EXHIBIT 4
XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
NC CAPITAL CORPORATION
Responsible Party,
DECISION ONE MORTGAGE COMPANY, LLC,
Responsible Party,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Custodian
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POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2007
-----------------------------------------------------------------------
XXXXXX XXXXXXX ABS CAPITAL I INC. TRUST 2007-HE1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-HE1
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance 0f Mortgage Loans..............................................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans...........................................
Section 2.03 Representations and Warranties; Remedies for Breaches of Representations and
Warranties with Respect to the Mortgage Loans.............................................
Section 2.04 Execution and Delivery of Certificates....................................................
Section 2.05 REMIC Matters.............................................................................
Section 2.06 Representations and Warranties of the Depositor...........................................
Section 2.07 Enforcement of Obligations for Breach of Mortgage Loan Representations....................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans.......................................................
Section 3.02 Subservicing Agreements between a Servicer and Subservicers...............................
Section 3.03 Successor Subservicers....................................................................
Section 3.04 Liability of the Servicers................................................................
Section 3.05 No Contractual Relationship between Subservicers and the Trustee..........................
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee...........................
Section 3.07 Collection of Certain Mortgage Loan Payments..............................................
Section 3.08 Subservicing Accounts.....................................................................
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow Accounts.......................
Section 3.10 Collection Accounts.......................................................................
Section 3.11 Withdrawals from the Collection Accounts..................................................
Section 3.12 Investment of Funds in the Collection Accounts and the Distribution Account...............
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage............
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements.................................
Section 3.15 Realization upon Defaulted Mortgage Loans.................................................
Section 3.16 Release of Mortgage Files.................................................................
Section 3.17 Title, Conservation and Disposition of REO Property.......................................
Section 3.18 Notification of Adjustments...............................................................
Section 3.19 Access to Certain Documentation and Information Regarding the Mortgage Loans..............
Section 3.20 Documents, Records and Funds in Possession of the Servicers to Be Held for the
Trustee...................................................................................
Section 3.21 Servicing Compensation....................................................................
Section 3.22 Annual Statement as to Compliance.........................................................
Section 3.23 Annual Reports on Assessment of Compliance with Servicing Criteria; Annual
Independent Public Accountants" Attestation Report........................................
Section 3.24 Trustee to Act as Servicer................................................................
Section 3.25 Compensating Interest.....................................................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act..................................................
Section 3.27 Optional Purchase of Delinquent Mortgage Loans............................................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances..................................................................................
Section 4.02 Priorities of Distribution................................................................
Section 4.03 Monthly Statements to Certificateholders..................................................
Section 4.04 Certain Matters Relating to the Determination of LIBOR....................................
Section 4.05 Allocation of Applied Realized Loss Amounts...............................................
Section 4.06 Swap Account..............................................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates..........................................................................
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...............
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.........................................
Section 5.04 Persons Deemed Owners.....................................................................
Section 5.05 Access to List of Certificateholders' Names and Addresses.................................
Section 5.06 Maintenance of Office or Agency...........................................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers.................................
Section 6.02 Merger or Consolidation of the Depositor or a Servicer....................................
Section 6.03 Limitation on Liability of the Depositor, the Servicers and Others........................
Section 6.04 Limitation on Resignation of a Servicer...................................................
Section 6.05 Additional Indemnification by the Servicers; Third-Party Claims...........................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.........................................................................
Section 7.02 Trustee to Act; Appointment of Successor..................................................
Section 7.03 Notification to Certificateholders........................................................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.....................................................................
Section 8.02 Certain Matters Affecting the Trustee and the Custodian...................................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.....................................
Section 8.04 Trustee May Own Certificates..............................................................
Section 8.05 Trustee's Fees and Expenses...............................................................
Section 8.06 Eligibility Requirements for the Trustee..................................................
Section 8.07 Resignation and Removal of the Trustee....................................................
Section 8.08 Successor Trustee.........................................................................
Section 8.09 Merger or Consolidation of the Trustee....................................................
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............................................
Section 8.11 Tax Matters...............................................................................
Section 8.12 Periodic Filings..........................................................................
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis Risk CarryForward Amounts
and Class IO Shortfalls; Tax Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement..............................................
Section 8.14 Custodial Responsibilities................................................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans............................
Section 9.02 Final Distribution on the Certificates....................................................
Section 9.03 Additional Termination Requirements.......................................................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.................................................................................
Section 10.02 Recordation of Agreement; Counterparts....................................................
Section 10.03 Governing Law.............................................................................
Section 10.04 Intention of Parties......................................................................
Section 10.05 Notices...................................................................................
Section 10.06 Severability of Provisions................................................................
Section 10.07 Assignment; Sales; Advance Facilities.....................................................
Section 10.08 Limitation on Rights of Certificateholders................................................
Section 10.09 Inspection and Audit Rights...............................................................
Section 10.10 Certificates Nonassessable and Fully Paid.................................................
Section 10.11 Rule of Construction......................................................................
Section 10.12 Waiver of Jury Trial......................................................................
Section 10.13 Rights of the Third Parties...............................................................
Section 10.14 Regulation AB Compliance; Intent of the Parties; Reasonableness...........................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Saxon, as Servicer
Schedule II-A Further Representations and Warranties of Saxon
Schedule III Representations and Warranties of Xxxxxx Xxxxxxx ABS Capital I Inc. as to the Mortgage Loans
Schedule IV [Reserved]
Schedule V [Reserved]
Schedule VI Representations and Warranties of Decision One, as to the Decision One Mortgage Loans
Schedule VII Representations and Warranties of NC Capital, as to the NC Capital Mortgage Loans
Schedule VIII Representations and Warranties of NC Capital as to NC Capital
Schedule IX [Reserved]
Schedule X Representations and Warranties of LaSalle, as Custodian
Schedule XI Representations and Warranties of Countrywide Servicing, as Servicer
Schedule XII [Reserved]
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C-1 Form of Class R Certificate
Exhibit C-2 Form of Class RX Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of [Custodian]/ [Trustee]
Exhibit F Form of Document Certification and Exception Report of [Custodian]/ [Trustee]
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Trustee to Depositor
Exhibit N Form of Certification to be provided by Saxon to Depositor
Exhibit O [Reserved]
Exhibit P Decision One Purchase Agreement
Exhibit Q NC Capital Purchase Agreement
Exhibit R Form of Servicer Power of Attorney
Exhibit S Servicing Criteria To Be Addressed in Assessment of Compliance
Exhibit T Additional Form 10-D Disclosure
Exhibit U Additional Form 10-K Disclosure
Exhibit V Form 8-K Disclosure Information
Exhibit W Interest Rate Swap Agreement
Exhibit X-1 Form of Saxon Servicer Reports
Exhibit X-2 Form of Countrywide Servicing Servicer Reports
Exhibit Y-1 [Reserved]
Exhibit Y-2 [Reserved]
Exhibit Z [Reserved]
Exhibit AA Form of Additional Disclosure Notification
Exhibit BB Countrywide Amendment Regulation AB
Exhibit CC Representations and Warranties Agreement
Exhibit DD Interest Rate Cap Agreement
THIS POOLING AND SERVICING AGREEMENT, dated as of January 1,
2007 among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation, as
depositor (the "Depositor"), SAXON MORTGAGE SERVICES, INC., a Delaware
corporation, as a servicer ("Saxon"), COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership, as a servicer ("Countrywide Servicing" and, together
with Saxon, the "Servicers"), NC CAPITAL CORPORATION, a California corporation,
as a responsible party ("NC Capital"), DECISION ONE MORTGAGE COMPANY, LLC, as a
responsible party ("Decision One" and, together with NC Capital, the
"Responsible Parties"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking
association, as trustee (the "Trustee") and LASALLE BANK NATIONAL ASSOCIATION,
as custodian (the "Custodian").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that five segregated asset pools within
the Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap Assets
and the Interest Rate Cap Agreement, (iii) the Excess Reserve Fund Account, and
(iv) the right of the Offered Certificates to receive Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts and the
obligation to pay Class IO Shortfalls) be treated for federal income tax
purposes as comprising five REMICs (Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC, respectively,
and each, a "Trust REMIC"). The Class X Interest, the Class IO Interest and each
Class of Offered Certificates (other than the right of each Class of Offered
Certificates to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts and the obligation to pay Class IO
Shortfalls) represents ownership of a regular interest in a REMIC for purposes
of the REMIC Provisions. The Class R Certificates represent ownership of the
sole class of residual interest in each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC for purposes of the REMIC
Provisions. The Class RX Certificates represent ownership of the sole class of
residual interest in the Class X REMIC for purposes of the REMIC provisions. The
Startup Day for each Trust REMIC described herein is the date referenced in
Section 2.05. The latest possible maturity date for each regular interest is the
latest date referenced in Section 2.05. The Class X REMIC shall hold as assets
the Class UT-X Interest and the Class UT-IO Interest as set out below. The
Upper-Tier REMIC shall hold as assets the several classes of uncertificated
Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC shall hold as
assets the several classes of uncertificated Pooling-Tier REMIC-2 Regular
Interests. Pooling-Tier REMIC-2 shall hold as assets the several classes of
uncertificated Pooling-Tier REMIC-1 Regular Interests. Pooling-Tier REMIC-1
shall hold as assets the assets of the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets and the Interest Rate Cap Agreement,
(iii) the Excess Reserve Fund Account, and (iv) the right of the Offered
Certificates to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts and the obligation to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of Offered
Certificates represents a beneficial ownership of a regular interest in the
Upper-Tier REMIC, the right to receive Basis Risk CarryForward Amounts and
without duplication, Upper-Tier CarryForward Amounts, and the obligation to pay
Class IO Shortfalls; the Class X Certificates represent beneficial ownership of
the Class X Interest, the Class IO Interest, the Interest Rate Swap Agreement,
the Swap Account, the Interest Rate Cap Agreement, the Excess Reserve Fund
Account and the right to receive Class IO Shortfalls, subject to the obligation
to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts; and the Class P Certificates represent beneficial
ownership of the Prepayment Premiums, which portions of the Trust Fund shall be
treated as a grantor trust under subpart E, Part I of subchapter J of the Code
(the "Grantor Trust").
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Pooling-Tier REMIC-1 Initial Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 Interest Interest Rate Principal Amount
----------------------------- ------------- ----------------
Class PT1-I-1 (1) $ 155,483,161.14
Class PT1-I-2A (2) $ 5,205,849.62
Class PT1-I-2B (3) $ 5,205,849.62
Class PT1-I-3A (2) $ 4,983,088.93
Class PT1-I-3B (3) $ 4,983,088.93
Class PT1-I-4A (2) $ 4,769,535.28
Class PT1-I-4B (3) $ 4,769,535.28
Class PT1-I-5A (2) $ 4,565,192.47
Class PT1-I-5B (3) $ 4,565,192.47
Class PT1-I-6A (2) $ 4,369,661.04
Class PT1-I-6B (3) $ 4,369,661.04
Class PT1-I-7A (2) $ 4,182,558.85
Class PT1-I-7B (3) $ 4,182,558.85
Class PT1-I-8A (2) $ 4,003,520.55
Class PT1-I-8B (3) $ 4,003,520.55
Class PT1-I-9A (2) $ 4,817,777.84
Class PT1-I-9B (3) $ 4,817,777.84
Class PT1-I-10A (2) $ 15,681,561.11
Class PT1-I-10B (3) $ 15,681,561.11
Class PT1-I-11A (2) $ 2,974,118.39
Class PT1-I-11B (3) $ 2,974,118.39
Class PT1-I-12A (2) $ 2,799,419.80
Class PT1-I-12B (3) $ 2,799,419.80
Class PT1-I-13A (2) $ 2,681,028.33
Class PT1-I-13B (3) $ 2,681,028.33
Class PT1-I-14A (2) $ 2,567,684.08
Class PT1-I-14B (3) $ 2,567,684.08
Class PT1-I-15A (2) $ 3,459,957.00
Class PT1-I-15B (3) $ 3,459,957.00
Class PT1-I-16A (2) $ 14,536,497.22
Class PT1-I-16B (3) $ 14,536,497.22
Class PT1-I-17A (2) $ 1,716,942.05
Class PT1-I-17B (3) $ 1,716,942.05
Class PT1-I-18A (2) $ 1,596,337.36
Class PT1-I-18B (3) $ 1,596,337.36
Class PT1-I-19A (2) $ 1,536,188.27
Class PT1-I-19B (3) $ 1,536,188.27
Class PT1-I-20A (2) $ 1,522,375.39
Class PT1-I-20B (3) $ 1,522,375.39
Class PT1-I-21A (2) $ 5,688,346.75
Class PT1-I-21B (3) $ 5,688,346.75
Class PT1-I-22A (2) $ 8,247,157.92
Class PT1-I-22B (3) $ 8,247,157.92
Class PT1-I-23A (2) $ 819,167.11
Class PT1-I-23B (3) $ 819,167.11
Class PT1-I-24A (2) $ 757,273.09
Class PT1-I-24B (3) $ 757,273.09
Class PT1-I-25A (2) $ 733,668.49
Class PT1-I-25B (3) $ 733,668.49
Class PT1-I-26A (2) $ 755,421.18
Class PT1-I-26B (3) $ 755,421.18
Class PT1-I-27A (2) $ 4,433,061.77
Class PT1-I-27B (3) $ 4,433,061.77
Class PT1-I-28A (2) $ 596,516.50
Class PT1-I-28B (3) $ 596,516.50
Class PT1-I-29A (2) $ 453,519.19
Class PT1-I-29B (3) $ 453,519.19
Class PT1-I-30A (2) $ 435,236.98
Class PT1-I-30B (3) $ 435,236.98
Class PT1-I-31A (2) $ 422,619.60
Class PT1-I-31B (3) $ 422,619.60
Class PT1-I-32A (2) $ 435,808.23
Class PT1-I-32B (3) $ 435,808.23
Class PT1-I-33A (2) $ 2,534,000.44
Class PT1-I-33B (3) $ 2,534,000.44
Class PT1-I-34A (2) $ 346,662.61
Class PT1-I-34B (3) $ 346,662.61
Class PT1-I-35A (2) $ 265,674.88
Class PT1-I-35B (3) $ 265,674.88
Class PT1-I-36A (2) $ 255,754.66
Class PT1-I-36B (3) $ 255,754.66
Class PT1-I-37A (2) $ 247,068.88
Class PT1-I-37B (3) $ 247,068.88
Class PT1-I-38A (2) $ 238,673.45
Class PT1-I-38B (3) $ 238,673.45
Class PT1-I-39A (2) $ 230,558.91
Class PT1-I-39B (3) $ 230,558.91
Class PT1-I-40A (2) $ 222,716.01
Class PT1-I-40B (3) $ 222,716.01
Class PT1-I-41A (2) $ 215,135.85
Class PT1-I-41B (3) $ 215,135.85
Class PT1-I-42A (2) $ 207,809.81
Class PT1-I-42B (3) $ 207,809.81
Class PT1-I-43A (2) $ 201,063.51
Class PT1-I-43B (3) $ 201,063.51
Class PT1-I-44A (2) $ 193,871.51
Class PT1-I-44B (3) $ 193,871.51
Class PT1-I-45A (2) $ 187,265.42
Class PT1-I-45B (3) $ 187,265.42
Class PT1-I-46A (2) $ 181,662.72
Class PT1-I-46B (3) $ 181,662.72
Class PT1-I-47A (2) $ 174,678.38
Class PT1-I-47B (3) $ 174,678.38
Class PT1-I-48A (2) $ 168,725.65
Class PT1-I-48B (3) $ 168,725.65
Class PT1-I-49A (2) $ 163,297.63
Class PT1-I-49B (3) $ 163,297.63
Class PT1-I-50A (2) $ 157,372.86
Class PT1-I-50B (3) $ 157,372.86
Class PT1-I-51A (2) $ 151,989.63
Class PT1-I-51B (3) $ 151,989.63
Class PT1-I-52A (2) $ 147,560.51
Class PT1-I-52B (3) $ 147,560.51
Class PT1-I-53A (2) $ 141,727.44
Class PT1-I-53B (3) $ 141,727.44
Class PT1-I-54A (2) $ 136,872.45
Class PT1-I-54B (3) $ 136,872.45
Class PT1-I-55A (2) $ 132,373.62
Class PT1-I-55B (3) $ 132,373.62
Class PT1-I-56A (2) $ 127,640.33
Class PT1-I-56B (3) $ 127,640.33
Class PT1-I-57A (2) $ 123,261.55
Class PT1-I-57B (3) $ 123,261.55
Class PT1-I-58A (2) $ 119,472.20
Class PT1-I-58B (3) $ 119,472.20
Class PT1-I-59A (2) $ 114,923.94
Class PT1-I-59B (3) $ 114,923.94
Class PT1-I-60A (2) $ 110,975.86
Class PT1-I-60B (3) $ 110,975.86
Class PT1-I-61A (2) $ 3,077,964.34
Class PT1-I-61B (3) $ 3,077,964.34
Class PT1-II-1 (4) $ 351,152,841.66
Class PT1-II-2A (5) $ 11,757,214.58
Class PT1-II-2B (6) $ 11,757,214.58
Class PT1-II-3A (5) $ 11,254,117.97
Class PT1-II-3B (6) $ 11,254,117.97
Class PT1-II-4A (5) $ 10,771,815.12
Class PT1-II-4B (6) $ 10,771,815.12
Class PT1-II-5A (5) $ 10,310,314.63
Class PT1-II-5B (6) $ 10,310,314.63
Class PT1-II-6A (5) $ 9,868,714.26
Class PT1-II-6B (6) $ 9,868,714.26
Class PT1-II-7A (5) $ 9,446,151.05
Class PT1-II-7B (6) $ 9,446,151.05
Class PT1-II-8A (5) $ 9,041,799.80
Class PT1-II-8B (6) $ 9,041,799.80
Class PT1-II-9A (5) $ 10,880,769.11
Class PT1-II-9B (6) $ 10,880,769.11
Class PT1-II-10A (5) $ 35,416,212.94
Class PT1-II-10B (6) $ 35,416,212.94
Class PT1-II-11A (5) $ 6,716,933.96
Class PT1-II-11B (6) $ 6,716,933.96
Class PT1-II-12A (5) $ 6,322,383.80
Class PT1-II-12B (6) $ 6,322,383.80
Class PT1-II-13A (5) $ 6,055,001.12
Class PT1-II-13B (6) $ 6,055,001.12
Class PT1-II-14A (5) $ 5,799,017.42
Class PT1-II-14B (6) $ 5,799,017.42
Class PT1-II-15A (5) $ 7,814,182.10
Class PT1-II-15B (6) $ 7,814,182.10
Class PT1-II-16A (5) $ 32,830,129.43
Class PT1-II-16B (6) $ 32,830,129.43
Class PT1-II-17A (5) $ 3,877,648.70
Class PT1-II-17B (6) $ 3,877,648.70
Class PT1-II-18A (5) $ 3,605,267.59
Class PT1-II-18B (6) $ 3,605,267.59
Class PT1-II-19A (5) $ 3,469,423.13
Class PT1-II-19B (6) $ 3,469,423.13
Class PT1-II-20A (5) $ 3,438,227.26
Class PT1-II-20B (6) $ 3,438,227.26
Class PT1-II-21A (5) $ 12,846,916.10
Class PT1-II-21B (6) $ 12,846,916.10
Class PT1-II-22A (5) $ 18,625,894.38
Class PT1-II-22B (6) $ 18,625,894.38
Class PT1-II-23A (5) $ 1,850,057.94
Class PT1-II-23B (6) $ 1,850,057.94
Class PT1-II-24A (5) $ 1,710,272.66
Class PT1-II-24B (6) $ 1,710,272.66
Class PT1-II-25A (5) $ 1,656,962.56
Class PT1-II-25B (6) $ 1,656,962.56
Class PT1-II-26A (5) $ 1,706,090.17
Class PT1-II-26B (6) $ 1,706,090.17
Class PT1-II-27A (5) $ 10,011,902.43
Class PT1-II-27B (6) $ 10,011,902.43
Class PT1-II-28A (5) $ 1,347,209.95
Class PT1-II-28B (6) $ 1,347,209.95
Class PT1-II-29A (5) $ 1,024,255.96
Class PT1-II-29B (6) $ 1,024,255.96
Class PT1-II-30A (5) $ 982,966.27
Class PT1-II-30B (6) $ 982,966.27
Class PT1-II-31A (5) $ 954,470.40
Class PT1-II-31B (6) $ 954,470.40
Class PT1-II-32A (5) $ 984,256.42
Class PT1-II-32B (6) $ 984,256.42
Class PT1-II-33A (5) $ 5,722,944.21
Class PT1-II-33B (6) $ 5,722,944.21
Class PT1-II-34A (5) $ 782,924.39
Class PT1-II-34B (6) $ 782,924.39
Class PT1-II-35A (5) $ 600,016.67
Class PT1-II-35B (6) $ 600,016.67
Class PT1-II-36A (5) $ 577,612.24
Class PT1-II-36B (6) $ 577,612.24
Class PT1-II-37A (5) $ 557,995.72
Class PT1-II-37B (6) $ 557,995.72
Class PT1-II-38A (5) $ 539,034.95
Class PT1-II-38B (6) $ 539,034.95
Class PT1-II-39A (5) $ 520,708.59
Class PT1-II-39B (6) $ 520,708.59
Class PT1-II-40A (5) $ 502,995.69
Class PT1-II-40B (6) $ 502,995.69
Class PT1-II-41A (5) $ 485,876.20
Class PT1-II-41B (6) $ 485,876.20
Class PT1-II-42A (5) $ 469,330.59
Class PT1-II-42B (6) $ 469,330.59
Class PT1-II-43A (5) $ 454,094.34
Class PT1-II-43B (6) $ 454,094.34
Class PT1-II-44A (5) $ 437,851.49
Class PT1-II-44B (6) $ 437,851.49
Class PT1-II-45A (5) $ 422,931.88
Class PT1-II-45B (6) $ 422,931.88
Class PT1-II-46A (5) $ 410,278.38
Class PT1-II-46B (6) $ 410,278.38
Class PT1-II-47A (5) $ 394,504.52
Class PT1-II-47B (6) $ 394,504.52
Class PT1-II-48A (5) $ 381,060.50
Class PT1-II-48B (6) $ 381,060.50
Class PT1-II-49A (5) $ 368,801.52
Class PT1-II-49B (6) $ 368,801.52
Class PT1-II-50A (5) $ 355,420.64
Class PT1-II-50B (6) $ 355,420.64
Class PT1-II-51A (5) $ 343,262.82
Class PT1-II-51B (6) $ 343,262.82
Class PT1-II-52A (5) $ 333,259.84
Class PT1-II-52B (6) $ 333,259.84
Class PT1-II-53A (5) $ 320,086.06
Class PT1-II-53B (6) $ 320,086.06
Class PT1-II-54A (5) $ 309,121.25
Class PT1-II-54B (6) $ 309,121.25
Class PT1-II-55A (5) $ 298,960.83
Class PT1-II-55B (6) $ 298,960.83
Class PT1-II-56A (5) $ 288,270.87
Class PT1-II-56B (6) $ 288,270.87
Class PT1-II-57A (5) $ 278,381.55
Class PT1-II-57B (6) $ 278,381.55
Class PT1-II-58A (5) $ 269,823.45
Class PT1-II-58B (6) $ 269,823.45
Class PT1-II-59A (5) $ 259,551.36
Class PT1-II-59B (6) $ 259,551.36
Class PT1-II-60A (5) $ 250,634.79
Class PT1-II-60B (6) $ 250,634.79
Class PT1-II-61A (5) $ 6,951,466.11
Class PT1-II-61B (6) $ 6,951,466.11
Class PT1-R (7) (7)
____________________
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to a
maximum rate of 9.80%.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group I WAC Rate over (B) 9.80%.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate subject to a
maximum rate of 9.80%.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group II WAC Rate over (B) 9.80%.
(7) The Class PT1 R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in
respect of the Mortgage Loans from the related Loan Group for such Distribution
Date shall be deemed to be distributed to the Pooling-Tier REMIC-1 Regular
Interests at the rates shown above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries and payments of principal in respect of the Group I Mortgage Loans
(including, for the first Distribution Date only, the portion of the Closing
Date Deposit Amount allocable to the Group I Mortgage Loans) shall be allocated
to the outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group I
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent
Recoveries and payments of principal in respect of the Group II Mortgage Loans
(including, for the first Distribution Date only, the portion of the Closing
Date Deposit Amount allocable to the Group II Mortgage Loans) shall be allocated
to the outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group
II Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group II
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in
Pooling-Tier REMIC-2 and shall be represented by the Class R Certificates.
Corresponding
Pooling-Tier Pooling-Tier Corresponding Pooling-Tier Corresponding
Pooling-Tier REMIC-2 REMIC-2 REMIC-2 Initial Pooling-Tier REMIC-2 REMIC-1 Regular Scheduled Crossover
Interest Interest Rate Principal Amount IO Interest Interest Distribution Date
-------------------- ------------- ---------------- -------------------- --------------- -----------------
Class PT2-I-1 (1) $ 155,483,161.14 N/A N/A N/A
Class PT2-I-2A (2) $ 5,205,849.62 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 5,205,849.62 N/A N/A N/A
Class PT2-I-3A (2) $ 4,983,088.93 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 4,983,088.93 N/A N/A N/A
Class PT2-I-4A (2) $ 4,769,535.28 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 4,769,535.28 N/A N/A N/A
Class PT2-I-5A (2) $ 4,565,192.47 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 4,565,192.47 N/A N/A N/A
Class PT2-I-6A (2) $ 4,369,661.04 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 4,369,661.04 N/A N/A N/A
Class PT2-I-7A (2) $ 4,182,558.85 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 4,182,558.85 N/A N/A N/A
Class PT2-I-8A (2) $ 4,003,520.55 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 4,003,520.55 N/A N/A N/A
Class PT2-I-9A (2) $ 4,817,777.84 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 4,817,777.84 N/A N/A N/A
Class PT2-I-10A (2) $ 15,681,561.11 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 15,681,561.11 N/A N/A N/A
Class PT2-I-11A (2) $ 2,974,118.39 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 2,974,118.39 N/A N/A N/A
Class PT2-I-12A (2) $ 2,799,419.80 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 2,799,419.80 N/A N/A N/A
Class PT2-I-13A (2) $ 2,681,028.33 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 2,681,028.33 N/A N/A N/A
Class PT2-I-14A (2) $ 2,567,684.08 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 2,567,684.08 N/A N/A N/A
Class PT2-I-15A (2) $ 3,459,957.00 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 3,459,957.00 N/A N/A N/A
Class PT2-I-16A (2) $ 14,536,497.22 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 14,536,497.22 N/A N/A N/A
Class PT2-I-17A (2) $ 1,716,942.05 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 1,716,942.05 N/A N/A N/A
Class PT2-I-18A (2) $ 1,596,337.36 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 1,596,337.36 N/A N/A N/A
Class PT2-I-19A (2) $ 1,536,188.27 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 1,536,188.27 N/A N/A N/A
Class PT2-I-20A (2) $ 1,522,375.39 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 1,522,375.39 N/A N/A N/A
Class PT2-I-21A (2) $ 5,688,346.75 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 5,688,346.75 N/A N/A N/A
Class PT2-I-22A (2) $ 8,247,157.92 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 8,247,157.92 N/A N/A N/A
Class PT2-I-23A (2) $ 819,167.11 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 819,167.11 N/A N/A N/A
Class PT2-I-24A (2) $ 757,273.09 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 757,273.09 N/A N/A N/A
Class PT2-I-25A (2) $ 733,668.49 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 733,668.49 N/A N/A N/A
Class PT2-I-26A (2) $ 755,421.18 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 755,421.18 N/A N/A N/A
Class PT2-I-27A (2) $ 4,433,061.77 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 4,433,061.77 N/A N/A N/A
Class PT2-I-28A (2) $ 596,516.50 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 596,516.50 N/A N/A N/A
Class PT2-I-29A (2) $ 453,519.19 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 453,519.19 N/A N/A N/A
Class PT2-I-30A (2) $ 435,236.98 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 435,236.98 N/A N/A N/A
Class PT2-I-31A (2) $ 422,619.60 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 422,619.60 N/A N/A N/A
Class PT2-I-32A (2) $ 435,808.23 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 435,808.23 N/A N/A N/A
Class PT2-I-33A (2) $ 2,534,000.44 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 2,534,000.44 N/A N/A N/A
Class PT2-I-34A (2) $ 346,662.61 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 346,662.61 N/A N/A N/A
Class PT2-I-35A (2) $ 265,674.88 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 265,674.88 N/A N/A N/A
Class PT2-I-36A (2) $ 255,754.66 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 255,754.66 N/A N/A N/A
Class PT2-I-37A (2) $ 247,068.88 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 247,068.88 N/A N/A N/A
Class PT2-I-38A (2) $ 238,673.45 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 238,673.45 N/A N/A N/A
Class PT2-I-39A (2) $ 230,558.91 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 230,558.91 N/A N/A N/A
Class PT2-I-40A (2) $ 222,716.01 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 222,716.01 N/A N/A N/A
Class PT2-I-41A (2) $ 215,135.85 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 215,135.85 N/A N/A N/A
Class PT2-I-42A (2) $ 207,809.81 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 207,809.81 N/A N/A N/A
Class PT2-I-43A (2) $ 201,063.51 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 201,063.51 N/A N/A N/A
Class PT2-I-44A (2) $ 193,871.51 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 193,871.51 N/A N/A N/A
Class PT2-I-45A (2) $ 187,265.42 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 187,265.42 N/A N/A N/A
Class PT2-I-46A (2) $ 181,662.72 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 181,662.72 N/A N/A N/A
Class PT2-I-47A (2) $ 174,678.38 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 174,678.38 N/A N/A N/A
Class PT2-I-48A (2) $ 168,725.65 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 168,725.65 N/A N/A N/A
Class PT2-I-49A (2) $ 163,297.63 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 163,297.63 N/A N/A N/A
Class PT2-I-50A (2) $ 157,372.86 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 157,372.86 N/A N/A N/A
Class PT2-I-51A (2) $ 151,989.63 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 151,989.63 N/A N/A N/A
Class PT2-I-52A (2) $ 147,560.51 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 147,560.51 N/A N/A N/A
Class PT2-I-53A (2) $ 141,727.44 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 141,727.44 N/A N/A N/A
Class PT2-I-54A (2) $ 136,872.45 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 136,872.45 N/A N/A N/A
Class PT2-I-55A (2) $ 132,373.62 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 132,373.62 N/A N/A N/A
Class PT2-I-56A (2) $ 127,640.33 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56B (3) $ 127,640.33 N/A N/A N/A
Class PT2-I-57A (2) $ 123,261.55 Class PT2-I-IO-57 N/A N/A
Class PT2-I-57B (3) $ 123,261.55 N/A N/A N/A
Class PT2-I-58A (2) $ 119,472.20 Class PT2-I-IO-58 N/A N/A
Class PT2-I-58B (3) $ 119,472.20 N/A N/A N/A
Class PT2-I-59A (2) $ 114,923.94 Class PT2-I-IO-59 N/A N/A
Class PT2-I-59B (3) $ 114,923.94 N/A N/A N/A
Class PT2-I-60A (2) $ 110,975.86 Class PT2-I-IO-60 N/A N/A
Class PT2-I-60B (3) $ 110,975.86 N/A N/A N/A
Class PT2-I-61A (2) $ 3,077,964.34 Class PT2-I-IO-61 N/A N/A
Class PT2-I-61B (3) $ 3,077,964.34 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A January 2008
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A February 2008
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A March 2008
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A April 2008
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A May 2008
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A June 2008
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A July 2008
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A August 2008
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A September 2008
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A October 2008
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A November 2008
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A December 2008
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A January 2009
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A February 2009
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A March 2009
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A April 2009
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A May 2009
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A June 2009
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A July 2009
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A August 2009
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A September 2009
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A October 2009
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A November 2009
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A December 2009
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A January 2010
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A February 2010
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A March 2010
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A April 2010
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A May 2010
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A June 2010
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A July 2010
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A August 2010
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A September 2010
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A October 2010
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A November 2010
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A December 2010
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A January 2011
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A February 2011
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A March 2011
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A April 2011
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A May 2011
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A June 2011
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A July 2011
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A August 2011
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A September 2011
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A October 2011
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A November 2011
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A December 2011
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A January 2012
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A February 2012
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A March 2012
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A April 2012
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A May 2012
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A June 2012
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A July 2012
Class PT2-I-IO-57 (4) (4) N/A Class PT1-I-50A August 2012
Class PT2-I-IO-58 (4) (4) N/A Class PT1-I-51A September 2012
Class PT2-I-IO-59 (4) (4) N/A Class PT1-I-52A October 2012
Class PT2-I-IO-60 (4) (4) N/A Class PT1-I-53A November 2012
Class PT2-I-IO-61 (4) (4) N/A Class PT1-I-54A December 2012
Class PT2-II-1 (5) $ 351,152,841.66 N/A N/A N/A
Class PT2-II-2A (6) $ 11,757,214.58 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 11,757,214.58 N/A N/A N/A
Class PT2-II-3A (6) $ 11,254,117.97 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 11,254,117.97 N/A N/A N/A
Class PT2-II-4A (6) $ 10,771,815.12 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 10,771,815.12 N/A N/A N/A
Class PT2-II-5A (6) $ 10,310,314.63 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 10,310,314.63 N/A N/A N/A
Class PT2-II-6A (6) $ 9,868,714.26 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 9,868,714.26 N/A N/A N/A
Class PT2-II-7A (6) $ 9,446,151.05 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 9,446,151.05 N/A N/A N/A
Class PT2-II-8A (6) $ 9,041,799.80 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 9,041,799.80 N/A N/A N/A
Class PT2-II-9A (6) $ 10,880,769.11 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 10,880,769.11 N/A N/A N/A
Class PT2-II-10A (6) $ 35,416,212.94 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 35,416,212.94 N/A N/A N/A
Class PT2-II-11A (6) $ 6,716,933.96 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 6,716,933.96 N/A N/A N/A
Class PT2-II-12A (6) $ 6,322,383.80 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 6,322,383.80 N/A N/A N/A
Class PT2-II-13A (6) $ 6,055,001.12 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 6,055,001.12 N/A N/A N/A
Class PT2-II-14A (6) $ 5,799,017.42 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 5,799,017.42 N/A N/A N/A
Class PT2-II-15A (6) $ 7,814,182.10 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 7,814,182.10 N/A N/A N/A
Class PT2-II-16A (6) $ 32,830,129.43 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 32,830,129.43 N/A N/A N/A
Class PT2-II-17A (6) $ 3,877,648.70 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 3,877,648.70 N/A N/A N/A
Class PT2-II-18A (6) $ 3,605,267.59 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 3,605,267.59 N/A N/A N/A
Class PT2-II-19A (6) $ 3,469,423.13 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 3,469,423.13 N/A N/A N/A
Class PT2-II-20A (6) $ 3,438,227.26 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 3,438,227.26 N/A N/A N/A
Class PT2-II-21A (6) $ 12,846,916.10 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 12,846,916.10 N/A N/A N/A
Class PT2-II-22A (6) $ 18,625,894.38 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 18,625,894.38 N/A N/A N/A
Class PT2-II-23A (6) $ 1,850,057.94 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 1,850,057.94 N/A N/A N/A
Class PT2-II-24A (6) $ 1,710,272.66 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 1,710,272.66 N/A N/A N/A
Class PT2-II-25A (6) $ 1,656,962.56 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 1,656,962.56 N/A N/A N/A
Class PT2-II-26A (6) $ 1,706,090.17 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 1,706,090.17 N/A N/A N/A
Class PT2-II-27A (6) $ 10,011,902.43 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 10,011,902.43 N/A N/A N/A
Class PT2-II-28A (6) $ 1,347,209.95 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 1,347,209.95 N/A N/A N/A
Class PT2-II-29A (6) $ 1,024,255.96 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 1,024,255.96 N/A N/A N/A
Class PT2-II-30A (6) $ 982,966.27 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 982,966.27 N/A N/A N/A
Class PT2-II-31A (6) $ 954,470.40 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 954,470.40 N/A N/A N/A
Class PT2-II-32A (6) $ 984,256.42 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 984,256.42 N/A N/A N/A
Class PT2-II-33A (6) $ 5,722,944.21 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 5,722,944.21 N/A N/A N/A
Class PT2-II-34A (6) $ 782,924.39 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 782,924.39 N/A N/A N/A
Class PT2-II-35A (6) $ 600,016.67 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 600,016.67 N/A N/A N/A
Class PT2-II-36A (6) $ 577,612.24 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 577,612.24 N/A N/A N/A
Class PT2-II-37A (6) $ 557,995.72 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 557,995.72 N/A N/A N/A
Class PT2-II-38A (6) $ 539,034.95 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 539,034.95 N/A N/A N/A
Class PT2-II-39A (6) $ 520,708.59 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 520,708.59 N/A N/A N/A
Class PT2-II-40A (6) $ 502,995.69 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 502,995.69 N/A N/A N/A
Class PT2-II-41A (6) $ 485,876.20 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 485,876.20 N/A N/A N/A
Class PT2-II-42A (6) $ 469,330.59 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 469,330.59 N/A N/A N/A
Class PT2-II-43A (6) $ 454,094.34 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 454,094.34 N/A N/A N/A
Class PT2-II-44A (6) $ 437,851.49 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 437,851.49 N/A N/A N/A
Class PT2-II-45A (6) $ 422,931.88 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 422,931.88 N/A N/A N/A
Class PT2-II-46A (6) $ 410,278.38 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 410,278.38 N/A N/A N/A
Class PT2-II-47A (6) $ 394,504.52 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 394,504.52 N/A N/A N/A
Class PT2-II-48A (6) $ 381,060.50 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 381,060.50 N/A N/A N/A
Class PT2-II-49A (6) $ 368,801.52 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 368,801.52 N/A N/A N/A
Class PT2-II-50A (6) $ 355,420.64 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 355,420.64 N/A N/A N/A
Class PT2-II-51A (6) $ 343,262.82 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 343,262.82 N/A N/A N/A
Class PT2-II-52A (6) $ 333,259.84 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 333,259.84 N/A N/A N/A
Class PT2-II-53A (6) $ 320,086.06 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 320,086.06 N/A N/A N/A
Class PT2-II-54A (6) $ 309,121.25 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 309,121.25 N/A N/A N/A
Class PT2-II-55A (6) $ 298,960.83 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 298,960.83 N/A N/A N/A
Class PT2-II-56A (6) $ 288,270.87 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $ 288,270.87 N/A N/A N/A
Class PT2-II-57A (6) $ 278,381.55 Class PT2-II-IO-57 N/A N/A
Class PT2-II-57B (7) $ 278,381.55 N/A N/A N/A
Class PT2-II-58A (6) $ 269,823.45 Class PT2-II-IO-58 N/A N/A
Class PT2-II-58B (7) $ 269,823.45 N/A N/A N/A
Class PT2-II-59A (6) $ 259,551.36 Class PT2-II-IO-59 N/A N/A
Class PT2-II-59B (7) $ 259,551.36 N/A N/A N/A
Class PT2-II-60A (6) $ 250,634.79 Class PT2-II-IO-60 N/A N/A
Class PT2-II-60B (7) $ 250,634.79 N/A N/A N/A
Class PT2-II-61A (6) $ 6,951,466.11 Class PT2-II-IO-61 N/A N/A
Class PT2-II-61B (7) $ 6,951,466.11 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A January 2008
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A February 2008
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A March 2008
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A April 2008
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A May 2008
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A June 2008
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A July 2008
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A August 2008
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A September 2008
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A October 2008
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A November 2008
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A December 2008
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A January 2009
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A February 2009
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A March 2009
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A April 2009
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A May 2009
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A June 2009
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A July 2009
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A August 2009
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A September 2009
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A October 2009
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A November 2009
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A December 2009
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A January 2010
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A February 2010
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A March 2010
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A April 2010
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A May 2010
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A June 2010
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A July 2010
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A August 2010
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A September 2010
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A October 2010
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A November 2010
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A December 2010
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A January 2011
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A February 2011
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A March 2011
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A April 2011
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A May 2011
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A June 2011
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A July 2011
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A August 2011
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A September 2011
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A October 2011
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A November 2011
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A December 2011
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A January 2012
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A February 2012
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A March 2012
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A April 2012
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A May 2012
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A June 2012
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A July 2012
Class PT2-II-IO-57 (4) (4) N/A Class PT1-II-57A August 2012
Class PT2-II-IO-58 (4) (4) N/A Class PT1-II-58A September 2012
Class PT2-II-IO-59 (4) (4) N/A Class PT1-II-59A October 2012
Class PT2-II-IO-60 (4) (4) N/A Class PT1-II-60A November 2012
Class PT2-II-IO-61 (4) (4) N/A Class PT1-II-61A December 2012
Class PT2-R (8) (8) N/A N/A N/A
-------------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation, provided that, on each Distribution Date on which
interest is distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this Pooling-Tier REMIC-2 Regular Interest shall bear interest at
a per annum rate equal to Swap LIBOR subject to a maximum rate equal to the
weighted average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I and having
an "A" in their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in
their class designation.
(4) This Pooling-Tier REMIC-2 IO Interest is an interest-only interest and does
not have a principal balance but has a notional balance ("Pooling-Tier
REMIC-2 IO Notional Balance") equal to the Pooling-Tier REMIC-2 Principal
Amount of the Corresponding Pooling-Tier REMIC-1 Regular Interest. From the
Closing Date through and including the Corresponding Actual Crossover
Distribution Date, this Pooling-Tier REMIC-2 IO Interest shall be entitled
to receive interest that accrues on the Corresponding Pooling-Tier REMIC-1
Regular Interest at a rate equal to the excess, if any, of (i) the
Pooling-Tier REMIC-1 Interest Rate for the Corresponding Pooling-Tier
REMIC-1 Regular Interest over (ii) Swap LIBOR. After the Corresponding
Actual Crossover Distribution Date, this Pooling-Tier REMIC-2 IO Interest
shall not accrue interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
having an "A" in their class designation, provided that, on each
Distribution Date on which interest is distributable on the Corresponding
Pooling-Tier REMIC-2 IO Interest, this Pooling-Tier REMIC-2 Regular
Interest shall bear interest at a per annum rate equal to Swap LIBOR
subject to a maximum rate equal to the weighted average of the Pooling-Tier
REMIC-1 Interest Rates on the Pooling-Tier REMIC-1 Regular Interests
relating to Loan Group II and having an "A" in their class designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in
respect of the Mortgage Loans from the related Loan Group for such Distribution
Date shall be distributed to the Pooling-Tier REMIC-2 Regular Interests at the
Pooling-Tier REMIC-2 Interest Rates shown above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries and payments of principal in respect of the Group I Mortgage Loans
(including, for the first Distribution Date only, the portion of the Closing
Date Deposit Amount allocable to the Group I Mortgage Loans) shall be allocated
to the then outstanding Pooling-Tier REMIC-2 Regular Interests (other than the
Pooling-Tier REMIC-2 IO Interests) relating to the Group I Mortgage Loans with
the lowest numerical denomination until the Pooling-Tier REMIC-2 Principal
Amount of such interest is reduced to zero, provided that, for Pooling-Tier
REMIC-2 Regular Interests relating to the Group I Mortgage Loans with the same
numerical denomination, such Realized Losses, Subsequent Recoveries and payments
of principal shall be allocated pro rata between such Pooling-Tier REMIC-2
Regular Interests, until the Pooling-Tier REMIC-2 Principal Amount of such
interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent
Recoveries and payments of principal in respect of the Group II Mortgage Loans
(including, for the first Distribution Date only, the portion of the Closing
Date Deposit Amount allocable to the Group II Mortgage Loans) shall be allocated
to the then outstanding Pooling-Tier REMIC-2 Regular Interests (other than the
Pooling-Tier REMIC-2 IO Interests) relating to Loan Group II with the lowest
numerical denomination until the Pooling-Tier REMIC-2 Principal Amount of such
interest is reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular
Interests relating to the Group II Mortgage Loans with the same numerical
denomination, such Realized Losses and payments of principal shall be allocated
pro rata between such Pooling-Tier REMIC-2 Regular Interests, until the
Pooling-Tier REMIC-2 Principal Amount of such interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and
each such interest, other than the Class LT-R Interest, is hereby designated as
a regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Lower-Tier Lower-Tier Interest Initial Lower-Tier Upper-Tier REMIC
REMIC Interest Rate Principal Amount Regular Interest
-------------- ------------------- ---------------- ----------------
Class LT-A-1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier Regular Interest
Class LT-A-2fpt (1) 1/2 initial Class Certificate Balance of A-2fpt
Corresponding Upper-Tier Regular Interest
Class LT-A-2a (1) 1/2 initial Class Certificate Balance of A-2a
Corresponding Upper-Tier Regular Interest
Class LT-A-2b (1) 1/2 initial Class Certificate Balance of A-2b
Corresponding Upper-Tier Regular Interest
Class LT-A-2c (1) 1/2 initial Class Certificate Balance of A-2c
Corresponding Upper-Tier Regular Interest
Class LT-A-2d (1) 1/2 initial Class Certificate Balance of A-2d
Corresponding Upper-Tier Regular Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier Regular Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier Regular Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier Regular Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier Regular Interest
Class LT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier Regular Interest
Class LT-M-6 (1) 1/2 initial Class Certificate Balance of M-6
Corresponding Upper-Tier Regular Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier Regular Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier Regular Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier Regular Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2 N/A
Subordinated Amount, less the aggregate
initial Lower-Tier Principal Amount of
Class LT-Group I and Class LT Group II
Class LT-Group I (2) 0.001% aggregate Stated Principal Balance N/A
of Group I Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated Principal Balance N/A
of Group II Mortgage Loans(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
-------------------------
(1) The interest rate with respect to any Distribution Date for these interests
is a per annum variable rate equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling Tier REMIC-2 IO Interests) relating to
the Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the weighted average
of the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling Tier REMIC-2 IO Interests)
relating to the Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2fpt, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2 and Class LT-B-3 Interests are hereby designated the LT-Accretion
Directed Classes (the "LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the Subordinated
Amount shall be payable as a reduction of the Lower-Tier Principal Amount of the
LT-Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the Class Certificate Balance of its Corresponding Class) and
shall be accrued and added to the Lower-Tier Principal Amount of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the Lower-Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed interest
accruals for such Distribution Date for the Class LT-Accrual Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the Subordinated
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans (including, for the first Distribution Date only, the Closing
Date Deposit Amount) and all Subsequent Recoveries allocable to principal shall
be allocated (i) 50% to the Class LT-Accrual Interest, the Class LT-Group I
Interest and Class LT-Group II Interest (and further allocated among these
Lower-Tier Regular Interests in the manner described below) and (ii) 50% to the
LT-Accretion Directed Classes (such principal payments and Subsequent Recoveries
shall be allocated among such LT-Accretion Directed Classes in an amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Subordinated Amount shall be allocated to the Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so that after
all distributions have been made on each Distribution Date (i) the Lower-Tier
Principal Amount of each of the LT-Accretion Directed Classes is equal to 50% of
the Class Certificate Balance of their Corresponding Class, and (ii) the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) is equal to 50% of the aggregate Stated Principal
Balance of the Mortgage Loans plus 50% of the Subordinated Amount. Any increase
in the Class Certificate Balance of a Class of Offered Certificates as a result
of a Subsequent Recovery shall increase the Lower-Tier Principal Amount of the
Corresponding Lower-Tier Regular Interest by 50% of such increase, and the
remaining 50% of such increase shall increase the Lower-Tier Principal Amount of
the Class LT-Accrual Interest, the Class LT-Group I Interest and the Class
LT-Group II Interest (such increase shall be further allocated among such
Lower-Tier Regular Interests in the manner described below). As among the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest, all payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans, all Subsequent Recoveries and all Realized
Losses, allocable to such Lower-Tier Regular Interests and all increases in the
Lower-Tier Principal Amount of such Lower-Tier Regular Interests as a result of
Subsequent Recoveries shall be allocated (i) to the Class LT-Group I Interest
and the Class LT-Group II Interest, each from the related Loan Group so that
their respective Lower-Tier Principal Amounts (computed to at least eight
decimal places) are equal to 0.001% of the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group and (ii) the remainder to the Class
LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and
each such interest, other than the Class UT-R Interest, is hereby designated as
a regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier Initial Principal Corresponding Class of
Upper-Tier REMIC Interest Interest Rate Upper-Tier Amount Certificates
------------------------- ------------- ----------------- ----------------------
Class A-1 (1) $ 309,100,000 Class A-1
Class A-2fpt (2) $ 200,000,000 Class A-2fpt
Class A-2a (2) $ 205,435,000 Class A-2a
Class A-2b (2) $ 60,235,000 Class A-2b
Class A-2c (2) $ 145,950,000 Class A-2c
Class A-2d (2) $ 86,470,000 Class A-2d
Class M-1 (3) $ 54,108,000 Class M-1
Class M-2 (3) $ 60,627,000 Class M-2
Class M-3 (3) $ 22,165,000 Class M-3
Class M-4 (3) $ 25,424,000 Class M-4
Class M-5 (3) $ 24,772,000 Class M-5
Class M-6 (3) $ 14,994,000 Class M-6
Class B-1 (3) $ 21,513,000 Class B-1
Class B-2 (3) $ 9,779,000 Class B-2
Class B-3 (3) $ 18,253,000 Class B-3
Class UT-IO (4) (4) N/A
Class UT-X (5) (5) N/A
Class UT-R (6) (6) Class R
_________________
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest (the "Upper-Tier REMIC Loan Group I Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO Interest.
This interest shall be beneficially owned by the holders of the Class X
Certificates and shall be held as an asset of the Swap Account.
(5) The Class UT-X Interest has an initial principal balance of $44,986,255 but
will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class UT-X
Interest shall have a notional principal balance equal to the aggregate of
the Lower-Tier Principal Amounts of the Lower-Tier Regular Interests (other
than the Class LT-IO Interest) as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of the
Upper-Tier REMIC WAC Rate over the product of (i) 2 and (ii) the weighted
average of the Lower-Tier Interest Rates of the Lower-Tier REMIC Interests
(other than the Class LT-IO Interest), where the Lower-Tier Interest Rate
on each of the Class LT-Accrual Interest, Class LT-Group I Interest and
Class LT-Group II Interest is subject to a cap equal to zero and each
LT-Accretion Directed Class is subject to a cap equal to the Upper-Tier
Interest Rate on its Corresponding Class of Upper-Tier Regular Interest.
With respect to any Distribution Date, interest that so accrues on the
notional principal balance of the Class UT-X Interest shall be deferred in
an amount equal to any increase in the Subordinated Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect
of the Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class UT-IO Interest shall be entitled to receive interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
Class X REMIC
The Class X REMIC shall issue the following classes of
interests. The Class X Interest and the Class IO Interest shall each represent a
regular interest in the Class X REMIC and the Class RX Certificates shall
represent the sole class of residual interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
------------------------- ------------- ----------------
Class X Interest (1) (1)
Class IO Interest (2) (2)
Class RX Certificates (3) (3)
-------------------------
(1) The Class X Interest has an initial principal balance equal to the initial
principal balance of the Class UT-X Interest and is entitled to 100% of the
interest and principal on the Class UT-X Interest on each Distribution
Date.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be entitled
to receive 100% of the interest distributable on the Class UT-IO Interest.
(3) The Class RX Certificates do not have a principal balance or an interest
rate.
The Certificates
Class Designation Class Pass-Through Rate Class Certificate Balance
----------------- ----------------------- -------------------------
Class A-1(11) (1) $ 309,100,000
Class A-2fpt(11) (2) $ 200,000,000
Class A-2a(11) (3) $ 205,435,000
Class A-2b(11) (4) $ 60,235,000
Class A-2c(11) (5) $ 145,950,000
Class A-2d(11) (6) $ 86,470,000
Class M-1(11) (7) $ 54,108,000
Class M-2(11) (7) $ 60,627,000
Class M-3(11) (7) $ 22,165,000
Class M-4(11) (7) $ 25,424,000
Class M-5(11) (7) $ 24,772,000
Class M-6(11) (7) $ 14,994,000
Class B-1(11) (7) $ 21,513,000
Class B-2(11) (7) $ 9,779,000
Class B-3(11) (7) $ 18,253,000
Class X (8) $ 0(8)
Class R (9) $ 0(9)
Class RX (10) (10)
-------------------------
(1) The Class A-1 Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the WAC
Cap.
(2) The Class A-2fpt Certificates will bear interest during each Interest
Accrual Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the
WAC Cap.
(3) The Class A-2a Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the
WAC Cap.
(4) The Class A-2b Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the
WAC Cap.
(5) The Class A-2c Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the
WAC Cap.
(6) The Class A-2d Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the
WAC Cap.
(7) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
B-1, Class B-2 and Class B-3 Certificates will bear interest during each
Interest Accrual Period at a per annum rate equal to the lesser of (i)
LIBOR plus the applicable Pass-Through Margin, and (ii) the WAC Cap.
(8) The Class X Certificates will represent beneficial ownership of the Class X
Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
Interest Rate Cap Agreement, the right to receive Class IO Shortfalls and
amounts in the Excess Reserve Fund Account and the Swap Account, subject to
the obligation to make payments from the Excess Reserve Fund Account in
respect of Basis Risk CarryForward Amounts and amounts in the Swap Account
subject to the obligation to make Net Swap Payments, Swap Termination
Payments and Basis Risk CarryForward Amounts and, without duplication,
Upper Tier CarryForward Amounts. For federal income tax purposes, the
Trustee will treat a Class X Certificateholder's obligation to make
payments from the Excess Reserve Fund Account or the Swap Account as
payments made under a notional principal contract between the Class X
Certificateholders and the holder of each Class of Offered Certificates.
Such rights of the Class X Certificateholders and Offered
Certificateholders shall be treated as held in the Grantor Trust.
(9) The Class R Certificates do not have an interest rate or a principal
balance.
(10) The Class RX Certificates do not have an interest rate or a principal
balance.
(11) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts and, without duplication,
Upper Tier CarryForward Amounts. Each of these Certificates will also be
subject to the obligation to pay Class IO Shortfalls as described in
Section 8.13. For federal income tax purposes, any amount distributed on
the Offered Certificates on any such Distribution Date in excess of the
amount distributable on their Corresponding Class of Upper-Tier Regular
Interest on such Distribution Date shall be treated as having been paid
from the Excess Reserve Fund Account or the Swap Account, as applicable,
and any amount distributable on such Corresponding Class of Upper-Tier
Regular Interest on such Distribution Date in excess of the amount
distributable on the Offered Certificates on such Distribution Date shall
be treated as having been paid to the Swap Account, all pursuant to, and as
further provided in, Section 8.13. For federal income tax purposes, the
Trustee will treat an Offered Certificateholder's right to receive payments
from the Excess Reserve Fund Account or the Swap Account, subject to the
obligation to pay Class IO Shortfalls, as rights and obligations under a
notional principal contract between the Class X Certificateholders and the
Offered Certificateholders.
The minimum denomination for each Class of Certificates, other
than the Class P, Class R, Class RX and the Class X Certificates, will be
$25,000 with integral multiples of $1 in excess thereof. The minimum
denomination for the Class P and the Class X Certificates will each be a 1%
Percentage Interest in such Class. The Class R Certificate and the Class RX
Certificate will each represent a 100% Percentage Interest in the related Class.
It is expected that each Class of Certificates will receive
its final distribution of principal and interest on or prior to the Final
Scheduled Distribution Date.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates........................... All Classes of Certificates other than the Physical
Certificates.
Class A Certificates.............................. Class A-1, Class A-2fpt, Class A-2a, Class A-2b, Class A-2c
and Class A-2d Certificates.
Class B Certificates.............................. Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates.............................. Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6 Certificates.
Delay Certificates................................ None.
ERISA-Restricted Certificates..................... Residual, Class P and Class X Certificates; any certificate
with a rating below the
lowest applicable
permitted rating under the
Underwriters Exemption.
Non-Delay Certificates............................ Class A, Class X and Subordinated Certificates.
Offered Certificates.............................. All Classes of Certificates other than the Private
Certificates.
Physical Certificates............................. Class P, Class X and Residual Certificates.
Private Certificates.............................. Class P, Class X and Residual Certificates.
