________________________________________
H-3
EXHIBIT I
ADDITIONAL FORM 8-K DISCLOSURE
___________________________________________________________________________________________________________________
FORM 8-K DISCLOSURE INFORMATION
___________________________________________________________________________________________________________________
Item on Form 8-K Party Responsible
___________________________________________________________________________________________________________________
Item 1.01- Entry into a Material Definitive Agreement All parties
Disclosure is required regarding entry into or amendment
of any definitive agreement that is material to the
securitization, even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
___________________________________________________________________________________________________________________
Item 1.02- Termination of a Material Definitive Agreement All parties
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance with
its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
___________________________________________________________________________________________________________________
Item 1.03- Bankruptcy or Receivership Depositor
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
___________________________________________________________________________________________________________________
• Sponsor (Seller) Sponsor (Seller)
___________________________________________________________________________________________________________________
• Depositor Depositor
___________________________________________________________________________________________________________________
• Master Servicer Master Servicer
___________________________________________________________________________________________________________________
• Affiliated Servicer Servicer
___________________________________________________________________________________________________________________
• Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
___________________________________________________________________________________________________________________
• Other material servicers Servicer
___________________________________________________________________________________________________________________
• Indenture Trustee Indenture Trustee
___________________________________________________________________________________________________________________
• Securities Administrator Securities Administrator
___________________________________________________________________________________________________________________
I-1
___________________________________________________________________________________________________________________
• Significant Obligor Depositor
___________________________________________________________________________________________________________________
• Credit Enhancer (10% or more) Depositor
___________________________________________________________________________________________________________________
• Derivative Counterparty Depositor
___________________________________________________________________________________________________________________
• Custodian Custodian
___________________________________________________________________________________________________________________
Item 2.04- Triggering Events that Accelerate or Increase Depositor
a Direct Financial Obligation or an Obligation under an Master Servicer
Off-Balance Sheet Arrangement Securities Administrator
Includes an early amortization, performance trigger or
other event, including event of default, that would
materially alter the payment priority/distribution of
cash flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the Payment Date
Statements to the noteholders.
___________________________________________________________________________________________________________________
Item 3.03- Material Modification to Rights of Security Securities Administrator
Holders Depositor
Disclosure is required of any material modification to
documents defining the rights of Certificateholders,
including the Sale and Servicing Agreement.
___________________________________________________________________________________________________________________
Item 5.03- Amendments of Articles of Incorporation or Depositor
Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to the
governing documents of the issuing entity".
___________________________________________________________________________________________________________________
Item 6.01- ABS Informational and Computational Material Depositor
___________________________________________________________________________________________________________________
Item 6.02- Change of Servicer or Securities Administrator Master Servicer/Securities Administrator/Depositor/
Servicer/Indenture Trustee (if change of the
Requires disclosure of any removal, replacement, Securities Administrator)
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10% or
more of pool assets at time of report, other material
servicers or trustee.
___________________________________________________________________________________________________________________
Reg AB disclosure about any new servicer or master Servicer/Master Servicer/Depositor
servicer is also required.
___________________________________________________________________________________________________________________
Reg AB disclosure about any new Indenture Trustee is Indenture Trustee
also required.
___________________________________________________________________________________________________________________
I-2
___________________________________________________________________________________________________________________
Item 6.03- Change in Credit Enhancement or External Depositor/Securities Administrator
Support
Covers termination of any enhancement in manner other
than by its terms, the addition of an enhancement, or a
material change in the enhancement provided. Applies to
external credit enhancements as well as derivatives.
___________________________________________________________________________________________________________________
Reg AB disclosure about any new enhancement provider is Depositor
also required.
___________________________________________________________________________________________________________________
Item 6.04- Failure to Make a Required Distribution Securities Administrator
___________________________________________________________________________________________________________________
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or
more at the time of issuance of the securities from the
description in the final prospectus, provide updated Reg
AB disclosure about the actual asset pool.
___________________________________________________________________________________________________________________
If there are any new servicers or originators required Depositor
to be disclosed under Regulation AB as a result of the
foregoing, provide the information called for in Items
1108 and 1110 respectively.
___________________________________________________________________________________________________________________
Item 7.01- Reg FD Disclosure All parties
___________________________________________________________________________________________________________________
Item 8.01- Other Events Depositor
Any event, with respect to which information is not
otherwise called for in Form 8-K, that the registrant
deems of importance to certificateholders.