Rating Agencies................................... Xxxxx'x and Standard & Poor's.
Regular Certificates.............................. All Classes of Certificates other than the Class P and
Residual Certificates.
Residual Certificates............................. Class R and Class RX Certificates.
Subordinated Certificates......................... Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution
Account, any Escrow Account, the Excess Reserve Fund Account or the Swap
Account. Each Account shall be an Eligible Account and shall be non-interest
bearing.
Accrued Certificate Interest Distribution Amount: With respect
to any Distribution Date for each Class of Offered Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Additional Disclosure Notification: A notification in the form
of Exhibit AA.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage
Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Rate less the Expense Fee
Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Due Date on which the related Mortgage Rate adjusts as set forth in the
related Mortgage Note and each Due Date thereafter on which the Mortgage Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described
in Section 10.07.
Advancing Person: The Person to whom any Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
have been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any Distribution Date, the aggregate amount held in each Collection Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation
Proceeds on the Mortgage Loans received after the end of the related Prepayment
Period and (ii) all Scheduled Payments on the Mortgage Loans due after the end
of the related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the Depositor.
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the Offered Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form (other than the
assignee's name and recording information not yet returned from the recording
office), reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicers on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicers
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicers during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased with respect to such
Distribution Date; (vi) the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 9.01; and (vii) the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to which
the Servicers, the Depositor, the Custodian or the Trustee are entitled to be
paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass- Through Rate for any Class of Offered Certificates
is based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date on such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of Offered Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal
to the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for
such Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for (x) amounts paid from the Excess Reserve Fund Account to pay any
Basis Risk CarryForward Amount or (y) any Defaulted Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended
from time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions, in (a) the States
of Arizona, New York, California, Texas, Minnesota, New Jersey, Delaware or
Utah, (b) a State in which any Servicer's servicing operations are located, or
(c) the State in which the Trustee's operations are located, are authorized or
obligated by law or executive order to be closed.
Cap Provider: Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of
Certificates, other than the Class X, Class P, Class R or Class RX Certificates,
at any date, the maximum dollar amount of principal to which the Holder thereof
is then entitled hereunder, such amount being equal to the Denomination thereof
minus all distributions of principal previously made with respect thereto and in
the case of any Certificates, reduced by any Applied Realized Loss Amounts
allocated to such Class of Certificates pursuant to Section 4.05; provided,
however, that immediately following the Distribution Date on which a Subsequent
Recovery is distributed, the Class Certificate Balances of any Class or Classes
of Certificates that have been previously reduced by Applied Realized Loss
Amounts will be increased, in order of seniority, by the amount of the
Subsequent Recovery distributed on such Distribution Date (up to the amount of
the Unpaid Realized Loss Amount for such Class or Classes for such Distribution
Date). The Class X, Class P, Class R and Class RX Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any Affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
Affiliate of the Depositor in determining which Certificates are registered in
the name of an Affiliate of the Depositor.
Class: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or
the Group II Class A Certificates, as applicable.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (x) 54.50% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $6,519,056.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2fpt Certificates: All Certificates bearing the class
designation of "Class A-2fpt".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class A-2d Certificates: All Certificates bearing the class
designation of "Class A-2d".
Class B Certificates: As specified in the Preliminary
Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $6,519,056.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 90.30% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$6,519,056.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 93.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $6,519,056.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the
avoidance of doubt, the Class IO Shortfall for any Distribution Date shall equal
the amount payable to the Class X Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Defaulted Swap Termination Payments) from
Available Funds on such Distribution Date, all as further provided in Section
8.13.
Class LT-R Interest: The residual interest in the Lower-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class M Certificates: As specified in the Preliminary
Statement.
Class M-1 Enhancement Percentage: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Certificate Balances of the Class M and Class B Certificates
(other than the Class M-1 Certificates) and (ii) the Subordinated Amount, in
each case after taking into account the distributions of the related Principal
Distribution Amount and any principal payments on those Classes of Certificates
from the Swap Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 62.80%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $6,519,056.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 72.10% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$6,519,056.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 75.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $6,519,056.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 79.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$6,519,056.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 83.20% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $6,519,056.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 85.50% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$6,519,056.
Class P Certificates: All Certificates bearing the class
designation of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier
REMIC-1 as described in the Preliminary Statement and the related footnote
thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier
REMIC-2 as described in the Preliminary Statement and the related footnote
thereto.
Class R Certificates: All Certificates bearing the class
designation of "Class R".
Class RX Certificates: All Certificates bearing the class
designation of "Class RX".
Class UT-IO Interest: A regular interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class UT-X Interest: A regular interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class X Certificates: All Certificates bearing the class
designation of "Class X".
Class X Distributable Amount: On any Distribution Date, the
sum of (i) as a distribution in respect of interest, the amount of interest that
has accrued on the Class UT-X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class UT-X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund Account to pay Basis Risk CarryForward Amounts, and any Defaulted
Swap Termination Payment payable from Available Funds to the Swap Provider.
Class X Interest: The regular interest in the Class X REMIC
represented by the Class X Certificates as specified and described in the
Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Class X REMIC Regular Interest: Each of the Class X Interest
and Class IO Interest issued by the Class X REMIC.
Closing Date: January 26, 2007.
Closing Date Deposit Amount: $2111.19 (all of which is
allocable to principal) deposited by the Depositor into the Distribution Account
on the Closing Date. $160.03 of the Closing Date Deposit Amount shall be
attributable to the Group I Mortgage Loans and $1951.16 of the Closing Date
Deposit Amount shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to
any Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a)
sum of (i) the outstanding principal balance of the Second Lien Mortgage Loan
and (ii) the outstanding principal balance as of such date of any mortgage loan
or mortgage loans that are senior or equal in priority to the Second Lien
Mortgage Loan and which are secured by the same Mortgaged Property to (b) the
Appraised Value as determined pursuant to the Underwriting Guidelines of the
related Mortgaged Property as of the origination of the Second Lien Mortgage
Loan.
Commission: The United States Securities and Exchange
Commission.
Compensating Interest: For any Distribution Date and each
Servicer, the lesser of (a) the amount by which the Prepayment Interest
Shortfall resulting from Principal Prepayments in Full exceeds all Prepayment
Interest Excesses for such Distribution Date on the Mortgage Loans serviced by
the applicable Servicer and (b) the amount of the aggregate Servicing Fee paid
to or retained by the applicable Servicer for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of
a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan which contains a provision whereby the Mortgagor is permitted to
convert the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in
accordance with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee
in the State of California at which at any particular time its corporate trust
business with respect to this Agreement is administered, which office at the
date of the execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attn: Trust Administration-MS07H1, facsimile
no. (000) 000-0000, and which is the address to which notices to and
correspondence with the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier, if applicable) of the Interest Rate Swap Agreement
applicable for such Distribution Date, in which case the Corresponding Actual
Crossover Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be
the first Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier
REMIC or Upper-Tier REMIC that corresponds to the class of interests in the
other such REMIC or to a Class of Certificates in the manner set out below:
Corresponding Corresponding Upper-Tier Corresponding
Lower-Tier Class Designation Regular Interest Class of Certificates
---------------------------- ----------------------- ---------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2fpt Class A-2fpt Class A-2fpt
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-A-2d Class A-2d Class A-2d
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Corresponding Pooling-Tier REMIC-1 Regular Interest: As
described in the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described
in the Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Countrywide Amendment Regulation AB: The Amendment Regulation
AB, dated as of January 26, 2006, by and among Countrywide Servicing,
Countrywide Home Loans, Inc. and the Sponsor, a copy of which is attached hereto
as Exhibit BB.
Countrywide Serviced Mortgage Loans: The Decision One Mortgage
Loans purchased by the Sponsor pursuant to the Decision One Purchase Agreement
for which Countrywide Servicing is identified as the Servicer on the Mortgage
Loan Schedule, and the NC Capital Mortgage Loans purchased by the Sponsor
pursuant to the NC Capital Purchase Agreement for which Countrywide Servicing is
identified as the Servicer on the Mortgage Loan Schedule.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas limited partnership, and its successors in interest.
Cumulative Loss Percentage: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date through the
last day of the related Prepayment Period and the denominator of which is the
Cut-off Date Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any
Distribution Date, a Cumulative Loss Trigger Event exists if the quotient
(expressed as a percentage) of (x) the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related Prepayment
Period divided by (y) the Cut-off Date Pool Principal Balance exceeds the
applicable cumulative loss percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
------------------------------ --------------------------
February 2009 through January 2010 1.500% for the first month, plus an additional 1/12th of 1.800%
for each month thereafter (e.g., 2.400% in August 2009)
February 2010 through January 2011 3.300% for the first month, plus an additional 1/12th of 1.850%
for each month thereafter (e.g., 4.225% in August 2010)
February 2011 through January 2012 5.150% for the first month, plus an additional 1/12th of 1.500%
for each month thereafter (e.g., 5.900% in August 2011)
February 2012 through January 2013 6.650% for the first month, plus an additional 1/12th of 0.800%
for each month thereafter (e.g., 7.050% in August 2012)
February 2013 through January 2014 7.450% for the first month, plus an additional 1/12th of 0.050%
for each month thereafter (e.g., 7.475% in August 2013)
February 2014 and thereafter 7.500%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Custodian consisting of items (a) - (h) as listed on Exhibit K
hereto.
Custodian: With respect to the Decision One Mortgage Loans,
LaSalle.
Custodian Fee: With respect to each Distribution Date, the
aggregate amount of fees and expenses that the Custodian is entitled to receive,
pursuant to the fee schedule related to the Decision One Mortgage Loans to which
the Depositor and the Custodian have previously agreed, for custodial services
rendered with respect to the Decision One Mortgage Loans, as during the related
Due Period. The Custodian shall inform the Trustee of its Custodian Fee on or
prior to the related Determination Date pursuant to Section 3.07(h).
Custodian Fee Rate: As to any Distribution Date, the Custodian
Fee for such Distribution Date, converted to a per annum rate on (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the close of
business on the day immediately preceding the first day of the related Due
Period and (ii) with respect to the Determination Date in February 2007 only,
the portion of the Closing Date Deposit Amount allocable to principal
(calculated on an actual/360 basis).
Custodian's Weighted Average Percentage: As defined in Section
8.14(e).
Cut-off Date: January 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate of the
Cut-off Date Principal Balances of all Mortgage Loans, plus the portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off Date
(after giving effect to payments of principal due on or prior to that date,
whether or not received).
Data Tape Information: The information provided by the
Responsible Parties as of the Cut-off Date to the Depositor or the Sponsor
setting forth the following information with respect to each Mortgage Loan: (1)
the Mortgagor's name; (2) as to each Mortgage Loan, the Scheduled Principal
Balance as of the Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a
code indicating whether the Mortgaged Property is owner occupied; (6) the type
of Mortgaged Property; (7) the first date on which the Scheduled Payment was due
on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (8) the "paid through date" based on
payments received from the related Mortgagor; (9) the original principal amount
of the Mortgage Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage
Loan); (12) a code indicating the purpose of the loan (i.e., purchase, rate and
term refinance, equity take out refinance); (13) a code indicating the
documentation style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Responsible Party with
respect to such Mortgage Loan; (23) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; and (24) if such Mortgage Loan is covered by a
primary mortgage insurance policy or a lender-paid primary mortgage insurance
policy, the primary mortgage insurance rate. With respect to the Mortgage Loans
in the aggregate, the Data Tape Information shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Decision One: Decision One Mortgage Company, LLC, a North
Carolina limited liability company, and its successors in interest.
Decision One Mortgage Loans: The Mortgage Loans purchased by
the Sponsor pursuant to the Decision One Purchase Agreement for which Decision
One is identified as Responsible Party on the Mortgage Loan Schedule.
Decision One Purchase Agreement: The Fourth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of May 1,
2006, by and between Decision One and the Sponsor, a copy of which is attached
hereto as Exhibit P.
Defaulted Swap Termination Payment: Any Swap Termination
Payment required to be paid by the Trust to the Swap Provider pursuant to the
Interest Rate Swap Agreement as a result of an Event of Default (as defined in
the Interest Rate Swap Agreement) with respect to which the Swap Provider is the
Defaulting Party (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement) (other than
Illegality or a Tax Event that is not a Tax Event Upon Merger (each as defined
in the Interest Rate Swap Agreement )) with respect to which the Swap Provider
is the sole Affected Party (as defined in the Interest Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Loss Trigger Event: With respect to any
Distribution Date, the circumstances in which the quotient (expressed as a
percentage) of (x) the rolling three month average of the aggregate unpaid
principal balance of 60+ Day Delinquent Mortgage Loans (including Mortgage Loans
in foreclosure and Mortgage Loans related to REO Property) and (y) (1) until the
aggregate Class Certificate Balance of the Class A Certificates have been
reduced to zero, the aggregate unpaid principal balance of the Mortgage Loans
for such Distribution Date equals or exceeds 35.16% of the prior period's Senior
Enhancement Percentage and (2) after the aggregate Class Certificate Balance of
the Class A Certificates have been reduced to zero, the aggregate unpaid
principal balance of the Mortgage Loans for such Distribution Date equals or
exceeds 43.01% of the prior period's Class M-1 Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Xxxxx'x, "F1+" by Fitch and "A-1" by Standard & Poor's (to
the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to each Distribution Date,
the 18th day (or if such day is not a Business Day, the immediately preceding
Business Day) in the case of Countrywide Servicing, and the 15th day (or if such
day is not a Business Day, the immediately preceding Business Day) in the case
of Saxon, of the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.07(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Deutsche Bank,
National Trust Company in trust for registered Holders of Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE1 Mortgage Pass-Through Certificates, Series
2007-HE1." Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution
Date, 12:00 noon New York City time on the second Business Day immediately
preceding such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if
such day is not a Business Day, the next succeeding Business Day, commencing in
February 2007.
Document Certification and Exception Report: The report
attached to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment
is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a
federal or state-chartered depository institution or trust company that complies
with the definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Xxxxx'x and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicers and the Trustee) (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
XXXXX-Xxxxxxxxxx Underwriting: A best efforts or firm
commitment underwriting or private placement that meets the requirements of
Prohibited Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or
any successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c)
in the name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank, National Trust Company, in trust for registered
Holders of Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1, Mortgage
Pass-Through Certificates, Series 2007-HE1." Funds in the Excess Reserve Fund
Account shall be held in trust for the Regular Certificateholders for the uses
and purposes set forth in this Agreement. Amounts on deposit in the Excess
Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Subordinated Amount on such Distribution
Date over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate
equal to the sum of the Servicing Fee Rate, the Trustee Fee Rate and the
Custodian Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing Fee, the Trustee Fee, the Custodian Fee and any lender-paid primary
mortgage insurance fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution
Date, the lesser of (x) the related Total Monthly Excess Spread for such
Distribution Date and (y) the related Subordination Deficiency for such
Distribution Date.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx" Guide and the
Xxxxxx Xxx Servicers" Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan or any REO Property (other than any Mortgage Loan or REO Property
purchased by the applicable Responsible Party or the Depositor, as applicable,
as contemplated by this Agreement), a determination made by the applicable
Servicer that all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and other payments or recoveries which the applicable Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. Each Servicer shall maintain records, prepared
by a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date in
November 2036.
First Lien Mortgage Loan: A Mortgage Loan secured by a first
lien Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch
is designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2007-HE1, or such other address as Fitch may
hereafter furnish to the Depositor, the Trustee and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Grantor Trust: As described in the Preliminary Statement.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note to be
added to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2fpt Certificates,
the Class A-2a Certificates, the Class A-2b Certificates, the Class A-2c
Certificates and the Class A-2d Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Index: As to each Adjustable Rate Mortgage Loan, the index
from time to time in effect for the adjustment of the Mortgage Rate set forth as
such on the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period: With respect to each Class of
Non-Delay Certificates and the Corresponding Class of Lower-Tier Regular
Interests and any Distribution Date, the period commencing on the Distribution
Date occurring in the month preceding the month in which the current
Distribution Date occurs (or, in the case of the first Distribution Date, the
period from and including the Closing Date to but excluding such first
Distribution Date) and ending on the day immediately preceding the current
Distribution Date. With respect to the Class LT-Accrual, Class LT Group-I, Class
LT-Group II, Class LT-IO, Class UT-X, Class UT-IO, Class X and Class IO
Interests and each Pooling-Tier REMIC-1 Regular Interest and Pooling-Tier
REMIC-2 Regular Interest and any Distribution Date, the calendar month preceding
such Distribution Date. For purposes of computing interest accruals on each
Class of Non-Delay Certificates, each Interest Accrual Period has the actual
number of days in such month and each year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Cap Agreement: The interest rate cap agreement
relating to the Offered Certificates, dated as of the Closing Date, between the
Cap Provider and the Trustee, a copy of which is attached hereto as Exhibit DD.
Interest Rate Cap Payment: With respect to the Distribution
Date, the payment, if any, required to be made by the Cap Provider under the
Interest Rate Cap Agreement with respect to such Distribution Date.
Interest Rate Swap Agreement: The interest rate swap
agreement, dated as of the Closing Date, between the Swap Provider and the
Trustee (a copy of which is attached hereto as Exhibit W).
Interest Remittance Amount: With respect to any Distribution
Date and the Mortgage Loans in a Loan Group, the portion of Available Funds
attributable to interest received or advanced on such Mortgage Loans, net of the
fees payable to the Servicers, the Custodian and the Trustee, and net of any Net
Swap Payments and any Swap Termination Payments, other than Defaulted Swap
Termination Payments, payable to the Swap Provider from Available Funds
attributable to such Loan Group with respect to that Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers"), or any comparable exemption available under Similar Law.
LaSalle: LaSalle Bank National Association, a national banking
association, and its successors in interest.
Late Collections: With respect to any Mortgage Loan and any
Due Period, all amounts received after the Determination Date immediately
following such Due Period, whether as late payments of Scheduled Payments or as
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which represent late payments or collections of principal and/or interest due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the
Offered Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which either (a)
was liquidated in the calendar month preceding the month of such Distribution
Date and as to which the applicable Servicer has certified to the Trustee that
it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property, or (b) is a Second Lien Mortgage Loan (1) that is delinquent 180 days
or longer, (2) for which the related first lien mortgage loan is not a Mortgage
Loan, and (3) as to which the applicable Servicer has certified to the Trustee
that it does not believe there is a reasonable likelihood that any further net
proceeds will be received or recovered with respect to such Second Lien Mortgage
Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II
Mortgage Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap,
as applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans
as of any Distribution Date, the weighted average of the Adjusted Net Mortgage
Rates then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and the first
Distribution Date, the Loan Group I Cap shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group I Mortgage Loans and the denominator of which is the portion of the
Cut-off Date Pool Principal Balance relating to the Group I Mortgage Loans.
Loan Group II Cap: With respect to the Group II Mortgage Loans
as of any Distribution Date, the weighted average of the Adjusted Net Mortgage
Rates then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and the first
Distribution Date, the Loan Group II Cap shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group II Mortgage Loans and the denominator of which is the portion of
the Cut-off Date Pool Principal Balance relating to the Group II Mortgage Loans.
Loan-to-Value Ratio or LTV: With respect to any First Lien
Mortgage Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary
Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2fpt, Class LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class
LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6,
Class LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-IO, Class LT-Group I, Class
LT-Group II and Class LT-Accrual Interests as described in the Preliminary
Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a)
the Responsible Parties have designated or will designate MERS as, and have
taken or will take such action as is necessary to cause MERS to be, the
mortgagee of record, as nominee for the Responsible Parties, in accordance with
MERS Procedure Manual and (b) the Responsible Parties have designated or will
designate the Trustee as the Investor on the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as
more particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc., and its successors
in interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b), the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Trustee and the
Servicers.
Xxxxxx Xxxxxxx: Xxxxxx Xxxxxxx, a Delaware corporation.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes, without limitation, the Mortgage File, the Scheduled Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition proceeds, Prepayment Charges, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered
to the Custodian and referred to on Schedule I, such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property; (3) the
number and type of residential units constituting the Mortgaged Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
whether such Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage
Loan; (16) the identity of the Responsible Party and the date such Mortgage Loan
was sold by the applicable Responsible Party to the Sponsor, (17) whether such
Mortgage Loan provides for a Prepayment Charge as well as the term and amount of
such Prepayment Charge, if any; (18) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; (19) the applicable Servicer's name; and (20) the
date on which servicing of the Mortgage Loan was transferred to the applicable
Servicer.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time in the case of an Adjustable
Rate Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate
Mortgage Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and
the Minimum Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the
real property (or leasehold estate, if applicable) identified on the Mortgage
Loan Schedule as securing repayment of the debt evidenced by the related
Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
NC Capital: NC Capital Corporation, a California corporation,
and its successors in interest.
NC Capital Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the NC Capital Purchase Agreement for which NC Capital is
identified as Responsible Party on the Mortgage Loan Schedule.
NC Capital Purchase Agreement: The Sixth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2006, by and
between NC Capital and the Sponsor, a copy of which is attached hereto as
Exhibit Q.
Net Monthly Excess Cash Flow: For any Distribution Date the
portion of Available Funds remaining for distribution pursuant to subsection
4.02(a)(iii) (before giving effect to distributions pursuant to such
subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any
net payment (other than a Swap Termination Payment) payable by the Trust to the
Swap Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any
net payment (other than a Swap Termination Payment) made by the Swap Provider to
the Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise
backed by some or all of the Class X and Class P Certificates that are rated by
one or more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Schedule Payment is, as of the last day of the
prior Due Period, three months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, and
(ii) each REO Property.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the applicable Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property, which, in accordance with Accepted Servicing Practices, will not or,
in the case of a proposed Servicing Advance, would not be ultimately recoverable
from related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided
pursuant to Section 9.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
any Servicer or Subservicer with responsibility for the servicing of the
Mortgage Loans required to be serviced by such Servicer or Subservicer and
listed on a list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee (and/or such other Persons as may be set forth herein), provided that
any Opinion of Counsel relating to (a) qualification of any Trust REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of such
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in such Servicer of the Mortgage Loans or in an
Affiliate thereof and (iii) is not connected with such Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 5% or less of the Cut-off Date Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance made by the applicable Servicer in respect of any Remittance Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Offered
Certificates (except as set forth in the following sentence), the following
percentages: Class A-1 Certificates, 0.1350%; Class A-2fpt Certificates,
0.0800%; Class A-2a Certificates, 0.0500%; Class A-2b Certificates, 0.1000%;
Class A-2c Certificates, 0.1500%; Class A-2d Certificates, 0.2300%; Class M-1
Certificates, 0.2700%; Class M-2 Certificates, 0.2800%; Class M-3 Certificates,
0.3100%; Class M-4 Certificates, 0.3800%; Class M-5 Certificates, 0.4000%; Class
M-6 Certificates, 0.4400%; Class B-1 Certificates, 0.9500%; Class B-2
Certificates, 1.5000%; and Class B-3 Certificates, 2.2500%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class A-1 Certificates, 0.2700%; Class A-2fpt Certificates,
0.1600%; Class A-2a Certificates, 0.1000%; Class A-2b Certificates, 0.2000%;
Class A-2c Certificates, 0.3000%; Class A-2d Certificates, 0.4600%; Class M-1
Certificates, 0.4050%; Class M-2 Certificates, 0.4200%; Class M-3 Certificates,
0.4650%; Class M-4 Certificates, 0.5700%; Class M-5 Certificates, 0.6000%; Class
M-6 Certificates, 0.6600%; Class B-1 Certificates, 1.4250%; Class B-2
Certificates, 2.2500%; and Class B-3 Certificates, 3.3750%.
Pass-Through Rate: For each Class of Regular Certificates,
each Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular Interest,
and each Class X REMIC Regular Interest, the per annum rate set forth or
calculated in the manner described in the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal to
the percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by any Servicer, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers" acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers" acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
"P-1" by Xxxxx'x, "F1+" by Fitch and "A-1+" by Standard & Poor's (to
the extent they are Rating Agencies hereunder and are so rated by
such Rating Agency);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Trustee or an Affiliate thereof, that
have been rated "Aaa" by Xxxxx'x, "AAAm" by Standard & Poor's and at
least "AA" by Fitch (to the extent they are Rating Agencies
hereunder and such funds are so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies
as a permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
international organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by Section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in Section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty of such
Person or any other U.S. Person, or a U.S. Person treated as a partnership for
U.S. federal income tax purposes, any direct or indirect beneficial owner of
which (other than through a U.S. corporation) is (or is permitted to be under
the related partnership agreement) not a U.S. Person, (vi) an "electing large
partnership" within the meaning of Section 775 of the Code and (vii) any other
Person so designated by the Depositor based upon an Opinion of Counsel that the
Transfer of an Ownership Interest in a Residual Certificate to such Person may
cause any Trust REMIC to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of Freddie Mac, a majority of its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Loan Group I WAC Rate: With respect to
the Group I Mortgage Loans as of any Distribution Date, a per annum rate equal
to the weighted average of the Adjusted Net Mortgage Rates for each such
Mortgage Loan then in effect on the beginning of the related Due Period on the
Group I Mortgage Loans, adjusted in each case to accrue on the basis of a
360-day year and the actual number of days in the related Interest Accrual
Period. With respect to the first Due Period and the first Distribution Date,
the Pooling-Tier REMIC-1 Loan Group I WAC Rate shall be reduced by a fraction,
the numerator of which is the portion of the Closing Date Deposit Amount
allocable to the Group I Mortgage Loans and the denominator of which is the
portion of the Cut-off Date Pool Principal Balance relating to the Group I
Mortgage Loans.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to
the Group II Mortgage Loans as of any Distribution Date, a per annum rate equal
to the weighted average of the Adjusted Net Mortgage Rates for each such
Mortgage Loan then in effect on the beginning of the related Due Period on the
Group II Mortgage Loans, adjusted in each case to accrue on the basis of a
360-day year and the actual number of days in the related Interest Accrual
Period. With respect to the first Due Period and the first Distribution Date,
the Pooling-Tier REMIC-1 Loan Group II WAC Rate shall be reduced by a fraction,
the numerator of which is the portion of the Closing Date Deposit Amount
allocable to the Group II Mortgage Loans and the denominator of which is the
portion of the Cut-off Date Pool Principal Balance relating to the Group II
Mortgage Loans.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier
REMIC-2 Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date, any interest collected by a Servicer with respect to any Mortgage Loan
serviced by such Servicer as to which a Principal Prepayment in Full occurs from
the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the 1st
day of such month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any
Distribution Date, the sum of, for each Mortgage Loan that was during the
portion of the Prepayment Period from and including the 16th day of the month
preceding the month in which such Distribution Date occurs (or from the day
following the Cut-off Date, in the case of the first Distribution Date) through
the last day of such month, the subject of a Principal Prepayment which is not
accompanied by an amount equal to one month of interest that would have been due
on such Mortgage Loan on the Due Date in the following month and which was
applied by the applicable Servicer to reduce the outstanding principal balance
of such Mortgage Loan on a date preceding such Due Date an amount equal to the
product of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage
Loan, (b) the amount of the Principal Prepayment for such Mortgage Loan, (c)
1/360 and (d) the number of days commencing on the date on which such Principal
Prepayment was applied and ending on the last day of the calendar month in which
the related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and
any Servicer, the period commencing on 16th day of the month preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, from and including the Cut-off Date) to and including the
15th day of the month in which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the
sum of (i) the Basic Principal Distribution Amount for such Distribution Date
and (ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received by the applicable Servicer in advance of its
scheduled Due Date, excluding any Prepayment Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by
a Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date, the amount equal to the sum of the following amounts (without duplication)
with respect to the related Due Period: (i) each scheduled payment of principal
on a Mortgage Loan due during such Due Period and received by the applicable
Servicer on or prior to the related Determination Date or advanced by the
applicable Servicer for the related Remittance Date, and all Principal
Prepayments received during the related Prepayment Period; (ii) all Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans
allocable to principal actually collected by the applicable Servicer during the
related Prepayment Period; (iii) the portion of the Repurchase Price allocable
to principal with respect to each Mortgage Loan repurchased with respect to such
Distribution Date; (iv) all Substitution Adjustment Amounts allocable to
principal received in connection with the substitutions of Mortgage Loans with
respect to such Distribution Date; (v) with respect to the Distribution Date in
February 2007 only, the portion of the Closing Date Deposit Amount allocable to
principal; and (vi) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 9.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated
January 24, 2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Decision One Purchase
Agreement and the NC Capital Purchase Agreement.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and
any Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the applicable Servicer in connection
with the liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close
of business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Definitive Certificate, the Record Date shall be
the close of business on the last Business Day of the month preceding the month
in which the applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Servicemembers Civil Relief Act or any similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the
second Business Day immediately preceding such Distribution Date with respect to
Countrywide Servicing, and the 21st day (or if such day is a Saturday, then the
first Business Day immediately preceding that day, or if such day is a Sunday or
otherwise not a Business Day, then the immediately following Business Day) of
the month of each related Distribution Date with respect to Saxon.
REO Disposition: The final sale by the applicable Servicer of
any REO Property.
REO Imputed Interest: As to any REO Property, for any period,
an amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement interest rate
swap agreement.
Reportable Event: As defined in Section 8.12(f).
Representations and Warranties Agreement: The Representations
and Warranties Agreement, dated as of January 26, 2007, between the Depositor
and the Sponsor, a copy of which is attached hereto as Exhibit CC.
Repurchase Price: With respect to any Mortgage Loan for which
a breach of a representation and warranty made by the Depositor or a Responsible
Party hereunder exists, an amount equal to the sum of (i) the unpaid principal
balance of such Mortgage Loan as of the date of repurchase, (ii) interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage Rate from
the last date through which interest has been paid and distributed to the
Trustee to the date of repurchase, (iii) all unreimbursed Servicing Advances,
(iv) all costs and expenses incurred by the Trustee arising out of or based upon
such breach, including without limitation, costs and expenses relating to the
Trustee's enforcement of the repurchase obligation of the Depositor or a
Responsible Party hereunder, and (v) any costs and damages incurred by the Trust
in connection with any violation by such Mortgage Loan of any predatory lending
law or abusive lending law. In addition to the Repurchase Price, the applicable
Responsible Party is obligated to make certain payments for material breaches of
representations and warranties as further set forth in Section 2.03(o) in this
Agreement.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the Custodian, as applicable,
substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee,
any managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any associate, or any other
officer of the Trustee, customarily performing functions similar to those
performed by any of the above designated officers who at such time shall be
officers to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Agreement.
Responsible Parties: NC Capital and Decision One.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation, and
its successors in interest.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Certificate Balance of the Subordinated Certificates and (ii)
the Subordinated Amount, in each case after taking into account the distribution
of the Principal Distribution Amount, including any principal payments on those
Classes of Certificates from the Swap Account, on that Distribution Date, by (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 45.50%.
Servicer: Countrywide Servicing or Saxon, and if a successor
Xxxxxxxx to any is appointed hereunder, such successor. When the term "Servicer"
is used in this Agreement in connection with the administration of servicing
obligations with respect to any Mortgage Loan, Mortgaged Property, REO Property
or Mortgage File, "Servicer" shall mean the Person identified as the Servicer of
such Mortgage Loan on the Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(e).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing Advances
shall also include any reasonable "out-of-pocket" costs and expenses (including
legal fees) incurred by the applicable Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage in connection with any foreclosure in respect of any Mortgage Loan to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. No Servicer shall be required to make any Nonrecoverable Servicing
Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit S
hereto. With respect to Countrywide Servicing, "servicing criteria" shall have
the meaning set forth in the Countrywide Amendment Regulation AB.
Servicing Fee: With respect to each Servicer, each Mortgage
Loan serviced by such Servicer and for any calendar month, an amount equal to
one month's interest at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan as of the close of business on the day
immediately preceding the first day of the related Due Period. Such fee shall be
payable monthly, solely from the interest portion (including recoveries with
respect to interest from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds and proceeds received with respect to REO Properties, to the extent
permitted by Section 3.11) of such Scheduled Payment collected by such Servicer,
or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Custodian in the
Custodial File and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by such Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, (ii)
each Mortgage Loan in foreclosure and (iii) each REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount equal to 3.45% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 6.90% of the aggregated Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then aggregate Stated Principal Balance of the Mortgage Loans
but will instead remain the same as the prior period's Specified Subordinated
Amount until the Distribution Date on which a Trigger Event is no longer in
effect. When the Class Certificate Balance of each Class of Offered Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Sponsor: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and its successors in interest. If
Standard & Poor's is designated as a Rating Agency in the Preliminary Statement,
for purposes of Section 10.05(b) the address for notices to Standard & Poor's
shall be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust 2007-HE1, or such other address as Standard & Poor's may hereafter
furnish to the Depositor, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: As defined in Section 2.05.
Stated Principal Balance: As to each Mortgage Loan and as of
any date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Trustee with respect to the related Mortgage Loan representing payments or
recoveries of principal including advances in respect of scheduled payments of
principal. For purposes of any Distribution Date, the Stated Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of principal
received by the related Servicer on or prior to the related Determination Date
or advanced by the related Servicer for the related Remittance Date and any
unscheduled principal payments and other unscheduled principal collections
received during the related Prepayment Period, and the Stated Principal Balance
of any Mortgage Loan that has prepaid in full or has become a Liquidated
Mortgage Loan during the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur
of (a) the Distribution Date in February 2010 and (b) the Distribution Date
following the Distribution Date on which the aggregate Class Certificate
Balances of the Class A Certificates have been reduced to zero and (ii) the
first Distribution Date on which the Senior Enhancement Percentage (calculated
for this purpose only after taking into account payments of principal on the
Mortgage Loans applied to reduce the Stated Principal Balances of the Mortgage
Loans for the applicable Distribution Date but prior to any allocation of the
Principal Distribution Amount and principal payments from the Swap Account to
the Certificates on such Distribution Date) is greater than or equal to the
Senior Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor,
subcontractor or other Person utilized by a Servicer, a Subservicer, the Trustee
or the Custodian, as applicable, that is not responsible for the overall
servicing (as "servicing" is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans. With respect to Countrywide Servicing, "Subcontractor" shall
have the meaning set forth in the Countrywide Amendment Regulation AB.
Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the aggregate of the Class
Certificate Balances of the Offered Certificates as of such Distribution Date
(after giving effect to the payment of the Principal Remittance Amount on such
Certificates on such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Subordinated Amount applicable to
such Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess Subordinated
Amount and (b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or
related Mortgaged Property that became a Liquidated Mortgage Loan or was
otherwise disposed of, all amounts received in respect of such Liquidated
Mortgage Loan after an Applied Realized Loss Amount related to such Mortgage
Loan or Mortgaged Property is allocated to reduce the Class Certificate Balance
of any Class of Subordinated Certificates. Any Subsequent Recovery that is
received during a Prepayment Period will be treated as Liquidation Proceeds and
included as part of the Principal Remittance Amount for the related Distribution
Date.
Subservicer: Any Person that services Mortgage Loans on behalf
of a Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by a Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB. With respect to Countrywide
Servicing, "Subservicer" shall have the meaning set forth in the Countrywide
Amendment Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by
the Depositor or the applicable Responsible Party for a Deleted Mortgage Loan
that satisfies the criteria set forth in the definition of "Qualified Substitute
Mortgage Loan" in the applicable Purchase Agreement or (ii) substituted by the
Depositor for a Deleted Mortgage Loan, which, if substituted by the Depositor,
must, on the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not more than 10% less than, the
Stated Principal Balance of the Deleted Mortgage Loan; (b) be accruing interest
at a rate no lower than and not more than 1% per annum higher than, that of the
Deleted Mortgage Loan; (c) have a Loan-to-Value Ratio or a Combined
Loan-to-Value Ratio, as applicable, no higher than that of the Deleted Mortgage
Loan; (d) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan; and (e) comply with each
applicable representation and warranty set forth in Section 2.03 and in the
Representations and Warranties Agreement.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate
Swap Agreement, the Class IO Interest and the right to receive Class IO
Shortfalls, subject to the obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the
related Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in
the Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the Offered Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment (other
than a Defaulted Swap Termination Payment) payable from Available Funds to the
Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: Xxxxxx Xxxxxxx Capital Services Inc., a
Delaware corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or
the Swap Provider upon termination of the Interest Rate Swap Agreement as a
result of an Event of Default (as defined in the Interest Rate Swap Agreement)
or a Termination Event (as defined in the Interest Rate Swap Agreement);
provided that a Swap Termination Payment shall not be paid from Available Funds
to the extent already paid by a replacement swap provider as a Replacement Swap
Provider Payment.
Tax Matters Person: The Holder of the (i) Class R and (ii)
Class RX Certificates designated as "tax matters person" of (i) Pooling-Tier
REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC,
and (ii) the Class X REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated
on the Bridge Telerate Service (or such other page as may replace that page on
that service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest on the Mortgage Loans
received by the Servicers on or prior to the related Determination Date (other
than Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date, (B) any Net Swap Payments to the Swap Provider and (C) any Swap
Termination Payment (other than a Defaulted Swap Termination Payment) payable to
the Swap Provider from Available Funds.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Loss Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all principal outstanding as the close
of business on the Cut-off Date (after giving effect to payments of principal
due on or prior to the Cut-off Date, whether or not received) and interest due
and accrued on the Mortgage Loan after the Cut-off Date (or, if the Due Date for
any Mortgage Loan is other than on the first day of the month, after the Due
Date immediately preceding the Cut-off Date); (ii) the Collection Accounts, the
Excess Reserve Fund Account, the Distribution Account, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) property
that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure or otherwise; (iv) the Closing Date Deposit Amount; (v) the Swap
Assets; (vi) the Depositor's rights under the Representations and Warranties
Agreement; (vii) the Interest Rate Cap Agreement; and (viii) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC, the Upper-Tier REMIC, or the Class X REMIC, as
applicable.
Trustee: Deutsche Bank National Trust Company, a national
banking association, and its successors in interest and, if a successor trustee
is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
the product of (a) one twelfth of the Trustee Fee Rate and (b)(i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the close of business on
the date immediately preceding the first day of the related Due Period and (ii)
with respect to the Distribution Date in February 2007 only, the portion of the
Closing Date Deposit Amount allocable to principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0030%
per annum.
Trustee Float Period: With respect to the Distribution Date
and the related amounts in the Distribution Account, the period commencing on
the Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached
to the Purchase Agreements.
Unpaid Interest Amount: As of any Distribution Date and any
Class of Certificates, the sum of (a) the portion of the Accrued Certificate
Interest Distribution Amount from Distribution Dates prior to the current
Distribution Date remaining unpaid immediately prior to the current Distribution
Date and (b) interest on the amount in clause (a) above at the applicable
Pass-Through Rate (to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Upper-Tier Regular Interest on such
Distribution Date taking into account the Upper-Tier REMIC Loan Group I Rate or
Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier
REMIC WAC Rate and (B) the Upper-Tier CarryForward Amount for such Class of
Certificates for all previous Distribution Dates not previously paid, together
with interest thereon at a rate equal to the applicable Upper-Tier Interest Rate
for such Class of Certificates for such Distribution Date, without giving effect
to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II
Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Loan Group I Rate: As described in the
Preliminary Statement.
Upper-Tier REMIC Loan Group II Rate: As described in the
Preliminary Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the
weighted average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests (other than the Class LT-IO Interest) as of the first day of the
related Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal Amounts of such Lower-Tier Regular Interests as of the first day of
the related Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax purposes) created
or organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia; (iii)
a partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution Date, the weighted average of the Adjusted Net Mortgage Rates then
in effect on the beginning of the related Due Period on the Mortgage Loans minus
the Swap Payment Rate, adjusted in each case to accrue on the basis of a 360-day
year and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date only, the WAC
Cap shall be reduced by a fraction, the numerator of which is the Closing Date
Deposit Amount and the denominator of which is the Cut-off Date Pool Principal
Balance.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund. On the Closing Date, the Depositor shall pay,
without any right of reimbursement from the Trust, to the Cap Provider the
"Fixed Amount" (as defined in the Interest Rate Cap Agreement) due and payable
to the Cap Provider pursuant to the terms of the Interest Rate Cap Agreement.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to LaSalle
with respect to the Decision One Mortgage Loans and to the Trustee with respect
to the NC Capital Mortgage Loans, for the benefit of the Certificateholders the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________, without
recourse" and signed (which may be by facsimile signature) in the
name of the last endorsee by an authorized officer. To the extent
that there is no room on the face of the Mortgage Note for
endorsements, the endorsement may be contained on an allonge, unless
the Trustee or Custodian, as applicable, is advised in writing by
the applicable Responsible Party (if required by the applicable
Purchase Agreement) or the Depositor that state law does not so
allow;
(ii) the original of any guaranty executed in connection with
the Mortgage Note, if any;
(iii) the original Mortgage with evidence of recording thereon
or a certified true copy of such Mortgage submitted for recording.
If, in connection with any Mortgage Loan, the original Mortgage
cannot be delivered with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the
applicable Responsible Party shall deliver or cause to be delivered
to the Trustee or Custodian, as applicable, a photocopy of such
Mortgage certified by the applicable Responsible Party, originator,
the Depositor, title company, escrow company or attorney, as
applicable, to be a true and complete copy of such Mortgage and
shall forward to the Trustee or Custodian, as applicable, such
original recorded Mortgage within 14 days following the applicable
Responsible Party's receipt of such Mortgage from the applicable
public recording office; or in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original
recorded Mortgage;
(iv) the originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon or a certified true copy of such agreement submitted for
recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank, which may be included in a blanket assignment or
assignments (except with respect to MERS Designated Mortgage Loans);
(vi) the originals of all intervening assignments of Mortgage
(if any) evidencing a complete chain of assignment from the
applicable originator (or MERS with respect to each MERS Designated
Mortgage Loan) to the last endorsee with evidence of recording
thereon or a certified true copy of such intervening assignments of
Mortgage submitted for recording, or if any such intervening
assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains
the original recorded assignments of Mortgage, the applicable
Responsible Party shall deliver or cause to be delivered a photocopy
of such intervening assignment, certified by the applicable
Responsible Party, originator, Depositor, title company, escrow
company or attorney, as applicable, to be a true and complete copy
of such intervening assignment and shall forward to the Trustee or
Custodian, as applicable, such original recorded intervening
assignment within 14 days following the applicable Responsible
Party's receipt of such from the applicable public recording office;
or in the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after recordation
in a public recording office, a copy of such intervening assignment
certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy, a
photocopy of the mortgage title insurance policy, or attorney's
opinion of title and abstract of title, or, in the event such title
policy is unavailable, a copy of the related policy binder or
commitment for title from the title insurance company; and
(viii) the original of any security agreement, chattel
mortgage or equivalent document executed in connection with the
Mortgage (if provided).
The applicable Responsible Party shall cause to be delivered
to the Trustee or Custodian, as applicable, the applicable recorded document
promptly upon receipt from the respective recording office.
If any Mortgage has been recorded in the name of Mortgage
Electronic Registration System, Inc. ("MERS") or its designee, no Assignment of
Mortgage in favor of the Trustee will be required to be prepared or delivered
and instead, the applicable Servicer shall take all reasonable actions as are
necessary at the expense of the applicable Responsible Party to cause the Trust
to be shown as the owner of the related Mortgage Loan on the records of MERS for
the purpose of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
From time to time, the Depositor or the applicable Servicer,
as applicable, shall forward to the Trustee or Custodian, as applicable,
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan in accordance with
the terms of this Agreement upon receipt of such documents. All such mortgage
documents held by the Trustee or Custodian, as applicable, as to each Mortgage
Loan shall constitute the "Custodial File".
On or prior to the Closing Date, each Responsible Party shall
deliver to the Custodian Assignments of Mortgages, in blank, for each Mortgage
Loan. The Responsible Parties shall cause the Assignments of Mortgages and
complete recording information to be provided to the applicable Servicer in a
reasonably acceptable manner. No later than thirty (30) Business Days following
the later of the Closing Date and the date of receipt by the applicable Servicer
of the complete recording information for a Mortgage, the applicable Servicer
shall promptly submit or cause to be submitted for recording, at the expense of
the applicable Responsible Party as required pursuant to the related Purchase
Agreement and at no expense to the Trust Fund, the Trustee, the applicable
Servicer, or the Depositor, in the appropriate public office for real property
records, each Assignment of Mortgage referred to in Section 2.01(b)(v).
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be completed and submitted for recording with
respect to any Mortgage Loan (i) if the Trustee, the Custodian and each Rating
Agency have received an Opinion of Counsel, satisfactory in form and substance
to the Trustee and each Rating Agency to the effect that the recordation of such
Assignments of Mortgage in any specific jurisdiction is not necessary to protect
the Trustee's interest in the related Mortgage Note, (ii) if such Mortgage Loan
is a MERS Designated Mortgage Loan or (iii) if the Rating Agencies have each
notified the Depositor in writing that not recording any such Assignments of
Mortgage would not cause the initial ratings on any Offered Certificates to be
downgraded or withdrawn; provided, however, that no Servicer shall be held
responsible or liable for any loss that occurs because an Assignment of Mortgage
was not recorded, but only to the extent the applicable Servicer does not have
prior knowledge of the act or omission that causes such loss. Unless the
Depositor gives the Servicers notice to the contrary, the Depositor is deemed to
have given the Servicers notice that the condition set forth in clause (iii)
above is applicable. However, with respect to the Assignments of Mortgage
referred to in clauses (i) and (ii) above, if foreclosure proceedings occur
against a Mortgaged Property, the applicable Servicer shall record such
Assignment of Mortgage at the expense of the applicable Responsible Party (and
at no expense to such Servicer) as required pursuant to the related Purchase
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to "Deutsche Bank National Trust Company, as trustee under the
Pooling and Servicing Agreement dated as of January 1, 2007, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE1." In the event that any such Assignment of
Mortgage is lost or returned unrecorded because of a defect therein, the
applicable Responsible Party shall promptly cause to be delivered a substitute
Assignment of Mortgage to cure such defect and thereafter cause each such
assignment to be duly recorded.
In the event that such original or copy of any document
submitted for recordation to the appropriate public recording office is not so
delivered to the Custodian within one year following the date such Mortgage Loan
was sold by such Responsible Party to the Sponsor, and in the event that such
Responsible Party does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor, the related
Mortgage Loan shall, upon the request of the Depositor, be repurchased by such
Responsible Party at the price and in the manner specified in Section 2.03. The
foregoing repurchase obligation shall not apply in the event that the applicable
Responsible Party cannot deliver such original or copy of any document submitted
for recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided, that such Responsible Party shall instead deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of an officer of such Responsible Party,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this
Section 2.01, in those instances where the public recording office retains or
loses the original Mortgage or assignment after it has been recorded, the
obligations of the applicable Responsible Party shall be deemed to have been
satisfied upon delivery by the applicable Responsible Party to the Custodian
prior to the Closing Date of a copy of such Mortgage or assignment, as the case
may be, certified (such certification to be an original thereof) by the public
recording office to be a true and complete copy of the recorded original
thereof.
On or prior to the Closing Date, the Depositor shall deliver
to the Trustee and the Custodian, as applicable, a copy of the Data Tape
Information in an electronic, machine readable medium in a form acceptable to
the Depositor, the Trustee or the Custodian, as applicable.
(c) The Depositor does hereby establish, pursuant to the
further provisions of this Agreement and the laws of the State of New York, an
express trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX ABS
CAPITAL I INC. TRUST 2007-HE1" and Deutsche Bank National Trust Company is
hereby appointed as Trustee in accordance with the provisions of this Agreement.
The parties hereto acknowledge and agree that it is the policy and intention of
the Trust to acquire only Mortgage Loans meeting the requirements set forth in
this Agreement, including without limitation, the representations and warranties
set forth in paragraph (yy) of Schedule VI and paragraph (aaa) of Schedule VII
to this Agreement. The Trust's fiscal year is the calendar year.
(d) The Trust shall have the capacity, power and authority,
and the Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans and the Representations and
Warranties Agreement) pursuant to Section 2.01(a). The Trustee on behalf of the
Trust is hereby directed to enter into the Interest Rate Swap Agreement and the
Interest Rate Cap Agreement.
(e) The Depositor shall use reasonable effort to assist the
Trustee in enforcing the obligations of the Sponsor under the Representations
and Warranties Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The Trustee and the Custodian shall acknowledge, on the Closing Date, receipt by
the Trustee or the Custodian, as applicable, on behalf of the Trustee of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit E, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee and the Custodian shall maintain possession of the related Mortgage
Notes in the States of California, Illinois, Minnesota or Utah unless otherwise
permitted by the Rating Agencies. Furthermore, the Trustee solely in its
capacity as trustee hereunder, and on behalf of the Trust, hereby assumes the
obligations of the Depositor under the Representations and Warranties Agreement
from and after the Closing Date and solely insofar as they relate to the
Mortgage Loans.
As provided above, in connection with the Closing Date, the
Trustee and the Custodian shall be required to deliver via facsimile or
electronically in .pdf format (with original to follow the next Business Day) to
the Depositor and the Servicers an Initial Certification on the Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage for each
applicable Mortgage Loan. Neither the Trustee nor the Custodian shall be
responsible to verify the validity, sufficiency, genuineness, perfection or
priority of any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee and the
Custodian shall, for the benefit of the Holders of the Certificates, ascertain
that all documents identified in the Document Certification and Exception Report
in the form attached hereto as Exhibit F with respect to the Mortgage Loans for
which it is acting as the Custodian, are in its possession, and shall deliver to
the Depositor, the Servicers and the Trustee, if delivered by the Custodian, a
Document Certification and Exception Report, in the form annexed hereto as
Exhibit F, to the effect that, as to each applicable Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such certification): (i) all documents identified in the Document
Certification and Exception Report and required to be reviewed by it are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; (iii) based on its examination and
only as to the foregoing documents, the information set forth in items (1), (2),
(7) and (9) of the Mortgage Loan Schedule and items (1), (9) and (17) of the
Data Tape Information respecting such Mortgage Loan accurately reflects the
information set forth in the Custodial File; and (iv) each Mortgage Note has
been endorsed as provided in Section 2.01 of this Agreement. Neither the Trustee
nor the Custodian shall be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the applicable Servicer
(for the benefit of the Holders of the Certificates, based solely on the list of
MERS Designated Mortgage Loans and screen printouts from the MERS(R) System
provided to such Servicer by each applicable Responsible Party no later than 45
days after the Closing Date) shall confirm, on behalf of the Trust, that the
Trustee is shown as the Investor with respect to each MERS Designated Mortgage
Loan on such screen printouts. If the Trustee is not shown as the Investor with
respect to any MERS Designated Mortgage Loans on such screen printouts, the
applicable Servicer shall promptly notify the applicable Responsible Party of
such fact, and such Person shall then either cure such defect or repurchase such
Mortgage Loan in accordance with Section 2.03.
The Trustee and the Custodian shall retain possession and
custody of each applicable Custodial File in accordance with and subject to the
terms and conditions set forth herein. The applicable Servicer shall promptly
deliver to the Trustee or the Custodian, as applicable, upon the execution or
receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of such Servicer
from time to time.
Each Responsible Party shall deliver to the applicable
Servicer copies of all trailing documents required to be included in the
Custodial File at the same time the original or certified copies thereof are
delivered to the Trustee or the Custodian, as applicable, including but not
limited to such documents as the title insurance policy and any other Mortgage
Loan Documents upon return from the public recording office. Such documents
shall be delivered by the applicable Responsible Party at such Responsible
Party's expense to such Servicer.
Section 2.03 Representations and Warranties; Remedies for
Breaches of Representations and Warranties with Respect to the Mortgage Loans.
(a) Saxon hereby makes the representations and warranties set forth in Schedules
II and II-A hereto to the Depositor and the Trustee. Countrywide Servicing in
its capacity as Servicer hereby makes the representations and warranties set
forth in Schedule XI hereto to the Depositor and the Trustee as of the dates set
forth in such Schedule.
(b) Decision One hereby makes the representations and
warranties set forth in Schedule VI hereto to the Depositor, the Servicers and
the Trustee as of the dates set forth in such Schedule. NC Capital hereby makes
the representations and warranties set forth in Schedule VII and Schedule VIII
hereto to the Depositor, the Servicers and the Trustee as of the dates set forth
in such Schedules.
(c) The Depositor hereby makes the representations and
warranties set forth in Schedule III hereto to the Trustee as of the dates set
forth in such Schedule.
(d) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by any of the parties to this Agreement of a
breach of any of the foregoing representations and warranties that materially
and adversely affect the value of any Mortgage Loan or the interest of the
Trustee or the Certificateholders therein, the party discovering such breach
shall give prompt written notice to the other parties.
(e) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made by a Responsible Party under this Agreement,
that materially and adversely affects the value of any Mortgage Loan or the
interests of the Trustee or the Certificateholders therein, the party
discovering such breach shall give prompt written notice thereof to the other
parties. Upon receiving written notice of a breach of a representation and
warranty or written notice that a Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the Trustee
shall in turn notify the applicable Responsible Party in writing to correct or
cure, in accordance with this Agreement, any such breach of a representation or
warranty made by the applicable Responsible Party under this Agreement within
sixty (60) days from the date of notice from the Trustee or the discovery by the
applicable Responsible Party of the breach, and if the applicable Responsible
Party fails or is unable to correct or cure the defect or breach within such
period, the Trustee (upon receiving such notice or having actual knowledge)
shall notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by the applicable Responsible Party to correct or
cure, the Trustee shall notify the applicable Responsible Party to repurchase
the Mortgage Loan (a "Deleted Mortgage Loan") at the Repurchase Price or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such Mortgage
Loan, in each case, pursuant to this Agreement. Notwithstanding the foregoing,
in the event that the Trustee receives notice of a breach by (i) Decision One of
any representations and warranties set forth in paragraphs (g), (i), (xx), (yy),
(ggg), (hhh), (iii), (jjj), (kkk), (lll), (mmm), (nnn) and (ooo), (ppp), (qqq),
(sss) and (ttt) of Schedule VI, or (ii) NC Capital of any representations and
warranties set forth in paragraphs (g), (i), (uu), (vv), (zz), (aaa), (eee),
(fff), (ggg), (hhh), (iii), (jjj), (kkk), (lll), (mmm), (nnn), (ooo) and (ppp)
of Schedule VII, the Trustee shall notify the applicable Responsible Party to
repurchase the Mortgage Loan at the Repurchase Price within sixty (60) days of
the applicable Responsible Party's receipt of such notice. If, by the end of
such sixty (60) day period, such Responsible Party fails to repurchase such
Mortgage Loan, the Trustee shall notify the Depositor of such failure. The
Trustee shall pursue all legal remedies available to the Trustee against the
applicable Responsible Party under this Agreement, if the Trustee has received
written notice from the Depositor directing the Trustee to pursue such remedies.
(f) Within 90-days of the earlier of either discovery by or
notice to the Depositor of any breach of a representation or warranty set forth
on Schedule III hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Depositor shall purchase such Mortgage Loan at the Repurchase Price or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such Mortgage
Loan. Within 90 days of the earlier of discovery by the Depositor or receipt of
notice by the Depositor of the breach of any representation and warranty set
forth in Schedule VI to this Agreement (with respect to the Decision One
Mortgage Loans), that (1) materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan and (2) has not been cured, repurchased
or substituted for by Decision One in accordance with the terms of this
Agreement, (i) the Depositor shall, within the time period permitted therefor
under this Agreement take such action described in Section 2.03(h) of this
Agreement in respect of such Mortgage Loan, as if the Depositor were Decision
One, and (ii) the Trustee shall promptly deliver to the Depositor or its
designee the related Mortgage File in accordance with the applicable Servicer's
direction in a Request for Release and shall assign to the Depositor all of its
rights with respect to Decision One's breach under this Agreement, which
assignment shall be evidenced by a writing prepared by the Depositor and
executed by the Trustee in favor of the Depositor. Any obligation of the
Depositor under this subsection shall terminate upon receipt by the Trustee of a
confirmation from each Rating Agency that such termination will not cause a
downgrade, qualification or withdrawal of the rating then assigned to any Class
of Certificates by any Rating Agency.
(g) Upon the Depositor's discovery of or receipt of notice of
a breach of a representation and warranty of NC Capital set forth on Schedule
VII hereto that materially and adversely affects the interests of the
Certificateholders in any NC Capital Mortgage Loan and that has not been cured,
repurchased or substituted for by NC Capital in accordance with the terms of
this Agreement, the Depositor shall have the option, exercisable in its sole
discretion, to repurchase such NC Capital Mortgage Loan at the Repurchase Price,
or, if permitted hereunder, substitute a Substitute Mortgage Loan for such NC
Capital Mortgage Loan. The Trustee shall promptly deliver to the Depositor or
its designee the related Mortgage File in accordance with the Servicer's
direction in a Request for Release and, upon the Depositor's request and
repurchase, shall assign to the Depositor all of its rights with respect to the
NC Capital's breach under this Agreement, which assignment shall be evidenced by
a writing prepared by the Depositor and executed by the Trustee in favor of the
Depositor.
(h) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's or the Custodian's review of the
related Custodial File, the Trustee or the Custodian, as applicable, shall
notify the applicable Responsible Party, the applicable Servicer, the Trustee
(if applicable) and the Depositor by delivery of the certification of the
Custodian or Trustee required by Section 2.02 to such parties, which shall be a
request that such Responsible Party correct or cure such defect as required
under this Agreement, and if such Responsible Party fails or is unable to
correct or cure the defect within the period set forth in this Agreement, the
Trustee or Custodian, as applicable, shall notify the Depositor and the Trustee
of such failure to correct or cure. Unless otherwise directed by the Depositor
within five (5) Business Days after such notice to the Depositor and the Trustee
of such failure by the applicable Responsible Party to correct or cure, the
Trustee shall notify the applicable Responsible Party to repurchase the Mortgage
Loan at the Repurchase Price or, if permitted hereunder, substitute a Substitute
Mortgage Loan for such Mortgage Loan, in each case, pursuant to the terms of
this Agreement, as applicable. If, within ten (10) Business Days of receipt of
such notice by the applicable Responsible Party, such Responsible Party fails to
repurchase such Mortgage Loan, the Trustee shall notify the Depositor of such
failure. The Trustee shall pursue all legal remedies available to the Trustee
against the applicable Responsible Party under this Agreement, if the Trustee
has received written notice from the Depositor directing the Trustee to pursue
such remedies.
(i) Within 90 days of the earlier of either discovery by or
notice to the applicable Responsible Party of any breach of a representation or
warranty set forth on Schedule VI or Schedule VII, as applicable, that
materially and adversely affects the value of any Mortgage Loan or the interest
of the Trustee or the Certificateholders therein, the applicable Responsible
Party shall use its best efforts to promptly cure such breach in all material
respects and, if such defect or breach cannot be remedied, the applicable
Responsible Party shall, at the Depositor's option, purchase such Mortgage Loan
at the Repurchase Price or, if permitted hereunder, substitute a Substitute
Mortgage Loan for such Mortgage Loan, if applicable.
(j) Any substitution of a Substitute Mortgage Loan by a
Responsible Party shall be made in accordance with the substitution procedures
set forth in the applicable Purchase Agreement, which provisions shall be as set
forth in such agreements as if they were set forth herein. With respect to any
Substitute Mortgage Loan or Loans substituted by the Depositor or any
Responsible Party, the Sponsor, the Depositor or such Responsible Party, as
applicable, shall deliver to the Trustee or Custodian, as applicable, for the
benefit of the Certificateholders the Mortgage Note, the Mortgage, the related
Assignment of Mortgage, and such other documents and agreements as are required
by Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01. Notwithstanding anything to the contrary set forth in
this Agreement, no substitution under this Agreement is permitted to be made (a)
in any calendar month after the Determination Date for such month or (b) if the
substitution were to be made on or after the second anniversary of the Closing
Date. Scheduled Payments due with respect to Substitute Mortgage Loans in the
Due Period of substitution shall not be part of the Trust Fund and will be
retained by the Depositor or the applicable Responsible Party, as applicable, on
the next succeeding Distribution Date. For the Due Period of substitution,
distributions to Certificateholders will include the Scheduled Payment due on
any Deleted Mortgage Loan for such Due Period and thereafter the Sponsor, the
Depositor or the applicable Responsible Party, as applicable, shall be entitled
to retain all amounts received in respect of such Deleted Mortgage Loan.
(k) Based upon information provided by the Depositor or the
applicable Responsible Party, as applicable, the applicable Servicer shall
include information regarding the removal of such Deleted Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans in its Servicer Remittance
Report delivered to the Trustee pursuant to Section 4.03(e) or the Custodian, as
applicable) for the Determination Date immediately following the receipt of such
information, to the extent such information is required to be included in the
Servicer Remittance Report. Upon such substitution, the Substitute Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects, and,
if the substitution is made by the Sponsor or the Depositor, as applicable, the
Sponsor or the Depositor, as applicable, shall be deemed to have made with
respect to such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to such Substitute Mortgage Loan. Upon receipt of a Request
for Release in connection with any such substitution and certification by the
applicable Servicer to the Trustee or the Custodian, as applicable, that the
deposit into the applicable Collection Account of the amount required to be
deposited therein in connection with such substitution as described in Section
2.03(l), the Trustee or the Custodian, as applicable, shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the applicable Responsible Party and the Trustee shall execute
and deliver at the direction of the Depositor or the applicable Responsible
Party, as applicable, such instruments of transfer or assignment prepared by the
Sponsor, the Depositor or the applicable Responsible Party, as applicable, in
each case without recourse, representation or warranty, as shall be necessary to
vest title in the Sponsor, the Depositor or the applicable Responsible Party, as
applicable, of the Trustee's interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
(l) For any month in which the Sponsor, the Depositor or any
Responsible Party substitutes one or more Substitute Mortgage Loans for one or
more Deleted Mortgage Loans, the applicable Servicer will determine the amount
(if any) by which the aggregate unpaid principal balance of all such Substitute
Mortgage Loans as of the date of substitution is less than the aggregate unpaid
principal balance of all such Deleted Mortgage Loans. The amount of such
shortage, plus an amount equal to the sum of (i) any accrued and unpaid interest
on the Deleted Mortgage Loans and (ii) all unreimbursed Servicing Advances with
respect to such Deleted Mortgage Loans, or the amount of any similar shortage
with respect to a Substitute Mortgage Loan substituted by a Responsible Party
under this Agreement (collectively, the "Substitution Adjustment Amount"), shall
be deposited into the applicable Collection Account of the related Servicer by
the Sponsor, the Depositor or the applicable Responsible Party, as applicable,
on or before the Distribution Account Deposit Date for the Distribution Date
following the Prepayment Period during which the related Mortgage Loan became
required to be purchased or replaced hereunder.
(m) Any Mortgage Loan repurchased pursuant to this Section
2.03 will be removed from the Trust Fund. The applicable Servicer shall include
information regarding such repurchase in its Servicer Remittance Report
delivered to the Trustee pursuant to Section 4.03(e) or the Custodian, as
applicable, for the Determination Date immediately following the receipt of
information regarding such repurchase, to the extent such information is
required to be included in the Servicer Remittance Report. For purposes of
determining the applicable Repurchase Price, any such repurchase shall occur or
shall be deemed to occur as of the last day of the applicable Prepayment Period.
(n) In the event that any Mortgage Loan shall have been
repurchased pursuant to this Agreement or the Representations and Warranties
Agreement, the Repurchase Price therefor shall be deposited by the applicable
Servicer in the applicable Collection Account of the related Servicer pursuant
to Section 3.10 on or before the Distribution Account Deposit Date for the
Distribution Date following the Prepayment Period during which such Mortgage
Loan was repurchased and upon such deposit of the Repurchase Price and receipt
of a Request for Release in the form of Exhibit J hereto, indicating such
deposit, the Trustee or the Custodian, as applicable, shall release the related
Custodial File held for the benefit of the Certificateholders to such Person as
directed by the applicable Servicer, and the Trustee shall execute and deliver
at such Person's direction such instruments of transfer or assignment prepared
by such Person, in each case without recourse, representation or warranty, as
shall be necessary to transfer title from the Trustee.
(o) In addition to any repurchase or substitution obligation
by any Responsible Party under this Agreement, each Responsible Party shall
indemnify the Depositor and its Affiliates, the Servicers, the Sponsor, the
Trustee, the Custodian and the Trust for any breach of any representation and
warranty of such Responsible Party set forth in this Agreement, in accordance
with the indemnification provisions relating to breaches of representations and
warranties (including without limitation, the representations and warranties set
forth in paragraph (yy) of Schedule VI and paragraph (aaa) of Schedule VII, as
applicable, to this Agreement) and defective Mortgage Loans set forth the
Decision One Purchase Agreement or the NC Capital Purchase Agreement, as
applicable, as if such indemnification provisions were set forth herein for the
benefit of the Depositor and its Affiliates, the Servicers, the Sponsor, the
Trustee, the Custodian and the Trust. This indemnity shall survive the
termination of this Agreement.
(p) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement or any Responsible Party under
this Agreement to cure, repurchase or substitute any Mortgage Loan as to which a
breach of a representation and warranty has occurred and is continuing, together
with any related indemnification obligations set forth herein, shall constitute
the sole remedies against such Persons respecting such breach available to
Certificateholders, the Depositor (if applicable), or the Trustee on their
behalf.
The provisions of this Section 2.03 shall survive delivery of
the respective Custodial Files to the Trustee or the Custodian, as applicable,
for the benefit of the Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The
Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized Denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets
forth the designations for federal income tax purposes of all interests created
hereby. The "Startup Day" of each Trust REMIC for purposes of the REMIC
Provisions shall be the Closing Date. The "latest possible maturity date" of the
regular interests in each Trust REMIC is the Distribution Date occurring in
December 2036, which is the Distribution Date in the month following the month
in which the latest maturity date of any Mortgage Loan occurs. Amounts
distributable to the Class X Certificates (prior to any reduction for any Basis
Risk Payment, Upper-Tier CarryForward Amount, Net Swap Payment or Swap
Termination Payment), exclusive of any amounts received from the Swap Provider
or the Cap Provider, shall be deemed paid from the Upper-Tier REMIC to the Class
X REMIC in respect of the Class UT-X Interest and the Class UT-IO Interest and
then from the Class X REMIC in respect of the Class X Interest and the Class IO
Interest to the Holders of the Class X Certificates prior to distribution of any
Basis Risk Payments or Upper-Tier CarryForward Amounts to the Offered
Certificates and Net Swap Payments or Swap Termination Payments to the Swap
Provider. For federal income tax purposes, any amount distributed on the Offered
Certificates on any Distribution Date in excess of the amount distributable on
their Corresponding Class of Upper-Tier Regular Interest on such Distribution
Date shall be treated as having been paid from the Excess Reserve Fund Account
or the Swap Account, as applicable, and any amount distributable on such
Corresponding Class of Upper-Tier Regular Interest on such Distribution Date in
excess of the amount distributable on the Corresponding Class of Offered
Certificates on such Distribution Date shall be treated as having been paid to
the Swap Account, all pursuant to and as further provided in Section 8.13.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Trustee and the
Servicers that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey the Mortgage Loans and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, all requisite corporate action having
been taken, and, assuming the due authorization, execution and delivery hereof
by the other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.06 shall survive delivery
of the respective Custodial Files to the Trustee or the Custodian, as
applicable, and shall inure to the benefit of the Trustee.
Section 2.07 Enforcement of Obligations for Breach of Mortgage
Loan Representations. Upon discovery by any of the parties hereto of a breach of
a representation or warranty made by the Sponsor pursuant to the Representations
and Warranties Agreement, the party discovering such breach shall give prompt
written notice thereof to the other parties to this Agreement and the Sponsor.
The Trustee shall pursue all legal remedies available to the Trustee with
respect to such breach under the Representations and Warranties Agreement, as
may be necessary or appropriate to enforce the rights of the Trust with respect
thereto, if the Trustee has received written notice from the Depositor directing
the Trustee to pursue such remedies.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and
on behalf of the Certificateholders, each Servicer shall service and administer
the Mortgage Loans for which it is acting as Servicer in accordance with the
terms of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or
any Affiliate of such Servicer or any Subservicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, each Servicer
shall seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective Mortgage Loans,
each Servicer shall have full power and authority, acting alone or through
Subservicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, each
Servicer in its own name or in the name of a Subservicer is hereby authorized
and empowered by the Trustee when the applicable Servicer believes it
appropriate in its best judgment in accordance with Accepted Servicing
Practices, to execute and deliver any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee. Each
Servicer shall service and administer the Mortgage Loans in accordance with
applicable state and federal law and shall provide to the Mortgagors any reports
required to be provided to them thereby. Each Servicer covenants that its
computer and other systems used in servicing the Mortgage Loans operate in a
manner such that the applicable Servicer can service the Mortgage Loans in
accordance with the terms of this Pooling and Servicing Agreement. Each Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.16, the Trustee or the Custodian, as applicable, shall
execute, at the written request of a Servicer, and furnish to such Servicer and
any Subservicer such documents provided to the Trustee or the Custodian, as
applicable, as are necessary or appropriate to enable such Servicer or any
Subservicer to carry out its servicing and administrative duties hereunder, and
the Trustee hereby grants to each Servicer, and this Agreement shall constitute,
a power of attorney to carry out such duties, including a power of attorney in
the form of Exhibit R hereto to take title to Mortgaged Properties after
foreclosure in the name of and on behalf of the Trustee. The Trustee shall
execute a separate power of attorney in favor of each Servicer for the purposes
described herein to the extent necessary or desirable to enable each Servicer to
perform its duties hereunder. The Trustee shall not be liable for the actions of
any Servicer or any Subservicers under such powers of attorney. Notwithstanding
anything contained herein to the contrary, no Servicer or Subservicer shall
without the Trustee's consent: (i) initiate any action, suit or proceeding
solely under the Trustee's name without indicating such Servicer's or
Subservicer's, as applicable, representative capacity, or (ii) take any action
with the intent to, or which actually does cause, the Trustee to be registered
to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the
standards of the preceding paragraph, each Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11. Any cost incurred by a Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the
contrary, a Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.01 and except for Servicing Advances) and
none of the Servicers shall, except with respect to any Mortgage Loan in default
or, which in the judgment of the applicable Servicer, a default is reasonably
foreseeable, (i) permit any modification with respect to any Mortgage Loan that
would change the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (except for a reduction of interest payments
resulting from the application of the Servicemembers Civil Relief Act or any
similar state statutes) or (ii) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup
date" under the REMIC Provisions, (iii) except as provided in Section 3.07(a),
waive any Prepayment Charges, or (iv) accept payment from the related Mortgagor
of an amount less than the unpaid principal balance of such Mortgage Loan in
final satisfaction thereof, if in such Servicer's determination such action is
not materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action).
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to
any Mortgage Loan contain provisions requiring the related Mortgagor to submit
to binding arbitration any disputes arising in connection with such Mortgage
Loan, the applicable Servicer shall be entitled to waive any such provisions on
behalf of the Trust and to send written notice of such waiver to the related
Mortgagor, although the Mortgagor may still require arbitration of such disputes
at its option.
(f) Notwithstanding anything to the contrary contained in
Sections 3.02(a), 3.02(d), 3.02(e), 3.03, 3.22, 3.23, 4.03(e), 6.02, 8.12 and
10.14, the obligations of Countrywide Servicing with respect to Regulation AB
and the Countrywide Serviced Mortgage Loans shall be solely as set forth in the
Countrywide Amendment Regulation AB with respect to the servicing of the
Countrywide Serviced Mortgage Loans.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). Each Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. The applicable Servicer shall give
notice to the Depositor and the Trustee of any such Subservicer and Subservicing
Agreement, which notice shall contain all information (including without
limitation a copy of the Subservicing Agreement) reasonably necessary to enable
the Trustee, pursuant to Section 8.12(g), to accurately and timely report the
event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports
under the Exchange Act are required to be filed under the Exchange Act). No
Subservicing Agreement shall be effective until 30 days after such written
notice is received by both the Depositor and the Trustee. The Trustee shall not
be required to review or consent to such Subservicing Agreements and shall have
no liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact
business in the state or states in which the related Mortgaged Properties it is
to service are situated, if and to the extent required by applicable law to
enable the Subservicer to perform its obligations hereunder and under the
Subservicing Agreement, (ii) an institution approved as a mortgage loan
originator by the Federal Housing Administration or an institution that has
deposit accounts insured by the FDIC and (iii) a Freddie Mac or Xxxxxx Xxx
approved mortgage servicer. Each Subservicing Agreement must impose on the
Subservicer requirements conforming to the provisions set forth in Section 3.08
and provide for servicing of the Mortgage Loans consistent with the terms of
this Agreement. Each Servicer will examine each Subservicing Agreement to which
it is a party and will be familiar with the terms thereof. The terms of any
Subservicing Agreement will not be inconsistent with any of the provisions of
this Agreement. Each Servicer and the respective Subservicers may enter into and
make amendments to the Subservicing Agreements or enter into different forms of
Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Trustee, without the consent of the Trustee. Any variation
without the consent of the Trustee from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Subservicing Accounts, or
credits and charges to the Subservicing Accounts or the timing and amount of
remittances by the Subservicers to such Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. Each Servicer shall
deliver to the Trustee and the Depositor copies of all Subservicing Agreements,
and any amendments or modifications thereof, promptly upon such Servicer's
execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, each
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee, shall enforce the obligations of each
Subservicer under the related Subservicing Agreement to which such Servicer is a
party, including, without limitation, any obligation to make advances in respect
of delinquent payments as required by a Subservicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as such Servicer, in its good faith business judgment, would require were
it the owner of the related Mortgage Loans. Each Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement, to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loans or (ii) from a specific recovery of costs, expenses or attorneys" fees
against the party against whom such enforcement is directed.
(d) Each Servicer shall cause any Subservicer engaged by such
Servicer (or by any Subservicer) for the benefit of the Depositor and the
Trustee to comply with the provisions of this Section 3.02 and with Sections
3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as if such
Subservicer were such Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12 of this Agreement. Such Servicer
shall be responsible for obtaining from each such Subservicer and delivering to
applicable Persons any servicer compliance statement required to be delivered by
such Subservicer under Section 3.22 and any assessment of compliance report and
related accountant's attestation required to be delivered by such Subservicer
under Section 3.23, in each case as and when required to be delivered.
(e) Subject to the conditions set forth in this Section
3.02(e), each Servicer and any Subservicer engaged by such Servicer is permitted
to utilize one or more Subcontractors to perform certain of its obligations
hereunder. Such Servicer shall promptly upon request provide to the Depositor a
written description (in form and substance satisfactory to the Depositor) of the
role and function of each Subcontractor utilized by such Servicer or any such
Subservicer, specifying no later than the date specified for delivery of the
annual report on assessment of compliance set forth in Section 3.23(b) (i) the
identity of each such Subcontractor, if any, that is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, and (ii)
which elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (i) of
this paragraph. As a condition to the utilization by such Servicer or any such
Subservicer of any Subcontractor determined to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, such
Servicer shall cause any such Subcontractor used by such Servicer (or by any
such Subservicer) for the benefit of the Depositor and the Trustee to comply
with the provisions of Section 3.23 of this Agreement to the same extent as if
such Subcontractor were such Servicer. Such Servicer shall be responsible for
obtaining from each such Subcontractor and delivering to the applicable Persons
any assessment of compliance report and related accountant's attestation
required to be delivered by such Subcontractor under Section 3.23, in each case
as and when required to be delivered.
Notwithstanding the foregoing, if a Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, such Servicer shall be responsible for determining whether such
Subcontractor is a "Servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If a Servicer determines, pursuant
to the preceding sentence, that such Subcontractor is a "Servicer" within the
meaning of Item 1101 of Regulation AB and meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB, then such Subcontractor shall be
deemed to be a Subservicer for purposes of this Agreement, the engagement of
such Subservicer shall not be effective unless and until notice is given
pursuant to Section 3.02(a) and such Servicer shall comply with Section 3.02(d)
with respect thereto.
Section 3.03 Successor Subservicers. Each Servicer shall be
entitled to terminate any Subservicing Agreement to which such Servicer is a
party and the rights and obligations of any Subservicer pursuant to any such
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement; provided, however, that the termination, resignation or
removal of a Subservicer shall not be effective until 30 days after written
notice is received by the Depositor and the Trustee that contains all
information reasonably necessary to enable the Trustee, pursuant to Section
8.12(g), to accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act). In the event of termination of any
Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the applicable Servicer party to the related Subservicing
Agreement without any act or deed on the part of such Subservicer or such
Servicer, and such Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that
such agreement may be immediately terminated by the Depositor or the Trustee
without fee, in accordance with the terms of this Agreement, in the event that
the Servicer who is party to the related Subservicing Agreement shall, for any
reason, no longer be a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers
and the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any other successor to such
Servicer) shall be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing
Agreements by Trustee. In the event a Servicer at any time shall for any reason
no longer be a Servicer (including by reason of the occurrence of an Event of
Default), the Trustee, as successor Servicer, or its designee, or another
successor Servicer if the successor is not the Trustee, shall thereupon assume
all of the rights and obligations of such Servicer under each Subservicing
Agreement that such Servicer may have entered into, with copies thereof provided
to the Trustee, or another successor Servicer if the successor is not the
Trustee, prior to the Trustee, or such other successor Servicer if the successor
is not the Trustee, assuming such rights and obligations, unless the Trustee
elects to terminate any Subservicing Agreement in accordance with its terms as
provided in Section 3.03.
Upon such assumption, the Trustee, as successor Servicer, its
designee or the successor Servicer shall be deemed, subject to Section 3.03, to
have assumed all of such Servicer's interest therein and to have replaced such
Servicer as a party to each Subservicing Agreement to which the predecessor
servicer was a party to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) such Servicer shall not
thereby be relieved of any liability or obligations under any such Subservicing
Agreement that arose before it ceased to be a Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor to such Servicer shall
be deemed to have assumed any liability or obligation of such Servicer that
arose before it ceased to be a Servicer.
Each Servicer at its expense shall, upon request of the
Trustee, its designee or the successor Servicer deliver to the assuming party
all documents and records relating to each Subservicing Agreement to which it is
a party and the Mortgage Loans then being serviced by it and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a)
Each Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Mortgage Loans, and shall, to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any applicable Insurance Policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing and
Accepted Servicing Practices, each Servicer may (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the Due Dates for
the Scheduled Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the applicable Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to Section
4.01 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements, subject to Section
4.01(d) pursuant to which such Servicer shall not be required to make any such
advances that are Nonrecoverable P&I Advances. Notwithstanding anything in this
Agreement to the contrary, a Servicer may waive, or permit a Subservicer to
waive, in whole or in part, a Prepayment Charge only under the following
circumstances: (i) such waiver relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of such Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan; provided, however, that the applicable
Servicer or Subservicer may (and with respect to any Group I Mortgage Loan
shall) waive such Prepayment Charge if the Mortgage Loan is accelerated or
paid-off in connection with the workout of a delinquent Mortgage Loan or due to
the related Mortgagor's default, notwithstanding that the terms of the Mortgage
Loan or federal or state law might permit the imposition of such Prepayment
Charge, (ii) such Prepayment Charge is not permitted to be collected by
applicable federal, state or local law or regulation or (iii) the collection of
such Prepayment Charge would be considered "predatory" pursuant to written
guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters. If a Prepayment Charge is waived other than as permitted by
the prior sentence, then the applicable Servicer is required to pay the amount
of such waived Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the related Collection Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the related Collection Account; provided,
however, that the applicable Servicer shall not have an obligation to pay the
amount of any uncollected Prepayment Charge if the failure to collect such
amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve Fund Account, on behalf of the Class X Certificateholders, to receive
any Basis Risk Payment and any Interest Rate Cap Payment and to secure their
limited recourse obligation to pay to the Offered Certificateholders Basis Risk
CarryForward Amounts (prior to using any Net Swap Receipts). For the avoidance
of doubt, any Basis Risk CarryForward Amounts shall be paid to the Offered
Certificates first from the Excess Reserve Fund Account and then from the Swap
Account.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment made for the benefit of the
Certificateholders and any Interest Rate Cap Payment made for the
benefit of the Offered Certificates for such date into the Excess
Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a
Basis Risk CarryForward Amount on any Class of Certificates, the Trustee shall
(1) withdraw from the Distribution Account and deposit in the Excess Reserve
Fund Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x) the
Class X Distributable Amount (without regard to the reduction in clause (iii) in
the definition thereof) (to the extent remaining after the distributions
specified in Sections 4.02(a)(iii)(A)-(R)) and (y) the aggregate Basis Risk
CarryForward Amounts for such Distribution Date and (2) withdraw from the Excess
Reserve Fund Account amounts necessary to pay to such Class or Classes of
Certificates the Basis Risk CarryForward Amount. Such payments, along with
payments from the Swap Account, shall be allocated to those Classes on a pro
rata basis based upon the amount of Basis Risk CarryForward Amount owed to each
such Class and shall be paid in the priority set forth in Sections
4.02(a)(iii)(T) and (U).
(ii) The Trustee shall account for the Excess Reserve Fund
Account as an asset of the Grantor Trust and not an asset of any
Trust REMIC. The beneficial owners of the Excess Reserve Fund
Account are the Class X Certificateholders. For all federal tax
purposes, amounts transferred by the Upper-Tier REMIC to the Excess
Reserve Fund Account shall be treated as distributions by the
Trustee to the Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee
to the Offered Certificateholders shall be accounted for by the
Trustee as amounts paid first to the Holders of the Class X
Certificates and then to the respective Class or Classes of Offered
Certificates. In addition, the Trustee shall account for the Offered
Certificateholders" rights to receive payments of Basis Risk
CarryForward Amounts (along with payments of Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts
from the Swap Account) and the obligation to pay Class IO Shortfalls
as rights and obligations under a notional principal contract
between the Class X Certificateholders and the Holders of the
Offered Certificates.
(iv) Notwithstanding any provision contained in this
Agreement, the Trustee shall not be required to make any payments
from the Excess Reserve Fund Account except as expressly set forth
in this Section 3.07(c) and Sections 4.02(a)(iii)(T), (U) and (W).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Depositor shall cause to be
deposited into the Distribution Account on the Closing Date the Closing Date
Deposit Amount. The Trustee shall, promptly upon receipt, deposit in the
Distribution Account and shall retain therein the following:
(i) the aggregate amounts remitted by the Servicers to the
Trustee pursuant to Section 3.11;
(ii) any amounts deposited by the Servicers pursuant to
Section 3.12(b) in connection with any losses on Permitted
Investments; and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 4.02.
(e) The Trustee may invest the funds in the Distribution
Account, in one or more Permitted Investments, in accordance with Section 3.12.
Each Servicer shall direct the Trustee to withdraw from the Distribution Account
and to remit to such Servicer no less than monthly, all income and gain realized
from the investment of the portion of funds deposited in the Distribution
Account by such Servicer (except during the Trustee Float Period). The Trustee
may withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein during the Trustee Float Period for its
own benefit.
(f) Each Servicer shall give notice to the Trustee, and the
Trustee shall give notice to each Rating Agency and the Depositor of any
proposed change of the location of the related Collection Account within a
reasonable period of time prior to any change thereof.
(g) In order to comply with laws, rules and regulations
applicable to banking institutions, including those relating to the funding of
terrorist activities and money laundering, the Trustee is required to obtain,
verify and record certain information relating to individuals and entities which
maintain a business relationship with the Trustee. Accordingly, each of the
parties agrees to provide to the Trustee upon its request from time to time such
party's complete name, address, tax identification number and such other
identifying information together with copies of such party's constituting
documentation, securities disclosure documentation and such other identifying
documentation as may be available for such party.
(h) On or prior to the Determination Date, the Custodian shall
deliver an invoice to the Trustee, setting forth the amount of the Custodian Fee
for the related Distribution Date. On each Distribution Date, the Trustee shall
remit the Custodian Fee to the Custodian from funds in the Distribution Account.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
related Servicer. The Subservicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the related Collection Account of the applicable
Servicer or remit such proceeds to such Servicer for deposit in the related
Collection Account of such Servicer not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, such Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar
Items; Escrow Accounts. (a) Each Servicer shall enforce the obligations under
each paid-in-full, life-of-the-loan tax service contract in effect with respect
to each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by
such Servicer. Each Tax Service Contract shall be assigned to the Trustee, or a
successor Servicer at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this
paragraph (b) are not otherwise provided pursuant to the Tax Service Contracts
described in paragraph (a) above, each Servicer undertakes to perform such
functions with respect to the Mortgage Loans serviced by such Servicer. To the
extent the related Mortgage provides for Escrow Payments, the related Servicer
shall establish and maintain, or cause to be established and maintained, one or
more segregated accounts (the "Escrow Accounts"), which shall be Eligible
Accounts. Each Servicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
such Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse such Servicer (or a Subservicer
to the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account at the
termination of such Servicer's obligations and responsibilities in respect of
the Mortgage Loans under this Agreement; (vi) to transfer such funds to a
replacement Escrow Account that meets the requirements hereof; or (vii) recover
amounts deposited in error. As part of its servicing duties, each Servicer or
Subservicers shall pay to the Mortgagors interest on funds in Escrow Accounts,
to the extent required by law and, to the extent that interest earned on funds
in the Escrow Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. To the extent that a Mortgage
does not provide for Escrow Payments, the applicable Servicer shall determine
whether any such payments are made by the Mortgagor in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The applicable Servicer assumes full responsibility
for the payment of all such bills within such time and shall effect payments of
all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments; provided, however, that such
advances are deemed to be Servicing Advances.
Section 3.10 Collection Accounts. (a) On behalf of the
Trustee, each Servicer shall establish and maintain, or cause to be established
and maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, each Servicer shall deposit or cause to be deposited
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after such Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent such Insurance Proceeds and Condemnation Proceeds are not to
be applied to the restoration of the related Mortgaged Property or
released to the related Mortgagor in accordance with the express
requirements of law or in accordance with Accepted Servicing
Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer
pursuant to the second paragraph of Section 3.13(a) in respect of
any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to
Section 3.07(a)) by such Servicer.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, NSF fees, reconveyance fees, assumption fees and other similar fees and
charges need not be deposited by each Servicer in the related Collection Account
and shall, upon collection, belong to the applicable Servicer as additional
compensation for its servicing activities. In the event a Servicer shall deposit
in the related Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from its Collection Account,
any provision herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in
Permitted Investments in accordance with the provisions set forth in Section
3.12. Each Servicer shall give notice to the Trustee of the location of the
related Collection Account maintained by it when established and prior to any
change thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a)
Each Servicer shall, from time to time, make withdrawals from the related
Collection Account for any of the following purposes or as described in Section
4.01:
(i) on or prior to each Remittance Date, to remit to the
Trustee (A) the Trustee Fee with respect to such Distribution Date
and (B) all Available Funds (without reduction for amounts owed to
the Depositor, the Trustee or the Custodian as provided for in the
definition of "Available Funds") in respect of the related
Distribution Date together with all amounts representing Prepayment
Charges from the Mortgage Loans received by the applicable Servicer
during the related Prepayment Period;
(ii) to reimburse such Servicer for P&I Advances, but only to
the extent of amounts received which represent Late Collections (net
of the related Servicing Fees) of Scheduled Payments on Mortgage
Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 4.01 (such Servicer's
right for recovery or reimbursement has priority over the Trust as
stated in the definition of "Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with
respect to each Mortgage Loan serviced by such Servicer or
Subservicer, but only to the extent of any Late Collections,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or
other amounts as may be collected by such Servicer from a Mortgagor,
or otherwise received with respect to such Mortgage Loan (or the
related REO Property) (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(iv) to pay to such Servicer as servicing compensation (in
addition to the Servicing Fee) on each Remittance Date any interest
or investment income earned on funds deposited in its Collection
Account and to withdraw any net Prepayment Interest Excesses in
accordance with Section 3.21(b);
(v) to pay to the Sponsor, the Depositor or the applicable
Responsible Party, as applicable, with respect to each Mortgage Loan
that has previously been repurchased or replaced pursuant to this
Agreement, all amounts received thereon subsequent to the date of
purchase or substitution, as further described herein;
(vi) to reimburse such Servicer for (A) any P&I Advance or
Servicing Advance previously made which such Servicer has determined
to be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance in accordance with the provisions of Section 4.01 and (B)
any unpaid Servicing Fees related to any Second Lien Mortgage Loan
to the extent not recoverable from Liquidation Proceeds, Insurance
Proceeds or other amounts received with respect to the related
Second Lien Mortgage Loan under Section 3.11(a)(iii) (such
Servicer's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(vii) to pay, or to reimburse such Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
serviced by such Servicer pursuant to Section 3.15 (such Servicer's
right for recovery or reimbursement has priority over the Trust);
(viii) to reimburse the such Servicer or the Depositor for
expenses incurred by or reimbursable to such Servicer or the
Depositor, as the case may be, pursuant to Section 6.03 (such
Xxxxxxxx's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(ix) to reimburse such Servicer or the Trustee, as the case
may be, for expenses reasonably incurred in respect of the breach or
defect giving rise to the repurchase obligation of any Responsible
Party or the Depositor, as applicable, that were included in the
Repurchase Price of the Mortgage Loan, including any expenses
arising out of the enforcement of the repurchase obligation, to the
extent not otherwise paid pursuant to the terms hereof (such
Servicer's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(x) to withdraw any amounts deposited in the related
Collection Account in error;
(xi) to withdraw any amounts held in the related Collection
Account and not required to be remitted to the Trustee on the
Remittance Date occurring in the month in which such amounts are
deposited into such Collection Account, to reimburse such Servicer
for unreimbursed P&I Advances;
(xii) to invest funds in Permitted Investments in accordance
with Section 3.12; and
(xiii) to clear and terminate the related Collection Account
upon termination of this Agreement.
(b) Each Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each Servicer shall provide written notification (as set forth
in Section 4.01(d)) to the Trustee, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and
reconciling the applicable Collection Account in accordance with Accepted
Servicing Practices. Each Servicer shall act promptly to resolve any
discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts
and the Distribution Account. (a) Each Servicer may invest the funds in the
related Collection Account and the related Escrow Account (to the extent
permitted by law and the related Mortgage Loan documents) and the Trustee may
(but is not obligated to) invest funds in the Distribution Account during the
Trustee Float Period, and, with respect to the portion of funds in the
Distribution Account deposited by a Servicer, shall (except during the Trustee
Float Period) invest such funds in the Distribution Account at the direction of
such Servicer (for purposes of this Section 3.12, such Accounts are referred to
as an "Investment Account"), in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand no later
than the Business Day immediately preceding the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement; provided,
however, that the Trustee shall have no obligation to invest funds deposited
into the Distribution Account by a Servicer on the Remittance Date later than
10:00 a.m. (Pacific Standard Time). If no investment instruction is given in a
timely manner, the Trustee shall hold the funds in the Distribution Account
uninvested. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account (other than
investments made during the Trustee Float Period) shall be made in the name of
the Trustee in Permitted Investments selected by the applicable Servicer. The
applicable Servicer shall be entitled to sole possession (except with respect to
investment direction of funds and any income and gain realized on any investment
in the Distribution Account during the Trustee Float Period, which shall be for
the sole benefit of the Trustee) over each such related investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the applicable Servicer, or with respect to investments
during the Trustee Float Period, the Trustee or its agent (with a copy to the
Trustee or its agent if related to investment of funds in the Distribution
Account not during the Trustee Float Period), together with any document of
transfer necessary to transfer title to such investment to the applicable
Servicer, or with respect to investments during the Trustee Float Period, the
Trustee or its agent. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
applicable Servicer, or with respect to investments during the Trustee Float
Period, the Trustee may:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder that
such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter
on deposit in an Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Such
Servicer shall deposit in its Collection Account or Escrow Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of the
portion of funds deposited in the Distribution Account by a Servicer and held by
the Trustee, shall be for the benefit of such Servicer (except for any income or
gain realized from the investment of funds on deposit in the Distribution
Account during the Trustee Float Period, which shall be for the benefit of the
Trustee) and shall be subject to the Trustee's withdrawal in the manner set
forth in Section 3.07(e). Each Servicer shall deposit in the Distribution
Account (except with respect to losses incurred during the Trustee Float Period)
the amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account (except that if any losses
are incurred from the investment of funds deposited in the Distribution Account
during the Trustee Float Period, the Trustee shall be responsible for
reimbursing the Trust for such loss immediately upon realization of such loss)
if made in accordance with this Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to
receive additional compensation that could be deemed to be in the Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments. Such compensation shall not be considered an amount that
is reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) Each Servicer shall cause to be maintained
for each Mortgage Loan serviced by such Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by such
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Trustee, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to the applicable laws and regulations as shall at any time be in force
and as shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the applicable Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that any Servicer shall obtain and maintain a
blanket policy with an insurer either (i) acceptable to Xxxxxx Xxx or Freddie
Mac or (ii) having a General Policy Rating of B:III or better from Best's (or
such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case such Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the related Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, each Servicer agrees to prepare and present, on behalf of itself and the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Freddie Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Xxx or Freddie Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Xxx or
Freddie Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Xxx or Freddie Mac. Each Servicer shall provide the Trustee upon
request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days" prior written notice to the Trustee. Each Servicer shall also cause each
Subservicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, such Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If a Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Trustee that any such substitution, modification
or assumption agreement has been completed and shall forward to the Trustee or
the Custodian, as applicable, the executed original of such substitution or
assumption agreement, which document shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, a Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Trustee, taking into
account, among other things, the timing of foreclosure proceedings; provided,
however, with respect to any Second Lien Mortgage Loan for which the related
first lien mortgage loan is not included in the Trust Fund, if, after such
Mortgage Loan becomes 180 days or more delinquent, the applicable Servicer
determines that a significant net recovery is not possible through foreclosure,
such Mortgage Loan may be charged off and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, a Servicer shall not be required
to expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to the Trustee, after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by such Servicer through Insurance Proceeds, Condemnation Proceeds
or Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 3.11. Each Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the applicable Servicer or any Subservicer for any related
unreimbursed Servicing Advances, pursuant to Section 3.11 or 3.17; second, to
reimburse the applicable Servicer for any related unreimbursed P&I Advances,
pursuant to Section 3.11; third, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the date of the
liquidation or REO Disposition, or to the Due Date prior to the Remittance Date
on which such amounts are to be distributed if not in connection with a
liquidation or REO Disposition; and fourth, as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to interest is less
than a full recovery thereof, that amount will be allocated as follows: first,
to unpaid Servicing Fees; and second, as interest at the Mortgage Rate (net of
the Servicing Fee Rate). The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the applicable Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
applicable Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to the last paragraph of
Section 3.17(f) with respect to certain excess recoveries from an REO
Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, such Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the
applicable Servicer shall determine consistent with Accepted Servicing Practices
how such Servicer shall proceed with respect to the Mortgaged Property. In the
event (a) the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes and (b) the
applicable Servicer determines, consistent with Accepted Servicing Practices, to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, such
Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean-up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse
such Servicer, such Servicer shall be entitled to be reimbursed from amounts in
the related Collection Account pursuant to Section 3.11. In the event the
applicable Servicer determines not to proceed with foreclosure or acceptance of
a deed in lieu of foreclosure, such Servicer shall be reimbursed from general
collections for all Servicing Advances made with respect to the related
Mortgaged Property from the related Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination made by the
applicable Servicer pursuant to this paragraph or otherwise.
In the event Saxon or Countrywide Servicing elects to
charge-off a Second Lien Mortgage Loan 180 days or more delinquent pursuant to
this Section 3.15, no Second Lien Mortgage Loan shall be characterized as a
Liquidated Mortgage Loan, unless the Depositor consents in writing to such
characterization after Xxxxx or Countrywide Servicing, as applicable, has
provided the Depositor with a combined equity analysis of such Second Lien
Mortgage Loan and the related first lien mortgage loan; provided, that if the
Depositor has failed to notify Saxon or Countrywide Servicing, as applicable,
within 3 Business Days of receipt of such combined equity analysis, then the
Depositor shall be deemed to have consented to such characterization. In the
event Saxon or Countrywide Servicing elects to charge off a Second Lien Mortgage
Loan 180 days or more delinquent pursuant to this Section 3.15, Saxon or
Countrywide Servicing, as applicable, shall notify the Trustee of such election,
which notice may be provided in a Servicer Remittance Report delivered pursuant
to Section 4.03(d).
Section 3.16 Release of Mortgage Files. (a) Upon the payment
in full of any Mortgage Loan, such Servicer will deposit all amounts received in
connection with such payment which are required to be deposited in the related
Collection Account pursuant to Section 3.10 and shall request delivery to it of
the Custodial File by submitting a Request for Release (in writing or an
electronic format acceptable to the Trustee or the Custodian, as applicable) to
the Trustee or the Custodian, as applicable. Upon receipt of such Request for
Release, the Trustee or the Custodian, as applicable, shall promptly release the
related Custodial File to such Servicer within five (5) Business Days. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Collection Account or to the
Trustee.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee or the
Custodian, as applicable, shall, upon request of a Servicer and delivery to the
Trustee or the Custodian, as applicable, of a Request for Release in written or
electronic form, release the related Custodial File to such Servicer, and the
Trustee shall, at the direction of such Servicer, execute such documents as
shall be necessary to the prosecution of any such proceedings and such Servicer
shall retain the Mortgage File in trust for the benefit of the Trustee. Such
Request for Release shall obligate the applicable Servicer to return each and
every document previously requested from the Custodial File to the Trustee or
the Custodian, as applicable, when the need therefor by such Servicer no longer
exists, unless the Mortgage Loan has been charged off or liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
related Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non- judicially, and such Servicer has delivered to the Trustee or the
Custodian, as applicable, a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was charged
off or liquidated and that all amounts received or to be received in connection
with such liquidation that are required to be deposited into the related
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or the Custodian, as applicable, to the applicable Servicer or its
designee upon request therefor. Upon receipt of a Request for Release under this
Section 3.16, the Trustee or the Custodian, as applicable, shall deliver the
related Custodial File to the requesting Servicer; provided, however, that in
the event a Servicer has not previously received copies of the relevant Mortgage
Loan Documents necessary to service the related Mortgage Loan in accordance with
Accepted Servicing Practices, the applicable Responsible Party shall reimburse
the Trustee or the Custodian, as applicable, for any overnight courier charges
incurred for the requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the applicable Servicer copies of any court
pleadings, requests for trustee's sale or other documents reasonably necessary
to the foreclosure or trustee's sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity, or shall exercise and deliver to such Servicer a
power of attorney sufficient to authorize such Servicer to execute such
documents on its behalf. Each such certification shall include a request that
such pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO
Property. (a) This Section shall apply only to REO Properties acquired for the
account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the applicable Servicer shall cause the deed or certificate of sale to
be issued in the name of the Trustee, on behalf of the Certificateholders. Upon
written request by the applicable Servicer, the Trustee shall provide such
Servicer with a power of attorney prepared by such Servicer with respect to such
REO Property in the form of Exhibit R.
(b) Each Servicer shall manage, conserve, protect and operate
each related REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. Each Servicer, either itself or through an agent selected
by such Servicer, shall manage, conserve, protect and operate the REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. Each Servicer
shall attempt to sell the same (and may temporarily rent the same for a period
not greater than one year, except as otherwise provided below) on such terms and
conditions as such Servicer deems to be in the best interest of the Trustee. The
Trustee shall have no obligations with respect to any REO Dispositions.
(c) Each Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following such Servicer's receipt thereof, in the related
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) Each Servicer, upon an REO Disposition, shall be entitled
to reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in
excess of the unpaid principal balance of the related Mortgage Loan, plus all
unpaid REO Imputed Interest thereon through the date of the REO Disposition,
shall be retained by the applicable Servicer as additional servicing
compensation.
(g) Each Servicer shall use its reasonable best efforts, to
sell, or cause its Subservicer to sell, in accordance with Accepted Servicing
Practices, any REO Property serviced by such Servicer or Subservicer as soon as
possible, but in no event later than the conclusion of the third calendar year
beginning after the year of its acquisition by Pooling-Tier REMIC-1 unless (i)
such Servicer applies for and receives an extension of such period from the
Internal Revenue Service pursuant to the REMIC Provisions and Code Section
856(e)(3), in which event such REO Property shall be sold within the applicable
extension period, or (ii) such Servicer obtains for the Trustee an Opinion of
Counsel, addressed to the Depositor, the Trustee and such Servicer, to the
effect that the holding by Pooling-Tier REMIC-1 of such REO Property subsequent
to such period will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code or cause any Trust REMIC to
fail to qualify as a REMIC under the REMIC Provisions or comparable provisions
of relevant state laws at any time. Each Servicer shall manage, conserve,
protect and operate each REO Property serviced by such Servicer for the Trustee
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) or result in the receipt by Pooling-Tier
REMIC-1 of any "income from non permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
efforts to sell such REO Property, the applicable Servicer shall either itself
or through an agent selected by such Servicer protect and conserve such REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Trustee on behalf of the Certificateholders,
rent the same, or any part thereof, as such Servicer deems to be in the best
interest of the Trustee on behalf of the Certificateholders for the period prior
to the sale of such REO Property; provided, however, that any rent received or
accrued with respect to such REO Property qualifies as "rents from real
property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the applicable Servicer shall adjust the Mortgage
Rate on the related Adjustment Date and shall adjust the Scheduled Payment on
the related mortgage payment adjustment date, if applicable, in compliance with
the requirements of applicable law and the related Mortgage and Mortgage Note.
In the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each Servicer shall execute
and deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. Each Servicer shall promptly, upon written
request therefor, deliver to the Trustee such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by a Servicer or the receipt of
notice from the Trustee that a Servicer has failed to adjust a Mortgage Rate or
Scheduled Payment in accordance with the terms of the related Mortgage Note,
such Servicer shall deposit in the related Collection Account from its own funds
the amount of any interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
any Subservicer to provide, to the Depositor and the Trustee, and at the request
of the OTS or the FDIC and the examiners and supervisory agents thereof, access
to the documentation regarding the Mortgage Loans in its possession required by
applicable regulations of the OTS. Such access shall be afforded without charge,
but only upon five (5) Business Days" prior written request and during normal
business hours at the offices of the applicable Servicer or any Subservicer.
Nothing in this Section shall derogate from the obligation of any such party to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of any such party to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee. Each Servicer shall account fully to the
Trustee for any funds received by such Servicer or which otherwise are collected
by such Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan serviced by such Servicer. All Mortgage
Files and funds collected or held by, or under the control of, a Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including, but not limited to,
any funds on deposit in its Collection Account, shall be held by such Servicer
for and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
Each Servicer also agrees that it shall not create, incur or subject any
Mortgage File or any funds that are deposited in any Collection Account, the
Distribution Account or any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that such Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to such Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for
its activities hereunder, each Servicer shall, with respect to each Mortgage
Loan serviced by it, be entitled to retain from deposits to its Collection
Account and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds
and REO Proceeds related to such Mortgage Loan, the Servicing Fee with respect
to each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, each Servicer shall be entitled to recover unpaid
Servicing Fees out of related late collections to the extent permitted in
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of a Servicer's
responsibilities and obligations under this Agreement; provided, however, that
each Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of
assumption or modification fees, late payment charges, NSF fees, reconveyance
fees and other similar fees and charges (other than Prepayment Charges) shall be
retained by a Servicer only to the extent such fees or charges are received by
such Servicer. Each Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the related Collection Account, and pursuant to
Section 3.07(e), to direct the Trustee to withdraw from the Distribution Account
and remit to the applicable Servicer (except for monies invested during the
Trustee Float Period), as additional servicing compensation, interest or other
income earned on the related portions of deposits therein. Each Servicer shall
also be entitled, as additional servicing compensation, to interest or other
income earned on deposits in the related Escrow Account (to the extent permitted
by law and the related Mortgage Loan documents) in accordance with Section 3.12.
Each Servicer shall also be entitled to retain net Prepayment Interest Excesses
(to the extent not required to offset Prepayment Interest Shortfalls), but only
to the extent such amounts are received by such Servicer.
(c) Each Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of premiums for any blanket policy insuring against hazard losses
pursuant to Section 3.13, servicing compensation of the Subservicer to the
extent not retained by it and the fees and expenses of independent accountants
and any agents appointed by such Servicer), and shall not be entitled to
reimbursement therefor from the Trust Fund except as specifically provided in
Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer
shall deliver or cause to be delivered, and shall cause each Subservicer engaged
by such Servicer to deliver or cause to be delivered to the Trustee (and the
Trustee shall deliver or otherwise make available to the Depositor and the
Rating Agencies) on or before March 5th (March 15th with respect to Saxon) of
each calendar year, commencing in 2008, an Officer's Certificate stating, as to
each signatory thereof, that (i) a review of the activities of such Servicer or
Subservicer, as applicable, during the preceding calendar year and of its
performance under this Agreement or the applicable Subservicing Agreement, as
the case may be, has been made under such officers' supervision, and (ii) to the
best of such officers' knowledge, based on such review, such Servicer or
Subservicer, as applicable, has fulfilled all of its obligations under this
Agreement or the applicable Subservicing Agreement, as the case may be, in all
material respects, throughout such year, or, if there has been a default in the
fulfillment of any such obligation in any material respect, specifying each such
default known to such officers and the nature and status thereof. Promptly after
receipt of each such Officer's Certificate, the Depositor shall review each such
Officer's Certificate and, if applicable, consult with the applicable Servicer
or Subservicer as to the nature of any defaults by the applicable Servicer or
any related Subservicer in the fulfillment of any of such Servicer's or any
related Subservicer's obligations. The obligations of each Servicer and each
Subservicer under this Section apply to each Servicer and each Subservicer that
serviced a Mortgage Loan during the applicable period, whether or not such
Servicer or such Subservicer is acting as a Servicer or a Subservicer at the
time such Officer's Certificate is required to be delivered. None of the
Servicers or Subservicer or any Servicing Function Participant shall be required
to cause the delivery of any Officer's Certificate required by this Section
until March 10th (March 15th with respect to Saxon) in any given year so long as
it has received written confirmation from the Depositor that a Form 10-K is not
required to be filed in respect of the Trust for the preceding calendar year.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants" Attestation Report.
(a) Not later than March 5th (March 15th with respect to
Saxon) of each calendar year commencing in 2008, each Servicer shall deliver,
and shall cause each Subservicer engaged by such Servicer to deliver, and the
Trustee shall deliver or otherwise make available, and each Servicer and the
Trustee shall cause each Subcontractor utilized by such Servicer (or by any such
Subservicer), the Trustee or the Custodian, as applicable, and determined by
such Servicer, the Trustee or the Custodian, as applicable, pursuant to Section
3.02(e) to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB (in each case, a "Servicing Function Participant"),
to deliver, each at its own expense, to the Trustee (and the Trustee shall make
available to the Depositor as part of the filing package forwarded to the
Depositor for review and verification) a report on an assessment of compliance
with the Servicing Criteria applicable to it that contains (A) a statement by
such party of its responsibility for assessing compliance with the Servicing
Criteria applicable to it, (B) a statement that such party used the Servicing
Criteria to assess compliance with the applicable Servicing Criteria, (C) such
party's assessment of compliance with the applicable Servicing Criteria as of
and for the period ending the end of the fiscal year covered by the Form 10-K
required to be filed pursuant to Section 8.12, including, if there has been any
material instance of noncompliance with the applicable Servicing Criteria, a
discussion of each such failure and the nature and status thereof, and (D) a
statement that a registered public accounting firm has issued an attestation
report on such Person's assessment of compliance with the applicable Servicing
Criteria as of and for such period. Each such assessment of compliance report
shall be addressed to the Depositor and signed by an authorized officer of the
applicable company, and shall address each of the applicable Servicing Criteria
set forth on Exhibit S hereto, or as set forth in the notification furnished to
the Depositor and the Trustee pursuant to Section 3.23(c). The Servicers, the
Trustee and the Custodian hereby acknowledge and agree that their respective
assessments of compliance will cover the items identified on Exhibit S hereto as
being covered by such party. The parties to this Agreement acknowledge that
where a particular Servicing Criteria has multiple components, each party's
assessment of compliance (and related attestation of compliance) will relate
only to those components that are applicable to such party. Promptly after
receipt of each such report on assessment of compliance, (i) the Depositor shall
review each such report and, if applicable, consult with the applicable
Servicer, the Trustee or the Custodian as to the nature of any material instance
of noncompliance with the Servicing Criteria applicable to it (and each
Subservicer or Servicing Function Participant engaged or utilized by the
applicable Servicer, such Subservicer, the Trustee or the Custodian, as
applicable), as the case may be. None of the Servicer, the Trustee or the
Custodian or any Subservicer or any Servicing Function Participant shall be
required to cause the delivery of any such assessments until March 10th (March
15th with respect to Saxon) in any given year, and the Custodian shall not be
required to deliver any such assessment, so long as it has received written
confirmation from the Depositor that a Form 10-K is not required to be filed in
respect of the Trust for the preceding calendar year.
(b) Not later than March 5th (March 15th with respect to
Saxon) of each calendar year commencing in 2008, each Servicer, the Trustee and
the Custodian shall cause, and such Servicer shall cause each Subservicer
engaged by such Servicer and such Servicer, the Trustee and the Custodian shall
cause each Servicing Function Participant utilized by the Trustee, the Custodian
or such Servicer, as applicable (or by any Subservicer engaged by such Servicer)
to cause, each at its own expense, a registered public accounting firm (which
may also render other services to such party) and that is a member of the
American Institute of Certified Public Accountants to furnish a report to the
Trustee (and the Trustee shall make available to the Depositor as part of the
filing package forwarded to the Depositor for review and verification, with a
copy to the Rating Agencies), to the effect that (i) it has obtained a
representation regarding certain matters from the management of such Person,
which includes an assertion that such Person has complied with the Servicing
Criteria applicable to it pursuant to Section 3.23(a) and (ii) on the basis of
an examination conducted by such firm in accordance with standards for
attestation engagements issued or adopted by the PCAOB, that attests to and
reports on such Person's assessment of compliance with the Servicing Criteria
applicable to it. In the event that an overall opinion cannot be expressed, such
registered public accounting firm shall state in such report why it was unable
to express such an opinion. Each such related accountant's attestation report
shall be made in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under the Securities Act and the Exchange Act. Such report must be available for
general use and not contain restricted use language. Promptly after receipt of
each such accountants' attestation report, the Depositor shall review the report
and, if applicable, consult with the applicable Servicer, the Trustee or the
Custodian as to the nature of any defaults by the applicable Servicer, the
Trustee or the Custodian (and each Subservicer or Servicing Function Participant
engaged or utilized by any Servicer, the Trustee or the Custodian, as
applicable, or by any Subservicer engaged by a Servicer), as the case may be, in
the fulfillment of any of the Servicer's, the Trustee's, the Custodian's, any of
the Custodian's or the applicable Subservicer's or Servicing Function
Participant's obligations hereunder or under any applicable sub-servicing
agreement. None of the Servicers, the Trustee, the Custodian or any Servicing
Function Participant shall be required to cause the delivery of any such
attestation required by this paragraph until March 10th (March 15th with respect
to Saxon) in any given year, and the Custodian shall not be required to deliver
any such assessment, so long as it has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect of the Trust
for the preceding calendar year.
(c) Promptly upon written request from the Depositor, each
Servicer shall notify the Trustee and the Depositor as to the name of each
Subservicer engaged by such Servicer and each Servicing Function Participant
utilized by such Servicer and by each Subservicer engaged by such Servicer, but
only to the extent there has been a change in the information in such
notification from notices previously delivered and the Trustee shall notify the
Depositor as to the name of each Servicing Function Participant utilized by it,
and each such notice will specify what specific Servicing Criteria will be
addressed in the report on assessment of compliance prepared by such Subservicer
and Servicing Function Participant in each case, to the extent of any change
from the prior year's notice, if any. When a Servicer or the Trustee submits its
assessment pursuant to Section 3.23(a), such Servicer and the Trustee, as
applicable, will also at such time include the assessment (and related
attestation pursuant to Section 3.23(b)) of each Servicing Function Participant
utilized by it and by each Subservicer engaged by it.
(d) The obligations of the Trustee, Custodian, each Servicer
or Subservicer under this Section apply to the Trustee, Custodian, and each
Servicer and Subservicer that serviced a Mortgage Loan during the applicable
period, whether or not such Trustee, Custodian, Servicer or Subservicer is
acting as Trustee, Custodian, Servicer or Subservicer, as applicable, at the
time such assessment of compliance with Servicing Criteria and related
accountant's attestation is required to be delivered.