___________________________________________________________________________________________________________________
Item 9.01- Financial Statements and Exhibits Responsible party for reporting/disclosing the
financial statement or exhibit
___________________________________________________________________________________________________________________
I-3
EXHIBIT J
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
Xxxxx Fargo Bank, N.A. as Securities Administrator
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
Attn: Corporate Trust Services - PHH MORTGAGE TRUST 2008-CIM2-SEC REPORT PROCESSING
RE: Additional Form [ ] Disclosure Required
Ladies and Gentlemen:
In accordance with Section 3.19(a)(ii) of the Sale and Servicing Agreement dated as of July 1, 2008 by
and among PHH Mortgage Trust, Series 2008-CIM2, a Delaware statutory trust, as issuer, Chimera Investment
Corporation, a Maryland corporation, as seller, Credit Suisse First Boston Mortgage Acceptance Corp., a Delaware
corporation, as depositor, Xxxxx Fargo Bank, N.A., a national banking association, as master servicer and as
securities administrator and HSBC Bank USA, National Association, a national banking association, as indenture
trustee, the undersigned, as [ ], hereby notifies you that certain events have come to our attention that
[will][may] need to be disclosed on Form [10-D] [10-K] [8-K].
Description of Additional Form [10-D] [10-K] [8-K] Disclosure:
List of Any Attachments hereto to be included in the Additional Form [ ] Disclosure:
Any inquiries related to this notification should be directed to [ ], phone number: [ ]; email
address: [ ].
[NAME OF PARTY]
as [role]
By: __________________________________________
Name:
Title:
J-1
EXHIBIT K
FORM OF BACK-UP CERTIFICATION
Re: PHH Mortgage Trust 2008-CIM2,
Mortgage-Backed Notes, Series 2008-CIM2
I, [identify the certifying individual], certify to Credit Suisse First Boston Mortgage Acceptance Corp.
(the "Depositor"), HSBC Bank USA, National Association (the "Indenture Trustee") and Xxxxx Fargo Bank, National
Association (the "Master Servicer" and the "Securities Administrator"), and their respective officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of _______________ provided in accordance
with Item 1123 of Regulation AB (the "Compliance Statement"), the report on assessment of the
_______________'s compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with Rules 13I-A-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of
Regulation AB (the "Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13I-A-18 and 15d-18 under the Exchange Act and Section
1122(b) of Regulation AB (the "Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the performance by _______________ of its
obligations under the Sale and Servicing Agreement during 200[ ] that were delivered by
_______________ to the Master Servicer or the Securities Administrator , as applicable,
pursuant to the Sale and Servicing Agreement (collectively, the "Servicing Information");
(2) Based on my knowledge, the Servicing Information, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicing Information;
(3) Based on my knowledge, all of the Servicing Information required to be provided by
_______________under the Sale and Servicing Agreement has been provided to the Master Servicer
or the Securities Administrator, as applicable;
(4) I am responsible for reviewing the activities performed by _______________ under the Sale and
Servicing Agreement, and based on my knowledge and the compliance review conducted in preparing
the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, _______________has fulfilled its obligations under the
Sale and Servicing Agreement in all material respects; and
K-1
(5) The Compliance Statement required to be delivered by _______________ pursuant to the Sale and
Servicing Agreement, and the Servicing Assessment and Attestation Report required to be
provided by _______________ and by any Subservicer or Subcontractor of _______________ pursuant
to the Sale and Servicing Agreement, have been provided to the Master Servicer or the
Securities Administrator, as applicable. Any material instances of noncompliance described in
such reports have been disclosed to the Master Servicer or the Securities Administrator, as
applicable. Any material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.
Capitalized terms used and not otherwise defined herein have the meanings assigned thereto in the Sale
and Servicing Agreement dated as of July 1, 2008 by and among PHH Mortgage Trust, Series 2008-CIM2, a Delaware
statutory trust, as issuer, Chimera Investment Corporation, a Maryland corporation, as seller, Credit Suisse
First Boston Mortgage Acceptance Corp., a Delaware corporation, as depositor, Xxxxx Fargo Bank, N.A., a national
banking association, as master servicer and as securities administrator and HSBC Bank USA, National Association,
a national banking association, as indenture trustee.
Date: ___________________________________________________
__________________________________________________________
[Signature]
__________________________________________________________
[Title]
K-2
EXHIBIT L
LOAN LEVEL DATA REPORT
LOAN NUM
NEXT DUE DATE
PMT P&I CONTSTANT
RTE
BEG SCHED BAL
SCHED PRIN
CURTAIL
LIQUIDATED BALANCE
END SCHED BAL
NET INT
NEG AMORT AMOUNT
NEXT RATE CHANGE DATE
ACTION CODE STATUS
DEALID
LOSS ON LIQUIDATED PROP
MODIFICATION DATE
L-1
SCHEDULE I
MORTGAGE LOAN SCHEDULE