Section 3.24 Trustee to Act as Servicer. (a) Subject to
Section 7.02, in the event that any Servicer shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of such predecessor servicer pursuant to Section 3.10 or any
acts or omissions of such predecessor servicer hereunder), (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of such predecessor servicer pursuant to Section 2.03
or (iv) deemed to have made any representations and warranties of such Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a Servicer
shall contain a provision giving the successor Servicer the option to terminate
such agreement in the event a successor Servicer is appointed.
(c) If any Servicer shall for any reason no longer be a
Servicer (including by reason of any Event of Default), the Trustee (or any
other successor Servicer) may, at its option, succeed to any rights and
obligations of such Servicer under any Subservicing Agreement in accordance with
the terms thereof; provided that the Trustee (or any other successor Servicer)
shall not incur any liability or have any obligations in its capacity as
successor Servicer under a Subservicing Agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of such Servicer thereunder; and such Servicer shall not thereby be
relieved of any liability or obligations under the Subservicing Agreement
arising prior to the date of such succession.
(d) The applicable Servicer shall, upon request of the
Trustee, but at the expense of such Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement (if any) to which
it is party and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of such Subservicing
Agreement to the assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit
to the Trustee on each Remittance Date for deposit in the Distribution Account
an amount from such Servicer's own funds equal to the Compensating Interest
payable by such Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a)
With respect to each Mortgage Loan, each Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
Section 3.27 Optional Purchase of Delinquent Mortgage Loans.
The applicable Servicer (or its assignee) may, or upon request of the Holders of
a majority (by Percentage Interest) of the Class X Certificates (other than the
Depositor or any Affiliate of the Depositor, and provided that neither the
Depositor nor any Affiliate of the Depositor shall have the power to direct the
Holders of the majority (by Percentage Interest) of the Class X Certificates to
issue any direction under this Section 3.28) shall, purchase any 90+ Delinquent
Mortgage Loans from the Trust Fund. No Servicer shall use any procedure in
selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The purchase price for any such Mortgage
Loan shall be 100% of the unpaid principal balance of such Mortgage Loan plus
accrued and unpaid interest on the related Mortgage Loan at the applicable
Mortgage Interest Rate, plus the amount of any unreimbursed Servicing Advances
made by such Servicer. Upon receipt of such purchase price, the applicable
Servicer shall provide to the Trustee or the Custodian, as applicable, a Request
for Release and the Trustee or the Custodian, as applicable, shall promptly
release to such Servicer the Mortgage File relating to the Mortgage Loan being
repurchased.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be
made by each Servicer for any Remittance Date shall equal, subject to Section
4.01(c), the sum of (i) the aggregate amount of Scheduled Payments (with each
interest portion thereof net of the related Servicing Fee), due during the Due
Period immediately preceding such Remittance Date in respect of the Mortgage
Loans serviced by such Servicer, which Scheduled Payments were not received as
of the close of business on the related Determination Date (provided, however,
that with respect to any Balloon Loan that is delinquent on its maturity date,
the applicable Servicer will not be required to advance the principal portion of
the related balloon payment but will be required to continue to make P&I
Advances in accordance with this Section 4.01(a) with respect to such Balloon
Loan in an amount equal to the assumed scheduled interest that would otherwise
be due based on the original amortization schedule for such Balloon Loan (with
interest at the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO
Property serviced by such Servicer, which REO Property was acquired during or
prior to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, each Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties serviced by such Servicer for the related Remittance Date either
(i) from its own funds or (ii) from the related Collection Account, to the
extent of funds held therein for future distribution (in which case, such
Servicer will cause to be made an appropriate entry in the records of the
related Collection Account that Amounts Held for Future Distribution have been,
as permitted by this Section 4.01, used by such Servicer in discharge of any
such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by such Servicer with
respect to such Mortgage Loans and REO Properties. Any Amounts Held for Future
Distribution and so used shall be appropriately reflected in such Servicer's
records and replaced by such Servicer by deposit in the related Collection
Account on or before any future Remittance Date to the extent required.
(c) The obligation of each Servicer to make such P&I Advances
is mandatory, notwithstanding any other provision of this Agreement but subject
to paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by any
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the applicable
Servicer shall be entitled to reimbursement pursuant to Section 3.11 for
Servicing Advances from recoveries from the related Mortgagor or from all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each
Distribution Date, the Trustee shall allocate from amounts then on deposit in
the Distribution Account in the following order of priority and to the extent of
the Available Funds and, on such Distribution Date, shall make distributions on
the Certificates in accordance with such allocation:
(i) to the holders of each Class of Offered Certificates and
to the Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap
Payments, and (y) any Swap Termination Payment, other than a
Defaulted Swap Termination Payment, owed to the Swap Provider
with respect to such Distribution Date, to the extent a
Replacement Swap Provider Payment has not been made to the
Swap Account;
(B) from the Interest Remittance Amounts for both the
Loan Groups, to the Class A Certificates, the related Accrued
Certificate Interest Distribution Amounts and any related
Unpaid Interest Amounts for such Distribution Date, pursuant
to the allocation set forth in clauses (iv) and (v) of this
Section 4.02(a);
(C) from any remaining Interest Remittance Amounts, to
the Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to
the Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to
the Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to
the Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to
the Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to
the Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to
the Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to
the Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
and
(K) from any remaining Interest Remittance Amounts, to
the Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown
Date or (2) with respect to which a Trigger Event is in effect, to
the holders of the related Class or Classes of Offered Certificates
then entitled to distributions of principal as set forth below, from
amounts remaining on deposit in the Distribution Account after
making distributions pursuant to clause (i) above, an amount equal
to the Principal Distribution Amount in the following order of
priority:
(1) to the Class A Certificates, allocated as described
in Section 4.02(c), until the respective Class Certificate
Balances thereof are reduced to zero; and
(2) sequentially to the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and
Class B-3 Certificates, in that order, until the respective
Class Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the
Stepdown Date and (2) as long as a Trigger Event is not in
effect, to the holders of the related Class or Classes of
Offered Certificates then entitled to distribution of
principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to, in the aggregate, the
Principal Distribution Amount in the following amounts and
order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section
4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and to the Class M-1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in clause
(ii)(B)(c) above and (y) the Class M-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above and to the Class M-3 Certificates in clause
(ii)(B)(d) above and (y) the Class M-4 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above and to the Class M-4 Certificates in clause
(ii)(B)(e) above and (y) the Class M-5 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(7) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above and to the Class M-5 Certificates in clause
(ii)(B)(f) above and (y) the Class M-6 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(8) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above and to the Class M-6 Certificates in clause
(ii)(B)(g) above and (y) the Class B-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(9) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above, to the Class M-6 Certificates in clause
(ii)(B)(g) above and to the Class B-1 Certificates in clause
(ii)(B)(h) above and (y) the Class B-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero; and
(10) to the Class B-3 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amount distributed to the Class A Certificateholders in
clause (ii)(B)(a) above, to the Class M-1 Certificates in
clause (ii)(B)(b) above, to the Class M-2 Certificates in
clause (ii)(B)(c) above, to the Class M-3 Certificates in
clause (ii)(B)(d) above, to the Class M-4 Certificates in
clause (ii)(B)(e) above, to the Class M-5 Certificates in
clause (ii)(B)(f) above, to the Class M-6 Certificates in
clause (ii)(B)(g) above, to the Class B-1 Certificates in
clause (ii)(B)(h) above and to the Class B-2 Certificates in
clause (ii)(B)(i) above and (y) the Class B-3 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses
(i) and (ii) above, plus as specifically indicated below, from
amounts on deposit in the Excess Reserve Fund Account, shall be
distributed in the following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest
Amount for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest
Amount for such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest
Amount for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest
Amount for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized
Loss Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest
Amount for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized
Loss Amount for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest
Amount for such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized
Loss Amount for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest
Amount for such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest
Amount for such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest
Amount for such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of
any Basis Risk Payment for such Distribution Date;
(T) from any Interest Rate Cap Payment on deposit in the
Excess Reserve Fund Account with respect to that Distribution
Date, an amount equal to any unpaid Basis Risk CarryForward
Amount with respect to the Offered Certificates for that
Distribution Date, allocated (a) first, among the Classes of
Offered Certificates, pro rata, based upon their respective
Class Certificate Balances and (b) second, any remaining
amounts to those Classes of Offered Certificates, pro rata,
based on any Basis Risk CarryForward Amounts remaining unpaid,
in order to reimburse such unpaid amounts;
(U) from funds on deposit in the Excess Reserve Fund
Account (not including any Interest Rate Cap Payment included
in that account) with respect to such Distribution Date, an
amount equal to any remaining Basis Risk CarryForward Amount
with respect to the Offered Certificates for such Distribution
Date, allocated to the Offered Certificates in the same order
and priority in which the Accrued Certificate Interest
Distribution Amount is allocated among such Classes of
Certificates, with the allocation to the Class A Certificates
being (a) first, among the Class A Certificates, pro rata,
based on their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A Certificates, pro
rata, based on any Basis Risk CarryForward Amounts remaining
unpaid, in order to reimburse such unpaid amounts;
(V) to the Swap Account, the amount of any Defaulted
Swap Termination Payment owed to the Swap Provider;
(W) to the Class X Certificates, the remainder of the
Class X Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(V);
(X) to the Class R Certificates, any remaining amount in
the Trust REMICs, in respect of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier
REMIC; and
(Y) to the Class RX Certificates, any remaining amount,
in respect of the Class X REMIC.
(iv) Solely for purposes of interest allocation calculations,
the Interest Remittance Amount attributable to Group I Mortgage
Loans will be allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid
Interest Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2fpt, Class
A-2a, Class A-2b, Class A-2c and Class A-2d Certificates, pro
rata (based on the amounts distributable or payable under
Section 4.02(a)(i)(B) to such Classes of Certificates), the
Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amount for the Class A-2fpt, Class A-2a, Class
A-2b, Class A-2c and Class A-2d Certificates, respectively, to
the extent not otherwise previously paid from the Interest
Remittance Amount attributable to Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations,
the Interest Remittance Amount attributable to Group II Mortgage
Loans will be allocated:
(1) first, concurrently, to the Class A-2fpt, Class
A-2a, Class A-2b, Class A-2c and Class A-2d Certificates, pro
rata (based on the amounts distributable or payable under
Section 4.02(a)(i)(B) to such Classes of Certificates), the
Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amount for the Class A-2fpt, Class A-2a, Class
A-2b, Class A-2c and Class A-2d Certificates, respectively;
and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid
Interest Amount for the Class A-1 Certificates, to the extent
not otherwise previously paid from the Interest Remittance
Amount attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing
allocation rules, any Class of Class A Certificates does not receive in full the
related Accrued Certificate Interest Distribution Amount or the related Unpaid
Interest Amount, if any, then such shortfall will be allocated to the Holders of
such Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on
any other Class of Certificates, all amounts representing Prepayment Charges
from the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
(d) Any principal distributions allocated to the Group II
Class A Certificates shall be allocated first, concurrently on a pro rata basis
(based on (i) the Class Certificate Balance of the Class A-2fpt Certificates, on
the one hand, and (ii) the aggregate Class Certificate Balance of the Class A-2a
and Class A-2b Certificates on the other hand) to (A) the Class A-2fpt
Certificates until their Class Certificate Balance has been reduced to zero and
(B) sequentially to the Class A-2a and Class A-2b Certificates in that order,
until their respective Class Certificate Balances have been reduced to zero, and
second, sequentially, to the Class A-2c and Class A-2d Certificates, in that
order, until their respective Class Certificate Balance has been reduced to
zero. Notwithstanding the foregoing, on and after the Distribution Date on which
the aggregate Class Certificate Balances of the Subordinated Certificates and
the principal balance of the Class X Certificates have been reduced to zero, any
principal distributions allocated to the Group II Class A Certificates shall be
allocated pro rata among the Classes of Group II Class A Certificates, based on
their respective Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero.
(e) On any Distribution Date, any Relief Act Shortfalls and
Net Prepayment Interest Shortfalls for such Distribution Date shall be allocated
by the Trustee as a reduction in the following order:
(1) first, to the portion of the Class X Distributable
Amount allocable to interest; and
(2) second, pro rata, as a reduction of the Accrued
Certificate Interest Distribution Amount for the Class A,
Class M and Class B Certificates, based on the amount of
interest to which such Classes would otherwise be entitled.
(f) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments made or received under the Interest Rate Swap Agreement and the
Interest Rate Cap Agreement and payments to Certificateholders of interest or
original issue discount that the Trustee reasonably believes are applicable
under the Code. The consent of Certificateholders shall not be required for such
withholding. If the Trustee does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Trustee shall indicate the amount withheld
to such Certificateholders. Such amounts shall be deemed to have been
distributed to such Certificateholders for all purposes of this Agreement.
(g) For purposes of this Agreement, any Net Swap Payments or
Swap Termination Payments (other than Defaulted Swap Termination Payments) shall
be allocated by the Trustee between Loan Groups based on the respective
aggregate Stated Principal Balance of the Mortgage Loans in each Loan Group.
Section 4.03 Monthly Statements to Certificateholders. (a) Not
later than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicers, the Depositor, and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date
and the LIBOR Determination Date for such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal,
the Principal Remittance Amount (separately identifying the
components thereof) and the Principal Distribution Amount
(separately identifying the components thereof);
(iv) the amount of Available Funds allocable to interest and
each Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class
included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk
CarryForward Amount for each Class and the amount of such Basis Risk
CarryForward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall and the allocation
of the shortfall as between principal and interest, including any
Basis Risk CarryForward Amount not covered by amounts in the Excess
Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of
Certificates before and after giving effect to the distribution of
principal on such Distribution Date;
(viii) the Pool Stated Principal Balance for the Distribution
Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicers and the Trustee (stated separately and in the aggregate)
with respect to such Distribution Date;
(x) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(xi) the amount of P&I Advances included in the distribution
on such Distribution Date reported by the Servicers (and the Trustee
as successor Servicer and any other successor Servicer, if
applicable) as of the close of business on the Determination Date
immediately preceding such Distribution Date;
(xii) the number and aggregate outstanding principal balances
of Mortgage Loans (1) as to which the Scheduled Payment is
delinquent 31 to 60 days, 61 to 90 days and 91 or more days, (2)
that have become REO Property, (3) that are in foreclosure and (4)
that are in bankruptcy, in each case as of the close of business on
the last Business Day of the immediately preceding month;
(xiii) with respect to any Mortgage Loans that became REO
Properties during the preceding calendar month, the aggregate number
of such Mortgage Loans and the aggregate Stated Principal Balance of
such Mortgage Loans as of the close of business on the last Business
Day of the immediately preceding month;
(xiv) the total number and outstanding principal balance of
any REO Properties (and market value, if available) as of the close
of business on the last Business Day of the immediately preceding
month;
(xv) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the
Trigger Event);
(xvi) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xvii) in the aggregate and for each Class of Certificates,
the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized
Loss Amounts through such Distribution Date;
(xviii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders
with respect to Unpaid Interest Amounts, Unpaid Realized Loss
Amounts or Basis Risk CarryForward Amounts;
(xix) the amount of any Net Swap Payments, Net Swap Receipts,
Swap Termination Payments or Defaulted Swap Termination Payments;
(xx) the calculations of LIBOR and Swap LIBOR;
(xxi) the Subordinated Amount and Specified Subordinated
Amount;
(xxii) Prepayment Charges collected or paid (pursuant to
Section 3.07(a)) by the Servicers;
(xxiii) the Cumulative Loss Percentage and the aggregate
amount of Realized Losses used to calculate the Cumulative Loss
Percentage;
(xxiv) the amount distributed on the Class X Certificates;
(xxv) the amount of any Subsequent Recoveries for such
Distribution Date;
(xxvi) the number of Mortgage Loans at the end of the
applicable reporting period, the pool factor (being the Stated
Principal Balance of the Mortgage Loans for the related Distribution
Date divided by the Cut-off Date Principal Balance), and the
weighted average interest rate, and weighted average remaining term;
and
(xxvii) the Interest Rate Cap Payment, if any, for such
Distribution Date.
In addition, each Form 10-D prepared and filed by the Trustee
pursuant to Section 8.12 shall include the following information
with respect to the related distribution:
(i) material breaches of Mortgage Loan representations and
warranties under this Agreement of which the Trustee has actual
knowledge or has received written notice; and
(ii) material breaches of any covenants under this Agreement
of which the Trustee has actual knowledge or received written
notice;
provided that, if the Trustee receives written notice of the events described in
(i) and/or (ii) above from any Servicer, such Servicer shall be responsible for
providing information to the Trustee for inclusion in the applicable Form 10-D.
(b) The Trustee's responsibility for providing the above
statement to the Certificateholders, each Rating Agency and the Depositor is
limited, if applicable, to the availability, timeliness and accuracy of the
information derived from the Servicers and the Swap Provider. The Trustee shall
make available the above statement via the Trustee's internet website. The
Trustee's website will initially be located at https: xxx.xxx.xx.xxx/xxxx and
assistance in using the website can be obtained by calling the Trustee's
investor relations desk at 0-000-000-0000. Parties that are unable to use the
website are entitled to have a paper copy mailed to them via first class mail by
calling the investor relations desk and indicating such. The Trustee may change
the way the monthly statements to Certificateholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trustee shall provide timely and adequate notification to all
above parties regarding any such changes. As a condition to access the Trustee's
internet website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee will not be liable for the dissemination of information
in accordance with this Agreement.
The Trustee shall make available to each Analytics Company,
either electronically or via the Trustee's internet website, each statement to
Certificateholders prepared pursuant to Section 4.03(a). The Trustee (and the
applicable Servicer, if such discrepancy results from or arises out of any
information provided by the applicable Servicer pursuant to this Agreement)
shall cooperate in good faith with the Depositor to reconcile any discrepancies
in such statements, and the Trustee shall provide any corrections to such
statements to each Analytics Company as soon as reasonably practicable after the
related Distribution Date.
The Trustee will also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement to Certificateholders
and may affix thereto any disclaimer it deems appropriate in its reasonable
discretion (without suggesting liability on the part of any other party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) The Trustee shall be entitled to rely on information
provided by third parties for purposes of preparing the foregoing report, but
shall not be responsible for the accuracy of such information.
(e) No later than the 18th day of each month, or if such date
is not a Business Day, the next succeeding Business Day (but in no event later
than the 20th day of each month), each Servicer shall furnish to the Trustee, a
monthly remittance advice statement (the "Servicer Remittance Report")
containing the data fields set forth on Exhibit X-1 attached hereto in the case
of Saxon, or Exhibit X-2 attached hereto in the case of Countrywide Servicing in
the case of each Exhibit specified in this Section 4.03(e), in a format mutually
agreed upon by the applicable Servicer and the Trustee and such information as
shall be reasonably requested (i) by the Depositor to enable the Depositor to
disclose "static pool information", as required by Item 1105 of Regulation AB,
with respect to the Mortgage Loans, and (ii) by the Trustee to enable the
Trustee to provide the reports required by Section 4.03(a) as to the
accompanying remittance and applicable Due Period and Prepayment Period to which
such remittance relates.
The Servicer Remittance Report shall, at a minimum, document,
on such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of
any Principal Prepayment, including the date of such prepayment, and
any Prepayment Charges, received during the related Prepayment
Period along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of
such remittance allocable to interest;
(iii) the amount of servicing compensation received by such
Servicer during the current distribution period;
(iv) the individual and aggregate Stated Principal Balance of
the Mortgage Loans;
(v) the aggregate expenses reimbursed to such Servicer during
the prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances
of Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days and 91
or more days; (b) as to which foreclosure or bankruptcy proceedings
of the related mortgagor have commenced; and (c) as to which REO
Property has been acquired.
The Trustee shall promptly make available the Servicer
Remittance Report and the related supplemental statement to the Depositor.
(f) [Reserved].
(g) For all purposes of this Agreement, with respect to any
Mortgage Loan, delinquencies shall be determined by the Trustee from information
provided by the Servicers and reported by the Trustee based on the "OTS"
methodology for determining delinquencies on mortgage loans similar to the
Mortgage Loans. By way of example, a Mortgage Loan would be delinquent with
respect to a Scheduled Payment due on a Due Date if such Scheduled Payment is
not made by the close of business on the Mortgage Loan's next succeeding Due
Date, and a Mortgage Loan would be more than 30-days Delinquent with respect to
such Scheduled Payment if such Scheduled Payment were not made by the close of
business on the Mortgage Loan's second succeeding Due Date. Each Servicer hereby
represents and warrants to the Depositor that such Servicer is not subject to
any delinquency recognition policy established by the primary safety and
soundness regulator, if any, of such Servicer, that is more restrictive than the
foregoing delinquency recognition policy.
Section 4.04 Certain Matters Relating to the Determination of
LIBOR. LIBOR shall be calculated by the Trustee in accordance with the
definition of LIBOR. Until all of the Offered Certificates are paid in full, the
Trustee shall at all times retain at least four Reference Banks for the purpose
of determining LIBOR with respect to each LIBOR Determination Date. The Trustee
initially shall designate the Reference Banks (after consultation with the
Depositor). Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Trustee and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the Trustee
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Trustee shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR or (ii) any inability to retain at least four Reference Banks which is
caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of Offered Certificates
for each Interest Accrual Period shall be determined by the Trustee on each
LIBOR Determination Date so long as the Offered Certificates are Outstanding on
the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the Offered Certificates in the table relating to the
Certificates in the Preliminary Statement. The Trustee shall not have any
liability or responsibility to any Person for its inability, following a
good-faith reasonable effort, to obtain quotations from the Reference Banks or
to determine the arithmetic mean referred to in the definition of LIBOR, all as
provided for in this Section 4.04 and the definition of LIBOR. The establishment
of LIBOR and each Pass-Through Rate for the Offered Certificates by the Trustee
shall (in the absence of manifest error) be final, conclusive and binding upon
each Holder of a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Trustee to the most
junior Class of Subordinated Certificates then Outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Trustee
shall establish and maintain in its name, a separate non-interest bearing trust
account for the benefit of the holders of the Certificates (the "Swap Account")
as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments
(including, without duplication, Replacement Swap Provider Payments), Net Swap
Payments owed to the Swap Provider, Net Swap Receipts and, without duplication,
amounts distributable on the Class IO Interest for that Distribution Date will
be deposited into the Swap Account. Funds in the Swap Account will be
distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed
to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, owed to the Swap Provider
for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid
Interest Amounts as described in Section 4.02(a)(i), to the extent
unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts
as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the
extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described
and, in the same manner and order of priority as set forth, in
Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but
only to the extent necessary to restore the Subordinated Amount to
the Specified Subordinated Amount for prior or current Realized
Losses that have not yet been reimbursed, after giving effect to
payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts, pro rata, based on their Class Certificate
Balances for such Distribution Date, up to the Swap Payment
Allocation for each Class of Class A Certificates and to the extent
unpaid from Available Funds (including Basis Risk Payments on
deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay Basis Risk CarryForward Amounts, and, without
duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment
Allocation for each Class of Class M and Class B Certificates and to
the extent unpaid from Available Funds (including Basis Risk
Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis
Risk CarryForward Amounts, and, without duplication, Upper-Tier
CarryForward Amounts, pro rata, based on their respective remaining
unpaid Basis Risk CarryForward Amounts or, without duplication,
Upper-Tier CarryForward Amounts after the allocation of payments as
set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay any Unpaid Realized Loss Amount, to the extent
unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap
Termination Payment owed to the Swap Provider for that Distribution
Date; and
(xi) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding the foregoing, in the event that the Trust
receives a Swap Termination Payment, the Trustee shall use the Swap Termination
Payment to enter into a replacement interest rate swap agreement as directed by
the Depositor with a successor swap provider (or its guarantor) meeting the
ratings requirements set forth in the Interest Rate Swap Agreement being
terminated on the same remaining terms as those in the Interest Rate Swap
Agreement being terminated, so long as the Swap Termination Payment is
sufficient to obtain such replacement interest rate swap agreement. In the event
that the Trust receives a Swap Termination Payment and a successor swap provider
cannot be obtained, then the Trustee shall deposit the Swap Termination Payment
into the reserve account that is a sub-account of the Swap Account. On each
subsequent Distribution Date (so long as funds are available in the reserve
account), the Trustee shall withdraw from the reserve account and deposit into
the Swap Account an amount equal to the amount of any Net Swap Receipt due the
Trust (calculated in accordance with the terms of the original Interest Rate
Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of
determining the distributions from the Swap Account. The remaining amount in the
reserve account will remain in that account and will not be treated as a Swap
Termination Payment for purposes of determining the distributions from the Swap
Account until the final Distribution Date. In no event shall the Trustee be
responsible for the selection of any successor or replacement Swap Provider or
any shortfalls caused by a failure to enter into a replacement interest rate
swap agreement.
Upon termination of the Trust, any amounts remaining in the
Swap Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
In the event that, upon the Trust entering into a replacement
interest rate swap, the Trust is entitled to receive a Replacement Swap Provider
Payment from a replacement swap provider, the Trustee shall direct the
replacement swap provider to make such Replacement Swap Provider Payment to the
Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider
Payment shall be made from the Swap Account to the Swap Provider immediately
upon receipt of such payment, regardless of whether the date of receipt thereof
is a Distribution Date. To the extent that any Replacement Swap Provider Payment
is made to an account other than the Swap Account, then, notwithstanding
anything to the contrary contained in this Agreement, any Replacement Swap
Provider Payment shall be paid to the Swap Provider immediately upon receipt of
such Replacement Swap Provider Payment by the Trust, regardless of whether the
date of receipt thereof is a Distribution Date and without regard to anything to
the contrary contained in this Agreement. For the avoidance of doubt, the
parties agree that the Swap Provider shall have first priority to any
Replacement Swap Provider Payment over the payment by the Trust to
Certificateholders, any Servicer, the Custodian, any Responsible Party, the
Trustee or any other Person. However, to the extent any Replacement Swap
Provider Payment received from a replacement swap provider and paid to the Swap
Provider being replaced is less than the full amount of a Swap Termination
Payment owed to the Swap Provider, any remaining amount of the Swap Termination
Payment shall be paid to the Swap Provider on subsequent Distribution Dates in
accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap
Provider Payment is paid to the Swap Provider on a Distribution Date, in which
case such remaining amounts will be paid on such Distribution Date).
The Trustee shall account for the Swap Account as an asset of
the Grantor Trust and not as an asset of any Trust REMIC created pursuant to
this Agreement. The beneficial owners of the Swap Account are the Class X
Certificateholders. For federal income tax purposes, Net Swap Payments and Swap
Termination Payments (without duplication of previously paid Replacement Swap
Provider Payments) payable to the Swap Provider shall be deemed to be paid to
the Swap Account from the Class X REMIC, first, by the Holder of the Class X
Certificates (in respect of the Class IO Interest and, if applicable, the Class
X Interest) and second, other than any Defaulted Swap Termination Payment, from
the Upper-Tier REMIC by the Holders of the applicable Class or Classes of
Offered Certificates (in respect of Class IO Shortfalls) as and to the extent
provided in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Trustee to the Offered
Certificateholders shall be accounted for by the Trustee, for federal income tax
purposes, as amounts paid first to the Holders of the Class X Certificates in
respect of the Class X Interest and (to the extent remaining after payments to
the Swap Provider) the Class IO Interest, and then to the respective Class or
Classes of Offered Certificates. In addition, the Trustee shall account for the
rights of Holders of each Class of Offered Certificates to receive payments of
Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward
Amounts payable from the Excess Reserve Fund Account), subject to the obligation
to pay Class IO Shortfalls, as rights and obligations under a separate limited
recourse notional principal contract between the Class X Certificateholders and
Holders of each such Class.
The Swap Account shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any Trust REMIC. Furthermore,
the Holders of the Class X Certificates shall be the beneficial owners of the
Swap Account for all federal income tax purposes, and shall be taxable on all
income earned thereon.
With respect to the failure of the Swap Provider to perform
any of its obligations under the Interest Rate Swap Agreement, the breach by the
Swap Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Schedule to the Interest
Rate Swap Agreement, the Trustee shall send any notices and make any demands, on
behalf of the Trust as are required under the Interest Rate Swap Agreement. To
the extent that the Swap Provider fails to make any payment required under the
terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall
immediately demand that Xxxxxx Xxxxxxx, the guarantor of the Swap Provider's
obligations under the guarantee of Xxxxxx Xxxxxxx relating to the Interest Rate
Swap Agreement, make any and all payments then required to be made by Xxxxxx
Xxxxxxx pursuant to such guarantee. In addition, in the event a "Delivery
Amount" (as defined in the Interest Rate Swap Agreement) payable but not
delivered by the Swap Provider as required by the Interest Rate Swap Agreement,
the Trustee shall deliver a notice of failure to transfer collateral on the next
Business Day following such failure, in accordance with the terms of the
Schedule to the Interest Rate Swap Agreement. The Trustee shall cause any
replacement swap provider to provide a copy of the related replacement interest
rate swap agreement to the Trustee and the Depositor.
If a Responsible Officer of the Trustee receives written
notice that the Swap Provider or its guarantor has been downgraded below the
levels set forth in Part 5(f) of the Interest Rate Swap Agreement and the
posting of collateral is required in accordance with the terms of Part 5(f) of
the Interest Rate Swap Agreement, the Trustee shall demand that the Swap
Provider or its guarantor post collateral in accordance with the terms of Part
5(f) of the Interest Rate Swap Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class
X and Class P Certificates in the name of the Depositor or its designee. On a
date as to which the Depositor notifies the Trustee, the Trustee shall transfer
the Class X and Class P Certificates in the name of the NIM Trustee, or such
other name or names as the Depositor shall request, and to deliver the Class X
and Class P Certificates to the NIM Trustee or to such other Person or Persons
as the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on
the Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer
and Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of this Section 5.02, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to (i) the
transfer of the Class X, Class P or Residual Certificates to the Depositor or an
Affiliate of the Depositor or, in the case of the Class RX Certificates, the
initial transfer by an Affiliate of the Depositor, (ii) the transfer of the
Class X or Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
transfer of the Class X or Class P Certificates from the NIM Issuer or the NIM
Trustee to the Depositor or an Affiliate of the Depositor, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Trustee in writing the
facts surrounding the transfer in substantially the form set forth in Exhibit H
(the "Transferor Certificate") and either (i) there shall be delivered to the
Trustee a letter in substantially the form of Exhibit I (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made without registration under
the Securities Act. In the event that a transfer of a Private Certificate which
is a Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicers shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and each Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of Class X or Class P
Certificates or the Residual Certificates to the Depositor or an Affiliate of
the Depositor or, in the case of the Class RX Certificates, the initial transfer
by an Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, no transfer of an ERISA-Restricted
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal, state
or local law ("Similar Law") materially similar to the foregoing provisions of
ERISA or the Code, nor a Person acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such transfer, or
(ii) in the case of an ERISA-Restricted Certificate other than a Residual
Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee, which Opinion of Counsel shall not be an expense of the Servicers, the
Depositor, the Trustee or the Trust Fund, addressed to the Trustee, to the
effect that the purchase or holding of such ERISA-Restricted Certificate will
not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Depositor, the Trustee or the Servicers to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Physical Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of the Investor-Based
Exemptions.
(c) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee;
(ii) Other than in the case of the Depositor or an Affiliate
of the Depositor that is a Permitted Transferee, no Ownership
Interest in a Residual Certificate may be registered on the Closing
Date or thereafter transferred, and the Trustee shall not register
the Transfer of any Residual Certificate unless, in addition to the
certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with
an affidavit (a "Transfer Affidavit") of the initial owner or the
proposed transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer
of a Residual Certificate and (C) not to Transfer its Ownership
Interest in a Residual Certificate or to cause the Transfer of an
Ownership Interest in a Residual Certificate to any other Person if
it has actual knowledge that such Person is a Non-Permitted
Transferee;
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall
vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Residual Certificate in
violation of the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer
of such Residual Certificate. The Trustee shall not have any
liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section
5.02(b) and this Section 5.02(c) or for making any payments due on
such Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement
so long as the Transfer was registered after receipt of the related
Transfer Affidavit, Transferor Certificate and the Rule 144A Letter.
The Trustee shall be entitled but not obligated to recover from any
Holder of a Residual Certificate that was in fact a Non-Permitted
Transferee at the time it became a Holder or, at such subsequent
time as it became a Non-Permitted Transferee, all payments made on
such Residual Certificate at and after either such time. Any such
payments so recovered by the Trustee shall be paid and delivered by
the Trustee to the last preceding Permitted Transferee of such
Certificate; and
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section
860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Residual Certificate to any Holder who is a
Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund or the
Trustee, to the effect that the elimination of such restrictions will not cause
any Trust REMIC hereunder to fail to qualify as a REMIC at any time that the
Certificates are Outstanding or result in the imposition of any tax on the Trust
Fund, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Residual Certificate hereby consents to any
amendment of this Agreement which, based on an Opinion of Counsel furnished to
the Trustee, is reasonably necessary (a) to ensure that the record ownership of,
or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is a Non-Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate which is
held by a Person that is a Non-Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, or (y) the Depositor
notifies the Depository (and the Trustee consents) of its intent to terminate
the book-entry system through the Depository, and, upon receipt of notice of
such intent from the Depository, the Depository Participants holding beneficial
interests in the Book-Entry Certificates agree to initiate such termination, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. None of the Servicers, the Depositor or the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
(f) No transfer of any Private Certificate presented or
surrendered for registration of transfer or exchange shall be made unless the
transfer or exchange is accompanied by a written instrument of transfer and
accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments)
or W-9 duly executed by the Certificateholder or its representative or nominee
duly authorized in writing. The Trustee shall promptly forward any such IRS Form
(other than with respect to the Residual Certificates) received to the Swap
Provider and the Cap Provider located at 0000 Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000,
Xxxxxxxxx: XX ISD SPV Team, Fax: (000) 000-0000. Each such Private
Certificateholder by its purchase of such Private Certificate is deemed to
consent to any IRS Form being so forwarded. The Trustee shall not be liable for
the completeness, accuracy, content or truthfulness of any such tax
certification provided to it.
(g) Each Certificate presented or surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by the
Trustee in accordance with its customary practice. No service charge shall be
made for any registration of transfer or exchange of Private Certificates, but
the Trustee may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Depositor, the
Servicers and the Trustee such security or indemnity as may be required by them
to hold each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicers, the
Trustee, the Depositor, and any agent of a Servicer, the Depositor or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and none of the
Servicers, the Trustee, the Depositor, or any agent of a Servicer, the Depositor
or the Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, such Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in the United States where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates the
offices of its agent located at DB Services Tennessee, 000 Xxxxxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Transfer Unit for such purposes. The
Trustee shall give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a
Servicer. The Depositor and each of the Servicers will each keep in full effect
its existence, rights and franchises as a corporation or federally chartered
savings bank, as the case may be, under the laws of the United States or under
the laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or a Servicer, shall be a party, or any person succeeding
to the business of the Depositor or a Servicer (including through the
acquisition of substantially all of the assets of a Servicer), shall be the
successor of the Depositor or such Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding
(except that any person succeeding to the business of a Servicer shall be
required to assume all of such Servicer's future obligations under this
Agreement and satisfy all of the requirements of this Agreement to be a
successor servicer); provided, however, that the successor or surviving Person
to such Servicer shall be qualified to service mortgage loans on behalf of,
Xxxxxx Xxx or Freddie Mac. As a condition to the succession to any Servicer
under this Agreement by any Person (i) into which a Servicer may be merged or
consolidated or whom succeeds to the business of a Servicer, or (ii) which may
be appointed as a successor to a Servicer, such Servicer shall provide to the
Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Depositor of such
succession or appointment and (y) in writing to the Depositor and in form and
substance reasonably satisfactory to the Depositor, all information reasonably
necessary to enable the Trustee, pursuant to Section 8.12(g), to accurately and
timely report the event under Item 6.02 of Form 8-K pursuant to the Exchange Act
(if such reports under the Exchange Act are then required to be filed under the
Exchange Act).
Section 6.03 Limitation on Liability of the Depositor, the
Servicers and Others. Neither the Depositor, the Servicers nor any of their
respective directors, officers, employees or agents shall be under any liability
to the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Servicers or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicers or any such Person from any liability which would otherwise be imposed
by reasons of willful misfeasance, bad faith or negligence (or gross negligence
in the case of the Depositor) in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, each
Servicer and any director, officer, employee or agent of the Depositor and each
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and its Affiliates, the Sponsor, each Servicer and any director,
officer, employee or agent of the Depositor, the Sponsor or each Servicer shall
be indemnified by the Trust Fund and held harmless against any loss, liability
or expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates other than any loss, liability or
expense related to any specific Mortgage Loan or Mortgage Loans (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor any
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and which
in its opinion may involve it in any expense or liability; provided, however,
that each of the Depositor and each Servicer may in its discretion undertake any
such action (or direct the Trustee to undertake such actions pursuant to Section
2.03 for the benefit of the Certificateholders) that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Depositor and the applicable Servicer shall be entitled to be reimbursed
therefor out of the applicable Collection Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject
to Sections 7.01 and 10.07, no Servicer shall assign this Agreement or resign
from the obligations and duties hereby imposed on it except by mutual consent of
the applicable Servicer, the Depositor and the Trustee or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by such Servicer without the incurrence of
unreasonable expense. Any such determination permitting the resignation of a
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Depositor and the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Depositor and the Trustee. No such resignation shall
become effective until a successor shall have assumed such Servicer's
responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its sole discretion
has consented, which consent shall not be unreasonably withheld, (ii) the Rating
Agencies' ratings of the Certificates in effect immediately prior to such action
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies) and (iii) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided, further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Trustee, the Custodian, the Depositor, the other Servicers hereunder,
any sub-servicer, the successor Servicer and each Certificateholder harmless
against any and all claims, losses, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments, and any other costs, fees and expenses
that such party may sustain in any way related to such assignment except with
respect to a successor Xxxxxxxx's failure to comply with the terms of this
Agreement. No assignment by such Servicer shall become effective until a
successor Servicer acceptable to the Depositor and the Trustee shall have
assumed in writing such Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement. Any such assignment shall not relieve the
applicable Servicer of responsibility for any of the obligations specified
herein except to the extent that such responsibilities have been expressly
assumed by the successor Servicer.
Section 6.05 Additional Indemnification by the Servicers;
Third-Party Claims. (a) Each Servicer, severally and not jointly, shall
indemnify the applicable Responsible Party, the Depositor, the Sponsor, the
Trustee and any director, officer, employee or agent of the Depositor, the
Sponsor or the Trustee and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to (i) any breach by such Servicer of
any of its representations and warranties referred to in Section 2.03(a), (ii)
any error in any tax or information return prepared by such Servicer or (iii)
the failure of such Servicer to perform its duties and service the Mortgage
Loans in compliance with the terms of this Agreement (including, without
limitation, the failure to deliver accurate and complete information on a timely
basis pursuant to Section 4.03(e). The applicable Servicer immediately shall
notify the Depositor and the Trustee if such claim is made by a third-party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Sponsor, the applicable Responsible Party or
the Trustee in respect of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, each Servicer shall indemnify the Depositor, the Sponsor, the Trustee
and any director, officer, employee or agent of the Depositor, the Sponsor or
the Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any failure by such Servicer or any Subservicer
engaged by such Servicer or any Subcontractor utilized by such Servicer to
deliver any information, report, certification or accountants' letter when and
as required under Sections 3.22, 3.23, 6.02 or 8.12, including without
limitation any failure by such Servicer to identify pursuant to Section 3.02(e)
any Subcontractor "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05
is unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then such Servicer shall contribute to the amount
paid or payable to the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and
such Servicer, on the other, in connection with such Servicer's obligations
pursuant to this Section 6.05. This Section 6.05 shall survive the termination
of this Agreement or the earlier resignation or removal of each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever
used herein, means, with respect to each Servicer individually, any one of the
following events:
(a) any failure by a Servicer to remit to the Trustee any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to such Servicer by the Depositor or the Trustee, or to such Servicer, the
Depositor and the Trustee by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(b) any failure on the part of a Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of such Servicer set forth in this Agreement which continues unremedied for
a period of sixty (60) days (except that (x) such number of days shall be
fifteen (15) in the case of a failure to pay any premium for any insurance
policy required to be maintained under this Agreement and (y) such number of
days shall be ten (10) in the case of a failure of Countrywide Servicing to
observe or perform any of its obligations under the provisions of the
Countrywide Amendment Regulation AB incorporated by reference into this
Agreement pursuant to Section 3.01(f) which are equivalent to a Servicer's
obligations under Sections 3.02, 3.22 and 3.23 of this Agreement or zero (0),
with respect to Saxon, in the case of a failure to observe or perform any of the
obligations set forth in Sections 3.02, 3.22, 3.23, 6.02 or 8.12) and such
number of days shall be after the earlier of (i) the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to such Servicer by the Depositor or the Trustee, or to such Servicer, the
Depositor and the Trustee by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates and (ii) actual knowledge of such failure by a
Servicing Officer of such Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to a Servicer or of or relating to all or
substantially all of its property; or
(e) a Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Trustee or the Depositor, or to such Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(g) with respect to Saxon, any withdrawal or downgrade of two
or more levels (i.e., from "Above Average" to "Below Average" or the equivalent)
of Saxon's rating, as of the Closing Date which results a downgrade,
qualification or withdrawal of the rating assigned to any Class of Certificates
by any Rating Agency.
If an Event of Default described in clauses (a) through (g) of
this Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Trustee may, and at the
direction of a majority of the Voting Rights, the Trustee shall, by notice in
writing to the applicable Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the Mortgage Loans serviced by such Servicer and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that the Trustee shall not be required to give written notice
to such Servicer of the occurrence of an Event of Default described in clauses
(b) through (g) of this Section 7.01 unless and until a Responsible Officer of
the Trustee has actual knowledge of the occurrence of such an event. In the
event that a Responsible Officer of the Trustee has actual knowledge of the
occurrence of an Event of Default described in clause (a) of this Section 7.01,
the Trustee shall give written notice to the applicable Servicer of the
occurrence of such an event within one Business Day of the first day on which
such Responsible Officer obtains actual knowledge of such occurrence; provided,
that if such failure is the failure to make a P&I Advance, the Trustee shall
send such notice prior to 12:00 noon New York time on the Distribution Date and,
if the Event of Default of such Servicer was the failure to make a P&I Advance,
the Trustee, as successor Servicer, shall make such P&I Advance on the
Distribution Date that such notice was delivered. On and after the receipt by
such Servicer of such written notice, all authority and power of such Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. Subject to Section 7.02, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of such Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of such Servicer to pay amounts owed pursuant to
Article VIII. Such Servicer agrees to cooperate with the Trustee in effecting
the termination of such Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the related Collection Account of such
predecessor Servicer, or thereafter be received with respect to the Mortgage
Loans.
Notwithstanding any termination of the activities of a
Servicer hereunder, such Servicer shall be entitled to receive from the Trust
Fund, prior to transfer of its servicing obligations hereunder, payment of all
accrued and unpaid Servicing Fees and reimbursement for all outstanding P&I
Advances and Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and
after the time a Servicer receives a notice of termination pursuant to Section
3.24 or Section 7.01, the Trustee shall, subject to and to the extent provided
in Section 3.05, be the successor to such Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on such Servicer by the terms and provisions hereof and
applicable law including the obligation to make P&I Advances or Servicing
Advances pursuant to Section 3.24 or Section 7.01. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans that such
Servicer would have been entitled to charge to its Collection Account if such
Servicer had continued to act hereunder including, if such Servicer was
receiving the Servicing Fee, the Servicing Fee and the income on investments or
gain related to its Collection Account and the Distribution Account which such
Servicer would be entitled to receive (in addition to income on investments or
gain related to the Distribution Account for the benefit of the Trustee during
the Trustee Float Period). Notwithstanding the foregoing, if the Trustee has
become the successor to such Servicer in accordance with Section 7.01, (a) the
Trustee shall have a period not to exceed 90 days to complete the transfer of
servicing and all data and to correct or manipulate such servicing data as may
be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise enable the Trustee or other successor Servicer to
service the Mortgage Loans in accordance with Accepted Servicing Practices and
(b) the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making P&I Advances and Servicing Advances
pursuant to Section 4.01, if it is otherwise unable to so act or at the written
request of Certificateholders entitled to at least a majority of the Voting
Rights, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to such servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of such servicer
hereunder. Any successor to such servicer shall be an institution which is a
Xxxxxx Xxx and Freddie Mac approved servicer in good standing, which has a net
worth of at least $30,000,000, which is willing to service the Mortgage Loans
and which executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, containing an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of such terminated servicer (other than liabilities of such
terminated servicer under Section 6.03 incurred prior to termination of such
Servicer under Section 7.01), with like effect as if originally named as a party
to this Agreement; provided, that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to the predecessor
servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor Servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the predecessor servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that a Servicer is terminated pursuant to Section
7.01, such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor Servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to a Servicer as servicer shall give notice to
the related Mortgagors of such change of servicer and shall, during the term of
its service as servicer, maintain in force the policy or policies that each
Servicer is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and to each Rating
Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders and each
Rating Agency notice of each such Event of Default hereunder known to the
Trustee, unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred
and is continuing:
(a) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of the duties and obligations
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee, and the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming on their face to the requirements of this Agreement which
it believed in good faith to be genuine and to have been duly executed by the
proper authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it is finally proven that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
The Trustee shall be permitted to utilize one or more
Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Trustee complies with Section 3.02(e) as if the
Trustee were a "Servicer" pursuant to that Section. The Trustee shall indemnify
the Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to the failure of the Trustee to
perform any of its obligations under Section 3.22 or Section 3.23, including
without limitation any failure by the Trustee to identify pursuant to Section
3.02(e) any Subcontractor that is a Servicing Function Participant. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Trustee.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodian. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodian may request and rely upon
and shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties and neither the
Trustee nor the Custodian shall have responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(b) the Trustee and the Custodian may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) neither the Trustee nor the Custodian shall be liable for
any action taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, accountants or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder; provided, further, the Trustee shall
not be responsible for any act or omission of the Custodian;
(f) the Trustee shall not be required to risk or expend its
own funds or otherwise incur any financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of the
investment security and with respect to the investment of funds in the
Distribution Account during the Trustee Float Period);
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an Event of Default, the Trustee shall not be
deemed to have knowledge of an Event of Default, until a Responsible Officer of
the Trustee shall have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any
of the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, the Interest Rate Swap Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and authentication of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or a
Servicer of any funds paid to the Depositor or a Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from any Collection Account or the
Distribution Account by the Depositor or a Servicer.
The Trustee shall have no responsibility for filing or
recording any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder (unless the Trustee shall have become the
successor Servicer).
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for
its activities under this Agreement, the Trustee may withdraw from the
Distribution Account on each Distribution Date the Trustee Fee for the
Distribution Date and any interest or investment income earned on funds
deposited in the Distribution Account during the Trustee Float Period. The
Trustee and any director, officer, employee, or agent of the Trustee shall be
indemnified by the Trust Fund against any loss, liability, or expense (including
reasonable attorney's fees) resulting from any error in any tax or information
return prepared by any Servicer or incurred in connection with any claim or
legal action relating to (a) this Agreement, (b) the Certificates or the
Interest Rate Swap Agreement, or (c) the performance of any of the Trustee's
duties under this Agreement (including any unreimbursed out-of-pocket costs
resulting from a servicing transfer), the Certificates or the Interest Rate Swap
Agreement, other than any loss, liability, or expense (i) resulting from any
breach of any Servicer's obligations in connection with this Agreement for which
the related Servicer has performed its obligation to indemnify the Trustee
pursuant to Section 6.05, (ii) resulting from any breach of the Responsible
Party's obligations in connection with this Agreement for which the Responsible
Party has performed its obligations to indemnify the Trustee pursuant to Section
2.03(o) or (iii) incurred because of willful misconduct, bad faith, or
negligence in the performance of any of the Trustee's duties under this
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee under this Agreement. Without limiting the
foregoing, except as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any expense, disbursement, or advance arising from the
Trustee's negligence, bad faith, or willful misconduct, the Trust Fund shall pay
or reimburse the Trustee, for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with this Agreement with
respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance
of the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not
regularly employed by the Trustee, to the extent that the
Trustee must engage them to perform services under this
Agreement.
Except as otherwise provided in this Agreement or a separate
letter agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
that no expense shall be reimbursed by the Trust Fund under this Agreement if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The
Trustee hereunder shall at all times be a corporation or association organized
and doing business under the laws of a state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating which would
not cause any of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicers and their Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor or a
Servicer other than the Trustee in its role as successor to Servicer.
Section 8.07 Resignation and Removal of the Trustee. The
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice of resignation to the Depositor, the Servicers and each
Rating Agency not less than 60 days before the date specified in such notice,
when, subject to Section 8.08, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.08 meeting the
qualifications set forth in Section 8.06. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee
appointed as provided in Section 8.07 shall execute, acknowledge and deliver to
the Depositor and to its predecessor trustee and the Servicers an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The Depositor, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee shall notify the Depositor of such
succession or appointment and shall furnish to the Depositor in writing and in
form and substance reasonably satisfactory to the Depositor, all information
reasonably necessary for the Depositor to accurately and timely report, pursuant
to Section 8.12(g), the event under Item 6.02 of Form 8-K pursuant to the
Exchange Act (if such reports under the Exchange Act are required to be filed
under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee as successor Servicer
under this Agreement to advance funds, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to a
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable
because of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such separate
trustee or co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for
the payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to each Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC and that in such
capacity it shall:
(a) prepare, sign and file, in a timely manner, a U.S. Real
Estate Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
Trust REMIC containing such information and at the times and in the manner as
may be required by the Code or state or local tax laws, regulations, or rules,
and furnish to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby;
(b) apply for an employer identification number from the
Internal Revenue Service via Form SS-4 or any other acceptable method for all
tax entities (i.e., the Trust REMICs and the Grantor Trust), furnish to the
Depositor, not later than the Closing Date in the case of the Grantor Trust (the
corpus of which includes the Interest Rate Swap Agreement and Interest Rate Cap
Agreement) and within thirty days of the Closing Date in the case of the Trust
REMICs, copies of such Form SS-4 requesting the employer identification numbers,
use its best efforts to obtain, as promptly as practicable, employer
identification numbers for any other Trust REMICs or Grantor Trusts created
pursuant to this Agreement (and provide such employer identification numbers to
the Depositor promptly upon receipt thereof), furnish to the Internal Revenue
Service, on Form 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code];
(c) deliver or cause to be delivered the federal taxpayer
identification number of the Grantor Trust on a correct, complete and duly
executed IRS Form W-9 of the Grantor Trust to the Swap Provider promptly upon
receipt of such number after applying for it pursuant to 8.11(b) above and, in
any event, no later than the first Payment Date under the Interest Rate Swap
Agreement, and, if requested by the Swap Provider, an applicable IRS Form
W-8IMY;
(d) make an election that each of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X
REMIC be treated as a REMIC on the federal tax return for its first taxable year
(and, if necessary, under applicable state law);
(e) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(f) provide information necessary for the computation of tax
imposed on the Transfer of a Residual Certificate to a Person that is a
Non-Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax);
(g) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
Outstanding so as to maintain the status of each Trust REMIC as a REMIC under
the REMIC Provisions;
(h) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of any
Trust REMIC created hereunder;
(i) pay, from the sources specified in the last paragraph of
this Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings);
(j) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other Person as may be required to
sign such returns by the Code or state or local laws, regulations or rules; and
(k) maintain records relating to each Trust REMIC created
hereunder, including the income, expenses, assets, and liabilities thereof on a
calendar year basis and on the accrual method of accounting and the fair market
value and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information.
The Holder of the largest Percentage Interest of the Class RX
Certificates shall act as Tax Matters Person for the Class X REMIC, and the
holder of the largest Percentage Interest of the Class R Certificates shall act
as Tax Matters Person for Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC, in each case, within the meaning of
Treasury Regulations Section 1.860F-4(d), and the Trustee is hereby designated
as agent of such Certificateholder for such purpose (or if the Trustee is not so
permitted, such Holder shall be the Tax Matters Person in accordance with the
REMIC Provisions). In such capacity, the Trustee shall, as and when necessary
and appropriate, represent each Trust REMIC created hereunder in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each Trust REMIC created hereunder, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of each Trust REMIC created hereunder, and
otherwise act on behalf of each Trust REMIC in relation to any tax matter or
controversy involving it.
The Trustee shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Swap Account (subject to the obligation to pay Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts) and the rights of the
Offered Certificateholders to receive Basis Risk CarryForward Amounts and,
without duplication, Upper-Tier CarryForward Amounts as the beneficial ownership
of interests in the Grantor Trust, and not as obligations of any Trust REMIC
created hereunder, for federal income tax purposes. The Trustee shall file or
cause to be filed with the Internal Revenue Service Form 1041 or such other form
as may be applicable and, as described above, shall apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for the Grantor Trust and shall furnish or cause to be
furnished, to the Class P Certificateholders, Class X Certificateholders and
Offered Certificateholders, the respective amounts described above that are
received, in the time or times and in the manner required by the Code.
To enable the Trustee to perform its duties under this
Agreement, the Depositor shall provide to the Trustee within ten days after the
Closing Date all information or data that the Trustee requests in writing and
determines to be relevant for tax purposes to the valuations and offering prices
of the Certificates, including the price, yield, prepayment assumption, and
projected cash flows of the Certificates and the Mortgage Loans. Moreover, the
Depositor shall provide information to the Trustee concerning the value, if any,
to each Class of Certificates of the right to receive Basis Risk CarryForward
Amounts from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account.
Thereafter, the Depositor shall provide to the Trustee promptly upon written
request therefor any additional information or data that the Trustee may, from
time to time, reasonably request to enable the Trustee to perform its duties
under this Agreement; provided, however, that the Depositor shall not be
required to provide any information regarding the Mortgage Loans that the
applicable Servicer is required to provide to the Trustee pursuant to this
Agreement. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims, or expenses of the Trustee arising from any errors
or miscalculations of the Trustee that result from any failure of the Depositor
to provide pursuant to this paragraph accurate information or data to the
Trustee on a timely basis.
None of the Servicers nor the Trustee shall (i) permit the
creation of any interests in any Trust REMIC other than the regular and residual
interests set forth in the Preliminary Statement, (ii) receive any amount
representing a fee or other compensation for services (except as otherwise
permitted by this Agreement or the related Mortgage Loan documents) or (iii)
otherwise knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any Trust REMIC as a REMIC or (ii)
result in the imposition of a tax upon any Trust REMIC or the Trust Fund
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Trustee receives an Opinion of Counsel (at the expense of
the party seeking to take such action or, if such party fails to pay such
expense, at the expense of the Trust Fund, but in no event at the expense of the
Trustee) to the effect that the contemplated action will not, with respect to
the Trust Fund, any Trust REMIC created hereunder, endanger such status or
result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any
Trust REMIC as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section
860G(c) of the Code, on any contribution to any Trust REMIC after the Start-up
Day pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including, if applicable, any minimum tax imposed on any Trust REMIC pursuant to
Sections 23153 and 24878 of the California Revenue and Taxation Code, if not
paid as otherwise provided for herein, the tax shall be paid by (i) the Trustee,
if such tax arises out of or results from negligence of the Trustee, as
applicable, in the performance of any of its obligations under this Agreement,
(ii) the applicable Servicer and the applicable Responsible Party, jointly, in
the case of any such minimum tax, and the applicable Servicer if such tax arises
out of or results from a breach by such Servicer of any of its obligations under
this Agreement, (iii) the applicable Responsible Party if such tax arises out of
or results from the applicable Responsible Party's obligation to repurchase a
Mortgage Loan pursuant to Section 2.03, (iv) the Sponsor if such tax arises out
of or results from the Sponsor's obligation to repurchase a Mortgage Loan
pursuant to the Representations and Warranties Agreement, or (v) in all other
cases, or if the Trustee, the applicable Servicer or the applicable Responsible
Party fails to honor its obligations under the preceding clause (i), (ii), (iii)
or (iv), any such tax will be paid with amounts otherwise to be distributed to
the Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and each
Servicer shall reasonably cooperate with the Depositor in connection with the
reporting requirements of the Trust under the Exchange Act. The Trustee shall
prepare for execution by the Depositor any Forms 8-K (other than the initial
Form 8-K relating to this Agreement, which shall be the responsibility of the
Depositor to prepare and file), 10-D and 10-K required by the Exchange Act and
the rules and regulations of the Commission thereunder, in order to permit the
timely filing thereof, pursuant to the terms of this Section 8.12, and the
Trustee shall file (via the Commission's Electronic Data Gathering and Retrieval
System, or XXXXX) such Forms executed by the Depositor. The Trustee shall have
no duty to verify information received by it from other Persons (other than
Subcontractors utilized by the Trustee) in connection with its duties under this
Section 8.12.
(b) No later than 1:00 p.m. (Eastern Standard Time) (so long
as the Trustee has received from the Depositor the executed Form 10-D no later
than noon (Eastern Standard Time) on the preceding Business Day (or otherwise,
the Trustee will utilize reasonable best efforts to file such Form 10-D no later
than the filing deadline for such Form 10-D)) on any date within 15 calendar
days after each Distribution Date (subject to permitted extensions under the
Exchange Act), the Trustee shall prepare and file on behalf of the Trust any
Form 10-D required by the Exchange Act, in form and substance as required by the
Exchange Act. The Trustee shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the Monthly
Statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be prepared by the party responsible for preparing such
disclosure as set forth in Exhibit T hereto and provided to the Trustee in
XXXXX-compatible form at the email address for the Trustee set forth in Section
10.05, using Exhibit Z and the Trustee shall compile such disclosure pursuant to
the following paragraph. As used in this Agreement, XXXXX-compatible form means
an electronic information storage format acceptable to the Trustee and the party
providing such information. The Trustee will have no duty or liability for any
failure hereunder to determine or prepare any Additional Form 10-D Disclosure,
except as set forth in the next paragraph.
As set forth on Exhibit T hereto, within 5 calendar days after
the related Distribution Date, certain parties to this Agreement shall be
required to provide to the Trustee and the Depositor, to the extent known by
such applicable parties, any Additional Form 10-D Disclosure, if applicable. The
Trustee shall compile all such information provided to it in a Form 10-D
prepared by it.
The Trustee shall prepare and forward electronically a draft
copy of the Form 10-D to the Depositor sufficiently far in advance of, but in no
event less than two (2) Business Days prior to, when the Depositor is required
to execute such Form 10-D to permit the Depositor to review, verify and execute
such Form 10-D. No later than 2 Business Days prior to the 15th calendar day
after the related Distribution Date, an officer of the Depositor shall sign the
Form 10-D and return an electronic or fax copy of such signed Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Trustee. If a
Form 10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Trustee will follow the procedures set forth in Section
8.12(f)(ii). The signing party at the Depositor can be contacted at the
Depositor's address for notices set forth in Section 10.5(b)(ii)(a), or such
other address as to which the Depositor has provided prior written notice to the
Trustee. The Depositor acknowledges that the performance by the Trustee of its
duties under this Section 8.12(b) related to the timely preparation and filing
of Form 10-D is contingent, in part, upon each Servicer, and the Depositor and
any other Person obligated to provide Additional Form 10-D Disclosure as set
forth on Exhibit T hereto observing all applicable deadlines in the performance
of their duties under this Section 8.12(b). The Trustee shall have no liability
for any loss, expense, damage, or claim arising out of or with respect to any
failure to properly prepare and/or timely file such Form 10-D, where such
failure results from the Trustee's inability or failure to obtain or receive, on
a timely basis, any information or signature from any party hereto (other than
the Trustee or any Subcontractor utilized by the Trustee) needed to prepare,
arrange for execution or file such Form 10-D, not resulting from its own
negligence, bad faith or willful misconduct.
(c) No later than 1:00 p.m. (Eastern Standard Time) (so long
as the Trustee has received from the Depositor the executed Form 10-K no later
than noon (Eastern Standard Time) on the preceding Business Day (or otherwise,
the Trustee shall utilize reasonable best efforts to file such Form 10-K no
later than the filing deadline for such Form 10-K)) on any date within 90 days
after the end of each fiscal year of the Trust or such earlier date as may be
required by the Exchange Act (the "10-K Filing Deadline"), commencing in March
2008, the Trustee shall prepare and file on behalf of the Trust a Form 10-K, in
form and substance as required by the Exchange Act. Each such Form 10-K shall
include the following items, in each case to the extent they have been delivered
to the Trustee within the applicable time frames set forth in this Agreement,
(i) an annual compliance statement for each Servicer and each Subservicer
engaged by any Servicer and the Trustee, as described under Section 3.22,
(ii)(A) the annual reports on assessment of compliance with servicing criteria
for the Trustee, each Servicer, the Custodian, each Subservicer engaged by any
Servicer and each Servicing Function Participant utilized by a Servicer, the
Custodian or the Trustee, as described under Section 3.23, and (B) if any such
report on assessment of compliance with servicing criteria described under
Section 3.23 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or such report on assessment of
compliance with servicing criteria described under Section 3.23 is not included
as an exhibit to such Form 10-K, disclosure that such report is not included and
an explanation why such report is not included, (iii)(A) the registered public
accounting firm attestation report for the Trustee, each Servicer, the
Custodian, each Subservicer engaged by a Servicer and each Servicing Function
Participant utilized by a Servicer, or the Trustee or the Custodian, as
described under Section 3.23, and (B) if any registered public accounting firm
attestation report described under Section 3.23 identifies any material instance
of noncompliance, disclosure identifying such instance of noncompliance, or if
any such registered public accounting firm attestation report is not included as
an exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, and (iv) a certification
substantially in the form attached hereto as Exhibit L, with such changes as may
be necessary or appropriate as a result of changes promulgated by the Commission
(the "Sarbanes Certification"), which shall be signed by the senior officer of
the Depositor in charge of securitization. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form 10-K
("Additional Form 10-K Disclosure") shall be prepared by the party responsible
for preparing such disclosure as set forth on Exhibit U hereto and provided to
the Trustee in XXXXX-compatible form at the email address for the Trustee set
forth in Section 10.05, using Exhibit Z and the Trustee shall compile such
disclosure pursuant to the following paragraph. The Trustee will have no duty or
liability for any failure hereunder to determine or prepare any Additional Form
10-K Disclosure, except as set forth in the next paragraph.
As set forth on Exhibit U hereto, no later than March 1st of
each year (or, in the case of each Servicer, March 5th of each year) that the
Trust is subject to the Exchange Act reporting requirements, commencing in 2008,
the parties to this Agreement shall be required to provide to the Trustee and
the Depositor, to the extent known by such applicable parties, any Additional
Form 10-K Disclosure, if applicable. The Trustee shall compile all such
information provided to it in a Form 10-K prepared by it.
The Trustee shall prepare and forward electronically a draft
copy of the Form 10-K to the Depositor sufficiently far in advance of, but in no
event less than five (5) Business Days prior to, when the Depositor is required
to execute such Form 10-K to permit the Depositor to review, verify and execute
such Form 10-K. No later than 5:00 p.m. Eastern Standard Time on the 3rd
Business Day prior to the 10-K Filing Deadline, an officer of the Depositor
shall sign the Form 10-K and return an electronic or fax copy of such signed
Form 10-K (with an original executed hard copy to follow by overnight mail) to
the Trustee. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Trustee will follow the procedures set forth
in Section 8.12(f)(ii). The signing party at the Depositor can be contacted at
the Depositor's address for notices set forth in Section 10.5(b)(ii)(a), or such
other address as to which the Depositor has provided prior written notice to the
Trustee. The Depositor acknowledges that the performance by the Trustee of its
duties under this Section 8.12(c) related to the timely preparation and filing
of Form 10-K is contingent, in part, upon each Servicer (and any Subservicer or
Servicing Function Participant engaged by a Servicer) and the Depositor and any
other Person obligated to provide Additional Form 10-K Disclosure as set forth
on Exhibit U hereto, observing all applicable deadlines in the performance of
their duties under this Section 8.12(c), Section 8.12(d), Section 3.22 and
Section 3.23. The Trustee shall have no liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare
and/or timely file such Form 10-K, where such failure results from the Trustee's
inability or failure to obtain or receive, on a timely basis, any information or
signature from any party hereto (other than the Trustee or any Subcontractor
utilized by the Trustee) needed to prepare, arrange for execution or file such
Form 10-K, not resulting from its own negligence, bad faith or willful
misconduct.
(d) In connection with the execution of a Sarbanes
Certification, the Trustee shall sign a certification (in the form attached
hereto as Exhibit M, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Commission) for the benefit of the
Depositor and its officers, directors and Affiliates, and each Servicer shall
sign a certification solely with respect to such Servicer (substantially in the
form attached hereto as Exhibit N, with such changes as may be necessary or
appropriate as a result of changes promulgated by the Commission) for the
benefit of the Depositor, the Trustee and their respective officers, directors
and Affiliates. Each such certification shall be delivered to the Depositor no
later than March 10th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the Sarbanes
Certification no later than the time set forth for the delivery to the Trustee
of the signed Form 10-K pursuant to Section 8.12(d) for such year). In the event
that prior to the filing date of the Form 10-K in March of each year, the
Trustee or any Servicer has actual knowledge of information material to the
Sarbanes Certification, that party shall promptly notify the Depositor and each
of the other parties signing the certifications. In addition, (i) the Trustee
shall indemnify and hold harmless the Depositor and the Sponsor and their
officers, directors, employees, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon any breach of the Trustee's obligations under this Section 8.12(d) or
any material misstatement or material omission contained in any information,
report, certification, accountants' letter or other material provided in written
or electronic form pursuant to Sections 3.23 and 8.12 of this Agreement and
Exhibits T, U and V to this Agreement provided by or on behalf of the Trustee or
any Subcontractor utilized by the Trustee (excluding any information, report,
certification, accountants' letter or other materials provided in written or
electronic form by or on behalf of any Person other than the Trustee or any
Subcontractor utilized by the Trustee), negligence, bad faith or willful
misconduct in connection therewith, and (ii) each Servicer, severally and not
jointly, shall indemnify and hold harmless the Depositor, the Sponsor, the
Trustee and their respective officers, directors, employees, agents and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon any breach of the applicable
Servicer's obligations under this Section 8.12(d) or any material misstatement,
omission, negligence, bad faith or willful misconduct of such Servicer in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless any indemnified party, then (i) the Trustee
agrees in connection with a breach of the Trustee's obligations under this
Section 8.12(d) or any material misstatement or material omission contained in
any information, report, certification, accountants' letter or other material
provided in written or electronic form pursuant to Sections 3.23 and 8.12 of
this Agreement and Exhibits T, U and V to this Agreement provided by or on
behalf of the Trustee or any Subcontractor utilized by the Trustee (excluding
any information, report, certification, accountants' letter or other materials
provided in written or electronic form by or on behalf of any Person other than
the Trustee or any Subcontractor utilized by the Trustee), negligence, bad faith
or willful misconduct in connection therewith that it shall contribute to the
amount paid or payable by the Depositor and the Sponsor as a result of the
losses, claims, damages or liabilities of the Depositor and the Sponsor in such
proportion as is appropriate to reflect the relative fault of the Depositor and
the Sponsor on the one hand and the Trustee on the other and (ii) each Servicer
agrees that it shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, on the one hand, and such Servicer, on
the other hand, in connection with a breach of the Servicers' obligations under
this Section 8.12(d) or any material misstatement or omission, negligence, bad
faith or willful misconduct of such Servicer in connection therewith. The
obligations of the Trustee and each Servicer under this Section 8.12(d) shall
apply to the Trustee, and each Servicer that serviced a Mortgage Loan during the
applicable period, whether or not such Trustee or Servicer is acting as Trustee
or Servicer, as applicable, at the time such certification is required to be
delivered. The indemnification and contribution obligations set forth in this
Section 8.12(d) shall survive the termination of this Agreement or the earlier
resignation or removal of the Trustee or the applicable Servicer, as applicable.
(e) Upon any filing with the Commission, the Trustee shall
promptly deliver to the Depositor a copy of each such executed report, statement
or information.
(f) (i) The obligations set forth in paragraphs (a) through
(d) of this Section shall only apply with respect to periods for which reports
are required to be filed with respect to the Trust under the Exchange Act. Prior
to January 30 of the first year in which the Trustee is able to do so under
applicable law, the Trustee shall file a Form 15 Suspension Notification with
respect to the Trust, with a copy to the Depositor. At any time after the filing
of a Form 15 Suspension Notification, if the number of Holders of the Offered
Certificates of record exceeds the number set forth in Section 15(d) of the
Exchange Act or the regulations promulgated pursuant thereto which would cause
the Trust to again become subject to the reporting requirements of the Exchange
Act, the Trustee shall recommence preparing and filing reports on Form 10-K,
10-D and 8-K as required pursuant to this Section 8.12 and the parties hereto
shall again have the obligations set forth in this Section.
(ii) In the event that the Trustee is unable to timely file
with the Commission all or any required portion of any Form 8-K,
10-D or 10-K required to be filed pursuant to 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, the Trustee will immediately notify the Depositor or the
Servicers. In the case of Form 10-D and 10-K, the Depositor,
Servicers and the Trustee will thereupon cooperate to prepare and
timely file a Form 12b-25 and a 10-D/A and 10-K/A as applicable,
pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Trustee will, upon receipt of all disclosure information
required to be included on Form 8-K, include such disclosure
information on the next Form 10-D. In the event that any previously
filed Form 8-K, 10-D or 10-K needs to be amended, the party to this
Agreement deciding that an amendment to such Form 8-K, 10-D or 10-K
is required will notify the Depositor, the Trustee, the Servicers
and such parties will cooperate to prepare any necessary Form 8-K/A,
10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to Form
8-K, 10-D or 10-K shall be signed by an officer of the Depositor.
The Depositor acknowledges that the performance by the Trustee of
its duties under this Section 8.12(f) related to the timely
preparation and filing of Form 15, a Form 12b-25 or any amendment to
Form 8-K, 10-D or 10-K is contingent, in part, upon the Servicers
and the Depositor observing all applicable deadlines in the
performance of their duties under this Section 8.12 and Sections
3.22 and 3.23. The Trustee shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file any such Form 15, Form 12b-25
or any amendments to Forms 8-K, 10-D or 10-K, where such failure
results from the Trustee's inability or failure to obtain or
receive, on a timely basis, any information from any party hereto
(other than the Trustee or any Subcontractor utilized by the
Trustee) 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.
(g) No later than 3:00 p.m. (Eastern Standard Time) (so long
as the Trustee has received from the Depositor the executed Form 8-K no later
than 5:00 p.m. (Eastern Standard Time) on the 3rd Business Day after the
Reportable Event (as defined below) (or otherwise, the Trustee shall utilize
reasonable best efforts to file such Form 8-K no later than the filing deadline
for such Form 8-K)) on any date within four (4) Business Days after the
occurrence of an event requiring disclosure on Form 8-K (each such event, a
"Reportable Event"), and also if requested by the Depositor, the Trustee shall
prepare and file on behalf of the Trust any Form 8-K, as required by the
Exchange Act, provided that the Depositor shall file the initial Form 8-K in
connection with the issuance of the Certificates. Any disclosure or information
related to a Reportable Event or that is otherwise required to be included on
Form 8-K ("Form 8-K Disclosure Information") shall be prepared by the party
responsible for preparing such disclosure as set forth on Exhibit V hereto and
compiled by the Trustee pursuant to the following paragraph. The Trustee will
have no duty or liability for any failure hereunder to determine or prepare any
Form 8-K Disclosure Information or any Form 8-K, except as set forth in the next
paragraph.
As set forth on Exhibit V hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than noon (Eastern
Standard Time) on the 2nd Business Day after the occurrence of a Reportable
Event, certain parties to this Agreement shall be required to provide to the
Depositor and the Trustee, to the extent known by such applicable parties, any
Form 8-K Disclosure Information, if applicable. The Trustee shall compile all
such information provided to it in a Form 8-K prepared by it.
The Trustee shall prepare and forward electronically a draft
copy of the Form 8-K to the Depositor sufficiently far in advance of, but in no
event later than noon (Eastern Standard Time) on the 3rd Business Day after a
Reportable Event, when the Depositor is required to execute such Form 8-K to
permit the Depositor to review, verify and execute such Form 8-K. No later than
the end of the 3rd Business Day after the Reportable Event, an officer of the
Depositor shall sign the Form 8-K and return an electronic or fax copy of such
signed Form 8-K (with an original executed hard copy to follow by overnight
mail) to the Trustee. If a Form 8-K cannot be filed on time or if a previously
filed Form 8-K needs to be amended, the Trustee will follow the procedures set
forth in Section 8.12(f)(ii). The signing party at the Depositor can be
contacted at the Depositor's address for notices set forth in Section
10.5(b)(ii)(a), or such other address as to which the Depositor has provided
prior written notice to the Trustee. The Depositor acknowledges that the
performance by the Trustee of its duties under this Section 8.12(g) related to
the timely preparation and filing of Form 8-K is contingent, in part, upon each
Servicer and the Depositor and any other Person obligated to provide Form 8-K
Disclosure Information as set forth on Exhibit V hereto providing such
information to the Trustee in XXXXX-compatible form at the email address for the
Trustee set forth in Section 10.05, using Exhibit Z, observing all applicable
deadlines in the performance of their duties under this Section 8.12(g). The
Trustee shall have no liability for any loss, expense, damage or claim arising
out of or with respect to any failure to properly prepare and/or timely file
such Form 8-K, where such failure results from the Trustee's inability or
failure to obtain or receive, on a timely basis, any information or signature
from any party hereto (other than the Trustee or any Subcontractor utilized by
the Trustee) needed to prepare, arrange for execution or file such Form 8-K, not
resulting from its own negligence, bad faith or willful misconduct.
(h) The Trustee shall have no liability for any loss, expense,
damage or claim arising out of or resulting from (i) the accuracy or inaccuracy
of any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form
8-K Disclosure Information (excluding any information therein provided by the
Trustee or any Subcontractor utilized by the Trustee) provided to the Trustee in
connection with the preparation of Forms 10-D, 10-K and 8-K pursuant to this
Section 8.12, or (ii) the failure of the Depositor to timely execute and return
for filing any Forms 10-D, 10-K and 8-K required to be filed by the Trustee
pursuant to this Section 8.12, in either case, not resulting from the Trustee's
own negligence, bad faith or misconduct.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts,
Basis Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of
the Excess Reserve Fund Account, Swap Account and the Interest Rate Swap
Agreement. For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account and the Swap Account as beneficially owned by the holders
of the Class X Certificates and shall treat such portion of the Trust Fund as a
grantor trust, within the meaning of subpart E, Part I of subchapter J of the
Code. The Trustee shall treat the rights that each Class of Offered Certificates
has to receive payments of Basis Risk CarryForward Amounts, and to the extent
not paid from the Excess Reserve Fund Account, Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account
(together with Basis Risk CarryForward Amounts from the Excess Reserve Fund
Account), subject to the obligation to pay Class IO Shortfalls, as rights and
obligations under a notional principal contract between the Class X
Certificateholder and each such Class and beneficially owned by each such Class
through the Grantor Trust. Accordingly, each Class of Certificates (excluding
the Class X, Class P, the Class R and the Class RX Certificates) will be
comprised of two components - an Upper-Tier Regular Interest and an interest in
a notional principal contract, and the Class X Certificates will be comprised of
the following components: two Class X REMIC Regular Interests (the Class X
Interest and the Class IO Interest), an interest in the Excess Reserve Fund
Account (including the Interest Rate Cap Agreement), subject to obligation to
pay Basis Risk CarryForward Amounts, ownership of the Swap Account and the
Interest Rate Swap Agreement, subject to the obligation to pay Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts,
and the right to receive Class IO Shortfalls. The Trustee shall allocate the
issue price for a Class of Certificates among the respective components for
purposes of determining the issue price of the Upper-Tier Regular Interest
component based on information received from the Depositor. Unless otherwise
advised by the Depositor in writing, for federal income tax purposes, the
Trustee is hereby directed to assign a value of zero to the right of each Holder
of an Offered Certificate to receive the related Basis Risk CarryForward Amounts
and, without duplication, the related Upper-Tier CarryForward Amounts for
purposes of allocating the purchase price of an Offered Certificate acquired by
an initial Holder thereof between such right and the related Upper-Tier Regular
Interest.
Holders of Offered Certificates shall also be treated as
having agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X Interest available
for such payments and amounts payable on the Class IO Interest (such excess, a
"Class IO Shortfall"), first from interest and then from principal distributable
on the Offered Certificates. A Class IO Shortfall payable from interest
collections shall be allocated pro rata among such Offered Certificates based on
the amount of interest otherwise payable to such Class of Offered Certificates,
and a Class IO Shortfall payable from principal collections shall be allocated
in reverse sequential order beginning with the most subordinate Class of Offered
Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Offered
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of Offered Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment or otherwise, such excess shall be deemed first paid to the
related Upper-Tier Regular Interest and then paid to the Class X Certificates in
a manner analogous to Class IO Shortfalls.
Section 8.14 Custodial Responsibilities. (a) The Custodian
shall provide access to the Mortgage Loan Documents in possession of the
Custodian regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon two (2) Business Days' prior written request and during normal business
hours at the office of the Custodian. The Custodian shall allow representatives
of the above entities to photocopy any of the records and documentation and
shall provide equipment for that purpose at the expense of the person requesting
such access.
Upon receipt of a written request made by a Servicer in the
form of the Request for Release, the Custodian shall release within five
Business Days the related Mortgage File in accordance with Section 3.16.
(b) The Custodian and any of its respective directors,
officers, employees or agents shall be indemnified by the Trust Fund and held
harmless against any loss, liability, or expense (including reasonable
attorneys' fees) incurred in connection with any claim or legal action relating
to this Agreement or the performance of any of the Custodian's duties under this
Agreement other than any loss, liability, or expense incurred (i) resulting from
any breach of a Servicer's obligations in connection with this Agreement for
which such Servicer has performed its obligations to indemnify the Custodian
pursuant to Section 6.05, (ii) resulting from any breach of the applicable
Responsible Party's obligations in connection with this Agreement for which the
applicable Responsible Party has performed its obligations to indemnify the
Custodian pursuant to Section 2.03(o), or (iii) because of willful misfeasance,
bad faith, or negligence in the performance of any of the Custodian's duties
under this Agreement. This indemnity shall survive the termination of this
Agreement or the earlier resignation or removal of the Custodian. Except as
otherwise provided in this Agreement or a separate letter agreement between the
Depositor and the Custodian, the Custodian shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by the Custodian in the
ordinary course of its duties as Custodian under this Agreement or for any other
expenses incurred by the Custodian; provided, however, that no expense shall be
reimbursed by the Trust Fund under this Agreement if it would not constitute an
"unanticipated expense incurred by the REMIC" within the meaning of the REMIC
Provisions.
(c) The Custodian may resign from its obligations hereunder
upon 60 days' prior written notice to the Trustee, the Depositor and the
Servicers. Such resignation shall take effect upon (i) the appointment of a
successor Custodian reasonably acceptable to the Trustee within such 60 day
period; and (ii) delivery of all Custodial Files to the successor Custodian. The
Trustee shall have the right, but not the obligation, to become the successor
Custodian. If no successor Xxxxxxxxx is appointed within 60 days after written
notice of the Custodian's resignation is received by the Trustee, the Custodian
may petition a court of competent jurisdiction to appoint a successor Xxxxxxxxx.
Upon such resignation and appointment of successor Xxxxxxxxx,
the Custodian shall, at the Custodian's expense (unless for nonpayment, then at
the expense of the Trust), promptly transfer to the successor Custodian, as
directed in writing by the Trustee, all Mortgage Files being administered under
this Agreement.
(d) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, the Custodian shall
not utilize any Subcontractor for the performance of its duties hereunder if
such Subcontractor would be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB. The Custodian shall indemnify the
Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to the breach by the Custodian of its
obligation set forth in the preceding sentence or the failure of the Custodian
to perform any of its obligations under Section 3.23. This indemnity shall
survive the termination of this Agreement or the earlier resignation or removal
of the Custodian.
(e) Notwithstanding anything in this Agreement to the
contrary, no Custodian shall be required to deliver, or to cause to be
delivered, information relating to Item 1117 of Regulation AB pursuant to
Sections 8.12(b) and (c) and Exhibits T and U to this Agreement for any
reporting period of the Trust in which the Custodian's Weighted Average
Percentage is less than 20%. The "Custodian's Weighted Average Percentage"
means, for the applicable reporting period of the Trust and the Custodian, the
quotient, expressed as a percentage, of (A) the aggregate of the Stated
Principal Balance for each Distribution Date in such reporting period of the
Mortgage Loans for which the Custodian acted as Custodian divided by (B) the
aggregate of the Pool Stated Principal Balance for each Distribution Date in
such reporting period.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Sections 9.02 and 9.03, the obligations and
responsibilities of the Depositor, the Servicers and the Trustee created hereby
with respect to the Trust Fund shall terminate upon the earlier of (a) the
purchase, on or after the Optional Termination Date, by Saxon or Countrywide
Servicing, individually or together, of all Mortgage Loans (and REO Properties)
at the price equal to the sum of (i) 100% of the unpaid principal balance of
each Mortgage Loan (other than in respect of REO Property) plus accrued and
unpaid interest thereon at the applicable Mortgage Rate, (ii) the lesser of (x)
the appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by Xxxxx or
Countrywide Servicing, individually or together, at the expense of Saxon or
Countrywide Servicing, individually or together, plus accrued and unpaid
interest on each Mortgage Loan at the applicable Mortgage Rate and (y) the
unpaid principal balance of each Mortgage Loan related to any REO Property, in
each case plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, and (iii) any Swap Termination Payment owed to the Swap Provider pursuant
to the Interest Rate Swap Agreement, and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no
such purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 9.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall have deposited in the related
Collection Account an amount to be remitted to the NIM Trustee that, together
with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the NIM Securities, to
the extent the NIM Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Accounts, Saxon or Countrywide Servicing, individually or together,
shall direct the Trustee promptly to send a Notice of Final Distribution to each
Certificateholder and the Swap Provider. If Saxon or Countrywide Servicing
individually elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, such Servicer shall notify the other Servicer of such election by
the 15th day of the month preceding the month of the final distribution and the
other Servicer shall have 5 days to elect, by notice to the other Servicer, to
purchase the Mortgage Loans it services. If Saxon or Countrywide Servicing,
individually or together, so elect to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, by the 25th day of the month preceding the month of
the final distribution, such Servicer or Servicers shall notify the Depositor
and the Trustee of the date such Servicer or Servicers intend to terminate the
Trust Fund and of the applicable repurchase price of the Mortgage Loans and REO
Properties.
A Notice of Final Distribution, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 10th day and not
later than the 15th day of the month of such final distribution. Any such Notice
of Final Distribution shall specify (a) the Distribution Date upon which final
distribution on the Certificates will be made upon presentation and surrender of
Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Trustee will give such Notice of Final Distribution to each
Rating Agency at the time such Notice of Final Distribution is given to
Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee or the Custodian, as applicable, of a
Request for Release therefor, the Trustee or the Custodian, as applicable, shall
promptly release to the applicable Servicer the Custodial Files for the Mortgage
Loans.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Certificateholders of each Class
(after reimbursement of all amounts due to the Servicers, the Depositor and the
Trustee hereunder), in each case on the final Distribution Date and in the order
set forth in Section 4.02, in proportion to their respective Percentage
Interests, with respect to Certificateholders of the same Class, up to an amount
equal to (i) as to each Class of Regular Certificates (except the Class X
Certificates), the Certificate Balance thereof plus for each such Class and the
Class X Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event
the applicable Servicer or all of the Servicers exercise their purchase option
with respect to the Mortgage Loans as provided in Section 9.01, the Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the applicable Servicer or all of the Servicers, as the case may be, to the
effect that the failure to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" on
any Trust REMIC as defined in Section 860F of the Code, or (ii) cause any Trust
REMIC to fail to qualify as a REMIC at any time that any Certificates are
Outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund
to the applicable Servicer and, no later than the next Distribution Date after
such sale, shall distribute to the Certificateholders the proceeds of such sale
in complete liquidation of each Trust REMIC; and
(b) The Trustee shall attach a statement to the final federal
income tax return for each Trust REMIC stating that pursuant to Treasury
Regulations Section 1.860F-1, the first day of the 90-day liquidation period for
each such Trust REMIC was the date on which the Trustee sold the assets of the
Trust Fund to the applicable Servicer or Servicers, as the case may be.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from
time to time by the Depositor, the Servicers, the Responsible Parties, the
Custodian and the Trustee without the consent of any of the Certificateholders
(i) to cure any ambiguity or mistake, (ii) to correct any defective provision
herein or to supplement any provision herein which may be inconsistent with any
other provision herein, (iii) to add to the duties of the Depositor, the
Custodian or the Servicers, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided
that any amendment pursuant to clauses (iv) or (v) above shall not, as evidenced
by an Opinion of Counsel (which Opinion of Counsel shall not be an expense of
the Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that any such
amendment pursuant to clause (iv) or (v) above shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
by such Rating Agency as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating. The Trustee, the Custodian, the Depositor, the Responsible Parties and
the Servicers also may at any time and from time to time amend this Agreement,
but without the consent of the Certificateholders to modify, eliminate or add to
any of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of each Trust REMIC under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on any Trust REMIC pursuant to
the Code that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code; provided
that the Trustee has been provided an Opinion of Counsel, which opinion shall be
an expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
avoid or minimize the risk of the imposition of such a tax or (iii) comply with
any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Responsible Parties, the Custodian and the Trustee
with the consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66(2)/3% of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66(2)/3%, or (iii) reduce the aforesaid percentages of Certificates
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to
fail to qualify as a grantor trust at any time that any Certificates are
Outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies and the Swap Provider (with a copy of such
notice to the Trustee) of such amendment, stating the provisions of the
Agreement to be amended.
Notwithstanding the foregoing provisions of this Section
10.01, with respect to any amendment that significantly modifies the permitted
activities of the Trustee or the Servicers, any Certificate beneficially owned
by the Depositor shall be deemed not to be Outstanding (and shall not be
considered when determining the percentage of Certificateholders consenting or
when calculating the total number of Certificates entitled to consent) for
purposes of determining if the requisite consents of Certificateholders under
this Section 10.01 have been obtained.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 10.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with
(including the obtaining of any required consents); and (ii) either (A) the
amendment does not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 10.01.
Notwithstanding the foregoing, any amendment to this Agreement
shall require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 10.02 Recordation of Agreement; Counterparts. This
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the applicable Servicer at the direction and expense of the
Depositor, but only upon receipt of an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent
of the parties hereto that the conveyance (i) of the Mortgage Loans by the
Depositor and (ii) of the Trust Fund by the Depositor to the Trustee each be,
and be construed as, an absolute sale thereof. It is, further, not the intention
of the parties that such conveyances be deemed a pledge thereof. However, in the
event that, notwithstanding the intent of the parties, such assets are held to
be the property of the Depositor, as the case may be, or if for any other reason
this Agreement is held or deemed to create a security interest in either such
assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders,
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices. (a) The Trustee shall promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of a Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies (which may be provided electronically via the Trustee's
website) of the following:
(i) Each report to Certificateholders described in Section
4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall
be in writing (unless otherwise indicated in this paragraph) and shall be deemed
to have been duly given when delivered to: (a) in the case of the Depositor,
Xxxxxx Xxxxxxx ABS Capital I Inc. (1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG
Finance, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (2) Xxxx Xxxxxxxx,
Xxxxxx Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx., Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx 00000; (3) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx - Whole Loan Operations, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (4) Xxxxx Xxxxxx, Xxxxxx Xxxxxxx - RFPG,
0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (5) in the case of a
direction or demand, notification to the following email addresses:
Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx, XX.Xxxxxx@xxxxxxxxxxxxx.xxx,
Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of Countrywide Servicing in its capacity
as Servicer, to Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx Xxx, Xxxx
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxxx, Fax: 000-000-0000, Email:
xxxx_xxxxxxx@xxxxxxxxxxx.xxx; (c) in the case of the Trustee, to Deutsche Bank
National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000,
Attention: Trust Administration-MS07H1 or such other address as the Trustee may
hereafter furnish to the other parties hereto and the Swap Provider by the
Trustee in writing; provided, however, all reports, statements, certifications
and information required to be provided to the Trustee pursuant to Section 8.12
for filing shall be electronically forwarded to XXXxx.Xxxxxxxxxxxxx@xx.xxx; (d)
in the case of Decision One, Decision One Mortgage Company, LLC, 0000 XXXX Xxx,
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000, Attention: General Counsel, or such other
address as may be hereafter furnished to the other parties hereto and the Swap
Provider by Decision One in writing; (e) in the case of NC Capital, NC Capital
Corporation, 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxx Xxxxxxxx, President, and the Swap Provider by NC Capital in writing, or
such other address as may be hereafter furnished to the other parties hereto by
NC Capital in writing; (f) in the case of LaSalle, LaSalle Bank National
Association, 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, or
such other address as may be hereafter furnished to the other parties hereto and
the Swap Provider by XxXxxxx in writing; (g) in the case of the Swap Provider,
Xxxxxx Xxxxxxx Capital Services Inc., Transaction Management Group, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Chief Legal Officer,
Facsimile No. (000) 000-0000, or such other address as may be hereafter
furnished to the other parties hereto by the Swap Provider in writing; and (h)
in the case of each of the Rating Agencies, the address specified therefor in
the definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.]
Section 10.06 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities.
Notwithstanding anything to the contrary contained herein, except as provided in
Section 6.04, this Agreement may not be assigned by any Servicer without the
prior written consent of the Trustee and the Depositor; provided, however, each
Servicer is hereby authorized to enter into an Advance Facility under which (l)
such Servicer sells, assigns or pledges to an Advancing Person the Servicer's
rights under this Agreement to be reimbursed for any P&I Advances or Servicing
Advances and/or (2) an Advancing Person agrees to fund some or all P&I Advances
or Servicing Advances required to be made by such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which a Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming such Servicer had made the related P&I
Advance(s) and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any
successor Servicer a detailed accounting on a loan-by-loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall
require that reimbursement amounts distributed with respect to each Mortgage
Loan be allocated to outstanding unreimbursed P&I Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a "first-in,
first out" (FIFO) basis. Such documentation shall also require the applicable
Servicer to provide to the related Advancing Person or its designee loan-by-loan
information with respect to each such reimbursement amount distributed to such
Advancing Person or Advance Facility trustee on each Distribution Date, to
enable the Advancing Person or Advance Facility trustee to make the FIFO
allocation of each such reimbursement amount with respect to each applicable
Mortgage Loan. The applicable Servicer shall remain entitled to be reimbursed by
the Advancing Person or Advance Facility trustee for all P&I Advances and
Servicing Advances funded by such Servicer to the extent the related rights to
be reimbursed therefor have not been sold, assigned or pledged to an Advancing
Person.
Any amendment to this Section 10.07 or to any other provision
of this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Responsible Parties, the Custodian and
the Servicers without the consent of any Certificateholder, notwithstanding
anything to the contrary in this Agreement, upon receipt by the Trustee of an
Opinion of Counsel that such amendment has no material adverse effect on the
Certificateholders or written confirmation from the Rating Agencies that such
amendment will not adversely affect the ratings on the Certificates. Prior to
entering into an Advance Facility, the applicable Servicer shall notify the
lender under such facility in writing that: (a) the Advances financed by and/or
pledged to the lender are obligations owed to such Servicer on a non-recourse
basis payable only from the cash flows and proceeds received under this
Agreement for reimbursement of Advances only to the extent provided herein, and
the Trustee and the Trust are otherwise obligated or liable to repay any
Advances financed by the lender; (b) such Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as reimbursement
for Advances funded by the lender, subject to the restrictions and priorities
created in this Agreement; and (c) the Trustee shall have any responsibility to
track or monitor the administration of the financing arrangement between the
applicable Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third-party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. Each Servicer
agrees that, on 5 Business Days prior notice, it will permit any representative
of the Depositor or the Trustee during such Person's normal business hours, to
examine all the books of account, records, reports and other papers of such
Person relating to the Mortgage Loans, to make copies and extracts therefrom, to
cause such books to be audited by independent certified public accountants
selected by the Depositor or the Trustee and to discuss its affairs, finances
and accounts relating to the Mortgage Loans with its officers, employees and
independent public accountants (and by this provision each Servicer hereby
authorizes said accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense of a Servicer incident to the
exercise by the Depositor or the Trustee of any right under this Section 10.09
shall be borne by such Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is
the intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rule of Construction. Article and section
headings are for the convenience of the reader and shall not be considered in
interpreting this Agreement or the intent of the parties hereto.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING
UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.13 Rights of the Third Parties. Each of the Swap
Provider, the Cap Provider, and each Person entitled to indemnification
hereunder who is not a party hereto, shall be deemed a third-party beneficiary
of this Agreement to the same extent as if it were a party hereto and shall have
the right to enforce its rights under this Agreement.
Section 10.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with all reasonable requests made by the Depositor in good faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the Trust, each Servicer,
the Trustee and the Custodian shall cooperate fully with the Depositor to
deliver to the Depositor (including its assignees or designees), any and all
statements, reports, certifications, records and any other information available
to such party and reasonably necessary in the good faith determination of the
Depositor to permit the Depositor to comply with the provisions of Regulation
AB, together with such disclosures relating to each Servicer, the Trustee and
the Custodian, as applicable, reasonably believed by the Depositor to be
necessary in order to effect such compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By:
-----------------------------------
Name:
Title:
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By:
-----------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
By:
-----------------------------------
Name:
Title:
NC CAPITAL CORPORATION,
as Responsible Party
By:
-----------------------------------
Name:
Title:
DECISION ONE MORTGAGE
COMPANY, LLC,
as Responsible Party
By:
-----------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By:
-----------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Custodian and the Trustee
and not attached to the Pooling and Servicing Agreement)
SCHEDULE II
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of Saxon
---------------------------------------
Saxon hereby makes with respect the Mortgage Loans the
following representations and warranties to the Depositor and the Trustee as of
the Closing Date. Capitalized terms used but not otherwise defined shall have
the meaning ascribed thereto in the Agreement to which this Schedule II is
attached.
(a) The Servicer is duly organized as a corporation and is
validly existing and in good standing under the laws of the State of
Texas and is licensed and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted
by the Servicer in any state in which a Mortgaged Property securing
a Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan
and to service the Mortgage Loans in accordance with the terms of
this Pooling and Servicing Agreement;
(b) The Servicer has the full power and authority to service
each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Pooling and Servicing Agreement and has duly authorized by all
necessary action on the part of the Servicer the execution, delivery
and performance of this Pooling and Servicing Agreement; and this
Pooling and Servicing Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of the Servicer,
enforceable against the Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors" rights generally and (b)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(c) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by
the Servicer hereunder, the consummation by the Servicer of any
other of the transactions herein contemplated, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Servicer and will not (A) result in a breach of any
term or provision of the organizational documents of the Servicer or
(B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which
it may be bound, or any statute, order or regulation applicable to
the Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Servicer; and the
Servicer is not a party to, bound by, or in breach or violation of
any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to
the Servicer's knowledge, would in the future materially and
adversely affect, (x) the ability of the Servicer to perform its
obligations under this Pooling and Servicing Agreement or (y) the
business, operations, financial condition, properties or assets of
the Servicer taken as a whole;
(d) The Servicer is an approved seller/servicer for Xxxxxx Xxx
or Freddie Mac;
(e) No action, suit, proceeding or investigation is pending
or, to the best of the Servicer's knowledge, threatened against the
Servicer, before any court, administrative agency or other tribunal
asserting the invalidity of this Pooling and Servicing Agreement,
seeking to prevent the consummation of any of the transactions
contemplated by this Pooling and Servicing Agreement or which,
either in any one instance or in the aggregate, may reasonably be
expected to result in a material adverse change in business,
operations, financial conditions, properties or assets of the
Servicer, or in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer,
or which would draw into question the validity of this Pooling and
Servicing Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of the Servicer
contemplated herein, or which would be likely to impair materially
the ability of the Servicer to perform under the terms of this
Pooling and Servicing Agreement;
(f) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Servicer of, or compliance by the
Servicer with, this Pooling and Servicing Agreement or the
consummation by the Servicer of the transactions contemplated by
this Pooling and Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
(g) The Servicer represents that its computer and other
systems used in servicing the Mortgage Loans operate in a manner
such that the Servicer can service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement; and
a. With respect to each Mortgage Loan, to the extent the
Servicer serviced such Mortgage Loan and to the extent
the Servicer provided monthly reports to the three
credit repositories, the Servicer has fully furnished,
in accordance with the Fair Credit Reporting Act and its
implementing regulation, accurate and compete
information i.e., favorable and unfavorable) on its
borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the national
credit repositories), on a monthly basis.
SCHEDULE II-A
Further Representations and Warranties of Saxon
-----------------------------------------------
(h) Mortgage Loan Schedule. With respect to each Mortgage
Loan, as of the applicable Cut-off Date, each of (1) the last Due
Date on which a payment was actually applied to the outstanding
principal balance of each Mortgage Loan; (2) the Stated Principal
Balance of each Mortgage Loan, after deduction of payments of
principal due and collected on or before the applicable Cut-off
Date; and (3) the Servicing Transfer Date for each Mortgage Loan, in
each case, as listed on the Mortgage Loan Schedule, is true and
correct;
(i) Payments Current. Unless otherwise indicated on the
related Mortgage Loan Schedule, with respect to each Mortgage Loan,
no Scheduled Payment is 30 days or more Delinquent as of the Cut-off
Date nor has any Payment been 30 days or more Delinquent at any time
from and after the Servicing Transfer Date through the Cut-off Date;
(j) Original Terms Unmodified. With respect to each Mortgage
Loan, the terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified by or on behalf of the
Servicer from and after the Servicing Transfer Date;
(k) No Satisfaction of Mortgage. With respect to each Mortgage
Loan, since the related Servicing Transfer Date and except for
prepayments in full, the Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any such release, cancellation, subordination or rescission.
From and after the Servicing Transfer Date, the Servicer has not
waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage
Loan to be in default, nor has the Servicer waived any default
resulting from any action or inaction by the Mortgagor;
(l) No Defaults. With respect to each Mortgage Loan, to the
best knowledge of the Servicer, other than payments due but not yet
30 days Delinquent, there is no material default, breach, violation
or event which would permit acceleration existing under the Mortgage
or the Mortgage Note;
(m) Escrow Payments/Interest Rate Adjustments. With respect to
each Mortgage Loan, since the Servicing Transfer Date, the servicing
and collection practices used by the Servicer with respect to such
Mortgage Loan have been in all material respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and
have been in all material respects legal and proper. With respect to
escrow deposits and Escrow Payments, if any, all such deposits and
payments received by the Servicer are in the possession of, or under
the control of, the Servicer and there exist no deficiencies in
connection therewith for which customary arrangements for repayment
thereof have not been made. All Escrow Payments have been collected
in full compliance with state and federal law and the provisions of
the related Mortgage Note and Mortgage (to the extent not otherwise
prohibited by law). From and after the Servicing Transfer Date, all
Mortgage Rate adjustments (if any) have been made in strict
compliance with state and federal law and the terms of the related
Mortgage Note;
(n) Other Insurance Policies. The improvements upon each
Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides
for fire and extended coverage and coverage for such other hazards
as are customary in the area where the Mortgaged Property is
located; and
(o) Servicemembers Civil Relief Act. With respect to each
Mortgage Loan, from and after the Servicing Transfer Date, no
Mortgagor has notified the Servicer, and the Servicer has no
knowledge, of any relief requested and allowed to the Mortgagor
under the Servicemembers Civil Relief Act or any similar state or
local law
SCHEDULE III
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect the Mortgage Loans the
following representations and warranties to the Trustee as of the Closing Date.
Capitalized terms used but not otherwise defined shall have the meaning ascribed
thereto in the Agreement to which this Schedule III is attached.
(1) Immediately prior to the transfer of the Mortgage Loans by the Depositor
to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or
encumbrances whatsoever.
(2) The original principal balance of each Group I Mortgage Loan was within
Freddie Mac's and Fannie Mae's dollar amount limits for conforming one- to
four-family mortgage loans and the original principal balance for each
Group I Mortgage Loan which is a Second Lien Mortgage Loan was within
one-half of Freddie Mac's and Fannie Mae's dollar amount limits for
one-unit conforming one-to four-family mortgage loans for first lien
mortgage loans, without regard to the number of units in the related
Mortgaged Property.
(3) None of the Group I Mortgage Loans originated on or after October 1, 2002
has a prepayment premium period at origination in excess of three years.
(4) With respect to each Group I Mortgage Loan which is a Second Lien Mortgage
Loan (A) such lien is on a one-to four-family residence that is the
principal residence of the related Mortgagor, and (B) the original
principal balance of the related first lien mortgage loan plus the
original principal balance of any subordinate lien mortgage loans relating
to the same Mortgaged Property was within Freddie Mac's and Fannie Mae's
dollar amount limits for first lien mortgage loans for that property type.
SCHEDULE IV
[Reserved]
SCHEDULE V
[Reserved]
SCHEDULE VI
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of Decision One
as to the Decision One Mortgage Loans
----------------------------------------------
With respect to the Mortgage Loans for which Decision One is
specific as the Responsible Party on the Mortgage Loan Schedule, Decision One
hereby makes the following representations and warranties set forth in this
Schedule VI to the other parties to the Agreement to which this Schedule VI is
attached as of the Closing Date. Capitalized terms used but not otherwise
defined in the Agreement shall have the meanings ascribed thereto in the
Decision One Purchase Agreement.
(a) Mortgage Loans as Described. The information set forth in
the Mortgage Loan Schedule as prepared by the Sponsor is complete,
true and correct as of the Closing Date;
(b) Payments Current. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of
the Mortgage Note, other than payments not yet 30 days delinquent,
have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the
Mortgage Loan been 30 days or more delinquent at any time since the
origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or
within the grace period, all in accordance with the terms of the
related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in
an amount sufficient to pay for every such item which remains unpaid
and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under
the Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in
any respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the
Custodian or to such other Person as the Purchaser shall designate
in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration
or modification has been approved by the title insurer, if any, to
the extent required by the policy, and its terms are reflected on
the related Mortgage Loan Schedule, if applicable. No Mortgagor has
been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer,
to the extent required by the policy, and which assumption agreement
is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and
the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, nor will the operation of any of
the terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or
Federal bankruptcy or insolvency proceeding at the time the Mortgage
Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are
insured by a generally acceptable insurer against loss by fire,
hazards of extended coverage and such other hazards, if any, as are
usually and customarily insured against by prudent mortgage lenders
in the community in which the related Mortgaged Property is located.
If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms to the
requirements usually and customarily insured against by prudent
mortgage lenders in the community in which the related Mortgaged
Property is located, as well as all additional requirements set
forth in Section 2.10 of the Interim Servicing Agreement. All
individual insurance policies contain a standard mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and
all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at such Xxxxxxxxx's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state
law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the
policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the
common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of
the transactions contemplated by this Agreement. The Seller has not
engaged in, and has no knowledge of the Mortgagor's having engaged
in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either including, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements
of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, disclosure and all
predatory and abusive lending laws applicable to the Mortgage Loan,
including, without limitation, any provisions relating to Prepayment
Penalties, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of
any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with
all such requirements. This representation and warranty is a Deemed
Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part,
and the Mortgaged Property has not been released from the lien of
the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any
action or inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is a fee simple property located in the state identified in
the Mortgage Loan Schedule and consists of a single parcel of real
property with a detached single family residence erected thereon, or
a two- to four-family dwelling, or an individual residential
condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a
mobile home, provided, however, that any condominium unit or planned
unit development shall not fall within any of the "Ineligible
Projects" of part VIII, Section 102 of the Xxxxxx Xxx Selling Guide
and shall conform with the Underwriting Guidelines. In the case of
any Mortgaged Properties that are Manufactured Homes (a
"Manufactured Home Mortgage Loans"), (i) the related manufactured
dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming
Seller as mortgagee, (iii) the applicable laws of the jurisdiction
in which the related Mortgaged Property is located will deem the
manufactured dwelling located on such Mortgaged Property to be a
part of the real property on which such dwelling is located, (iv) as
of the origination date of such Manufactured Home Mortgage Loan, the
related manufactured housing unit that secures such Mortgage Loan
either (x) was the principal residence of the Mortgagor or (y) was
classified as real property under applicable state law; and (v) such
Manufactured Home Mortgage Loan is (x) a qualified mortgage under
Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended
and (y) secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code. As of the date of
origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date of origination, no portion
of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office
shall not be considered as being used for commercial purposes as
long as the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials other
than those commonly used for homeowner repair, maintenance and/or
household purposes. This representation and warranty is a Deemed
Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to a
First Lien Loan) or second lien (with respect to a Second Lien Loan)
on the Mortgaged Property, including all buildings and improvements
on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The
lien of the Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and
assessments not yet due and payable;
(C) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and
perfected first lien (with respect to a First Lien Loan) or second
lien (with respect to a Second Lien Loan) and first priority (with
respect to a First Lien Loan) or second priority (with respect to a
Second Lien Loan) security interest on the property described
therein and the Seller has full right to sell and assign the same to
the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in connection with a Mortgage Loan are genuine, and each
is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms (including, without
limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the
Mortgage and any such agreement, and the Mortgage Note, the Mortgage
and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to
a Mortgage Loan has taken place on the part of any Person, including
without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the
Mortgage Loan or in the application for any insurance in relation to
such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage
Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and
holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the
Purchaser or the Purchaser's designee, in trust only for the purpose
of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the Seller has
good, indefeasible and marketable title thereto, and has full right
to transfer and sell the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of
any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest. The Seller intends to relinquish
all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or
alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such
state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage
Loan for which the related Mortgaged Property is located in
California a CLTA lender's title insurance policy, or other
generally acceptable form of policy or insurance acceptable to
Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac
and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or
second (with respect to a Second Lien Loan) priority lien of the
Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (A), (B) and (C)
of paragraph (j) of this Subsection 9.02, and in the case of
Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage
Interest Rate and Monthly Payment. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally,
such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title
insurance policy, and no prior holder of the related Mortgage,
including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback
or other unlawful compensation or value of any kind has been or will
be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days
or more delinquent, there is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit
acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics" Liens. There are no mechanics" or similar
liens or claims which have been filed for work, labor or material
(and no rights are outstanding that under law could give rise to
such liens) affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All
improvements which were considered in determining the Appraised
Value of the Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National
Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or other similar
institution which is supervised and examined by a federal or state
authority. The documents, instruments and agreements submitted for
loan underwriting were not falsified and contain no untrue statement
of material fact required to be stated therein or necessary to make
the information and statements therein not misleading. No Mortgage
Loan contains terms or provisions which would result in negative
amortization. Principal payments on the Mortgage Loan commenced no
more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as, in the
case of an Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and
the Periodic Cap are as set forth on the related Mortgage Loan
Schedule. The Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due
to the adjustments to the Mortgage Interest Rate on each Interest
Rate Adjustment Date, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise specified
on the related Mortgage Loan Schedule, the Mortgage Loan is payable
on the first day of each month. The Mortgage Loan does not require a
balloon payment on its stated maturity date, unless otherwise
specified in the related Mortgage Loan Schedule;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property
pursuant to the proper procedures, the holder of the Mortgage Loan
will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines (a copy of which is attached to each related Assignment
and Conveyance Agreement). The Mortgage Note and Mortgage are on
forms acceptable to Freddie Mac or Xxxxxx Xxx and the Seller has not
made any representations to a Mortgagor that are inconsistent with
the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related
Closing Date the Mortgaged Property is lawfully occupied under
applicable law. All inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and
fire underwriting certificates, have been made or obtained from the
appropriate authorities. Unless otherwise specified on the related
Mortgage Loan Schedule, the Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the
Mortgaged Property as the Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has
not been secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in paragraph (j)
above;
(y) Deeds of Trust. In the event the Mortgage constitutes a
deed of trust, a trustee, authorized and duly qualified under
applicable law to serve as such, has been properly designated and
currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents
required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian. The Seller is in
possession of a complete, true and accurate Mortgage File in
compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other
than a de minimis planned unit development) such condominium or
planned unit development project such Mortgage Loan was originated
in accordance with, and the Mortgaged Property meets the guidelines
set forth in the Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage
(except with respect to any Mortgage that has been recorded in the
name of MERS or its designee) with respect to each Mortgage Loan is
in recordable form and is acceptable for recording under the laws of
the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage
Loan, the Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee
thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate
Mortgage Loan, the Mortgage Loan Documents provide that after the
related first Interest Rate Adjustment Date, a related Mortgage Loan
may only be assumed if the party assuming such Mortgage Loan meets
certain credit requirements, if any, stated in the Mortgage Loan
Documents;
(ff) No Buydown Provisions; No Graduated Payments or
Contingent Interests. The Mortgage Loan does not contain provisions
pursuant to which Monthly Payments are paid or partially paid with
funds deposited in any separate account established by the Seller,
the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other
similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances
made to the Mortgagor prior to the related Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or
second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence
acceptable under the Underwriting Guidelines. The consolidated
principal amount does not exceed the original principal amount of
the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation
Proceedings. There is no proceeding pending or threatened for the
total or partial condemnation of the Mortgaged Property. The
Mortgaged Property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty so as to
affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property
and the Seller has no knowledge of any such proceedings in the
future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices
used by the Seller with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal
and proper. With respect to escrow deposits and Escrow Payments, all
such payments are in the possession of, or under the control of, the
Seller and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance
with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by
applicable law and has been established in an amount sufficient to
pay for every item that remains unpaid and has been assessed but is
not yet due and payable. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under
the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage and Mortgage Note
on the related Interest Rate Adjustment Date. If, pursuant to the
terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with
respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the
related Mortgage Note. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and
credited;
(jj) Conversion to Fixed Interest Rate. With respect to
Adjustable Rate Mortgage Loans, the Mortgage Loan is not a
Convertible Mortgage Loan;
(kk) Other Insurance Policies; No Defense to Coverage. No
action, inaction or event has occurred and no state of facts exists
or has existed on or prior to the related Closing Date that has
resulted or will result in the exclusion from, denial of, or defense
to coverage under any applicable hazard insurance policy or
bankruptcy bond (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due
thereunder to the insured), irrespective of the cause of such
failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or
will be received by the Seller or by any officer, director, or
employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or
employee had a financial interest at the time of placement of such
insurance;
(ll) No Violation of Environmental Laws. There is no pending
action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property; and nothing
further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use
and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act or other
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the
Mortgage Loan application by a Qualified Appraiser, accepted by the
Seller, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfied the
requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all
disclosure materials required by, and the Seller has complied with,
all applicable law with respect to the making of the Mortgage Loans.
The Seller shall maintain such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other
than a "construct-to-perm" loan) or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge
of any circumstances existing that could reasonably be expected to
adversely affect the value or the marketability of any Mortgaged
Property (except as may be expressly shown in the related appraisal)
or Mortgage Loan or to cause the Mortgage Loans to prepay during any
period materially faster or slower than similar mortgage loans held
by the Seller generally secured by properties in the same geographic
area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been
taken or failed to be taken, no event has occurred and no state of
facts exists or has existed on or prior to the related Closing Date
(whether or not known to the Seller on or prior to such date) which
has resulted or will result in an exclusion from, denial of, or
defense to coverage under any primary mortgage insurance (including,
without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions,
negligence, or fraud of the Seller, the related Mortgagor or any
party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer's breach of
such insurance policy or such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each
Mortgage, the Seller has within the last twelve months (unless such
Mortgage was originated within such twelve month period) analyzed
the required Escrow Payments for each Mortgage and adjusted the
amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded
to the Mortgagor, in accordance with RESPA and any other applicable
law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in
all material respects in strict compliance with Accepted Servicing
Practices;
(vv) Credit Information. As to each consumer report (as
defined in the Fair Credit Reporting Act, Public Law 91-508) or
other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law
or contract from furnishing such information to the Purchaser and
the Purchaser is not precluded from furnishing the same to any
subsequent or good faith legitimate prospective purchaser of such
Mortgage. The Seller shall hold the Purchaser harmless from any and
all damages, losses, costs and expenses (including attorney's fees)
arising from disclosure of credit information in connection with the
Purchaser's good faith legitimate secondary marketing operations and
the purchase and sale of mortgages or Servicing Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a
long-term residential lease, (1) the lessor under the lease holds a
fee simple interest in the land; (2) the terms of such lease
expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor's consent and the
acquisition by the holder of the Mortgage of the rights of the
lessee upon foreclosure or assignment in lieu of foreclosure or
provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of
the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the
lease in the event of damage or destruction as long as the Mortgage
is in existence, (c) prohibit the holder of the Mortgage from being
insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property or
(d) permit any increase in rent other than pre-established increases
set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate
earlier than five years after the maturity date of the Mortgage
Note; and (6) the Mortgaged Property is located in a jurisdiction in
which the use of leasehold estates in transferring ownership in
residential properties is a widely accepted practice;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to
a prepayment penalty as provided in the related Mortgage Note is
identified on the related Mortgage Loan Schedule. With respect to
each Mortgage Loan that has a Prepayment Penalty feature, each such
Prepayment Penalty is enforceable, and each Prepayment Penalty is
permitted pursuant to federal, state and local law. Each such
Prepayment Penalty is in an amount not more than the maximum amount
permitted under applicable law and no such Prepayment Penalty may be
imposed for a term in excess of five (5) years with respect to
Mortgage Loans originated prior to October, 1, 2002. With respect to
Mortgage Loans originated on or after October 1, 2002, the duration
of the Prepayment Penalty period shall not exceed three (3) years
from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than
three (3) years from the date of the related Mortgage Note and the
Mortgagor was notified in writing of such reduction in Prepayment
Penalty period. This representation and warranty is a Deemed
Material and Adverse Representation;
(yy) Predatory Lending Regulations. No Mortgage Loan is a High
Cost Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is
governed by the Georgia Fair Lending Act. No Mortgage Loan is
covered by the Home Ownership and Equity Protection Act of 1994 and
no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and
Adverse Representation;
(zz) [Reserved];
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a
paid in full, life of loan, tax service contract issued by Fidelity
National Tax Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending
practices, including, without limitation, the extension of credit
without regard to the ability of the Mortgagor to repay and the
extension of credit which has no apparent benefit to the Mortgagor,
were employed in the origination of the Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the
assignment to the Purchaser) have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the
process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days
after the related Closing Date, the Mortgagor has not filed and will
not file a bankruptcy petition or has not become the subject and
will not become the subject of involuntary bankruptcy proceedings or
has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in
respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously
been offered for sale;
(ggg) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility.
Each Mortgage Loan is in compliance with the anti-predatory lending
eligibility for purchase requirements of Xxxxxx Xxx Guides. This
representation and warranty is a Deemed Material and Adverse
Representation;
(hhh) Mortgagor Selection. No Mortgagor was encouraged or
required to select a Mortgage Loan product offered by the Originator
which is a higher cost product designed for less creditworthy
mortgagors, unless at the time of the Mortgage Loan's origination,
such Xxxxxxxxx did not qualify taking into account credit history
and debt-to-income ratios for a lower-cost credit product then
offered by the Originator. This representation and warranty is a
Deemed Material and Adverse Representation;
(iii) Underwriting Methodology. The methodology used in
underwriting the extension of credit for each Mortgage Loan employs
objective mathematical principles which relate the related
Mortgagor's income, assets and liabilities to the proposed payment
and such underwriting methodology does not rely on the extent of the
related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the related Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to
any Mortgage Loan that contains a provision permitting imposition of
a premium upon a prepayment prior to maturity: (i) the Mortgage Loan
provides some benefit to the Mortgagor (e.g., a rate or fee
reduction) in exchange for accepting such Prepayment Penalty, (ii)
the Mortgage Loan's originator had a written policy of offering the
Mortgagor, or requiring third-party brokers to offer the Mortgagor,
the option of obtaining a mortgage loan that did not require payment
of such a premium, (iii) the prepayment premium is disclosed to the
related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state
or federal law to the contrary, the Originator, as servicer, shall
not impose such prepayment premium in any instance when the mortgage
debt is accelerated as the result of the related Mortgagor's default
in making the Mortgage Loan payments. This representation and
warranty is a Deemed Material and Adverse Representation;
(kkk) Purchase of Insurance. No Mortgagor was required to
purchase any single premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment or health
insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit insurance policy (e.g., life, mortgage,
disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or
as a condition to closing, such Mortgage Loan. This representation
and warranty is a Deemed Material and Adverse Representation;
(lll) Points and Fees. All points and fees related to each
Mortgage Loan were disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation.
This representation and warranty is a Deemed Material and Adverse
Representation;
(mmm) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed,
collected or to be collected in connection with the origination and
servicing of each Mortgage Loan, have been disclosed in writing to
the Mortgagor in accordance with applicable state and federal law
and regulation. This representation and warranty is a Deemed
Material and Adverse Representation;
(nnn) No Arbitration. No Mortgage Loan originated on or after
July 1, 2004 requires the related Mortgagor to submit to arbitration
to resolve any dispute arising out of or relating in any way to the
Mortgage Loan transaction. This representation and warranty is a
Deemed Material and Adverse Representation;
(ooo) Request for Notice; No Consent Required. With respect to
any Second Lien Loan, where required or customary in the
jurisdiction in which the Mortgaged Property is located, the
original lender has filed for record a request for notice of any
action by the related senior lienholder, and the Seller has notified
the senior lienholder in writing of the existence of the Second Lien
Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for
the Second Lien Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the
Mortgage File. This representation and warranty is a Deemed Material
and Adverse Representation;
(ppp) No Default Under First Lien. With respect to each Second
Lien Loan, the related First Lien Loan related thereto is in full
force and effect, and there is no default, breach, violation or
event which would permit acceleration existing under such first
Mortgage or Mortgage Note, and no event which, with the passage of
time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would
permit acceleration thereunder. This representation and warranty is
a Deemed Material and Adverse Representation;
(qqq) Right to Cure First Lien. With respect to each Second
Lien Loan, the related first lien Mortgage contains a provision
which provides for giving notice of default or breach to the
mortgagee under the Mortgage Loan and allows such mortgagee to cure
any default under the related first lien Mortgage. This
representation and warranty is a Deemed Material and Adverse
Representation;
(rrr) No Failure to Cure Default. The Seller has not received
a written notice of default of any senior mortgage loan related to
the Mortgaged Property which has not been cured;
(sss) No Negative Amortization of Related First Lien Loan.
With respect to each Second Lien Loan, the related First Lien Loan
does not permit negative amortization. This representation and
warranty is a Deemed Material and Adverse Representation; and
(ttt) Principal Residence. With respect to each Second Lien
Loan, the related Mortgaged Property is the Mortgagor's principal
residence. This representation and warranty is a Deemed Material and
Adverse Representation.
SCHEDULE VII
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of NC Capital as to the NC Capital Mortgage Loans
--------------------------------------------------------------------------------
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule VII as to the Mortgage Loans only to the
Depositor, the Servicers and the Trustee, as of January 26, 2007 (the
"Securitization Closing Date") (unless otherwise expressly indicated).
Capitalized terms used but not otherwise defined in this Schedule VII shall have
the meanings ascribed thereto in the NC Capital Purchase Agreement.
(a) Mortgage Loans as Described. NC Capital Corporation has
delivered to the Sponsor, as of January 1, 2007, the Data Tape
Information and that Data Tape Information and the information set
forth on the Mortgage Loan Schedule (other than item (21) thereof,
as to which NC Capital Corporation makes no representation or
warranty) are true and correct, including, without limitation, the
terms of the Prepayment Charges, if any, as of the Securitization
Closing Date;
(b) Payments Current. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of
the Mortgage Note, other than payments not yet 30 days delinquent,
have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor, except as otherwise
disclosed to the Purchaser and set forth on an exhibit to the
related Assignment and Conveyance Agreement, has any payment under
the Mortgage Loan been 30 days or more delinquent at any time since
the origination of the Mortgage Loan. The first Monthly Payment was
or shall be made with respect to the Mortgage Loan on its Due Date
or within the grace period, all in accordance with the terms of the
related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in
an amount sufficient to pay for every such item which remains unpaid
and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under
the Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in
any respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the
Custodian or to such other Person as the Purchaser shall designate
in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration
or modification has been approved by the title insurer, if any, to
the extent required by the policy, and its terms are reflected on
the related Mortgage Loan Schedule, if applicable. No Mortgagor has
been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer,
to the extent required by the policy, and which assumption agreement
is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and
the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, nor will the operation of any of
the terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or
Federal bankruptcy or insolvency proceeding at the time the Mortgage
Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are
insured by a generally acceptable insurer against loss by fire,
hazards of extended coverage and such other hazards as are
customarily insured against in the jurisdiction where the related
Mortgaged Property is located and acceptable to the Rating Agencies,
as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance
Act of 1968, as amended, each Mortgage Loan is covered by a flood
insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration as in effect, as well as all
additional requirements set forth in Section 2.10 of the Servicing
Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Xxxxxxxxx's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an
opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium, or any hazard insurance policy
covering the common facilities of a planned unit development. The
hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and
effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor's
having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback
or other unlawful compensation or value of any kind has been or will
be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements
of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, disclosure and all
predatory, abusive and fair lending laws applicable to the Mortgage
Loan, including, without limitation, any provisions relating to the
Illinois Interest Act and prepayment penalties, have been complied
with, the consummation of the transactions contemplated hereby will
not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the
Purchaser's inspection, and shall deliver to the Purchaser upon
demand, evidence of compliance with all such requirements. This
representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part,
and the Mortgaged Property has not been released from the lien of
the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any
action or inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is located in the state identified in the Mortgage Loan
Schedule and consists of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low-rise condominium project, or an
individual unit in a planned unit development or a de minimis
planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) shall
conform with the applicable Xxxxxx Xxx and Xxxxxxx Mac requirements
regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing
corporation, a log home, a Manufactured Home or, except as described
in Exhibit B to the related Assignment and Conveyance Agreement, a
mobile home erected thereon or by a mixed-use property, a property
in excess of 10 acres, or other unique property types. As of the
date of origination, no portion of the Mortgaged Property was used
for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes
as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. This representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to a
First Lien Loan) or a second lien (with respect to a Second Lien
Loan) on the Mortgaged Property, including all buildings and
improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(i) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and
assessments not yet due and payable;
(iii) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser.;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in connection with a Mortgage Loan are genuine, and each
is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms (including, without
limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the
Mortgage and any such agreement, and the Mortgage Note, the Mortgage
and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to
a Mortgage Loan has taken place on the part of any Person, including
without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the
Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage
Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and
holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the
Purchaser or the Purchaser's designee, in trust only for the purpose
of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the Seller has
good, indefeasible and marketable title thereto, and has full right
to transfer and sell the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of
any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest. The Seller intends to relinquish
all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or
alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such
state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage
Loan for which the related Mortgaged Property is located in
California a CLTA lender's title insurance policy, or other
generally acceptable form of policy or insurance acceptable to
Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac
and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or
second (with respect to a Second Lien Loan) priority lien of the
Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization,
the maximum amount of negative amortization in accordance with the
Mortgage), subject only to the exceptions contained in clauses (i),
(ii) and (iii) of Paragraph (j) of this Schedule VII, and in the
case of Adjustable Rate Mortgage Loans, against any loss by reason
of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage
Interest Rate and Monthly Payment. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally,
such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title
insurance policy, and no prior holder of the related Mortgage,
including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback
or other unlawful compensation or value of any kind has been or will
be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days
or more delinquent, there is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit
acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics" Liens. There are no mechanics" or similar
liens or claims which have been filed for work, labor or material
(and no rights are outstanding that under the law could give rise to
such liens) affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All
improvements which were considered in determining the Appraised
Value of the Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan
was originated by a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company or other
similar institution which is supervised and examined by a federal or
state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements
set forth in clause (a), and (i) such Mortgage Loan was underwritten
in accordance with standards established by the Seller, using
application forms and related credit documents approved by the
Seller, (ii) the Seller approved each application and the related
credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to
fund such Mortgage Loan, (iii) the closing documents for such
Mortgage Loan were prepared on forms approved by the Seller, and
(iv) such Mortgage Loan was actually funded by the Seller and was
purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary to make the information and statements therein
not misleading. Principal payments on the Mortgage Loan commenced no
more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as, with
respect to Adjustable Rate Mortgage loans, the Lifetime Rate Cap and
the Periodic Cap, are as set forth on the related Mortgage Loan
Schedule. The Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due
to the adjustments to the Mortgage Interest Rate on each Interest
Rate Adjustment Date, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise specified
on the related Mortgage Loan Schedule, the Mortgage Loan is payable
on the first day of each month. There are no Convertible Mortgage
Loans which contain a provision allowing the Mortgagor to convert
the Mortgage Note from an adjustable interest rate Mortgage Note to
a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property
pursuant to the proper procedures, the holder of the Mortgage Loan
will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms acceptable
to Freddie Mac or Xxxxxx Xxx and neither the Seller nor the
Originator has made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related
Closing Date the Mortgaged Property is lawfully occupied under
applicable law. All inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and
fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has
not been secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in Paragraph (j)
above;
(y) Deeds of Trust. In the event the Mortgage constitutes a
deed of trust, a trustee, authorized and duly qualified under
applicable law to serve as such, has been properly designated and
currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, the Mortgage File or the Mortgagor's credit standing that
can reasonably be expected to cause private institutional investors
who invest in mortgage loans similar to the Mortgage Loan to regard
the Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the
mortgage loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents
required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian. The Seller is in
possession of a complete, true and accurate Mortgage File in
compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other
than a de minimis planned unit development) such condominium or
planned unit development project such Mortgage Loan was originated
in accordance with, and the Mortgaged Property meets the guidelines
set forth in the Originator's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage
with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located. The transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller are
not subject to the bulk transfer or similar statutory provisions in
effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage
Loan, the Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee
thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate
Mortgage Loan, the Mortgage Loan Documents provide that after the
related first Interest Rate Adjustment Date, a related Mortgage Loan
may only be assumed if the party assuming such Mortgage Loan meets
certain credit requirements stated in the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or
Contingent Interests. The Mortgage Loan does not contain provisions
pursuant to which Monthly Payments are paid or partially paid with
funds deposited in any separate account established by the Seller,
the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other
similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances
made to the Mortgagor prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or a
second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence
acceptable to Xxxxxx Xxx and Freddie Mac. The consolidated principal
amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation
Proceedings. There is no proceeding pending or threatened for the
total or partial condemnation of the Mortgaged Property. The
Mortgaged Property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty so as to
affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property
and the Seller has no knowledge of any such proceedings in the
future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices
used by the Seller and the Originator with respect to the Mortgage
Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or
under the control of, the Seller or the Originator and there exist
no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and
has been established in an amount sufficient to pay for every item
that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or
payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in strict compliance with state and federal law and the terms
of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage
Note, another index was selected for determining the Mortgage
Interest Rate, the same index was used with respect to each Mortgage
Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The
Seller or the Originator executed and delivered any and all notices
required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the
Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and
credited;
(jj) Conversion to Fixed Interest Rate. With respect to
Adjustable Rate Mortgage Loans, the Mortgage Loan is not a
Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event
has occurred and no state of facts exists or has existed that has
resulted or will result in the exclusion from, denial of, or defense
to coverage under any applicable, special hazard insurance policy,
or bankruptcy bond, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received
by the Seller or by any officer, director, or employee of the Seller
or any designee of the Seller or any corporation in which the Seller
or any officer, director, or employee had a financial interest at
the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending
action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing
further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use
and enjoyment of said property;
(mm) Servicemembers Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers
Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the
Mortgage Loan application by a Qualified Appraiser, duly appointed
by the Seller or the Originator, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the
security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Freddie Mac
and Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all
disclosure materials required by, and the Originator has complied
with, all applicable law with respect to the making of the Mortgage
Loans. The Seller shall cause the Originator to maintain such
statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in
or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge
of any circumstances existing that could reasonably be expected to
adversely affect the value or the marketability of any Mortgaged
Property or Mortgage Loan or to cause the Mortgage Loans to prepay
during any period materially faster or slower than similar mortgage
loans held by the Seller generally secured by properties in the same
geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been
taken or failed to be taken, no event has occurred and no state of
facts exists or has existed on or prior to the related Closing Date
(whether or not known to the Seller on or prior to such date) which
has resulted or will result in an exclusion from, denial of, or
defense to coverage under any primary mortgage insurance (including,
without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions,
negligence, or fraud of the Seller, the related Mortgagor or any
party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer's breach of
such insurance policy or such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the
Seller or the Originator has within the last twelve months (unless
such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted
the amount of such payments so that, assuming all required payments
are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded
to the Mortgagor, in accordance with RESPA and any other applicable
law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in
all material respects in strict compliance with Accepted Servicing
Practices;
(uu) No Default Under First Lien. With respect to each Second
Lien Loan, the related First Lien Loan related thereto is in full
force and effect, and there is no default, breach, violation or
event which would permit acceleration existing under such first
Mortgage or Mortgage Note, and no event which, with the passage of
time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would
permit acceleration thereunder. This representation and warranty is
a Deemed Material and Adverse Representation;
(vv) [Reserved];
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as
defined in the Fair Credit Reporting Act, Public Law 91-508) or
other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law
or contract from furnishing such information to the Purchaser and
the Purchaser is not precluded from furnishing the same to any
subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses,
costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's
secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a
long-term residential lease, (1) the lessor under the lease holds a
fee simple interest in the land; (2) the terms of such lease
expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor's consent and the
acquisition by the holder of the Mortgage of the rights of the
lessee upon foreclosure or assignment in lieu of foreclosure or
provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of
the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the
lease in the event of damage or destruction as long as the Mortgage
is in existence, (c) prohibit the holder of the Mortgage from being
insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property or
(d) permit any increase in rent other than pre-established increases
set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate
earlier than five years after the maturity date of the Mortgage
Note; and (6) the Mortgaged Property is located in a jurisdiction in
which the use of leasehold estates in transferring ownership in
residential properties is a widely accepted practice;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to
a prepayment penalty as provided in the related Mortgage Note is
identified on the related Mortgage Loan Schedule. With respect to
each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and will be enforced by the Seller
for the benefit of the Purchaser, and each prepayment penalty is
permitted pursuant to federal, state and local law. Each such
prepayment penalty is in an amount not more than the maximum amount
permitted under applicable law and no such prepayment penalty may be
imposed for a term in excess of five (5) years with respect to
Mortgage Loans originated prior to October, 1, 2002. With respect to
Mortgage Loans originated on or after October 1, 2002, the duration
of the prepayment penalty period shall not exceed three (3) years
from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the prepayment penalty period to no more than
three (3) years from the date of the related Mortgage Note and the
Mortgagor was notified in writing of such reduction in prepayment
penalty period. This representation and warranty is a Deemed
Material and Adverse Representation;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a
High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is
governed by the Georgia Fair Lending Act. No Mortgage Loan is
covered by the Home Ownership and Equity Protection Act of 1994 and
no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and
Adverse Representation;
(bbb) [Reserved];
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage," within the meaning of Section 860G(a)(3) of the Code, if
transferred to a REMIC on its startup day in exchange for the
regular or residual interests in the REMIC;
(ddd) No Prior Offer. The Mortgage Loan has not previously
been offered for sale to another entity that constitutes a broker
dealer registered with the Commission under Section 15 of the
Exchange Act;
(eee) Fair Credit Reporting Act. The Seller has, in its
capacity as servicer for each Mortgage Loan, fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis. This representation and warranty
is a Deemed Material and Adverse Representation;
(fff) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility.
Each Mortgage Loan is in compliance with the anti-predatory lending
eligibility for purchase requirements of Xxxxxx Xxx Guides. This
representation and warranty is a Deemed Material and Adverse
Representation;
(ggg) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Originator
which is a higher cost product designed for less creditworthy
mortgagors, unless at the time of the Mortgage Loan's origination,
such Mortgagor did not qualify taking into such facts as, without
limitation, the Mortgage Loan's requirements and the Mortgagor's
credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the
Originator or any Affiliate of the Originator. If, at the time of
loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the
Originator, the Originator referred the related Mortgagor's
application to such Affiliate for underwriting consideration. For a
Mortgagor who seeks financing through a Mortgage Loan originator's
higher-priced subprime lending channel, the Mortgagor was directed
towards or offered the Mortgage Loan originator's standard mortgage
line if the Mortgagor was able to qualify for one of the standard
products. This representation and warranty is a Deemed Material and
Adverse Representation;
(hhh) Underwriting Methodology. The methodology used in
underwriting the extension of credit for each Mortgage Loan does not
rely on the extent of the related Mortgagor's equity in the
collateral as the principal determining factor in approving such
extension of credit. The methodology employed objective criteria
that related such facts as, without limitation, the Mortgagor's
credit history, income, assets or liabilities, to the proposed
mortgage payment and, based on such methodology, the Mortgage Loan's
originator made a reasonable determination that at the time of
origination the Mortgagor had the ability to make timely payments on
the Mortgage Loan. Such underwriting methodology confirmed that at
the time of origination (application/approval) the related Mortgagor
had a reasonable ability to make timely payments on the Mortgage
Loan. This representation and warranty is a Deemed Material and
Adverse Representation;
(iii) Mortgage Loans with Prepayment Premiums. With respect to
any Mortgage Loan that contains a provision permitting imposition of
a prepayment penalty upon a prepayment prior to maturity: (i) the
Mortgage Loan provides some benefit to the Mortgagor, including but
not limited to a rate or fee reduction, in exchange for accepting
such prepayment penalty, (ii) the Mortgage Loan's originator had a
written policy of offering the Mortgagor, or requiring third-party
brokers to offer the Mortgagor, the option of obtaining a mortgage
loan that did not require payment of such a penalty, (iii) the
prepayment penalty was adequately disclosed to the Mortgagor in the
mortgage loan documents pursuant to applicable state, local and
federal law, and (iv) notwithstanding any state, local or federal
law to the contrary, the Originator, as servicer, shall not impose
such prepayment penalty in any instance when the mortgage debt is
accelerated or paid off in connection with the workout of a
delinquent Mortgage Loan or as a result of the Mortgagor's default
in making the Mortgage Loan payments. This representation and
warranty is a Deemed Material and Adverse Representation;
(jjj) Purchase of Insurance. No Mortgagor was required to
purchase any single premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment or health
insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid
single premium credit insurance policy (e.g., life, mortgage,
disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or
as a condition to closing, such Mortgage Loan. This representation
and warranty is a Deemed Material and Adverse Representation;
(kkk) Points and Fees. No Mortgagor was charged "points and
fees" (whether or not financed) in an amount greater than (i)
$1,000, or (ii) 5% of the principal amount of such Mortgage Loan,
whichever is greater. For purposes of this representation, such 5%
limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Xxx
Guides and "points and fees" (x) include origination, underwriting,
broker and finder fees and charges that the mortgagee imposed as a
condition of making the Mortgage Loan, whether they are paid to the
mortgagee or a third party, and (y) exclude bona fide discount
points, fees paid for actual services rendered in connection with
the origination of the Mortgage Loan (such as attorneys" fees,
notaries fees and fees paid for property appraisals, credit reports,
surveys, title examinations and extracts, flood and tax
certifications, and home inspections), the cost of mortgage
insurance or credit-risk price adjustments, the costs of title,
hazard, and flood insurance policies, state and local transfer taxes
or fees, escrow deposits for the future payment of taxes and
insurance premiums, and other miscellaneous fees and charges that,
in total, do not exceed 0.25% of the principal amount of such
Mortgage Loan. This representation and warranty is a Deemed Material
and Adverse Representation;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed,
collected or to be collected in connection with the origination and
servicing of each Mortgage Loan, have been disclosed in writing to
the Mortgagor in accordance with applicable state and federal law
and regulation. This representation and warranty is a Deemed
Material and Adverse Representation;
(mmm) No Arbitration. No Mortgage Loan originated on or after
July 1, 2004 requires the related Mortgagor to submit to arbitration
to resolve any dispute arising out of or relating in any way to the
Mortgage Loan transaction. This representation and warranty is a
Deemed Material and Adverse Representation;
(nnn) Request for Notice; No Consent Required. With respect to
any Second Lien Loan, if applicable to the Seller, where required or
customary in the jurisdiction in which the Mortgaged Property is
located, the original lender has filed for record a request for
notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the
existence of the Second Lien Loan and requested notification of any
action to be taken against the Mortgagor by the senior lienholder.
Either (a) no consent for the Second Lien Loan is required by the
holder of the related first lien or (b) such consent has been
obtained and is contained in the Mortgage File. This representation
and warranty is a Deemed Material and Adverse Representation;
(ooo) No Negative Amortization of Related First Lien Loan.
With respect to each Second Lien Loan, the related First Lien Loan
does not permit negative amortization. This representation and
warranty is a Deemed Material and Adverse Representation; and
(ppp) Principal Residence. With respect to each Second Lien
Loan, the related Mortgaged Property was the Mortgagor's principal
residence or second home at the time of the origination of such
Second Lien Loan, as set forth on the related Mortgage Loan
Schedule. This representation and warranty is a Deemed Material and
Adverse Representation.
SCHEDULE VIII
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of NC Capital as to NC Capital
-------------------------------------------------------------
NC Capital Corporation hereby makes the representations and
warranties set forth in this Schedule VIII to the Depositor, the Servicer and
the Trustee, as of the Closing Date:
(a) Due Organization and Authority. The Responsible Party is a
corporation duly organized, validly existing and in good standing
under the laws of the state of California and has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state wherein it
owns or leases any material properties or where a Mortgaged Property
is located, if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by
the Responsible Party, and in any event the Responsible Party is in
compliance with the laws of any such state to the extent necessary;
the Responsible Party has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of
this Agreement by the Responsible Party and the consummation of the
transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby
have been duly executed and delivered and constitute the valid,
legal, binding and enforceable obligations of the Responsible Party,
regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has been taken
by the Responsible Party to make this Agreement and all agreements
contemplated hereby valid and binding upon the Responsible Party in
accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Responsible Party's charter
or by-laws or any legal restriction or any agreement or instrument
to which the Responsible Party is now a party or by which it is
bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Responsible Party
or its property is subject, or result in the creation or imposition
of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage,
contract, deed of trust or other instrument;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible Party,
before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the aggregate,
may result in any material adverse change in the business,
operations, financial condition, properties or assets of the
Responsible Party, or in any material impairment of the right or
ability of the Responsible Party to carry on its business
substantially as now conducted, or in any material liability on the
part of the Responsible Party, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Responsible Party
contemplated herein, or which would be likely to impair materially
the ability of the Responsible Party to perform under the terms of
this Agreement; and
(d) No Consent Required. No consent, approval, authorization or order
of, or registration or filing with, or notice to any court or
governmental agency or body including the U.S. Department of Housing
and Urban Development ("HUD"), the Federal Housing Administration
("FHA") or the U.S. Department of Veterans Affairs ("VA") is
required for the execution, delivery and performance by the
Responsible Party of or compliance by the Responsible Party with
this Agreement or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained
prior to the Closing Date.
SCHEDULE IX
[Reserved]
SCHEDULE X
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of LaSalle, as Custodian
-------------------------------------------------------
LaSalle hereby makes the representations and warranties set
forth in this Schedule X to the Trustee as of the Closing Date. Capitalized
terms used but not otherwise defined shall have the meaning ascribed thereto in
the Agreement to which this Schedule X is attached.
(a) LaSalle is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation
and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by LaSalle
in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to perform
any of its obligations under this Agreement in accordance with the
terms thereof.
(b) LaSalle has the full power and authority to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized
by all necessary action on the part of LaSalle the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by
the other parties thereto, constitutes a legal, valid and binding
obligation of LaSalle, enforceable against LaSalle in accordance
with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors" rights generally and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(c) The execution and delivery of this Agreement by LaSalle,
the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms
thereof are in the ordinary course of business of LaSalle and will
not (i) result in a material breach of any term or provision of the
articles of incorporation or by laws of LaSalle, (ii) materially
conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which LaSalle is a
party or by which it may be bound, or (iii) constitute a material
violation of any statute, order or regulation applicable to LaSalle
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over LaSalle; and LaSalle is not in breach
or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may
materially impair LaSalle's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or, to the best of its knowledge,
threatened against LaSalle that would materially and adversely
affect the execution, delivery or enforceability of this Agreement
or the ability of LaSalle to perform any of its obligations under
this Agreement in accordance with the terms thereof.
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by XxXxxxx of, or compliance by LaSalle
with, this Agreement or the consummation of the transactions
contemplated thereby, or if any such consent, approval,
authorization or order is required, XxXxxxx has obtained the same.
SCHEDULE XI
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates,
Series 2007-HE1
Representations and Warranties of Countrywide Servicing, as Servicer
--------------------------------------------------------------------
Countrywide Servicing hereby makes the representations and
warranties set forth in this Schedule XI to the Depositor and the Trustee as of
the Closing Date.
(i) Due Organization and Authority. The Servicer is
validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation and has all
licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws
of such state require licensing or qualification in order to
conduct business of the type conducted by the Servicer. The
Seller has the power and authority to execute and deliver this
Pooling and Servicing Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this
Pooling and Servicing Agreement (including all instruments of
transfer to be delivered pursuant to this Pooling and
Servicing Agreement) by the Servicer and the consummation of
the transactions contemplated hereby have been duly and
validly authorized; this Pooling and Servicing Agreement has
been duly executed and delivered and constitutes the valid,
legal, binding and enforceable obligation of the Servicer,
except as enforceability may be limited by (i) bankruptcy,
insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement
of the rights of creditors and (ii) general principles of
equity, whether enforcement is sought in a proceeding in
equity or at law. All requisite action has been taken by the
Servicer to make this Pooling and Servicing Agreement valid
and binding upon the Servicer in accordance with its terms;
(ii) No Consent Required. No consent, approval,
authorization or order is required for the transactions
contemplated by this Pooling and Servicing Agreement from any
court, governmental agency or body, or federal or state
regulatory authority having jurisdiction over the Servicer is
required or, if required, such consent, approval,
authorization or order has been or will, prior to the related
Closing Date, be obtained;
(iii) Ordinary Course of Business. The consummation of
the transactions contemplated by this Pooling and Servicing
Agreement are in the ordinary course of business of the
Servicer;
(iv) No Conflicts. Neither the execution and delivery of
this Pooling and Servicing Agreement by the Servicer, the
consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of
this Pooling and Servicing Agreement, will conflict with or
result in a breach of any of the terms, conditions or
provisions of the Servicer's partnership agreement or any
legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute
a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Servicer or
its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have
an adverse effect upon any of its properties pursuant to the
terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Trustee to realize on
the Mortgage Loans, impair the value of the Mortgage Loans, or
impair the ability of the Trustee to realize the full amount
of any insurance benefits accruing pursuant to this Pooling
and Servicing Agreement;
(v) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or, to best of knowledge
of the Servicer, threatened against the Servicer, before any
court, administrative agency or other tribunal asserting the
invalidity of this Pooling and Servicing Agreement, seeking to
prevent the consummation of any of the transactions
contemplated by this Pooling and Servicing Agreement or which,
either in any one instance or in the aggregate, may reasonably
result in any material adverse change in the business,
operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially
as now conducted, or in any material liability on the part of
the Servicer, or which would draw into question the validity
of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which
would be likely to impair materially the ability of the
Servicer to perform under the terms of this Pooling and
Servicing Agreement;
(vi) Ability to Perform; Solvency. The Servicer does not
believe, nor does it have any reason or cause to believe, that
it cannot perform each and every covenant contained in this
Pooling and Servicing Agreement. The Servicer is solvent;
(vii) Servicer's Ability to Service. The Servicer is an
approved seller/servicer for Xxxxxx Xxx and Freddie Mac in
good standing and is a mortgagee approved by the Secretary of
HUD. No event has occurred, including a change in insurance
coverage, which would make the Servicer unable to comply with
Xxxxxx Xxx, Freddie Mac or HUD eligibility requirements;
(viii) Reasonable Servicing Fee. The Servicer
acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that
the entire Servicing Fee shall be treated by the Servicer, for
accounting and tax purposes, as compensation for the servicing
and administration of the Mortgage Loans pursuant to this
Pooling and Servicing Agreement;
(ix) No Untrue Information. Neither this Pooling and
Servicing Agreement nor any information, statement, tape,
diskette, report, form, or other document furnished or to be
furnished pursuant to this Pooling and Servicing Agreement or
any Reconstitution Agreement or in connection with the
transactions contemplated hereby (including any Pass-Through
Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact
necessary to make the statements contained herein or therein
not misleading;
SCHEDULE XII
[Reserved]
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 OR PTCE 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[ ]
A-2fpt-[ ]
A-2a-[ ]
A-2b-[ ]
A-2c-[ ]
A-2d-[ ]
M-1-[ ]
M-2- [ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date : January 1, 2007
First Distribution Date : February 26, 2007
Initial Certificate Balance of this
Certificate ("Denomination") : $[ ]
Initial Certificate Balances of all
Certificates of this Class :
[A-1] $[ ]
[A-2fpt] $[ ]
[A-2a] $[ ]
[A-2b] $[ ]
[A-2c] $[ ]
[A-2d] $[ ]
[M-1] $[ ]
[M-2] $[ ]
[M-3] $[ ]
[M-4] $[ ]
[M-5] $[ ]
[M-6] $[ ]
[B-1] $[ ]
[B-2] $[ ]
[B-3] $[ ]
CUSIP : [A-1] [ ]
[A-2fpt] [ ]
[A-2a] [ ]
[A-2b] [ ]
[A-2c] [ ]
[A-2d] [ ]]
[M-1] [ ]
[M-2] [ ]
[M-3] [ ]
[M-4] [ ]
[M-5] [ ]
[M-6] [ ]
[B-1] [ ]
[B-2] [ ]
[B-3] [ ]
ISIN : [A-1] [ ]
[A-2fpt] [ ]
[A-2a] [ ]
[A-2b] [ ]
[A-2c] [ ]
[A-2d] [ ]]
[M-1] [ ]
[M-2] [ ]
[M-3] [ ]
[M-4] [ ]
[M-5] [ ]
[M-6] [ ]
[B-1] [ ]
[B-2] [ ]
[B-3] [ ]
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, Series 2007-HE1
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable
monthly as set forth herein. Accordingly, the Certificate Balance at any time
may be less than the Certificate Balance as set forth herein. This Certificate
does not evidence an obligation of, or an interest in, and is not guaranteed by
the Depositor, the Trustee or any other party to the Agreement referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, Countrywide Home Loans Servicing LP, as a servicer, NC Capital
Corporation, as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, Deutsche Bank National Trust Company, as trustee, and LaSalle
Bank National Association, as custodian. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its
individual capacity, but solely as Trustee
By:_____________________________________________
Authenticated:
By ____________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in
its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
Cut-off Date Pool Principal Balance, Saxon Mortgage Services, Inc., or
Countrywide Home Loans Servicing LP, individually or together, will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ___________________, or, if mailed by check, to
___________________________________________________________. Applicable
statements should be mailed to ____________________________________,
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE FORM
OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT
SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS P CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS P CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE
TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR
W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH
FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH
FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE
OF ANY CLASS P CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER AND THE CAP PROVIDER. EACH HOLDER OF A
CLASS P CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE TRUSTEE FORWARDING TO THE SWAP PROVIDER AND THE CAP PROVIDER
ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH
THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS P
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL
BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : P-1
Cut-off Date : January 1, 2007
First Distribution Date : February 26, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, Series 2007-HE1
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, NC Capital
Corporation, as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, Deutsche Bank National Trust Company, as trustee, and LaSalle
Bank National Association, as custodian. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purposes, or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and any applicable
state securities laws or is made in accordance with the Securities Act and such
laws. In the event of any such transfer, the Trustee shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the Trustee that such transfer may be
made pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act or is being made pursuant to the Securities
Act, which Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made
unless the Trustee shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
or any materially similar provisions of applicable federal, state or local law
("Similar Law"), or a person acting on behalf of or investing plan assets of any
such plan, which representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its
individual capacity, but solely as Trustee
By:_____________________________________________
Authenticated:
By ______________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual
capacity, but solely as
Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
Cut-off Date Pool Principal Balance, Saxon Mortgage Services, Inc., or
Countrywide Home Loans Servicing LP, individually or together, will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ___________________, or, if mailed by check, to
___________________________________________________________. Applicable
statements should be mailed to ____________________________________,
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : January 1, 2007
First Distribution Date : Febraury 26, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, Series 2007-HE1
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, NC Capital
Corporation, as a responsible party, Deutsche Bank National Trust Company, as
trustee, and LaSalle Bank National Association, as custodian. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicers, the Depositor or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its
individual capacity, but solely as Trustee
By:_____________________________________________
Authenticated:
By ________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity, but
solely as Trustee
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
Cut-off Date Pool Principal Balance, Saxon Mortgage Services, Inc., or
Countrywide Home Loans Servicing LP, individually or together, will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate
and hereby authorizes the transfer of registration of such Percentage Interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ___________________, or, if mailed by check, to
___________________________________________________________. Applicable
statements should be mailed to ____________________________________,
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-2
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : RX-1
Cut-off Date : January 1, 2007
First Distribution Date : February 26, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, Series 2007-HE1
Class RX
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class RX Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Trustee or any other party to
the Agreement referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class RX Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, NC Capital
Corporation, as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, Deutsche Bank National Trust Company, as trustee, and LaSalle
Bank National Association, as custodian. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class RX
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class RX Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicers, the Depositor or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
Each Holder of this Class RX Certificate shall be deemed by
the acceptance or acquisition an Ownership Interest in this Class RX Certificate
to have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class RX Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class RX Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class RX Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class RX Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class RX Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class RX Certificate, (C) not to cause income with respect to the Class RX
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class RX Certificate or to cause the Transfer of the Ownership Interest in this
Class RX Certificate to any other Person if it has actual knowledge that such
Person is a Non-Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class RX Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its
individual capacity, but solely as Trustee
By:_____________________________________________
Authenticated:
By _____________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity, but
solely as Trustee
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
Cut-off Date Pool Principal Balance, Saxon Mortgage Services, Inc., or
Countrywide Home Loans Servicing LP, individually or together, will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate
and hereby authorizes the transfer of registration of such Percentage Interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ___________________, or, if mailed by check, to
___________________________________________________________. Applicable
statements should be mailed to ____________________________________,
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE FORM
OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW (`SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND
WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICERS TO ANY OBLIGATION
IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS X CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS X CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE
TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR
W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH
FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH
FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE
OF ANY CLASS X CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER AND THE CAP PROVIDER. EACH HOLDER OF A
CLASS X CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE TRUSTEE FORWARDING TO THE SWAP PROVIDER AND THE CAP PROVIDER
ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH
THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS X
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL
BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : X-1
Cut-off Date : January 1, 2007
First Distribution Date : Febraury 26, 2007
Percentage Interest of this Certificate
("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, Series 2007-HE1
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, NC Capital
Corporation, as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, Deutsche Bank National Trust Company, as trustee, and LaSalle
Bank National Association, as custodian. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or
Pass-Through Rate and will be entitled to distributions only to the extent set
forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the offices designated by the Trustee for such purposes
or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and any applicable
state securities laws or is made in accordance with the Securities Act and such
laws. In the event of any such transfer, the Trustee shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the Trustee that such transfer may be
made pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act or is being made pursuant to the Securities
Act, which Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made
unless the Trustee shall have received either (i) a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of the Trustee, the Servicers or the Trust Fund, addressed to
the Trustee, to the effect that the purchase or holding of such Certificate will
not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Depositor, the Trustee or the Servicers to any obligation in
addition to those expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its
individual capacity, but solely as Trustee
By:_____________________________________________
Authenticated:
By _______________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL
TRUST COMPANY, not in its
individual capacity, but
solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties to the Agreement with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 5% of the
Cut-off Date Pool Principal Balance, Saxon Mortgage Services, Inc. or
Countrywide Home Loans Servicing LP, individually or together, will have the
option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans
and all property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate
and hereby authorizes the transfer of registration of such Percentage Interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ___________________, or, if mailed by check, to
___________________________________________________________. Applicable
statements should be mailed to ____________________________________,
_______________________________________________________________________________.
This information is provided by _____________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF [CUSTODIAN]/[TRUSTEE]
January 26, 2007
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
Countrywide Home Loans Servicing LP
000 Xxxxxxxxxxx Xxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration MSAC 2007-HE1
LaSalle Bank, National Association
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of January 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Saxon Mortgage
Services, Inc., as a Servicer, Countrywide Home Loans Servicing LP,
as a servicer, NC Capital Corporation, as a Responsible Party,
Decision One Mortgage Company, LLC, as a Responsible Party, Deutsche
Bank National Trust Company, as Trustee, and LaSalle Bank National
Association, as Custodian, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust,
Series 2007-HE1
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule for which the undersigned is acting as
[Custodian]/[Trustee] (other than any Mortgage Loan listed in the attached
schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) except with respect to MERS Designated Mortgage Loans, an
executed assignment of the Mortgage (which may be included in a blanket
assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The [Custodian]/[Trustee] has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The [Custodian]/[Trustee] makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectibility, insurability, effectiveness, suitability, perfection or
priority of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the [Custodian]/[Trustee] has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as Noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:_____________________________________________
Name: ______________________________________
Title: _____________________________________
[DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee]
By:_____________________________________________
Name: ______________________________________
Title: _____________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF [CUSTODIAN]/[TRUSTEE]
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
Countrywide Home Loans Servicing LP
000 Xxxxxxxxxxx Xxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration MSAC 2007-HE1
LaSalle Bank, National Association
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of January 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Saxon Mortgage
Services, Inc., as a Servicer, Countrywide Home Loans Servicing LP,
as a servicer, NC Capital Corporation, as a Responsible Party,
Decision One Mortgage Company, LLC, as a Responsible Party, Deutsche
Bank National Trust Company, as Trustee, and LaSalle Bank National
Association, as Custodian, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust,
Series 2007-HE1
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
[Custodian]/[Trustee], hereby certifies that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original or county certified recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage Loans, an
executed assignment of the Mortgage endorsed in blank, which may be
included in a blanket assignment or assignments in the form provided in
Section 2.01 of the Pooling and Servicing Agreement; or, if the
Responsible Party has certified that the related Mortgage has not been
returned from the applicable recording office, a copy of the assignment of
the Mortgage (excluding information to be provided by the recording
office).
(iv) Except with respect to MERS Designated Mortgage Loans, the
original or county certified recorded assignment or assignments of the
Mortgage showing a complete chain of assignment from the originator to the
last endorsee.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (7) and (9)
of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The [Custodian]/[Trustee] has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Pooling and Servicing Agreement. The
[Custodian]/[Trustee] makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness,
suitability, perfection or priority of any such Mortgage Loan. Notwithstanding
anything herein to the contrary, the [Custodian]/[Trustee] has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:_____________________________________________
Name: ______________________________________
Title: _____________________________________
[DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee]
By:_____________________________________________
Name: ______________________________________
Title: _____________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE1,
Mortgage Pass-Through Certificates,
Series 2007-HE1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
a. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R][RX]
Certificate (the "Residual Certificate") issued pursuant to the
Pooling and Servicing Agreement (the "Agreement"), relating to
the above-referenced Series, by and among Xxxxxx Xxxxxxx ABS
Capital I Inc., as Depositor, Saxon Mortgage Services, Inc.,
Countrywide Home Loans Servicing LP, as a Servicer, NC Capital
Corporation, as a Responsible Party, Decision One Mortgage
Company, LLC, as a Responsible Party, Deutsche Bank National
Trust Company, as Trustee (the "Trustee"), and LaSalle Bank
National Association, as Custodian (the "Custodian"). Capitalized
terms used, but not defined herein shall have the meanings
ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of
the Transferee for the benefit of the Depositor and the Trustee.
b. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is
acquiring its Ownership Interest in the Residual Certificate for
its own account. The Transferee has no knowledge that any such
affidavit is false.
c. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Residual Certificate to
Persons that are Non-Permitted Transferees; (ii) such tax will be
imposed on the transferor, or, if such Transfer is through an
agent (which includes a broker, nominee or middleman) for a
Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved
of liability for the tax if the subsequent Transferee furnished
to such Person an affidavit that such subsequent Transferee is a
Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
d. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Residual
Certificate if at any time during the taxable year of the
pass-through entity a Person that is a Non-Permitted Transferee
is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any
period with respect to which the record holder furnishes to the
pass-through entity an affidavit that such record holder is a
Permitted Transferee and the pass-through entity does not have
actual knowledge that such affidavit is false. (For this purpose,
a "pass-through entity" includes a regulated investment company,
a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and,
except as may be provided in Treasury Regulations, persons
holding interests in pass-through entities as a nominee for
another Person.)
e. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Residual Certificate
including, without limitation, the restrictions on subsequent
Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Residual
Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render
the Transfer to the Transferee contemplated hereby null and void.
f. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership
Interest in the Residual Certificate, and in connection with any
Transfer by a Person for whom the Transferee is acting as
nominee, trustee or agent, and the Transferee will not Transfer
its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a
Non-Permitted Transferee. In connection with any such Transfer by
the Transferee, the Transferee agrees to deliver to the Trustee a
certificate substantially in the form set forth as Exhibit H to
the Agreement (a "Transferor Certificate") to the effect that,
among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted
Transferee.
g. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid
with respect to the Residual Certificate. The Transferee has
historically paid its debts as they have come due and intends to
pay its debts as they come due in the future. The Transferee
intends to pay all taxes due with respect to the Residual
Certificate as they become due.
h. The Transferee's taxpayer identification number is __________.
i. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
j. The Transferee is aware that the Residual Certificate may be a
"noneconomic residual interest" within the meaning of proposed
Treasury regulations promulgated pursuant to the Code and that
the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such
residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
k. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an applicable
income tax treaty, of the Transferee or any other U.S. Person.
l. Check the applicable paragraph:
/ / The present value of the anticipated tax liabilities
associated with holding the Residual Certificate, as
applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Residual Certificate;
(ii) the present value of the expected future distributions on such
Residual Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Residual Certificate as the related REMIC
generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
/ / The transfer of the Residual Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Residual Certificate will only be taxed
in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Residual Certificate only to
another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Residual Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
/ / None of the above.
m. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975
of the Code or a plan subject to any Federal, state or local
law that is substantially similar to Title I of ERISA or
Section 4975 of the Code, and the Transferee is not acting on
behalf of or investing plan assets of such a plan.
***
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 20__.
________________________________
Print Name of Transferee
By:
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day of , 20__.
_________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [__]
Deutsche Bank National Trust Company,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE1,
Mortgage Pass-Through Certificates, Series 2007-HE1, Class
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act and (c)
to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
___________________________________
Print Name of Transferor
By:________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.,
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [__]
Deutsche Bank National Trust Company,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxxx Capital Services Inc.,
as Swap Provider and Cap Provider
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [__]
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE1,
Mortgage Pass-Through Certificates, Series 2007-HE1, Class
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A-1, Class
A-2fpt, Class A-2a, Class A-2b, Class A-2c, Class A-2d, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 or Class B-3
Certificate or we are not an employee benefit plan that is subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, or a plan subject to materially similar provisions of
applicable federal, state or local law, nor are we acting on behalf of any such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such acquisition or, with respect to a Class X Certificate, the purchaser
is an insurance company that is purchasing this certificate with funds contained
in an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
In connection with our purchase of the Certificates, we acknowledge and
agree that (i) none of you nor any of your affiliates is acting as a fiduciary
or financial or investment adviser for us; (ii) we are not relying (for purposes
of making any investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of any of you or your affiliates with
respect to the Certificates; (iii) none of you nor any of your affiliates has
given to us (directly or indirectly through any other person) any assurance,
guarantee or representation whatsoever as to the expected or projected success,
profitability, return, performance, result, effect, consequence, or benefit
(including legal, regulatory, tax, financial, accounting or otherwise) of our
purchase of the Certificates; (iv) we have performed our own diligence to the
extent we have deemed necessary and we have consulted with our own legal,
regulatory, tax, business, investment, financial and accounting advisers to the
extent that we have deemed necessary, and we have made our own investment
decisions based upon our own judgment and upon any advice from such advisers as
we have deemed necessary and appropriate and not upon any view expressed by any
of you or your affiliates with respect to the Certificates; (v) none of you nor
any of your affiliates will be obligated to make payments on the Certificates in
the event that the assets of the trust is insufficient to provide for such
payments; (vi) you and your affiliates may have positions and may effect
transactions in any of the Series 2007-HE1 securities; and (vii) we are familiar
with the Certificates and have reviewed and understand the related pooling and
servicing agreement, the prospectus supplement and prospectus relating to Series
2007-HE1 and the other material transaction documents related thereto.
The Transferee's taxpayer identification number is __________. The
Transferee attaches hereto Forms W-8ECI, W-8BEN, W-8IMY (and all appropriate
attachments) or W-9. The Transferee hereby consents to the attached Forms being
provided to the Swap Provider and the Cap Provider.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned and/or
invested on a discretionary basis $ (1) in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A and (ii) the
Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "Securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
__________________________________________
Print Name of Transferee
By:______________________________________
Name:
Title:
Date: ___________________________________
--------------------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "Securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
__________________________________________
Print Name of Transferee
By: ______________________________________
Name:
Title:
IF AN ADVISER:
__________________________________________
Print Name of Buyer
Date: ____________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for [Trustee]/[Custodian])
To: [[Trustee]/[Custodian]]
Re: In connection with the administration of the Mortgage Loans held by
you as the [Trustee]/[Custodian] on behalf of the
Certificateholders, pursuant to the Pooling and Servicing Agreement,
dated as of January 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as Depositor, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a servicer, NC Capital
Corporation, as a Responsible Party, Decision One Mortgage Company,
LLC, as a Responsible Party, Deutsche Bank National Trust Company,
as Trustee, and LaSalle Bank National Association, as Custodian,
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE1, we request
the release, and acknowledge receipt, of the (Custodial
File/[specify documents]) for the Mortgage Loan described below, for
the reason indicated.
--------------------------------------------------------------------
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that
all amounts received in connection therewith have been credited
to its Collection Account as provided in the Pooling and
Servicing Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the
Pooling and Servicing Agreement. (The Servicer hereby certifies
that the repurchase price has been credited to Collection Account
as provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Servicer
hereby certifies that all proceeds of foreclosure, insurance,
condemnation or other liquidation have been finally received and
credited to its Collection Account pursuant to the Pooling and
Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other
(explain).____________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the [Custodian]/[Trustee], please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SAXON MORTGAGE SERVICES, INC.,
as Servicer]
By:
--------------------------------------
Name:
Title:
Date:
[COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer]
By:
--------------------------------------
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By: ---------------------------------
Name:
Title:
Date:
[DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee]
By: ---------------------------------
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Sponsor and which shall be retained by the applicable Servicer or delivered to
and retained by the Trustee or Custodian, as applicable:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and
signed (which may be by facsimile signature) in the name of the last
endorsee by an authorized officer. To the extent that there is no
room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, unless the Trustee or
Custodian, as applicable, is advised in writing by the applicable
Responsible Party (pursuant to the applicable Purchase Agreement)
that state law does not so allow;
(b) the original of any guaranty executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the applicable
Responsible Party shall deliver or cause to be delivered to the
Trustee or Custodian, as applicable, a photocopy of such Mortgage
certified by the applicable Responsible Party to be a true and
complete copy of such Mortgage and shall forward to the Trustee or
Custodian, as applicable, such original recorded Mortgage within 14
days following the applicable Responsible Party's receipt of such
Mortgage from the applicable public recording office; or in the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete
copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording;
(e) the original Assignment of Mortgage for each Mortgage Loan endorsed
in blank (except with respect to MERS Designated Mortgage Loans);
(f) the originals of all intervening assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage
Loan) to the last endorsee with evidence of recording thereon or a
certified true copy of such intervening assignments of Mortgage
submitted for recording, or if any such intervening assignment has
not been returned from the applicable recording office or has been
lost or if such public recording office retains the original
recorded assignments of Mortgage, the applicable Responsible Party
shall deliver or cause to be delivered a photocopy of such
intervening assignment, certified by the applicable Responsible
Party to be a true and complete copy of such intervening assignment
and shall forward to the Trustee or Custodian, as applicable, such
original recorded intervening assignment within 14 days following
the applicable Responsible Party's receipt of such from the
applicable public recording office; or in the case of an intervening
assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original
recorded intervening assignment;
(g) the original mortgagee title insurance policy or, in the event such
original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true
and complete by the title insurance company; and
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and amount of down
payment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
(p) Survey of the Mortgaged Property.
(q) Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report, structural engineer's
report, water potability and septic certification.
(t) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE1, issued pursuant
to the Pooling and Servicing Agreement, dated as of January 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, Countrywide Home Loans
Servicing LP, as a servicer, NC Capital Corporation, as a
Responsible Party, Decision One Mortgage Company, LLC, as a
Responsible Party, Deutsche Bank National Trust Company, as Trustee,
and LaSalle Bank National Association, as Custodian, Xxxxxx Xxxxxxx
ABS Capital I Inc. Trust, Series 2007-HE1
--------------------------------------------------------------------
I, [identify the certifying individual], certify that:
a. I have reviewed this annual report on Form 10-K ("Annual
Report"), and all reports on Form 10-D (collectively with this
Annual Report, the "Reports") required to be filed in respect
of period covered by this Annual Report, of the Trust;
b. Based on my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this Annual Report;
c. Based on my knowledge, all of the distribution, servicing and
other information required to be provided under Form 10-D for
the period covered by this Annual Report is included in the
Reports;
d. Based on my knowledge and the compliance statements required
in this Annual Report under Item 1123 of Regulation AB, and
except as disclosed in the Reports, the Servicers have
fulfilled their obligations under the Pooling and Servicing
Agreement in all material respects; and
e. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related
attestation reports on assessment of compliance with servicing
criteria required to be included in this Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act
Rules 13a-18 and 15d-18 have been included as an exhibit to
this Annual Report, except as otherwise disclosed in this
Annual Report. Any material instances of non-compliance
described in such reports have been disclosed in this Annual
Report.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee, the Servicers
and the Custodian.
Date: ________________________________
______________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY THE TRUSTEE TO DEPOSITOR
------------------------------------
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE1, issued pursuant
to the Pooling and Servicing Agreement, dated as of January 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, Countrywide Home Loans
Servicing LP, as a servicer, NC Capital Corporation, as a
Responsible Party, Decision One Mortgage Company, LLC, as a
Responsible Party, Deutsche Bank National Trust Company, as Trustee,
and LaSalle Bank National Association, as Custodian, Xxxxxx Xxxxxxx
ABS Capital I Inc. Trust, Series 2007-HE1
--------------------------------------------------------------------
The Trustee hereby certifies to the Depositor, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
a. I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 10-D
required to be filed in respect of period covered by the
Annual Report (collectively with the Annual Report, the
"Reports"), of the Trust;
b. To my knowledge, the Reports, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by the
Annual Report, it being understood that the Trustee is not
responsible for verifying the accuracy or completeness of
information in the Reports (a) provided by Persons other than
the Trustee or any Subcontractor utilized by the Trustee or
(b) relating to Persons other than the Trustee or any
Subcontractor utilized by the Trustee as to which a
Responsible Officer of the Trustee does not have actual
knowledge;
c. To my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under
the Pooling and Servicing Agreement for inclusion in the
Reports is included in the Reports;
d. The report on assessment of compliance with servicing criteria
for asset-backed securities applicable to the Trustee and each
Subcontractor utilized by the Trustee and their related
attestation [report] on assessment of compliance with
servicing criteria applicable to it required to be included in
the Annual Report in accordance with Item 1122 of Regulation
AB and Exchange Act Rules 13a-18 and 15d-18 has been included
as an exhibit to the Annual Report. Any material instances of
non-compliance are described in such report and have been
disclosed in the Annual Report.
Date: _________________________________
__________________________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED
BY SAXON TO DEPOSITOR
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2007-HE1,
issued pursuant to the Pooling and Servicing Agreement, dated
as of January 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as Depositor, Saxon Mortgage Services, Inc., as a
Servicer, Countrywide Home Loans Servicing LP, as a servicer,
NC Capital Corporation, as a Responsible Party, Decision One
Mortgage Company, LLC, as a Responsible Party, Deutsche Bank
National Trust Company, as Trustee, and LaSalle Bank National
Association, as Custodian, Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust, Series 2007-HE1
--------------------------------------------------------------
Xxxxx certifies to the Depositor and the Trustee, and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
x. Xxxxx has reviewed the servicer compliance statement of Saxon and
the compliance statements of each Subservicer, if any, engaged by Xxxxx
provided to the Depositor and the Trustee for the Trust's fiscal year
[___] in accordance with Item 1123 of Regulation AB (each a "Compliance
Statement"), the report on assessment of Xxxxx'x compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria") and reports on assessment of compliance with
servicing criteria for asset-backed securities of Saxon and of each
Subservicer or Subcontractor, if any, engaged or utilized by Xxxxx
provided to the Depositor and the Trustee for the Trust's fiscal year
[___] in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation
AB (each a "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and
15d-18 under the Exchange Act and Section 1122(b) of Regulation AB related
to each Servicing Assessment (each an "Attestation Report"), and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by Saxon during 200[ ] that were
delivered or caused to be delivered by Saxon pursuant to the Agreement
(collectively, the "Servicing Information");
b. Based on Xxxxx'x 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;
c. Based on Xxxxx'x knowledge, the servicing information required to
be provided to the Trustee by Saxon pursuant to the Pooling and Servicing
Agreement has been provided to the Trustee;
d. Based on Xxxxx'x knowledge and the compliance review conducted in
preparing Compliance Statement of Saxon and, if applicable, reviewing each
Compliance Statement of each Subservicer, if any, engaged by Xxxxx, and
except as disclosed in such Compliance Statement[(s)], Saxon [(directly
and through its Subservicers, if any)] has fulfilled its obligations under
the Pooling and Servicing Agreement in all material respects.
e. Each Servicing Assessment of Saxon and of each Subservicer or
Subcontractor, if any, engaged or utilized by Saxon and its related
Attestation Report required to be included in the Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18
and 15d-18 has been provided to the Depositor and the Trustee. Any
material instances of non-compliance are described in any such Servicing
Assessment or Attestation Report.
Date: _____________________________________________
By: _______________________________________________
Name: _____________________________________________
Title: ___________________
EXHIBIT O
[Reserved]
EXHIBIT P
DECISION ONE PURCHASE AGREEMENT
==============================================================================
FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
DECISION ONE MORTGAGE COMPANY, LLC,
Seller
------------------------------------------------
Dated as of May 1, 2006
Conventional,
Fixed and Adjustable Rate, Subprime Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. CONFIDENTIALITY..............................................
SECTION 33. ENTIRE AGREEMENT.............................................
SECTION 34. COMPLIANCE WITH REGULATION AB................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
---------------------------------------------------------------------------
This FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of May 1, 2006, by and between
Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office
at 0000 Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and
Decision One Mortgage Company, LLC, a North Carolina limited liability company,
having an office at 6060 J.A. Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Purchaser and the Seller are parties to that certain
Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of February 1, 2006 (the "Original Purchase Agreement"), pursuant to
which the Seller desires to sell, from time to time, to the Purchaser, and the
Purchaser desires to purchase, from time to time, from the Seller, certain
conventional adjustable-rate and fixed-rate subprime residential first and
second lien mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date"); and
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend and restate the Original Purchase Agreement to make certain modifications
as set forth herein, and upon the execution and delivery of this Agreement by
the Purchaser and the Seller this Agreement shall supercede the Original
Purchase Agreement and supplant the Original Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Interim Servicing Agreement.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Freddie Mac Transfer.
Agreement: This Fourth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser and without recourse except as
otherwise set forth herein.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of August 1,
2002, among the Seller, the Purchaser and the Custodian, which governs the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and or its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Subsection 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Seller, acting as interim servicer, a
copy of which is attached to the Interim Servicing Agreement as Exhibit 6.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," (excluding
New Jersey "Covered Home Loans" as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) a Mortgage Loan categorized as High Cost pursuant to Appendix E of Standard
& Poor's Glossary. For avoidance of doubt, the parties agree that this
definition shall apply to any law regardless of whether such law is presently,
or in the future becomes, the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Seller, as interim servicer, providing for the Seller to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan Performance Information: As defined in Subsection 34.03(e).
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity based on original
amortization schedule; (8) with respect to each First Lien Loan, the
Loan-to-Value Ratio at origination, and with respect to each Second Lien Loan,
the CLTV at origination; (9) the Mortgage Interest Rate as of the related
Cut-off Date; (10) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (11) the stated maturity date; (12) the first payment date; (13)
the amount of the Monthly Payment as of the related Cut-off Date; (14) the last
payment date on which a payment was actually applied to the outstanding
principal balance; (15) the original principal amount of the Mortgage Loan; (16)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (17) delinquency status as of the related
Cut-off Date; (18) with respect to each Adjustable Rate Mortgage Loan, the
Interest Rate Adjustment Date; (19) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (20) with respect to each Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap under the terms of the Mortgage Note; (21)
with respect to each Adjustable Rate Mortgage Loan, a code indicating the type
of Index; (22) the type of Mortgage Loan (i.e., Fixed or Adjustable Rate
Mortgage Loan, First or Second Lien Loan); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e., full, alternative or
reduced); (25) the loan credit classification (as described in the Underwriting
Guidelines); (26) whether such Mortgage Loan provides for a Prepayment Penalty
and, if applicable, the Prepayment Penalty period; (27) the Mortgage Interest
Rate as of origination; (28) the credit risk score (FICO score); (29) the date
of origination; (30) with respect to Adjustable Rate Mortgage Loans, the
Mortgage Interest Rate adjustment period; (31) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (32) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(33) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (34) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (35) a code indicating whether the Mortgage
Loan is a Home Loan; (36) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; (37) the Due Date for the first Monthly Payment; (38) the
original Monthly Payment due; (39) Appraised Value; (40) with respect to the
related Mortgagor, the debt-to-income ratio; and (41) the MERS Identification
Number, if applicable. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price Percentage: As defined in the related Purchase Price
and Terms Agreement.
Purchase Price and Terms Agreement: Those certain letter agreements
setting forth the general terms and conditions of the transactions consummated
herein and identifying the Mortgage Loans to be purchased from time to time
hereunder, by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, accepted by the Seller, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and such appraiser and the appraisal made by
such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization
Transaction.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: Decision One Mortgage Company, LLC, its successors in
interest and assigns.
Seller Information: As defined in Subsection 34.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Seller under the Interim Servicing Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such Monthly
Payment collected by the Seller, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller shall cease all servicing
responsibilities. Such date shall occur on the day indicated by the Purchaser to
the Seller in accordance with the Interim Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance Agreement, attached hereto as Exhibit G.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the related
Purchase Price Percentage (subject to adjustment as provided therein),
multiplied by the aggregate principal balance, as of the related Cut-off Date,
of the Mortgage Loans, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans, net of the
Servicing Fee Rate. The Purchase Price plus accrued interest as set forth in the
preceding paragraph shall be paid to the Seller by wire transfer of immediately
available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such related Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such related Cut-off date, but to be applied on a Due Date beyond the related
Cut-off Date shall not be applied to the principal balance as of the related
Cut-off Date. Such prepaid amounts shall be the property of the Purchaser. The
Seller shall deposit any such prepaid amounts into the Custodial Account, which
account is established for the benefit of the Purchaser for subsequent
remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser; provided, however, that
the Purchaser and the Seller shall agree in writing on the final pool of
Mortgage Loans to be purchased on a Closing Date pursuant to this Agreement The
Purchaser may, at its option and without notice to the Seller, purchase some or
all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. In addition, the Seller shall maintain
in its possession, available for inspection by the Purchaser, and shall deliver
to the Purchaser upon demand, evidence of compliance with all federal, state,
and local laws, rules and regulations in connection with the origination and
servicing of the Mortgage Loans to the extent required by law to be maintained.
The Seller shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement or the Interim Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller in trust for the benefit of the Purchaser or
the appropriate designee of the Purchaser, as the case may be, as the owner of
the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
ten (10) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan, as set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the Mortgage Loans, the Seller shall
reissue and deliver to the Purchaser or its designee said officer's certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
statistically verifies, on a regular basis, the existence and accuracy of the
legal documents, credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and monitoring the overall
quality of the Seller's loan production and the servicing activities of the
Seller. The program is to ensure that the Mortgage Loans are originated in
accordance with the Underwriting Guidelines, guard against dishonest,
fraudulent, or negligent acts, and guard against errors and omissions by
officers, employees, or other authorized persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the Purchaser as the
Investor and the Custodian as custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition, on or prior to the related
Closing Date, Seller shall provide the Custodian and the Purchaser with a MERS
Report listing the Purchaser as the Investor, the Custodian as custodian and no
Person as Interim Funder with respect to each MERS Designated Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement and the Interim Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Seller shall execute the Interim Servicing Agreement on the
initial Closing Date.
Pursuant to the Interim Servicing Agreement, the Seller shall begin
servicing the Mortgage Loans on behalf of the Purchaser and shall be entitled to
a Servicing Fee with respect to such Mortgage Loans from the related Closing
Date until the termination of the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the Mortgage Loans. The Transfer
Date shall be the date determined in accordance with Section 6.03 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the related Transfer Date, or as otherwise specified
below the Seller shall, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices within five (5) Business Days following the related
Transfer Date.
(b) [Reserved]
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
related Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied by the Seller to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail within one (1)
Business Day following the date of receipt. The Seller shall notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller forwards with its payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall assume full responsibility for the necessary and appropriate
legal application of such Monthly Payments received by the Seller after the
related Transfer Date with respect to related Mortgage Loans then in foreclosure
or bankruptcy; provided, for purposes of this Agreement, necessary and
appropriate legal application of such Monthly Payments shall include, but not be
limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
comply with the foregoing requirements with respect to all Monthly Payments
received by it after the related Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the related Transfer Date and discovered after
the related Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
related Transfer Date cannot be identified and said misapplied
payment has resulted in a shortage in a Custodial Account or Escrow
Account, the Seller shall be liable for the amount of such shortage.
The Seller shall reimburse the Purchaser for the amount of such
shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
related Transfer Date has created an improper Purchase Price as the
result of an inaccurate outstanding principal balance, a check shall
be issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books,
records and accounts of the Seller with respect to the related Mortgage Loans
shall be in accordance with all applicable Purchaser requirements as set forth
in this agreement.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed in accordance with applicable law
in relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of North Carolina and has all licenses necessary to carry
on its business as now being conducted and is licensed, qualified and in good
standing in the states where the related Mortgaged Property is located, if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Seller. The Seller has corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement and all agreements contemplated
hereby have been duly executed and delivered and constitute the valid, legal,
binding and enforceable obligations of the Seller, except as enforceability may
be limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the related Closing Date;
(h) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(i) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(j) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(k) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transaction or Whole Loan Transfer) contains or will contain
any untrue statement of fact or omits or will omit to state a fact necessary to
make the statements contained herein or therein not misleading;
(l) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws, regulations and executive orders
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Xxxxxxxxx to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. Additionally, no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of Treasury (the "OFAC
Regulations") or in violation of the Executive Order or the OFAC Regulations;
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(r) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards, if any, as are usually and customarily insured against
by prudent mortgage lenders in the community in which the related Mortgaged
Property is located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to the requirements usually and customarily
insured against by prudent mortgage lenders in the community in which the
related Mortgaged Property is located, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Xxxxxxxxx's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to Prepayment Penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements. This
representation and warranty is a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual residential condominium unit in a condominium project, or an
individual unit in a planned unit development and that no residence or dwelling
is a mobile home, provided, however, that any condominium unit or planned unit
development shall not fall within any of the "Ineligible Projects" of part VIII,
Section 102 of the Xxxxxx Xxx Selling Guide and shall conform with the
Underwriting Guidelines. In the case of any Mortgaged Properties that are
Manufactured Homes (a "Manufactured Home Mortgage Loans"), (i) the related
manufactured dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage properly
filed in the appropriate public recording office and naming Seller as mortgagee,
(iii) the applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such
Mortgaged Property to be a part of the real property on which such dwelling is
located, (iv) as of the origination date of the related Mortgage Loan, the
related manufactured housing unit that secures such Mortgage Loan either (x) was
the principal residence of the Mortgagor or (y) was classified as real property
under applicable state law; and (v) such Manufactured Home Mortgage Loan is (x)
a qualified mortgage under Section 860G(a)(3) of the Internal Revenue Code of
1986, as amended and (y) secured by manufactured housing treated as a single
family residence under Section 25(e)(10) of the Code. As of the date of
origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household purposes.
This representation and warranty is a Deemed Material and Adverse
Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
required to be stated therein or necessary to make the information and
statements therein not misleading. No Mortgage Loan contains terms or provisions
which would result in negative amortization. Principal payments on the Mortgage
Loan commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as
set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable in
equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. The Mortgage Loan does not require a
balloon payment on its stated maturity date, unless otherwise specified in the
related Mortgage Loan Schedule;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements, if any, stated in
the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable under the Underwriting Guidelines. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the related Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable hazard
insurance policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, accepted by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property (except as may be expressly
shown in the related appraisal) or Mortgage Loan or to cause the Mortgage Loans
to prepay during any period materially faster or slower than similar mortgage
loans held by the Seller generally secured by properties in the same geographic
area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(vv) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or good faith legitimate prospective purchaser of
such Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's good faith
legitimate secondary marketing operations and the purchase and sale of mortgages
or Servicing Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
Prepayment Penalty feature, each such Prepayment Penalty is enforceable, and
each Prepayment Penalty is permitted pursuant to federal, state and local law.
Each such Prepayment Penalty is in an amount not more than the maximum amount
permitted under applicable law and no such Prepayment Penalty may be imposed for
a term in excess of five (5) years with respect to Mortgage Loans originated
prior to October, 1, 2002. With respect to Mortgage Loans originated on or after
October 1, 2002, the duration of the Prepayment Penalty period shall not exceed
three (3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in Prepayment Penalty period. This representation and
warranty is a Deemed Material and Adverse Representation;
(yy) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(zz) [Reserved];
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National Tax
Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ggg) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Xxx Guides. This representation and warranty is
a Deemed Material and Adverse Representation;
(hhh) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Seller which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into such facts as, without limitation, the Mortgage Loan's requirements and the
Mortgagor's credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Seller. For a
Mortgagor who seeks financing through a Mortgage Loan originator's higher-priced
subprime lending channel, the Mortgagor was directed towards or offered the
Mortgage Loan originator's standard mortgage line if the Mortgagor was able to
qualify for one of the standard products. This representation and warranty is a
Deemed Material and Adverse Representation;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely on the extent of
the related Mortgagor's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology employed objective
criteria that related such facts as, without limitation, the Mortgagor's credit
history, income, assets or liabilities, to the proposed mortgage payment and,
based on such methodology, the Mortgage Loan's originator made a reasonable
determination that at the time of origination the Mortgagor had the ability to
make timely payments on the Mortgage Loan. Such underwriting methodology
confirmed that at the time of origination (application/approval) the related
Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a Prepayment
Penalty upon a prepayment prior to maturity: (i) the Mortgage Loan provides some
benefit to the Mortgagor (e.g., a rate or fee reduction) in exchange for
accepting such Prepayment Penalty, (ii) the Mortgage Loan's originator had a
written policy of offering the Mortgagor, or requiring third-party brokers to
offer the Mortgagor, the option of obtaining a mortgage loan that did not
require payment of such a penalty, (iii) the Prepayment Penalty was adequately
disclosed to the Mortgagor in the mortgage loan documents pursuant to applicable
state, local and federal law, and (iv) notwithstanding any state, local or
federal law to the contrary, the Seller shall not impose such Prepayment Penalty
in any instance when the mortgage debt is accelerated or paid off in connection
with the workout of a delinquent Mortgage Loan or as a result of the Mortgagor's
default in making the Mortgage Loan payments. This representation and warranty
is a Deemed Material and Adverse Representation;
(kkk) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan. No proceeds
from any Mortgage Loan were used to purchase single premium credit insurance
policies as part of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed Material and Adverse
Representation;
(lll) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. This representation and warranty is a
Deemed Material and Adverse Representation;
(mmm) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(nnn) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation;
(ooo) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. This
representation and warranty is a Deemed Material and Adverse Representation;
(ppp) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder. This representation and warranty is a
Deemed Material and Adverse Representation;
(qqq) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage.
This representation and warranty is a Deemed Material and Adverse
Representation;
(rrr) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(sss) No Negative Amortization of Related First Lien Loan. With
respect to each Second Lien Loan, the related First Lien Loan does not permit
negative amortization. This representation and warranty is a Deemed Material and
Adverse Representation; and
(ttt) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property is the Mortgagor's principal residence. This
representation and warranty is a Deemed Material and Adverse Representation.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, (i) within sixty (60) days after the earlier
of either discovery by, or notice to, the Seller of any breach of the
representation and warranty set forth in clause (aaa) of Subsection 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii) any
breach of a Deemed Material and Adverse Representation shall automatically be
deemed to materially and adversely affects the value of the Mortgage Loans or
the interest of the Purchaser therein. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01 which materially and
adversely affects the value of the Mortgage Loans as a whole or the interests of
the Purchaser therein, and such breach cannot be cured within 60 days of the
earlier of either discovery by or notice to the Seller of such breach, all of
the Mortgage Loans affected by such breach shall, at the Purchaser's option, be
repurchased by the Seller at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Subsection 9.02 (other than
the representation and warranty set forth in clause (aaa) of such Section or any
Deemed Material Breach Representation) and the Seller discovers or receives
notice of any such breach within 120 days of the related Closing Date, the
Seller shall, at the Purchaser's option and provided that the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as
provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than 120 days after the
related Closing Date. If the Seller has no Qualified Substitute Mortgage Loan,
it shall repurchase the deficient Mortgage Loan at the Repurchase Price. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Subsection 9.03 shall be accomplished by either (a) if the Interim
Servicing Agreement has been entered into and is in effect, deposit in the
Custodial Account of the amount of the Repurchase Price for distribution to the
Purchaser on the next scheduled Remittance Date, after deducting therefrom any
amount received in respect of such repurchased Mortgage Loan or Loans and being
held in the Custodial Account for future distribution or (b) if the Interim
Servicing Agreement has not been entered into or is no longer in effect, by
direct remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to
this Agreement. In connection with any such substitution, the Seller shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. The Seller shall effect such substitution
by delivering to the Custodian or to such other party as the Purchaser may
designate in writing for such Qualified Substitute Mortgage Loan the documents
required by Subsection 6.03 and the Custodial Agreement, with the Mortgage Note
endorsed as required by Subsection 6.03 and the Custodial Agreement. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans With First Payment
Defaults.
With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid by the
related Mortgagor to the Purchaser within thirty (30) days of such Due Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at a price equal to the related Purchase Price Percentage multiplied
by the then outstanding principal balance of such Mortgage Loan, plus accrued
and unpaid interest thereon from the date to which interest was last paid
through the day prior to the repurchase date at the applicable Mortgage Interest
Rate, plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan. Notwithstanding the foregoing, the Purchaser's right to request a
repurchase hereunder shall not commence until the date which is sixty (60) days
following the related Due Date (the "Breach Date"). The Purchaser shall have
ninety (90) days following the related Breach Date to notify the Seller and
request a repurchase and the Seller shall repurchase such Mortgage Loan within
forty-five (45) days of receipt of such notice. Notwithstanding the foregoing,
the Purchaser reserves the right to request a repurchase following such sixty
(60) day timeframe in the event of a NSF return. In addition, if any payment
referred to above is received by the Seller following the Transfer Date but such
payment is made within the allotted thirty (30) or sixty (60) day period, as
applicable, the Purchaser shall not have the option to request a repurchase.
Subsection 9.05 Premium Recapture
With respect to any Mortgage Loan without Prepayment Penalties that
prepays in full during the first three months following the Closing Date, the
Seller shall pay the Purchaser, within three (3) Business Days after such
prepayment in full, an amount equal to the excess of the Purchase Price
Percentage for such Mortgage Loan over par, multiplied by the outstanding
principal balance of such Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit
by modem, a listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with respect to
each Mortgage Loan, for an interim period, as specified therein) shall be
true and correct as of the related Closing Date and no event shall have
occurred which, with notice or the passage of time, would constitute a
default under this Agreement or an Event of Default under the Interim
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the related Mortgage Loan Schedule, one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached the related Assignment and Conveyance as the Mortgage
Loan Schedule thereto;
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
4. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
5. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. Assignment and Conveyance Agreement in the form of Exhibit G
hereto, and all exhibits thereto;
10. with respect to each Closing Date, the Underwriting Guidelines
to be attached to the related Assignment and Conveyance; and
11. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each a "Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect a sale (each, a "Reconstitution") of some or all of the Mortgage Loans
then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Xxx Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Freddie Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transaction, a pooling and servicing agreement
in form and substance reasonably acceptable to the Seller or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively the agreements referred to herein as designated, the
"Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements reasonably required by the Purchaser; and
(3) to restate the representations and warranties set forth in this Agreement
and the Interim Servicing Agreement as of the settlement or closing date in
connection with such Reconstitution that occurs on or prior to six (6) months
following the related Closing Date and in connection with any Reconstitution
thereafter, to restate the representations and warranties set forth in this
Agreement and the Interim Servicing Agreement as of the related Closing Date
(each, a "Reconstitution Date"), or make the representations and warranties set
forth in the related selling/servicing guide of the master servicer or issuer,
as the case may be, in connection with such Reconstitution. The Seller shall use
its reasonable best efforts to provide to such master servicer or issuer, as the
case may be, and any other participants in such Reconstitution: (i) any and all
information and appropriate verification of information which may be reasonably
available to the Seller or its affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably believed necessary
by the Purchaser or any such other participant, including, without limitation,
an Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate of the
Purchaser participating in the Reconstitution, each underwriter or placement
agent participating in the Reconstitution, and each Person who controls the
Purchaser, such Affiliate, underwriter or placement agent and their respective
present and former directors, officers, employees and agents, and hold each of
them harmless from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that each of them may sustain in any way
related to any information provided by or on behalf of the Seller regarding the
Seller, the Seller's servicing practices or performance, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document (including,
without limitation, structural term sheets, collateral term sheets and
computational materials) prepared in connection with any Reconstitution. For
purposes of the previous sentence, "Purchaser" shall mean the Person then acting
as the Purchaser under this Agreement and any and all Persons who previously
were "Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate
with all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
Notwithstanding the foregoing, the Seller shall not be obligated to
any greater extent under any Reconstitution Agreement than it is under this
Agreement. In addition, the Purchaser will reimburse to the Seller up to $10,000
of the Seller's out-of-pocket expenses incurred in connection with a
Securitization Transaction.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the prospective purchaser or
trustee, as applicable, upon the Seller's receipt thereof. Additionally, the
Seller shall prepare and execute, at the direction of the Purchaser, any note
endorsement (consistent with this Agreement) in connection with any and all
seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and its present and former
directors, officers, employees, and agents and any Successor Servicer and its
present and former directors, officers, employees, and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
Indemnification obligation under Subsection 14.01) and related costs, judgments,
and any other costs, fees and expenses that such parties may sustain in any way
related to the failure of the Seller to perform its duties and to service the
Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. For purposes of
this paragraph "Purchaser" shall mean the Person then acting as the Purchaser
under this Agreement and any and all Persons who previously were "Purchasers"
under this Agreement and "Successor Purchaser" shall mean any Person designated
as the Successor Servicer pursuant to this Agreement and any and all Persons who
previously were Successor Servicers pursuant to this Agreement. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written consent of the Purchaser, which consent shall not
be unreasonably withheld) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Purchaser
in respect of such claim. The Purchaser promptly shall reimburse the Seller for
all amounts advanced by it pursuant to the preceding sentence, except when the
claim is in any way related to the Seller's indemnification pursuant to Section
9, or is in any way related to the failure of the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a limited liability company under the laws of the state of its
incorporation except as permitted herein, and will obtain and preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a value or net worth of at least
$25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans is mandatory from and after the date of the execution of the Purchase
Price and Terms Agreement, it being specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver (i) each of the related Mortgage Loans or (ii) one or more Qualified
Substitute Mortgage Loans or (iii) one or more Mortgage Loans otherwise
reasonably acceptable to the Purchaser on or before the related Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing security
interest in each Mortgage Loan and each document and instrument evidencing each
such Mortgage Loan to secure the performance by the Seller of its obligations
under the related Purchase Price and Terms Agreement, and the Seller agrees that
it shall hold such Mortgage Loans in custody for the Purchaser subject to the
Purchaser's (i) right to reject any Mortgage Loan (or Qualified Substitute
Mortgage Loan) under the terms of this Agreement and to require another Mortgage
Loan (or Qualified Substitute Mortgage Loan) to be substituted therefor, and
(ii) obligation to pay the Purchase Price for the Mortgage Loans. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Decision One Mortgage Company, LLC
0000 X.X. Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Parks X. Xxxxxx
With a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-1935
Attention: Xxxxxx X. Xxxxxx, Xx./Xxxxxxx X. Xxxxxxx, Xx.
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx - Whole Loan Operations
Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx - RFPG
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Email: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld. This Agreement may be
assigned, pledged or hypothecated by the Purchaser in whole or in part, and with
respect to one or more of the Mortgage Loans, without the consent of the Seller.
In the event the Purchaser assigns this Agreement, and the assignee assumes any
of the Purchaser's obligations hereunder, the Seller acknowledges and agrees to
look solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability to
the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not cause any action to be taken by any of its affiliates, and that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
the borrower or obligor under any Mortgage Loan for any purpose whatsoever,
including to refinance a Mortgage Loan, in whole or in part, without (i) the
prior written consent of the Purchaser; or (ii) written notice from the related
borrower or obligor under a Mortgage Loan of such party's intention to refinance
such Mortgage Loan. It is understood and agreed that all rights and benefits
relating to the specific solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the Closing Date and the Seller
shall take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that the Seller, or any of its respective
affiliates:
(1) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(2) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
SECTION 32. Confidentiality. Each of the Purchaser and the Seller
shall employ proper procedures and standards designed to maintain the
confidential nature of the terms of this Agreement, except to the extent: (a)
the disclosure of which is reasonably believed by such party to be required in
connection with regulatory requirements or other legal requirements relating to
its affairs; (b) disclosed to any one or more of such party's employees,
officers, directors, agents, attorneys or accountants who would have access to
the contents of this Agreement and such data and information in the normal
course of the performance of such Person's duties for such party, to the extent
such party has procedures in effect to inform such Person of the confidential
nature thereof; (c) that is disclosed in a prospectus, prospectus supplement or
private placement memorandum relating to a securitization of the Mortgage Loans
by the Purchaser (or an affiliate assignee thereof) or to any Person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement; and
(d) that is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
Notwithstanding any other express or implied agreement to the
contrary, each of the Purchaser and the Seller agree and acknowledge that each
of them and each of their employees, representatives, and other agents may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to any of them
relating to such tax treatment and tax structure, except to the extent that
confidentiality is reasonably necessary to comply with U.S. federal or state
securities laws. For purposes of this paragraph, the terms "tax treatment" and
"tax structure" have the meanings specified in Treasury Regulation section
1.6011-4(c).
SECTION 33. Entire Agreement.
This Agreement constitutes the entire agreement and understanding
relating to the subject matter hereof between the parties hereto and any prior
oral or written agreements between them shall be deemed to have merged herewith.
SECTION 34. Compliance with Regulation AB.
Subsection 34.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 34 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with reasonable requests made by the
Purchaser or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate
reasonably and in good faith with the Purchaser to deliver to the Purchaser
(including any of its assignees or designees) and any Depositor, any and all
statements, reports, certifications, records and any other information necessary
to permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Seller, any
Third-Party Originator and the Mortgage Loans, or the servicing of the Mortgage
Loans, necessary in order to effect such compliance.
Subsection 34.02 Additional Representations and Warranties of the Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 34.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Seller; (ii) the Interim Servicer has
not been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Interim Servicer as servicer has been disclosed or reported by the
Seller; (iv) no material changes to the Interim Servicer's policies or
procedures with respect to the servicing function it will perform under the
Interim Servicing Agreement and any Reconstitution Agreement for mortgage loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v) there
are no aspects of the Interim Servicer's financial condition that could have a
material adverse effect on the performance by the Interim Servicer of its
servicing obligations under the Interim Servicing Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator; and (vii) there are no
affiliations, relationships or transactions relating to the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 34.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 34.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1110, 1117 and 1119 of Regulation
AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating
residential mortgage loans, which description shall include a
discussion of the originator's experience in originating
mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the
originator's origination portfolio; and information that may
be material, in the good faith judgment of the Purchaser or
any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s) as
the Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Seller and each Third-Party Originator; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Notwithstanding the foregoing, the
Static Pool Information required to be provided under this Subsection 34.03(b)
initially shall relate to the Mortgage Loans sold and purchased hereunder;
provided however, the Purchaser and the Seller agree that if the Purchaser
determines in its sole discretion due to changes in the interpretations of the
requirements of Regulation AB or market practice in complying with Regulation AB
that this limitation shall cause the Purchaser to be unable to comply with
Regulation AB or is not consistent with market practices with respect to static
pool disclosure under Regulation AB, then the Seller shall provide all Static
Pool Information regardless of whether the related Mortgage Loans were sold and
purchased by the Purchaser hereunder. The Seller shall provide all Static Pool
Information in a timely manner in order to allow the Purchaser to comply with
its obligations under Regulation AB. Such Static Pool Information shall be
prepared in form and substance reasonably satisfactory to the Purchaser and the
Seller by the Seller (or Third-Party Originator) on the basis of its reasonable,
good faith interpretation of the requirements of Item 1105(a)(1)-(3) of
Regulation AB. To the extent that there is reasonably available to the Seller
(or Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant to
this paragraph. Such Static Pool Information for each vintage origination year
or prior securitized pool, as applicable, shall be presented in increments no
less frequently than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the date of the
prospectus or other offering document in which the Static Pool Information is to
be included or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Seller's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be for
the benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
Notwithstanding the foregoing, the Static Pool Information required
to be provided under this Subsection 34.03(b) initially shall relate to the
Mortgage Loans sold and purchased hereunder; provided however, the Purchaser and
the Seller agree that if the Purchaser determines due to changes in the
interpretations of the requirements of Regulation AB or market practice in
complying with Regulation AB that this limitation shall cause the Purchaser to
be unable to comply with Regulation AB or is not consistent with market
practices with respect to static pool disclosure under Regulation AB, then the
Purchaser and the Seller shall negotiate in good faith to amend this provision
to reflect a reasonable, good faith interpretation of the requirements of
Regulation AB or market practice.
(c) [Reserved]
(d) Upon a request by the Purchaser or any Depositor, for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any Depositor
in writing of (A) any material litigation or governmental proceedings pending
against the Seller or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
(e) With respect to those Mortgage Loans that were sold to the
Purchaser pursuant to this Agreement and subsequently subject to a
Securitization Transfer, the Purchaser shall, to the extent consistent with
then-current industry practice, cause the servicer (or another party) to be
obligated to provide information, in the form customarily provided by such
servicer or other party (which need not be customized for the Seller) with
respect to the Mortgage Loans reasonably necessary for the Seller to comply with
its obligations under Regulation AB, including, without limitation, providing to
the Seller Static Pool Information, as set forth in Item 1105(a)(2) and (3) of
Regulation AB (such information provided by the servicer or such other party,
the "Loan Performance Information").
Subsection 34.04 Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, the Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction; each
broker dealer acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of each
of the foregoing and of the Depositor, and shall hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' letter or other material provided
under this Section 34 by or on behalf of the Seller, or
provided in written or electronic form under this Section 34
by or on behalf of any Third-Party Originator (collectively,
the "Seller Information"), or (B) the omission or alleged
omission to state in the Seller Information a material fact
required to be stated in the Seller Information or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Seller
Information and not to any other information communicated in
connection with a sale or purchase of securities, without
regard to whether the Seller Information or any portion
thereof is presented together with or separately from such
other information;
(ii) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants'
letter or other material when and as required under this
Section 34; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 34.02(a) or in a writing furnished
pursuant to Subsection 34.02(b) and made as of a date prior to
the closing date of the related Securitization Transaction, to
the extent that such breach is not cured by such closing date,
or any breach by the Seller of a representation or warranty in
a writing furnished pursuant to Subsection 34.02(b) to the
extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Seller or
any Third-Party Originator.
(b) Any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Section 34, or any breach by the Seller
of a representation or warranty set forth in Subsection 34.02(a) or in a writing
furnished pursuant to Subsection 34.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
34.02(b) to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Seller under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the Interim Servicing
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Interim Servicer; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
(c) The Purchaser shall indemnify the Seller, each affiliate of the
Seller and the respective present and former directors, officers, employees and
agents of each of the foregoing, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in the Loan Performance Information or
(B) the omission or alleged omission to state in the Loan
Performance Information a material fact required to be stated
in the Loan Performance Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way
of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Loan Performance
Information and not to any other information communicated in
connection with a sale or purchase of securities, without
regard to whether the Loan Performance Information or any
portion thereof is presented together with or separately from
such other information; or
(ii) any failure by the Purchaser or by the related servicer to
deliver any Loan Performance Information as required under
Subsection 34.03(e).
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:
Title:
DECISION ONE MORTGAGE COMPANY, LLC
(Seller)
By:____________________________________
Name:
Title:
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon.;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Loans). The Assignment of Mortgage shall be delivered in blank. If
the Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[Seller], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee with evidence of recording thereon;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage.
Notwithstanding the foregoing, in connection with any item described
above in clauses (c), (d), (f) or (g), if the Seller cannot deliver or cause to
be delivered the original of any such item with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public recording
office where such item has been delivered for recordation or because such item
has been lost or because such public recording office retains the original
recorded item (each such item, a "Delayed Document"), the Seller shall deliver
or cause to be delivered to the Custodian, (i) in the case of a delay caused by
the public recording office, a photocopy of such Delayed Document, together with
an Officer's Certificate of the Seller (or certified by the title company,
escrow agent, or closing attorney) to the effect that such copy is a true and
correct copy of the Delayed Document that has been dispatched to the appropriate
public recording office for recordation (and the original recorded Delayed
Document or a copy of such Delayed Document certified by such public recording
office to be a true and complete copy of the original recorded Delayed Document
will be promptly delivered to the Custodian upon receipt thereof by the Seller);
or (ii) in the case of a Delayed Document where a public recording office
retains the original recorded Delayed Document or in the case where a Delayed
Document is lost after recordation in a public recording office, a copy of such
Delayed Document certified by such public recording office to be a true and
complete copy of the original recorded Delayed Document; provided however in
connection with clauses (f) and (g), the Seller may deliver or cause to be
delivered to the Custodian in the case of a delay caused by the public recording
office, a photocopy of such Delayed Document certified by the Seller to be true
and correct, with the original recorded Delayed Document to be provided to the
Custodian within 180 days of the related Closing Date.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document is
expected to be delivered to the Custodian. An extension of the date specified in
(iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Exhibit B
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
----------------------
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the
"Depositor"), [______________], a [______________] (the "Underwriter"),
[______________], a [______________] (the "Initial Purchaser") and
[______________], a [______________] (the "Indemnifying Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Indemnifying Party and the Depositor are parties to
the Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
ABS Informational and Computational Material means any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act and
the 1934 Act, as may be amended from time to time.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Free Writing Prospectus: Any written communication that constitutes
a "free writing prospectus," as defined in Rule 405 under the 1933 Act.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: [(A)] All information in the
Prospectus Supplement, the Offering Circular or any Free Writing Prospectus or
any amendment or supplement thereto (i) contained under the headings
"Summary--Relevant Parties--Responsible Party [and Servicer,"] "The Mortgage
Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii) regarding the
Mortgage Loans, the related mortgagors and/or the related Mortgaged Properties
(but in the case of this clause (ii), only to the extent any untrue statement or
omission arose from or is based upon errors or omissions in the information
concerning the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties, as applicable, provided to the Depositor or any affiliate
by or on behalf of the Indemnifying Party) [and (B) static pool information
regarding mortgage loans originated or acquired by the Seller [and included in
the Prospectus Supplement, the Offering Circular, the ABS Informational and
Computational Materials or the Free Writing Prospectus or any amendment or
supplement thereto][incorporated by reference from the website located at
___________]].
Offering Circular: The offering circular, dated [_______], 200___,
relating to the private offering of the Privately Offered Certificates,
including any structural term sheets, collateral terms sheets and computational
materials used in connection with such offering.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to
the Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates, including any structural term sheets, collateral terms sheets and
computational materials used in connection with such offering.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Purchase Agreement: The Purchase Agreement, dated ___________, 200_,
between the Depositor and the Initial Purchaser, relating to the sale of the
Privately Offered Certificates.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, between the Depositor and the Underwriter, relating to the
sale of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor, the Underwriter and the Initial Purchaser and their respective
affiliates, and their respective present and former directors, officers,
employees, agents and each Person, if any, that controls the Depositor, the
Underwriter or such affiliate, within the meaning of either the 1933 Act or the
1934 Act (collectively, the "Indemnified Parties"), against any and all losses,
claims, damages, penalties, fines, forfeitures or liabilities, joint or several,
to which each such Indemnified Party may become subject, under the 1933 Act, the
1934 Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus Supplement, the Offering
Circular, the ABS Informational and Computational Materials, any Free Writing
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission relates to information set forth in the Indemnifying Party Information,
and the Indemnifying Party shall in each case reimburse each Indemnified Party
for any legal or other costs, fees, or expenses reasonably incurred and as
incurred by such Indemnified Party in connection with investigating or defending
any such loss, claim, damage, penalty, fine, forfeiture, liability or action.
The Indemnifying Party's liability under this Section 3.1 shall be in addition
to any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[______________]
[______________]
[______________]
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[______________]
[______________]
[______________]
Attention:
Telephone:
In the case of the Indemnifying Party:
[______________]
[______________]
[______________]
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:____________________________________
Name:
Title:
[UNDERWRITER]
By:____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By:____________________________________
Name:
Title:
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
DECISION ONE MORTGAGE COMPANY, LLC
----------------------------------
I, Xxxxxxx X. Xxxxx, hereby certify that I am a duly appointed, qualified
and acting Assistant Secretary of DECISION ONE MORTGAGE COMPANY, LLC, a North
Carolina Limited Liability Company (the "Company"), and hereby further certify
to the following
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of the
Integrated Limited Liability Company Operating Agreement of the Company
which is in full force and effect on the date hereof and which has been in
effect without amendment, waiver, rescission or modification since March
4, 1996 and restated as of Restated as of August 31, 1999.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
bylaws of the Company which are in effect on the date hereof and which
have been in effect without amendment, waiver rescission or modification
since March 4, 1996.
3. Attached hereto as Exhibit 3 is a certificate of existence of the Company
issued State of North Carolina Department of The Secretary of State on
[_____________], and no event has occurred since the date thereof which
would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy of the
resolutions adopted by the Managers of the Limited Liability Company on
[_____________], which have not been rescinded or modified.
5. Each person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Fourth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of
May 1, 2006, by and between the Company and Xxxxxx Xxxxxxx Mortgage
Capital Inc. ("MS Capital"), (b) the Amended and Restated Interim
Servicing Agreement, dated as of November 1, 2005, by and between the
Company and MS Capital and (c) the Custodial Agreement, dated as of
October 1, 2004, by and among MS Capital, the Company and Deutsche Bank
Trust Company Americas, as Custodian, and (d) any other document
delivered or on the date hereof in connection with any purchase
described in the agreements set forth above was, at the respective
times of such signing and delivery, and is now, a duly elected or
appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such
documents are their genuine signatures.
6. To my knowledge, neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, the Interim Servicing
Agreement and the Custodial Agreement referred to above conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter
IN WITNESS WHEREOF, the undersigned has executed this Certificate on this
the 28th day of November 2005.
_________________________________
X. X. Xxxxx
Assistant Secretary
Exhibit 1
EXHIBIT 1
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
---------------------------------------------
DECISION ONE MORTGAGE COMPANY, LLC
----------------------------------
Exhibit 2
EXHIBIT 2
BYLAWS
------
DECISION ONE MORTGAGE COMPANY, LLC
----------------------------------
Exhibit 3
EXHIBIT 3
CERTIFICATE OF GOOD STANDING - NORTH CAROLINA
---------------------------------------------
DECISION ONE MORTGAGE COMPANY, LLC
----------------------------------
Exhibit 4
EXHIBIT 4
DECISION ONE MORTGAGE COMPANY, LLC
----------------------------------
"WHEREAS, the Company desires to sell or securitize pools of
Mortgage Loans held for sale;
WHEREAS, in order to effect such sales and securitizations, the
Company must enter into Mortgage Loan Purchase Agreements, Interim Servicing
Agreements, Custodial Agreements and related and similar agreements;
NOW, THEREFORE, BE IT RESOLVED, that the Company is hereby
authorized to enter into (a) Mortgage Loan Purchase Agreements, (b) Interim
Servicing Agreements and (c) Custodial Agreements and related and similar
agreements.
RESOLVED FURTHER, that each of the President, and each Senior Vice
President, Vice President, Secretary and Assistant Secretary of the Company is
hereby authorized, for and on behalf of the Company, to execute and deliver each
of the foregoing agreements, as well as such other agreements, instruments and
certificates, and to take such other action, as any of them may deem necessary
or advisable to carry out the purpose of the foregoing resolutions.
BE IT FURTHER RESOLVED, that the Company is authorized to enter into
the Fourth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of May 1, 2006, and the Amended and Restated Interim Servicing
Agreement, dated as of November 1, 2005, with XXXXXX XXXXXXX MORTGAGE CAPITAL
INC. ("MS Capital"), and the Custodial Agreement, dated as of October 1, 2004,
among MS Capital, the Company and Deutsche Bank Trust Company Americas, as
Custodian, as well as such other agreements, instruments and certificates as any
of them may deem necessary or advisable in connection therewith, for the purpose
of selling mortgage loans to MS Capital from time to time and servicing such
mortgage loans on an interim basis."
Exhibit 5
EXHIBIT 5
LIST OF OFFICERS AS ADOPTED [_____________]
-------------------------------------------
DECISION ONE MORTGAGE COMPANY, LLC
----------------------------------
Manager Xxxxxxx X. Xxxxxxx
Manager Xxxxxxx X. Xxxxxxx
Manager Xxxx X. Xxxxxxxx
President Xxxx X. Xxxxxxxx
Senior Vice President & Assistant Secretary Xxxxxxx X. Xxxxxxx
Senior Vice President of Finance, CFO, Treasurer Xxxxxxx X. Xxxxxxx
& Secretary
Senior Vice President & Assistant Secretary Xxxxxx X. Xxxxxx, Xx
Vice President & Assistant Secretary Xxxx X. Xxxx
Senior Vice President Xxxxxxx X. Xxxx
Vice President & Controller Xxxxx X. Xxxxxx
Assistant Vice President Xxxxxxx X. Xxxxxxxx
Assistant Vice President Xxxx X. Xxxxxxx
Assistant Vice President Xxxxxx X. Xxxxxx
Assistant Vice President Xxxxxxxx X. Xxxxx
Assistant Vice President Xxxxx X. Xxxxxxxxx
Assistant Vice President and Assistant Secretary Xxxxxxx Xxxxxxx
Assistant Vice President and Assistant Secretary Xxxxx X. Xxxxxxxx
Assistant Vice President and Assistant Secretary Xxxxxx X. Xxxx
Assistant Vice President and Assistant Secretary Xxxxxx X. Xxxxxxx
Assistant Vice President and Assistant Secretary Xxxx X. Xxxxxxxx
Assistant Vice President and Assistant Secretary Xxxxx X.Xxxxxx
Assistant Vice President and Assistant Secretary Xxxxxxx X. Xxxxxxxx
Assistant Vice President and Assistant Secretary Xxxxx X. Xxxxxxxxx
Assistant Vice President Xxxxxxx X. Xxxxxxx
Managing Principal Xxxxxx X. XxXxxx
Assistant Secretary Xxxxxxx X. Xxxxx
Assistant Secretary Xxxxxxxx X. Xxxxxx
Assistant Secretary Xxxx X. Xxxxx
Assistant Secretary Xxxx X. Xxxxxx
Assistant Secretary Xxxxx X. Xxxxxxx
Assistant Secretary Xxxxxxx X. Xxxxxx
Assistant Secretary Xxxxx X. Xxx
Assistant Secretary Xxxxxxxx X. Xxxx
Assistant Secretary Xxxxx X. Xxxxxxx
Assistant Secretary Xxxxxx X. Xxxxxxx
Assistant Secretary Xxxxxx X. Xxxxxxxx
Assistant Secretary Xxxxxxx. X. Xxxx
Assistant Secretary XxXxxxx X. Xxxxx
Assistant Secretary Xxxxx X. Xxxxxx
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Fourth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of May 1, 2006 (the "Purchase Agreement") which sale
is in the form of whole loans, serviced pursuant to an Amended and Restated
Interim Servicing Agreement, dated as of November 1, 2005, between the Purchaser
and ________________________ (the "Interim Servicer") (the "Servicing
Agreement", and collectively with the Purchase Agreement, the "Agreements").
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Servicing Agreement;
(iii) the form of Assignment of Mortgage;
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to transact business in, and is in
good standing under, the laws of [the state of
incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and
conditions of the Agreements.
(iii) Each of the Agreements has been duly authorized, executed
and delivered by the Company and is a legal, valid and
binding agreement enforceable in accordance with its
respective terms against the Company, subject to bankruptcy
laws and other similar laws of general application affecting
rights of creditors and subject to the application of the
rules of equity, including those respecting the availability
of specific performance, none of which will materially
interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage
Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents
the legal and valid signature of said officer of the
Company.
(vi) Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale
of the Mortgage Loans by the Company or the consummation of
the transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vii) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreements
conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default
under the charter or by-laws of the Company the terms of any
indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule,
regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the
Company is subject or by which it is bound.
(viii) There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened
against the Company which, in [our] [my] judgment, either in
any one instance or in the aggregate, may result in any
material adverse change in the business, operations,
financial condition, properties or assets of the Company or
in any material impairment of the right or ability of the
Company to carry on its business substantially as now
conducted or in any material liability on the part of the
Company or which would draw into question the validity of
the Agreements or the Mortgage Loans or of any action taken
or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the
terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of
the Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable
form, except for the insertion of the name of the assignee,
and upon the name of the assignee being inserted, are
acceptable for recording under the laws of the state where
each related Mortgaged Property is located. The endorsement
of the Mortgage Notes, the delivery to the Purchaser, or its
designee, of the Assignments of Mortgage, and the delivery
of the original endorsed Mortgage Notes to the Purchaser, or
its designee, are sufficient to permit the Purchaser to
avail itself of all protection available under applicable
law against the claims of any present or future creditors of
the Company, and are sufficient to prevent any other sale,
transfer, assignment, pledge or hypothecation of the
Mortgages and the Mortgage Notes by the Company from being
enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
_____________________________
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement. The Company warrants that the
mortgage loans to be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
________________________________
By:____________________________
Name:__________________________
Title:_________________________
Date:___________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
_________________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
Upon receipt of the sum of $_____________ in immediately available funds, the
financial institution named below hereby relinquishes any and all right, title
and interest it may have in all Mortgage Loans to be purchased by to Xxxxxx
Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. from the Company named below pursuant
to that certain Fourth Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of ______ __, 200_, and certifies that all notes,
mortgages, assignments and other documents in its possession relating to such
Mortgage Loans have been delivered and released to the Company named below or
its designees, as of the date and time of the sale of such Mortgage Loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
------------------------
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_______________________________
By:____________________________
Title:_________________________
Date:__________________________
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
-------------------------------------------
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Fourth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of _________, ____ (the "Purchase Agreement"), does hereby sell,
transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc.
("Purchaser") as the Purchaser under the Agreements (as defined below) without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A (the "Mortgage Loans"), together with the Mortgage
Files and the related Servicing Rights and all rights and obligations arising
under the documents contained therein. Each Mortgage Loan subject to the
Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Seller has delivered to the Custodian the documents
for each Mortgage Loan to be purchased as set forth in the Purchase Agreement.
The ownership of each Mortgage Note, Mortgage and the contents of the Mortgage
File and Servicing File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in a custodial capacity only. The PPTA and the Purchase
Agreement shall collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
______________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:______________________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
------------------
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
-------------------------------------------------------
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a FICO Score of less than ___; or (4) a debt-to-income ratio of more than
___%. Each Mortgage Loan has a Mortgage Interest Rate of at least ___% per annum
and an outstanding principal balance of less than $______. Each Adjustable Rate
Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
-----------------------
Exhibit H
EXHIBIT H
UNDERWRITING GUIDELINES
-----------------------
Exhibit I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
--------------------------------------------
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
-------------------------
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Fourth Amended
and Restated Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), dated as of May 1, 2006, between the Assignor, as purchaser (the
"Purchaser"), and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
--------------------------
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
---------------------------------------------
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.02
of the Purchase Agreement are true and correct as of the date hereof as if such
representations and warranties were made on the date hereof unless otherwise
specifically stated in such representations and warranties.
Remedies for Breach of Representations and Warranties
-----------------------------------------------------
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
-------------
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By: __________________________________
Name:__________________________________
Its:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By: __________________________________
Name:__________________________________
Its:
[__________________________]
By: __________________________________
Name:__________________________________
Its:
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
-------------------------------------------------
Mortgage Loan Schedule
EXHIBIT Q
NC CAPITAL PURCHASE AGREEMENT
================================================================================
SIXTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
NC CAPITAL CORPORATION,
Seller
-----------------------
Dated as of May 1, 2006
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
-----------------
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. COMPLIANCE WITH REGULATION AB................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
SIXTH AMENDED AND RESTATED MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT
This SIXTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of May 1, 2006, by and between
Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office
at 0000 Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and NC
Capital Corporation, a California corporation, having an office at 00000 Xxx
Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Sixth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of March 1, 2006 (the "Original Purchase Agreement"), pursuant to which
the Seller may sell, from time to time, to the Purchaser, and the Purchaser may
purchase, from time to time, from the Seller, certain conventional adjustable
and fixed rate B/C, residential first and second mortgage loans (the "Mortgage
Loans") as described therein, and which shall be delivered in pools of whole
loans (each, a "Mortgage Loan Package") on various dates as provided therein
(each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend and restate the Original Purchase Agreement to make certain modifications
as set forth herein, and upon the execution and delivery of this Agreement by
the Purchaser and the Seller this Agreement shall supercede the Original
Purchase Agreement and supplant the Original Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Freddie Mac Transfer.
Agreement: This Sixth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees, and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Originator's servicing operations are located or (iii)
the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement".
Custodian: Deutsche Bank Trust Company Americas, or the Custodian's
successor in interest or permitted assigns, or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Subsection 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Servicing Agreement (with respect to each Mortgage Loan,
as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: Freddie Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Freddie Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," (excluding
New Jersey "Covered Home Loans" as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) categorized as High Cost pursuant to Appendix E of Standard & Poor's
Glossary. For avoidance of doubt, the parties agree that this definition shall
apply to any law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the Mortgagor or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create, with
respect to a First Lien Loan, a first lien, and with respect to a Second Lien
Loan, a second lien, in each case, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17) with
respect to each Second Lien Loan and First Lien Loan with a second lien behind
it, the combined principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
due and collected on or before the related Cut-off Date; (18) a code indicating
whether there is a simultaneous second; (19) delinquency status as of the
related Cut-off Date; (20) with respect to each Adjustable Rate Mortgage Loan,
the Interest Rate Adjustment Date; (21) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (22) with respect to each Adjustable Rate
Mortgage Loan , the Lifetime Rate Cap under the terms of the Mortgage Note; (23)
with respect to each Adjustable Rate Mortgage Loan, a code indicating the type
of Index; (24) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan, First or Second Lien Loan); (25) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(26) a code indicating the documentation style (i.e., full, alternative or
reduced); (27) the loan credit classification (as described in the Underwriting
Guidelines); (28) whether such Mortgage Loan provides for a prepayment penalty
and, if applicable, the prepayment penalty period; (29) the Mortgage Interest
Rate as of origination; (30) the credit risk score (FICO score); (31) the date
of origination; (32) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate adjustment period; (33) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (34) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(35) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (36) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (37) a code indicating whether the Mortgage
Loan is a High Cost Loan; (38) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; (39) the Due Date for the first Monthly Payment; (40) the
original Monthly Payment due; (41) with respect to the related Mortgagor, the
debt-to-income ratio; (42) sales price; (43) Appraised Value; (44) appraisal
type; (45) appraisal date; and (46) a code indicating whether the Mortgage Loan
is a Home Loan. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) securing repayment of the debt
evidenced by the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Originator, will not or, in the case of a proposed advance, would not, be
ultimately recoverable from related Insurance Proceeds, Liquidation Proceeds or
otherwise. The determination by the Originator that it has made a Nonrecoverable
Advance or that any proposed advance of principal and interest, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or assigns or any successor to the Purchaser under this Agreement as
herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation was
not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfied the
requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Freddie Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transaction in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transaction).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization
Transaction.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and/or the Originator and the Purchaser and/or certain third
parties on the Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a Securitization Transaction pursuant to Section 13, including, but
not limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: NC Capital Corporation, its successors in interest and
assigns.
Seller Information: As defined in Subsection 32.04(a).
Servicing Agreement: The Amended and Restated Interim Servicing
Agreement, dated as of December 1, 2005, between the Purchaser and the
Originator, providing for the Originator to service the Mortgage Loans as
specified in the Servicing Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to the
Servicing Agreement, a fee payable monthly equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) the outstanding principal balance of such
Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated for any
portion of a month during which the Mortgage Loan is serviced by the Originator
under the Servicing Agreement. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by this Agreement) of such Monthly Payment
collected by the Originator, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Originator consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit G and a then-current
copy of which shall be attached as an exhibit to the related Assignment and
Conveyance.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the related
Mortgage Loan Schedule for the Mortgage Loans to be purchased on a particular
Closing Date to the Purchaser at least two (2) Business Days prior to the
related Closing Date. The related Mortgage Loan Schedule shall be the related
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the related Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off Date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Originator pursuant to this Agreement to be appropriately identified in the
Seller's computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Seller shall
cause the Originator to release from its custody the contents of any Servicing
File retained by it only in accordance with this Agreement or the Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Originator after the
related Cut-off Date on or in connection with a Mortgage Loan shall be vested in
the Purchaser or one or more designees of the Purchaser; provided, however, that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Seller or the Originator in trust for the benefit of the
Purchaser or the appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Freddie Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Xxx Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for paying for and recording the Assignments of Mortgage.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, have an internal
quality control program that verifies, on a regular basis, the existence and
accuracy of the legal documents, credit documents, property appraisals, and
underwriting decisions. The program shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Servicing Agreement (with respect to each Mortgage Loan,
for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Originator as independent contract servicer of
the Mortgage Loans pursuant to and in accordance with the terms and conditions
contained in the Servicing Agreement. Pursuant to the Servicing Agreement, the
Originator shall begin servicing the Mortgage Loans on behalf of the Purchaser
and shall be entitled to the Servicing Fee and any Ancillary Income with respect
to such Mortgage Loans from the related Closing Date until the termination of
the Servicing Agreement with respect to any of the Mortgage Loans as set forth
in the Servicing Agreement. The Seller shall cause the Originator to service the
Mortgage Loans in accordance with the terms of the Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Originator to cease all servicing responsibilities related to the
related Mortgage Loans subject to such Transfer Date. The Transfer Date shall be
the date determined in accordance with Section 6.03 of the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
On or prior to the applicable Transfer Date, the Seller shall cause
the Originator shall, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall cause the Originator to
mail to the Mortgagor of each related Mortgage Loan a letter advising such
Mortgagor of the transfer of the servicing of the related Mortgage Loan to the
Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990; provided, however, the content and format of the
letter shall have the prior approval of the Purchaser. The Seller shall cause
the Originator to provide the Purchaser with copies of all such related notices
no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Originator to transmit to the applicable taxing authorities and
insurance companies (including primary mortgage insurance policy insurers, if
applicable) and/or agents, notification of the transfer of the servicing to the
Purchaser, or its designee, and instructions to deliver all notices, tax bills
and insurance statements, as the case may be, to the Purchaser from and after
the related Transfer Date. The Seller shall cause the Originator to provide the
Purchaser with copies of all such notices no later than such Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Originator to forward to the Purchaser, or its designee, all servicing records
and the Servicing File in the Originator's possession relating to each related
Mortgage Loan including the information enumerated in the Servicing Agreement
(with respect to each such Mortgage Loan, for an interim period, as specified
therein).
(d) Escrow Payments. The Seller shall cause the Originator to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Originator to provide the Purchaser with an accounting statement of
Escrow Payments and suspense balances and loss draft balances sufficient to
enable the Purchaser to reconcile the amount of such payment with the accounts
of the Mortgage Loans. Additionally, the Seller shall cause the Originator to
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Originator.
(e) Payoffs and Assumptions. The Seller shall cause the Originator
to provide to the Purchaser, or its designee, copies of all assumption and
payoff statements generated by the Originator on the related Mortgage Loans from
the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Originator on each related Mortgage
Loan shall be properly applied by the Originator to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The Seller shall
cause the amount of any related Monthly Payments received by the Originator
after the Transfer Date to be forwarded to the Purchaser by overnight mail on
the date of receipt. The Seller shall cause the Originator to notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Originator forwards with its payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall cause the Originator to assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received by
the Originator after the Transfer Date with respect to related Mortgage Loans
then in foreclosure or bankruptcy; provided, for purposes of this Agreement,
necessary and appropriate legal application of such Monthly Payments shall
include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and the
Seller shall comply with the foregoing requirements with respect to all Monthly
Payments received by the it after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
such Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall or the Seller shall cause the Originator to be liable
for the amount of such shortage. The Seller shall or the Seller
shall cause the Originator to reimburse the Purchaser for the amount
of such shortage within thirty (30) days after receipt of written
demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Originator with respect to the related Mortgage Loans shall be
in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall or shall cause the Originator
to, on or before the Transfer Date, reconcile principal balances and make any
monetary adjustments required by the Purchaser. Any such monetary adjustments
will be transferred between the Seller, the Originator and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall or shall cause the Originator to
file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller or Originator shall provide copies of
such forms to the Purchaser upon request and shall reimburse the Purchaser for
any costs or penalties incurred by the Purchaser due to the Seller's or
Originator's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Servicing Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder and thereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter or by-laws or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Service. Originator has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Originator is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Originator acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Originator,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transaction or Whole Loan Transfer) contains or will contain
any untrue statement of fact or omits or will omit to state a fact necessary to
make the statements contained herein or therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Origination. The Originator's decision to originate any mortgage
loan or to deny any mortgage loan application is an independent decision based
upon Originator's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;
(r) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws, regulations and
executive orders, including, without limitation, the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"). Additionally, no Mortgage Loan
is subject to nullification pursuant to Executive Order 13224 (the "Executive
Order") or the regulations promulgated by the Office of Foreign Assets Control
of the United States Department of Treasury (the "OFAC Regulations") or in
violation of the Executive Order or the OFAC Regulations; and no Mortgagor is
subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a "blocked person" for purposes of the OFAC Regulations; and
(s) Credit Reporting. The Seller shall cause the Originator, as
servicer, to fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis. Additionally, the Seller shall cause the Originator, as servicer,
to transmit full-file credit reporting data for each Mortgage Loan pursuant to
Xxxxxx Xxx Guide Announcement 95-19 and that for each Mortgage Loan, the Seller
shall cause the Originator, as servicer, to report one of the following statuses
each month as follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor,
except as otherwise disclosed to the Purchaser and set forth on an exhibit to
the related Assignment and Conveyance Agreement, has any payment under the
Mortgage Loan been 30 days or more delinquent at any time since the origination
of the Mortgage Loan. The first Monthly Payment shall be made with respect to
the Mortgage Loan on its related Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customarily insured against in the jurisdiction
where the related Mortgaged Property is located and acceptable to the Rating
Agencies, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration as in effect, as well as all additional requirements set forth in
Section 2.10 of the Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Xxxxxxxxx's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to the Illinois Interest Act and prepayment penalties, have
been complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the Seller
shall maintain in its possession, available for the Purchaser's inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance with all such
requirements. This representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) shall conform with
the applicable Xxxxxx Xxx and Xxxxxxx Mac requirements regarding such dwellings
and that no Mortgage Loan is secured by a single parcel of real property with a
cooperative housing corporation, a log home, a Manufactured Home or, except as
described in Exhibit B to the related Assignment and Conveyance Agreement, a
mobile home erected thereon or by a mixed-use property, a property in excess of
10 acres, or other unique property types. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. This representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or a
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser.;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan. The Seller has reviewed
all of the documents constituting the Servicing File and has made such inquiries
as it deems necessary to make and confirm the accuracy of the representations
set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (1), (2) and (3) of Paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as, with respect to
Adjustable Rate Mortgage loans, the Lifetime Rate Cap and the Periodic Cap, are
as set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable
in equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and neither the Seller nor the Originator has made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in Paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or a second (with
respect to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Originator with respect to the Mortgage Loan have been in all
respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Originator executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Servicemembers Civil Relief Act. The Mortgagor has not notified
the Seller, and the Seller has no knowledge of any relief requested or allowed
to the Mortgagor under the Servicemembers Relief Act or any similar state
statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, who had no interest, direct or indirect in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not affected
by the approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Freddie Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall cause the Originator to maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder. This representation and warranty is a
Deemed Material and Adverse Representation;
(vv) [Reserved];
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
prepayment penalty feature, each such prepayment penalty is enforceable and will
be enforced by the Seller for the benefit of the Purchaser, and each prepayment
penalty is permitted pursuant to federal, state and local law. Each such
prepayment penalty is in an amount not more than the maximum amount permitted
under applicable law and no such prepayment penalty may be imposed for a term in
excess of five (5) years with respect to Mortgage Loans originated prior to
October, 1, 2002. With respect to Mortgage Loans originated on or after October
1, 2002, the duration of the prepayment penalty period shall not exceed three
(3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the prepayment penalty period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in prepayment penalty period. This representation and
warranty is a Deemed Material and Adverse Representation;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(bbb) [Reserved];
(ccc) Qualified Mortgage. The Mortgage Loan would be a "qualified
mortgage," within the meaning of Section 860G(a)(3) of the Code, if transferred
to a REMIC on its startup day in exchange for the regular or residual interests
in the REMIC;
(ddd) No Prior Offer. The Mortgage Loan has not previously been
offered for sale to another entity that constitutes a broker dealer registered
with the Commission under Section 15 of the Exchange Act;
(eee) Fair Credit Reporting Act. The Seller has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis. This representation and warranty is a
Deemed Material and Adverse Representation;
(fff) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Xxx Guides. This representation and warranty is
a Deemed Material and Adverse Representation;
(ggg) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Originator which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into such facts as, without limitation, the Mortgage Loan's requirements and the
Mortgagor's credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Originator or any
Affiliate of the Originator. If, at the time of loan application, the Mortgagor
may have qualified for a lower-cost credit product then offered by any mortgage
lending Affiliate of the Originator, the Originator referred the related
Mortgagor's application to such Affiliate for underwriting consideration. For a
Mortgagor who seeks financing through a Mortgage Loan originator's higher-priced
subprime lending channel, the Mortgagor was directed towards or offered the
Mortgage Loan originator's standard mortgage line if the Mortgagor was able to
qualify for one of the standard products. This representation and warranty is a
Deemed Material and Adverse Representation;
(hhh) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely on the extent of
the related Mortgagor's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology employed objective
criteria that related such facts as, without limitation, the Mortgagor's credit
history, income, assets or liabilities, to the proposed mortgage payment and,
based on such methodology, the Mortgage Loan's originator made a reasonable
determination that at the time of origination the Mortgagor had the ability to
make timely payments on the Mortgage Loan. Such underwriting methodology
confirmed that at the time of origination (application/approval) the related
Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(iii) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a prepayment
penalty upon a prepayment prior to maturity: (i) the Mortgage Loan provides some
benefit to the Mortgagor, including but not limited to a rate or fee reduction,
in exchange for accepting such prepayment penalty, (ii) the Mortgage Loan's
originator had a written policy of offering the Mortgagor, or requiring
third-party brokers to offer the Mortgagor, the option of obtaining a mortgage
loan that did not require payment of such a penalty, (iii) the prepayment
penalty was adequately disclosed to the Mortgagor in the mortgage loan documents
pursuant to applicable state, local and federal law, and (iv) notwithstanding
any state, local or federal law to the contrary, the Originator, as servicer,
shall not impose such prepayment penalty in any instance when the mortgage debt
is accelerated or paid off in connection with the workout of a delinquent
Mortgage Loan or as a result of the Mortgagor's default in making the Mortgage
Loan payments. This representation and warranty is a Deemed Material and Adverse
Representation;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan. No proceeds
from any Mortgage Loan were used to purchase single premium credit insurance
policies as part of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed Material and Adverse
Representation;
(kkk) Points and Fees. No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i) $1,000, or (ii) 5% of
the principal amount of such Mortgage Loan, whichever is greater. For purposes
of this representation, such 5% limitation is calculated in accordance with
Fannie Mae's anti-predatory lending requirements as set forth in the Xxxxxx Xxx
Guides and "points and fees" (x) include origination, underwriting, broker and
finder fees and charges that the mortgagee imposed as a condition of making the
Mortgage Loan, whether they are paid to the mortgagee or a third party, and (y)
exclude bona fide discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage Loan (such as attorneys' fees,
notaries fees and fees paid for property appraisals, credit reports, surveys,
title examinations and extracts, flood and tax certifications, and home
inspections), the cost of mortgage insurance or credit-risk price adjustments,
the costs of title, hazard, and flood insurance policies, state and local
transfer taxes or fees, escrow deposits for the future payment of taxes and
insurance premiums, and other miscellaneous fees and charges that, in total, do
not exceed 0.25% of the principal amount of such Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse Representation;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation;
(nnn) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, if applicable to the Seller, where required or customary in
the jurisdiction in which the Mortgaged Property is located, the original lender
has filed for record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing of the
existence of the Second Lien Loan and requested notification of any action to be
taken against the Mortgagor by the senior lienholder. Either (a) no consent for
the Second Lien Loan is required by the holder of the related first lien or (b)
such consent has been obtained and is contained in the Mortgage File. This
representation and warranty is a Deemed Material and Adverse Representation;
(ooo) No Negative Amortization of Related First Lien Loan. With
respect to each Second Lien Loan, the related First Lien Loan does not permit
negative amortization. This representation and warranty is a Deemed Material and
Adverse Representation; and
(ppp) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property was the Mortgagor's principal residence or second
home at the time of the origination of such Second Lien Loan, as set forth on
the related Mortgage Loan Schedule. This representation and warranty is a Deemed
Material and Adverse Representation;
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, (i) within sixty (60) days after the earlier
of either discovery by, or notice to, the Seller of any breach of the
representation and warranty set forth in clause (ccc) of Subsection 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii) any
breach of a Deemed Material and Adverse Representation shall automatically be
deemed to materially and adversely affect the value of the Mortgage Loans and
the interest of the Purchaser therein. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01, and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans affected by such breach
shall, at the Purchaser's option, be repurchased by the Seller at the Repurchase
Price. However, if the breach shall involve a representation or warranty set
forth in Subsection 9.02 (other than the representation and warranty set forth
in clause (ccc) of such Section or any Deemed Material Breach Representation)
and the Seller discovers or receives notice of any such breach within 120 days
of the related Closing Date, the Seller shall, at the Purchaser's option and
provided that the Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a
"Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 120 days after the related Closing Date. If the Seller has no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan at the Repurchase Price. Any repurchase of a Mortgage Loan or Loans
pursuant to the foregoing provisions of this Subsection 9.03 shall be
accomplished by either (a) if the Servicing Agreement has been entered into and
is in effect, deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to the Purchaser on the next scheduled Remittance Date,
after deducting therefrom any amount received in respect of such repurchased
Mortgage Loan or Loans and being held in the Custodial Account for future
distribution or (b) if the Servicing Agreement has not been entered into or is
no longer in effect, by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Originator to remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold such
parties harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Seller representations
and warranties contained in this Agreement or any Reconstitution Agreement. It
is understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and the Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and the Successor
Servicer respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Repurchase of Mortgage Loans With First Payment
Defaults.
If the related Mortgagor is delinquent with respect to the Mortgage
Loan's first Monthly Payment either (i) after origination of such Mortgage Loan,
or (ii) after the related Closing Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at a price equal to the
percentage of par as stated in the related Purchase Price and Terms Agreement
(subject to adjustment as provided therein) multiplied by the then outstanding
principal balance of such Mortgage Loan, plus accrued and unpaid interest
thereon from the date to which interest was last paid through the day prior to
the repurchase date at the applicable Mortgage Interest Rate, plus any
outstanding advances owed to any servicer in connection with such Mortgage Loan.
For purposes of clarification, with respect to a Mortgage Loan's first Monthly
Payment after the related Closing Date, such payment shall not be considered a
"First Payment Default" for purposes of clause (ii) of the previous sentence
until the payment has not been received by the Purchaser within sixty (60) days
of the related Due Date (effectively allowing for a thirty (30) day cure
period). The Purchaser shall have ninety (90) days following any such
delinquency to notify the Seller of any repurchase request and the Seller shall
repurchase such delinquent Mortgage Loan within thirty (30) days of the date of
such request.
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the
event that any such Mortgage Loan prepays in full either (i) on or before a
Securitization Transaction or (ii) during the first three (3) months following
the related Closing Date, the Seller shall pay the Purchaser, within three (3)
Business Days of such prepayment in full, the difference between the Purchase
Price for such Mortgage Loan and the outstanding principal balance of such
Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Originator under the Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein) shall be true and correct as of the related Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement or an Event of Default under the Servicing
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
4. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
each of the Seller and the Originator, including all
attachments thereto; with respect to subsequent Closing Dates,
an Officer's Certificate upon request of the Purchaser;
5. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G; and
10. Assignment and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any fees and expenses relating to due
diligence review of the Mortgage Files, commissions due its salesmen, fees of
the Custodian incurred following the related Closing Date, fees for recording
each Assignment of Mortgage, any loan file shipping fees and the legal fees and
expenses of its attorneys and custodial fees. All other costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans and
the Servicing Rights including fees for title policy endorsements and
continuations, and the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Xxx Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Freddie Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transaction, a pooling and servicing agreement
in form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in this Agreement and the
Servicing Agreement as of the settlement or closing date in connection with such
Reconstitution that occurs on or prior to the date which is six (6) months
following the related Closing Date and in connection with any Reconstitution on
or after the date which is six (6) months following the related Closing Date, to
restate the representations and warranties set forth in this Agreement as of the
Closing Date (each, a "Reconstitution Date") or make the representations and
warranties set forth in the related selling/servicing guide of the master
servicer or issuer, as the case may be, in connection with such Reconstitution.
The Seller shall use its reasonable best efforts to provide to such master
servicer or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Originator as are reasonably believed necessary by the Purchaser or any such
other participant; and (iii) to execute, deliver and satisfy all conditions set
forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate designated
by the Purchaser and each Person who controls the Purchaser or such Affiliate
and hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may sustain
in any way related to any information provided by or on behalf of the Seller or
the Originator regarding the Seller, the Originator, the Seller's or other
originator's Static Pool Information, the Seller's and Originator's servicing
practices or performance, the Mortgage Loans or the Underwriting Guidelines set
forth in any offering document prepared in connection with any Reconstitution.
For purposes of the previous sentence, "Purchaser" shall mean the Person then
acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement. Moreover, the Seller agrees
to cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Servicing
Agreement shall remain in effect with respect to the related Mortgage Loan
Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Servicing Agreement and with respect thereto this Agreement
shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold such parties harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that such parties may
sustain in any way related to the failure of the Seller to perform its duties
and the Originator to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13. The Seller immediately shall notify the Purchaser if a claim is made
by a third party with respect to this Agreement or any Reconstitution Agreement
or the Mortgage Loans, assume (with the prior written consent of the Purchaser)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Purchaser in respect of such
claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Originator or the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the Purchaser a
lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx -
Whole Loan Operations Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx - RFPG
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Email: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the consent of the Purchaser. This Agreement may
be assigned, pledged or hypothecated by the Purchaser without the consent of the
Seller. In the event the Purchaser assigns this Agreement, and the assignee
assumes any of the Purchaser's obligations hereunder, the Seller acknowledges
and agrees to look solely to such assignee, and not to the Purchaser, for
performance of the obligations so assumed and the Purchaser shall be relieved
from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
SECTION 32. Compliance With Regulation AB.
Subsection 32.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 32 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate fully
with the Purchaser to deliver to the Purchaser (including any of its assignees
or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Seller, any Third-Party Originator and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the
Purchaser or any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Seller by providing timely notice of requests for information
under these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable judgment, to comply with Regulation AB.
Subsection 32.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 32.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Seller; (ii) the Interim Servicer has
not been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Interim Servicer as servicer has been disclosed or reported by the
Seller; (iv) no material changes to the Interim Servicer's policies or
procedures with respect to the servicing function it will perform under the
Interim Servicing Agreement and any Reconstitution Agreement for mortgage loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v) there
are no aspects of the Interim Servicer's financial condition that could have a
material adverse effect on the performance by the Interim Servicer of its
servicing obligations under the Interim Servicing Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator; and (vii) there are no
affiliations, relationships or transactions relating to the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 32.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 32.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential mortgage
loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of a similar type as the Mortgage
Loans; information regarding the size and composition of the originator's
origination portfolio; and information that may be material, in the good
faith judgment of the Purchaser or any Depositor, to an analysis of the
performance of the Mortgage Loans, including the originators'
credit-granting or underwriting criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of compliance with
Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Seller and each
Third-Party Originator; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator and any of the following parties to a
Securitization Transaction, as such parties are identified to the Seller
by the Purchaser or any Depositor in writing in advance of such
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared in form and substance reasonably satisfactory to the Purchaser by the
Seller (or Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To
the extent that there is reasonably available to the Seller (or Third-Party
Originator) Static Pool Information with respect to more than one mortgage loan
type, the Purchaser or any Depositor shall be entitled to specify whether some
or all of such information shall be provided pursuant to this paragraph. Such
Static Pool Information for each vintage origination year or prior securitized
pool, as applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic increment
must be as of a date no later than 135 days prior to the date of the prospectus
or other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Seller's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate, which may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(c) [Reserved].
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any Depositor
in writing of (A) any material litigation or governmental proceedings pending
against the Seller or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
Subsection 32.04 Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction; each broker dealer acting
as underwriter, placement agent or initial purchaser, each Person who controls
any of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(1) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants'
letter or other material provided in written or electronic form under this
Section 32 by or on behalf of the Seller, or provided under this Section
32 by or on behalf of any Third-Party Originator (collectively, the
"Seller Information"), or (B) the omission or alleged omission to state in
the Seller Information a material fact required to be stated in the Seller
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall
be construed solely by reference to the Seller Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Seller Information or any
portion thereof is presented together with or separately from such other
information;
(2) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or
other material when and as required under this Section 32; or
(3) any breach by the Seller of a representation or warranty set
forth in Subsection 32.02(a) or in a writing furnished pursuant to
Subsection 32.02(b) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
32.02(b) to the extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (a)(2)
of this Section, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Seller or
any Third-Party Originator.
(b) Any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Section 32, or any breach by the Seller
of a representation or warranty set forth in Subsection 32.02(a) or in a writing
furnished pursuant to Subsection 32.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
32.02(b) to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Seller under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the Interim Servicing
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Interim Servicer; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:
Title:
NC CAPITAL CORPORATION
(Seller)
By:____________________________________
Name:
Title:
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Sixth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(c) (a) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________, without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage Notes
for endorsements, the endorsement may be contained on an allonge, if state law
so allows and the Custodian is so advised by the Seller that state law so
allows. If the Mortgage Loan was acquired by the Seller in a merger, the
endorsement must be by "[Last Endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name, the endorsement must be by
"[Last Endorsee], formerly known as [previous name]";
(d) the original of any guarantee executed in connection with the
Mortgage Note;
(e) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(f) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon, or certified
copies thereof if the original has been sent for recording;
(g) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser or its designee. If the Assignment of
Mortgage is not to be recorded, the Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to [name
of predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(h) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(i) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company;
(j) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(k) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified by
the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in clause (iv)
above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver (a) the Sixth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of
_______ __, 200_, by and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser") and the Company (the "Purchase Agreement") and (b) the
Amended and Restated Interim Servicing Agreement, dated as of _______ __,
200_, by and between the Purchaser and New Century Mortgage Corporation
(the "Servicing Agreement"), [and to endorse the Mortgage Notes and
execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof and have
been in effect without amendment, waiver, rescission or modification since
____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated by
the agreements; or (ii) any required consent, approval, authorization or
order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement or the Servicing
Agreement conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company or, to the best of my knowledge, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement or the Servicing Agreement, or the mortgage loans or of any
action taken or to be taken in connection with the transactions
contemplated hereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Purchase
Agreement or the Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement or (c) any other document delivered
or on the date hereof in connection with any purchase described in the
agreements set forth above was, at the respective times of such signing
and delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the office set
forth opposite his or her name on Exhibit 5, and the signatures of such
persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Servicing
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Sixth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement") and
the Amended and Restated Interim Servicing Agreement, by and between the
Purchaser and New Century Mortgage Corporation (the "Originator"), dated as of
_________ __, 200_ (the "Servicing Agreement", and together with the Purchase
Agreement, the "Agreements"). which sale is in the form of whole loans.
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Agreements;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company and the
Originator contained in the Agreements. [We] [I] have assumed the authenticity
of all documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company and the Originator are [type of entity] duly
organized, validly existing and in good standing under the
laws of the [United States] and are qualified to transact
business in, and is in good standing under, the laws of [the
state of incorporation].
2. Each of the Company and the Originator has the power to engage
in the transactions contemplated by the Agreements and all
requisite power, authority and legal right to execute and
deliver the Agreements and to perform and observe the terms
and conditions of the Agreements.
3. Each Agreement has been duly authorized, executed and
delivered by the Company and the Originator, as applicable,
and is a legal, valid and binding agreement enforceable in
accordance with its terms against the Company and the
Originator, as applicable, subject to bankruptcy laws and
other similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. Each of the Company and the Originator has been duly
authorized to allow any of its officers to execute any and all
documents by original signature in order to complete the
transactions contemplated by the Agreements.
[5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company].
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company or the
Originator of or compliance by the Company or the Originator
with the Agreements and the sale of the Mortgage Loans by the
Company or the consummation of the transactions contemplated
by the Agreements or (ii) any required consent, approval,
authorization or order has been obtained by the Company or the
Originator.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company or the Originator, as applicable,
or, to the best of my knowledge, the material terms of any
indenture or other agreement or instrument to which the
Company or the Originator is a party or by which it is bound
or to which it is subject, or violates any statute or order,
rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company
or the Originator is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company or the Originator which, in [our] [my] judgment,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of the Company or
the Originator or in any material impairment of the right or
ability of the Company or the Originator to carry on its
business substantially as now conducted or in any material
liability on the part of the Company or the Originator or
which would draw into question the validity of the Agreements
or the Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company or the Originator to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement, is sufficient
to fully transfer to the Purchaser all right, title and
interest of the Company thereto as noteholder and mortgagee.
10. The endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit the
Purchaser to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company, and are sufficient to prevent any
other sale, transfer, assignment, pledge or hypothecation of
the Mortgages and the Mortgage Notes by the Company from being
enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
________________________________
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________ [COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell to Xxxxxx Xxxxxxx Mortgage
Capital Inc. under the Sixth Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of ______ __, 200_, certain mortgage loans
originated by the Association. The Company warrants that the mortgage loans to
be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond
any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
________________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
_________________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Sixth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __,
200_, and certifies that all notes, mortgages, assignments and other documents
in its possession relating to such Mortgage Loans have been delivered and
released to the Company or its designees, as of the date and time of the sale of
such Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall
be effective automatically without any further action by any party upon payment
in one or more installments, in immediately available funds, of $_____________,
in accordance with the wire instructions set forth below.
Name and Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
________________________________
By:_____________________________
Title:__________________________
Date:___________________________
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ NC Capital
Corporation ("Seller"), as the Seller under (i) that certain Purchase Price and
Terms Agreement, dated as of ___________, _____ (the "PPTA"), and (ii) that
certain Sixth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of May 1, 2006 (the "Purchase Agreement"), does hereby sell,
transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital Inc.
("Purchaser") as the Purchaser under the Agreements (as defined below), without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A (the "Mortgage Loans"), together with the Servicing
Rights, and the Mortgage Files and all rights and obligations arising under the
documents contained therein. Each Mortgage Loan subject to the Agreements was
underwritten in accordance with, and conforms to, the Underwriting Guidelines
attached hereto as Exhibit C. Pursuant to Section 6 of the Purchase Agreement,
the Seller has delivered to the Custodian the documents for each Mortgage Loan
to be purchased as set forth in the Purchase Agreement. The contents of each
Servicing File required to be retained by New Century Mortgage Corporation
("Servicer"), as Originator/Servicer under that certain Amended and Restated
Interim Servicing Agreement, dated as of December 1, 2005 (the "Servicing
Agreement") to service the Mortgage Loans pursuant to the Servicing Agreement
and thus not delivered to the Purchaser are and shall be held in trust by the
Servicer for the benefit of the Purchaser as the owner thereof. The Servicer's
possession of any portion of the Servicing File is at the will of the Purchaser
for the sole purpose of facilitating servicing of the related Mortgage Loan
pursuant to the Servicing Agreement, and such retention and possession by the
Servicer shall be in a custodial capacity only. The ownership of each Mortgage
Note, Mortgage, the Servicing Rights and the contents of the Mortgage File and
Servicing File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or which come
into the possession of the Seller or the Servicer shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in such custodial capacity only. The PPTA, the Purchase
Agreement and the Servicing Agreement shall collectively be referred to as the
"Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
[SELLER]
By:____________________________________
Name:__________________________________
Title:_________________________________
[SERVICER]
By:____________________________________
Name:__________________________________
Title:_________________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than __ months prior to the related
Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each Mortgage Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance less than $_________. Each Adjustable Rate Mortgage Loan has an Index of
[_______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT R
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
[Saxon Mortgage Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000]
[Countrywide Home Loans Servicing LP
000 Xxxxxxxxxxx Xxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000]
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States, and having its principal place of business at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, as Trustee (the "Trustee")pursuant to that
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 Pooling and Servicing
Agreement, dated as of January 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I Inc.,
as depositor (the "Depositor"), Saxon Mortgage Services, Inc. ("Saxon"), as a
servicer, Countrywide Home Loans Servicing LP ("Countrywide Servicing"), as a
servicer, NC Capital Corporation, as a responsible party ("NC Capital"),
Decision One Mortgage Company, LLC, as a responsible party ("Decision One"),
LaSalle Bank National Association, as custodian (the "Custodian") and the
Trustee hereby constitutes and appoints [Saxon] [Countrywide Servicing] by and
through [Saxon] [Countrywide Servicing]'s officers, the Trustee's true and
lawful Attorney in fact, in the Trustee's name, place and stead and for the
Trustee's benefit, in connection with all mortgage loans serviced by [Xxxxx]
[Countrywide Servicing] pursuant to the Agreement solely for the purpose of
performing such acts and executing such documents in the name of the Trustee
necessary and appropriate to effectuate the following enumerated transactions in
respect of any of the mortgages or deeds of trust (the "Mortgages" and the
"Deeds of Trust" respectively) and promissory notes secured thereby (the
"Mortgage Notes") for which the undersigned is acting as Trustee for various
certificateholders (whether the undersigned is named therein as mortgagee or
beneficiary or has become mortgagee by virtue of endorsement of the Mortgage
Note secured by any such Mortgage or Deed of Trust) and for which
[Saxon][Countrywide Servicing] is acting as servicer. This Appointment shall
apply only to the following enumerated transactions and nothing herein or in the
Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of
Trust, where said modification or re-recording is solely for
the purpose of correcting the Mortgage or Deed of Trust to
conform same to the original intent of the parties thereto or
to correct title errors discovered after such title insurance
was issued; provided that (i) said modification or
re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured and (ii)
otherwise conforms to the provisions of the Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust
to an easement in favor of a public utility company of a
government agency or unit with powers of eminent domain; this
section shall include, without limitation, the execution of
partial satisfactions/releases, partial reconveyances or the
execution or requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or
the closing of the title to the property to be acquired as
real estate owned, or conveyance of title to real estate
owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust
or full conveyance upon payment and discharge of all sums
secured thereby, including, without limitation, cancellation
of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the
related Mortgage Note, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon
payment and discharge of all sums secured thereby in
conjunction with the refinancing thereof, including, without
limitation, the assignment of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure,
the taking of a deed in lieu of foreclosure, or the completion
of judicial or non-judicial foreclosure or termination,
cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of
Trust, in accordance with state law and the Deed of
Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents
and performance of such other actions as may be
necessary under the terms of the Mortgage, Deed of Trust
or state law to expeditiously complete said transactions
in paragraphs 8.a. through 8.e. above.
9. With respect to the sale of property acquired through a
foreclosure or deed-in lieu of foreclosure, including, without
limitation, the execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed
causing the transfer of title of the property to a party
contracted to purchase same;
x. xxxxxx instructions; and
e. any and all documents necessary to effect the transfer
of property.
10. The modification or amendment of escrow agreements established
for repairs to the mortgaged property or reserves for
replacement of personal property.
The undersigned gives said Attorney-in-fact full power and
authority to execute such instruments and to do and perform all and every act
and thing necessary and proper to carry into effect the power or powers granted
by or under this Limited Power of Attorney as fully as the undersigned might or
could do, and xxxxxx does ratify and confirm to all that said Attorney-in-fact
shall be effective as of January 26, 2007.
This appointment is to be construed and interpreted as a
limited power of attorney. The enumeration of specific items, rights, acts or
powers herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by [Saxon] [Countrywide Servicing] to the Trustee under
the Agreement, or (ii) be construed to grant [Saxon] [Countrywide Servicing] the
power to initiate or defend any suit, litigation or proceeding in the name of
the Trustee except as specifically provided for herein. If [Saxon] [Countrywide
Servicing] receives any notice of suit, litigation or proceeding in the name of
the Trustee, then [Saxon] [Countrywide Servicing] shall promptly forward a copy
of same to the Trustee.
This limited power of attorney is not intended to extend the
powers granted to [Saxon] [Countrywide Servicing] under the Agreement or to
allow [Saxon] [Countrywide Servicing] to take any action with respect to
Mortgages, Deeds of Trust or Mortgage Notes not authorized by the Agreement.
[Saxon] [Countrywide Servicing] hereby agrees to indemnify and
hold the Trustee and its directors, officers, employees and agents harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever incurred by reason or result of or in connection with the
exercise by [Xxxxx] [Countrywide Servicing] of the powers granted to it
hereunder. The foregoing indemnity shall survive the termination of this Limited
Power of Attorney and the Agreement or the earlier resignation or removal of the
Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be
governed by the laws of the State of New York, without regard to conflicts of
law principles of such state.
Third parties without actual notice may rely upon the exercise
of the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as Trustee
has caused its corporate seal to be hereto affixed and these presents to be
signed and acknowledged in its name and behalf by a duly elected and authorized
signatory this ___________ day of ____________.
Deutsche Bank National Trust Company, as Trustee
By: ____________________________________________
Name:
Title:
Acknowledged and Agreed
[Countrywide Home Loans Servicing LP]
By: __________________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary Public
in and for said state, personally appeared ________________________________ of
Deutsche Bank National Trust Company, as Trustee for Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust 2007-HE1, personally known to me to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
that same in his/her authorized capacity, and that by his/her signature on the
instrument the entity upon behalf of which the person acted and executed the
instrument.
WITNESS my hand and official seal.
(SEAL)
___________________________________
Notary Public, State of California
EXHIBIT S
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Custodian], [the Servicer],
[each Subservicer] and [each Subcontractor] shall address, at a minimum, the criteria identified
as below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------ ---------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING CRITERIA
------------------------------------------------------------------------------------------ ---------------------------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ---------------------------------------
General Servicing Considerations
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(1)(i) Trustee/Servicer
Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the
transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(1)(ii) Trustee/Servicer
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) N/A
Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(1)(iv) Servicer
A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
Cash Collection and Administration
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(i) Servicer
Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(ii) Servicer/Trustee
Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(iii) Servicer
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(iv) Servicer/Trustee
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction
agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(v) Servicer/Trustee
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(vi) Servicer/Trustee
Unissued checks are safeguarded so as to prevent unauthorized
access.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(2)(vii) Servicer/Trustee
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
Investor Remittances and Reporting
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(3)(i) Trustee/Servicer
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(3)(ii) Trustee/Servicer
Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(3)(iii) Trustee/Servicer
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of
days specified in the transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(3)(iv) Trustee/Servicer
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank
statements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
Pool Asset Administration
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(i) Custodian/Trustee/
Collateral or security on mortgage loans is maintained as required Servicer
by the transaction agreements or related mortgage loan documents.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(ii) Trustee/Custodian/Servicer
Mortgage loan and related documents are safeguarded as required by
the transaction agreements
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(iii) Trustee/Servicer
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(iv) Servicer
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
loan documents.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(v) Servicer
The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal
balance.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(vi) Servicer
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
the transaction agreements and related pool asset documents.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(vii) Servicer
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(viii) Servicer
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).
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(ix) Servicer
Adjustments to interest rates or rates of return for mortgage loans
with variable rates are computed based on the related mortgage loan
documents.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(x) Servicer
Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents, on
at least an annual basis, or such other period specified in
the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C)
such funds are returned to the obligor within 30 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) Servicer
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.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(xii) Servicer
Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
obligor's error or omission.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(xiii) Servicer
Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(xiv) Servicer
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
-------------------- --------------------------------------------------------------------- ---------------------------------------
1122(d)(4)(xv) Trustee
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.
-------------------- --------------------------------------------------------------------- ---------------------------------------
EXHIBIT T
Additional Form 10-D Disclosure
Item on Form 10-D Party Responsible
-------------------------------------------------------------------- --------------------
Item 1: Distribution and Pool Performance Information
Information included in the Monthly Statement Servicers
Trustee
Any information required by Item 1121 of Regulation AB which is Depositor
NOT included on the Monthly Statement
Item 2: Legal Proceedings
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any proceedings
known to be contemplated by governmental
authorities:
o Issuing Entity (Trust Fund) Trustee and Servicers
o Sponsor Depositor
o Depositor Depositor
o Trustee Trustee
o Trustee Trustee
o Custodian Custodian
o Responsible Party Responsible Parties
o Any Item 1110(b) of Regulation AB Originator Depositor
o Any Item 1108(a)(2) of Regulation AB Servicer (other than Servicers
the Trustee)
o Any other party contemplated by Item 1100(d)(1)of Depositor
Regulation AB
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 Securities Trustee
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 Depositor or the party to this Agreement
submitting such matter to a vote of
Certificateholders
Information from Item 4 of Part II of Form 10-Q
Item 6: Significant Obligors of Pool Assets N/A
Item 1112(b) of Regulation AB - Significant Obligor Financial
Information*
* This information need only be reported on
the Form 10-D for the distribution period in
which updated information is required
pursuant to the Item.
Item 7: Significant Enhancement Provider Information
Item 1115(b) of Regulation AB - Derivative
Counterparty Financial Information*
o Determining current maximum probable exposure Depositor
o Determining current significance percentage Depositor
o Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation by
reference
* This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the Items.
Item 8: Other Information Any party to the Agreement responsible
for the applicable
Form 8-K disclosure item
Disclose any information required to be
reported on Form 8-K during the period
covered by the Form 10-D but not reported
Item 9: Exhibits
Monthly Statement to Certificateholders Trustee
Exhibits required by Item 601 of Regulation Depositor
S-K, such as material agreements
EXHIBIT U
Additional Form 10-K Disclosure
Item on Form 10-K Party Responsible
----------------------------------------------------------------- -------------------------------------------
Item 9B: Other Information Any party to this Agreement responsible for
disclosure items on Form 8-K
Disclose any information required to be
reported on Form 8-K during the fourth
quarter covered by the Form 10-K but not
reported
Item 15: Exhibits, Financial Statement Schedules Trustee
Depositor
Item 1115(b) of Regulation AB: Derivative Counterparty
Financial Information
o Determining current maximum probably exposure Depositor
o Determining current significance percentage Depositor
o 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 distribution period in
which updated information is required
pursuant to the Items.
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any proceedings
known to be contemplated by governmental
authorities:
o Issuing Entity (Trust Fund) Trustee, Servicers and Depositor
o Sponsor Depositor
o Depositor Depositor
o Trustee Trustee
o Custodian Custodian
o Responsible Party Responsible Parties
o Any Item 1110(b) of Regulation AB Originator Depositor
o Any Item 1108(a)(2) of Regulation AB Servicer (other than Servicers
the Trustee)
o Any other party contemplated by Item 1100(d)(1) of Depositor
Regulation AB
Item 1119 of Regulation AB: Affiliations and Relationships
Whether (a) the Sponsor, Depositor or Issuing Depositor as to the parties in (a)
Entity is an affiliate of the following
parties, and (b) to the extent known and
material, any of the following parties are
affiliated with one another:
o Trustee Trustee
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor
Provider
o Any other Item 1101(d)(1) of Regulation AB material party Depositor
Whether there are any "outside the ordinary Depositor
course business arrangements" other than
would be obtained in an arm's length
transaction between (a) the Sponsor,
Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or
their affiliates) on the other hand, that
exist currently or within the past two years
and that are material to a
Certificateholder's understanding of the
Certificates:
o Trustee
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
o Any Responsible Party Responsible Parties
o Any Item 1110 of Regulation AB Originator Depositor
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor
Provider
o Any other Item 1101(d)(1) of Regulation AB material party Depositor
Whether there are any specific relationships Depositor
involving the transaction or the pool assets
between (a) the Sponsor, Depositor or Issuing
Entity on the one hand, and (b) any of the
following parties (or their affiliates) on
the other hand, that exist currently or
within the past two years and that are
material:
o Trustee
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
o Any Responsible Party Responsible Parties
o Any Item 1110 of Regulation AB Originator Depositor
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor
Provider
o Any other Item 1101(d)(1) of Regulation AB material party Depositor
EXHIBIT V
Form 8-K Disclosure Information
Item on Form 8-K Party Responsible
------------------------------------------------------------- ------------------------------------------------
Item 1.01 - Entry into a Material Definitive Agreement The party to this Agreement entering into such
material definitive agreement.
Disclosure is required regarding entry into
or amendment of any definitive agreement that
is material to the securitization, even if
depositor is not a party.
Examples: servicing agreement, custodial
agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
Item 1.02 - Termination of a Material Definitive Agreement The party to this Agreement requesting
termination of a material definitive agreement.
Disclosure is required regarding termination
of any definitive agreement that is material
to the securitization (other than expiration
in accordance with its terms), even if
depositor is not a party.
Examples: servicing agreement, custodial
agreement.
Item 1.03 - Bankruptcy or Receivership
Disclosure is required regarding the
bankruptcy or receivership, with respect to
any of the following:
o Issuing Entity (Trust Fund) Trustee/Servicers
o Sponsor Depositor
o Depositor Depositor
o Affiliated Servicer Servicers
o Other Servicer servicing 20% or more of the pool assets at Servicers
the time of the report
o Other material servicers Servicers
o Trustee Trustee
o Derivative Counterparty Depositor
o Custodian Custodian
o Any other party contemplated by Item 1100(d)(1) of Depositor
Regulation AB
Item 2.04 - Triggering Events that Accelerate or Increase a Depositor
Direct Financial Obligation or an Obligation under an Trustee
Off-Balance Sheet Arrangement
Includes an early amortization, performance
trigger or other event, including event of
default, that would materially alter the
payment priority/distribution of cash
flows/amortization schedule
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
monthly statements to the certificateholders.
Item 3.03 - Material Modification to Rights of Security Holders The party requesting such modification
Disclosure is required of any material
modification to documents defining the rights
of Certificateholders, including the Pooling
and Servicing Agreement.
Item 5.03 - Amendments of Articles of Incorporation or Bylaws; Depositor
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 Trustee Servicers/Trustee
Requires disclosure of any removal,
replacement, substitution or addition of any
master servicer, affiliated servicer, other
servicer servicing 10% or more of pool assets
at time of report, other material servicers
or trustee.
Reg AB disclosure about any new servicer or master servicer is successor Servicers
also required.
Reg AB disclosure about any new Trustee is also required. successor Trustee
Item 6.03 - Change in Credit Enhancement or External Support Depositor/Trustee
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 Depositor
provider is also required.
Item 6.04 - Failure to Make a Required Distribution Trustee
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 Depositor
required to be disclosed under Regulation AB
as a result of the foregoing, provide the
information called for in Items 1108 and 1110
of Regulation AB respectively.
Item 7.01 - Regulation FD Disclosure Depositor
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 The party to this Agreement responsible for
reporting/disclosing the financial statement or
exhibit.
EXHIBIT W
INTEREST RATE SWAP AGREEMENT
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of January 26, 2007
XXXXXX XXXXXXX CAPITAL SERVICES and DEUTSCHE BANK NATIONAL TRUST COMPANY, a
INC. national banking association, not
individually, but solely as Trustee for
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust
2007-HE1, Mortgage Pass-Through
Certificates, Series 2007-HE1
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purposes of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
o-f the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in lull
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or an Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then continuing,
designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-Defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is
a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire Agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by xxxxx, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the ease of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except so as to avoid duplication, if Section 6(e)(i)(l) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with a respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such determination as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) its relation to any payment, from or through which such
payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either ease) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
XXXXXX XXXXXXX CAPITAL SERVICES INC. DEUTSCHE BANK NATIONAL TRUST COMPANY,
not individually, but solely as
Trustee for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE1,
Mortgage Pass-Through Certificates,
Series 2007-HE1
By: By:
------------------------------------ ------------------------------------
Name: Name:
Title: Title:
Date: Date:
SCHEDULE
TO THE
1992 ISDA MASTER AGREEMENT
dated as of January 26, 2007
between
XXXXXX XXXXXXX CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
a national banking association, not individually,
but solely as Trustee for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
(the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE1
("Party B")
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
(b) Events of Default. Notwithstanding anything in this Agreement to the
contrary, the following Events of Default shall apply to the
specified party:
Party A Party B
---------- ----------
(i) Section 5(a)(i), Failure to Pay Applicable Applicable
or Deliver
(ii) Section 5(a)(ii), Breach of Applicable Not
Agreement Applicable
(iii) Section 5(a)(iii), Credit Applicable Applicable
Support Default
(iv) Section 5(a)(iv), Applicable Not
Misrepresentation Applicable
(v) Section 5(a)(v), Default Under Not Not
Specified Transaction Applicable Applicable
(vi) Section 5(a)(vi), Cross Default Applicable Not
Applicable
(vii) Section 5(a)(vii), Bankruptcy Applicable Applicable
(viii) Section 5(a)(viii), Merger Applicable Applicable
Without Assumption
provided, however, that with respect to:
(i) Section 5(a)(iii)(1) (Credit Support Default), as it applies
to Party B only, shall be deleted in its entirety and replaced
with the following: "Failure by Party B to comply with or
perform any agreement or obligation to be complied with or
performed by it in accordance with Paragraph 3(b) of the
Credit Support Annex if such failure is continuing after any
applicable grace period has elapsed."
(ii) Section 5(a)(vi) (Cross Default), "Threshold Amount" means,
with respect to Party A, 3% of its Credit Support Provider's
(or the applicable Relevant Entity's) shareholder's equity (as
detailed in its Credit Support Provider's or the Relevant
Entity's most recent financial statements).
(iii) Section 5(a)(vii) (Bankruptcy), (i) clause (2) and (9) shall
not be applicable to Party B; (ii) clause (4) shall not be
applicable to Party B if the proceeding or petition is
instituted or presented by Party A or any of its Affiliates
and is in breach of Party A's agreement set forth in Part 5(j)
of this Schedule; (iii) the appointment of a trustee or other
secured party by Party B or the Certificateholders for the
purpose of holding all or a substantial portion of the assets
of Party B for the benefit of the Certificateholders or Party
A does not qualify as the appointment of a trustee, custodian
or similar official under clause (6); (iv) a security interest
granted by Party B to a trustee, collateral agent, custodian
or other secured party, as applicable (the "Secured Party"),
pursuant to an indenture, trust agreement, pooling and
servicing agreement or other customary securitization
transaction document (the "Security Agreement"), in property
of Party B (the "Securitization Collateral") supporting a
rated securitization transaction (the "Securitization"), and
the rights of the Secured Party in and to the Securitization
Collateral for the benefit of the investors in the
Securitization and/or Party A, is not intended to constitute
and shall not be treated as a secured party taking possession
of the assets of Party B for purposes of clause (7); (v) the
words "seeks or" shall be deleted from clause (6); and (vi)
clause (8) shall not apply to Party B to the extent that
clause (8) relates to clauses of Section 5(a)(vii) that are
not applicable to Party B as a result of the modifications set
forth herein. Notwithstanding the foregoing, for the avoidance
of doubt, the deletion of clause (9) is not intended to render
clauses (1) through (8) inapplicable on the basis that Party B
did not actively contest or oppose any of the acts referred to
in such clauses or, in the case of clause (4), if a proceeding
or petition referred to therein is instituted or presented
against Party B, on the basis that Party B consented to or
acquiesced in a judgment of bankruptcy or insolvency or the
entry of an order for relief or the making of an order for its
winding up or liquidation as a result of such proceeding or
petition.
(c) Termination Events. Notwithstanding anything in this Agreement to
the contrary, the following Termination Events shall apply to the
specified party:
Party A Party B
---------- ----------
(i) Section 5(b)(i), Illegality Applicable Applicable
(ii) Section 5(b)(ii), Tax Event Applicable Applicable
(iii) Section 5(b)(iii), Tax Event Applicable Applicable
Upon Merger
(iv) Section 5(b)(iv), Credit Event Not Not
Upon Merger Applicable Applicable
(v) Section 5(b)(v), Additional Applicable Applicable
Termination Event (as set (as set
forth in forth in
Part 1(g) Part 1(g)
below) below)
provided, however, that with respect to Section 5(b)(iii), Party A shall
not be entitled to designate an Early Termination Date by reason of a Tax
Event Upon Merger in respect of which it is the Affected Party.
(d) The "Automatic Early Termination" provisions of Section 6(a) will
not apply to Party A and will not apply to Party B.
(e) The "Transfer to Avoid Termination Event" provisions of 6(b)(ii)
will apply, provided that the words "or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party," shall be
deleted.
(f) Payments on Early Termination.
(i) For the purpose of Section 6(e), "Market Quotation" and
"Second Method" will apply.
(ii) Where an Early Termination Date is designated as a result of
an Event of Default with respect to which Party A is the
Defaulting Party or a Termination Event under Section
5(b)(iii), Section 5(b)(iv) or Section 5(b)(v) with respect to
which Party A is the sole Affected Party, paragraphs (1)
through (8) below shall apply:
(1) The definition of "Market Quotation" shall be deleted in
its entirety and replaced with the following:
"`Market Quotation' means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made
by an Eligible Replacement, (2) for an amount, if any,
that would be paid to Party B (expressed as a negative
number) or by Party B (expressed as a positive number)
in consideration of an agreement between Party B and an
Eligible Replacement to enter into a transaction (the
"Replacement Transaction") that would have the effect of
preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation
was absolute or contingent and assuming the satisfaction
of each applicable condition precedent) by the parties
under Section 2(a)(i) in respect of such Terminated
Transactions or group of Terminated Transactions that
would, but for the occurrence of the relevant Early
Termination Date, have been required after that date,
(3) made on the basis that Unpaid Amounts in respect of
the Terminated Transaction or group of Transactions are
to be excluded but, without limitation, any payment or
delivery that would, but for the relevant Early
Termination Date, have been required (assuming
satisfaction of each applicable condition precedent)
after that Early Termination Date is to be included and
(4) made in respect of a Replacement Transaction with
terms substantially the same as those of this Agreement
(save for the exclusion of provisions relating to
Transactions that are not Terminated Transactions).
Party A and Party B will request each Eligible
Replacement to provide a Firm Offer to the extent
reasonably practicable as of the same day and time
(without regard to different time zones). If no Firm
Offers are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or
group of Terminated Transactions cannot be determined.
(2) The definition of "Settlement Amount" shall be deleted
in its entirety and replaced with the following:
"Settlement Amount" means, with respect to any Early
Termination Date, an amount (as determined by Party B in
accordance with clauses (a) and (b) below; provided,
however, if Party B fails to make such determination
promptly, Party A shall have the right to make such
determination) equal to:
(a) the Termination Currency Equivalent of the
amount (whether positive or negative) for each
Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined.
If more than one Market Quotation is capable of becoming
legally binding upon acceptance, Party B shall accept
the Market Quotation that constitutes (1) the highest
Market Quotation in the case of a payment by an Eligible
Replacement to Party B or (2) the lowest Market
Quotation in the case of a payment by Party B to an
Eligible Replacement; provided, however, if Party B
fails to make such determination promptly, Party A shall
have the right to make such determination. If only one
Market Quotation is provided, Party B shall accept the
single Market Quotation. Party B shall be obligated to
accept the Market Quotation immediately upon
determination so as to become legally binding; or
(b) Party B's Loss (whether positive or negative
and without reference to any Unpaid Amounts) for each
Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be
determined.
(3) For the purpose of paragraph (4) of the definition of
Market Quotation, Party B shall make reasonable efforts
to determine, acting in a commercially reasonable
manner, whether a Firm Offer is made in respect of a
Replacement Transaction with terms substantially the
same as those of this Agreement (save for the exclusion
of provisions relating to Transactions that are not
Terminated Transactions); provided, however, if Party B
fails to make such determination promptly, Party A shall
have the right to make such determination.
(4) Party B undertakes to use its reasonable efforts to
obtain at least one Market Quotation on or before the
later of (a) the Early Termination Date or (b) 10
Business Days following the designation of the Early
Termination Date (the "Latest Settlement Amount
Determination Day").
(5) Party B will be deemed to have discharged its
obligations under (4) above if it requests Party A to
obtain Market Quotations, where such request is made in
writing within two Business Days after the day on which
the Early Termination Date is designated.
(6) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to
do so before the Latest Settlement Amount Determination
Day.
(7) Party A shall have the right to obtain Market
Quotations, without prior request by Party B, before the
Latest Settlement Amount Determination Day.
(8) If the Settlement Amount is a negative number, Section
6(e)(i)(3) of this Agreement shall be deleted in its
entirety and replaced with the following:
"Second Method and Market Quotation. If Second Method
and Market Quotation apply, (1) Party B shall pay to
Party A an amount equal to the absolute value of the
Settlement Amount in respect of the Terminated
Transactions, (2) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts
owing to Party A and (3) Party A shall pay to Party B
the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B, provided that, (i) the amounts
payable under (2) and (3) shall be subject to netting in
accordance with Section 2(c) of this Agreement and (ii)
notwithstanding any other provision of this Agreement,
any amount payable by Party A under (3) due to a failure
by Party A to make, when due, any payment under this
Agreement, shall not be netted against any amount
payable by Party B under (1)."
(g) "Termination Currency" means U.S. Dollars.
(h) Additional Termination Event.
(A) The following Additional Termination Event will apply to Party
A, with Party A as the sole Affected Party and all Transaction
as Affected Transactions.
(i) Party A fails to comply with the Rating Agency Downgrade
provisions as set forth in Part 5(f) below; or
(ii) A Firm Offer is accepted by Party B pursuant to Part
5(f)(ii)(2)(B) following a Moody's Second Tier Downgrade
Event.
(B) The following Additional Termination Events will apply to
Party B, with Party B as the sole Affected Party and all
Transaction as Affected Transactions.
(i) Upon any amendment, supplement, modification or waiver
of any provision of the PSA (as defined below) without
the consent of Party A that materially and adversely
affects the rights or interests of Party A.
(ii) The Servicer exercises its option to purchase the
Mortgage Loans pursuant to Section 9.01 of the PSA.
(iii) Upon the irrevocable direction to dissolve or otherwise
terminate the Trust following which all assets of the
Trust will be liquidated and the proceeds of such
liquidation distributed to the Certificateholders.
Part 2. Tax Representations.
Party A and Party B Payer Tax Representations.
(i) For the purpose of Section 3(e), each of Party A and Party B
makes the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or on
account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii), or 6(e) of this Agreement) to be made by it
to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of
this Agreement, (ii) the satisfaction of the agreement contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and
effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the
satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a
breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(ii) For the purposes of Section 3(f), Party A makes the following
representation:
Party A is a U.S. corporation organized under the laws of Delaware.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the
following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party
required to
deliver
document Form/Document/Certificate Date by which to be delivered
----------- ---------------------------- ----------------------------------
Party A A correct, complete and (i) Upon entering into this
duly executed IRS Form W-9. Agreement, (ii) promptly upon
reasonable demand by Party B, and
(iii) promptly upon learning that
any such Form previously provided
by Party A has become obsolete or
incorrect.
Party B (i) A correct, complete and In each case (a) upon entering
duly executed IRS Form W-9 into this Agreement, provided
(or any successor thereto) however, with respect to (i),
that eliminates U.S. the Trustee shall apply for the
federal withholding and employer identification number
backup withholding tax on of the Trust promptly upon
payments under this entering into this Agreement and
Agreement, (ii) if deliver the related correct,
requested by Party A, a complete and duly executed IRS
correct, complete and duly Form W-9 promptly upon receipt,
executed Form W-8IMY, and and in any event, no later than
(iii) a complete and the first Payment Date of this
executed IRS Form W-9, Transaction; (b) in the case of
W-8BEN, W-8ECI, or W-8IMY a W-8ECI, W-8IMY, and W-8BEN
(with attachments) (as that does not include a U.S.
appropriate) from each taxpayer identification number
Certificateholder that is in line 6, before December 31 of
not an "exempt recipient" each third succeeding calendar
as that term is defined in year, (c) promptly upon
Treasury regulations reasonable demand by Party A,
section 1.6049-4(c)(ii), and (d) promptly upon actual
that eliminates U.S. knowledge that any such Form
federal withholding and previously provided by Party B
backup withholding tax on has become obsolete or incorrect.
payments under this
Agreement.
(b) Other documents to be delivered are:-
Party Covered by
required to Section
deliver Date by which to be 3(d)
document Form/Document/Certificate delivered Representation
----------- --------------------------- ------------------- --------------
Party A Either (1) a signature The earlier of the Yes
and booklet containing fifth Business Day
Party B secretary's certificate and after the Trade
resolutions ("authorizing Date of the first
resolutions") authorizing Transaction or upon
the party to enter into execution of this
derivatives transactions of Agreement and as
the type contemplated by deemed necessary
the parties or (2) a for any further
secretary's certificate, documentation.
authorizing resolutions and
incumbency certificate, in
either case, for such party
and any Credit Support
Provider of such party
reasonably satisfactory in
form and substance to the
other party.
Party B An executed copy of the Upon execution of Yes
Pooling and Servicing this Agreement.
Agreement ("PSA"), dated
as of January 1, 2007,
among Xxxxxx Xxxxxxx ABS
Capital I Inc., as
Depositor, Deutsche Bank
National Trust Company, as
Trustee and Custodian,
Saxon Mortgage Services,
Inc., as Servicer,
Countrywide Home Loans
Servicing LP, as Servicer,
LaSalle Bank National
Association, as Custodian,
and NC Capital Corporation
and Decision One Mortgage
Company, LLC, as
Responsible Parties.
Party A A duly executed copy of the As soon as No
and Credit Support Document practicable after
Party B specified in Part 4 of this the execution of
Schedule. this Agreement.
Party A An opinion of counsel As soon as No
and Party B reasonably satisfactory in practicable after
form and substance to the the execution of
other party. this Agreement.
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):-
(i) Address for notices or communications to Party A:-
XXXXXX XXXXXXX CAPITAL SERVICES INC.
Transaction Management Group
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-8293
Attention: CHIEF LEGAL OFFICER
Fax No: 000 000 000 0000
(ii) Address for notices or communications to Party B:
DEUTSCHE BANK NATIONAL TRUST COMPANY
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Trust Administration - MS07H1
Facsimile No.: 000 000 0000
Telephone No.: 000 000 0000
(b) Notices. Section 12(a) is amended by adding in the third line
thereof after the phrase "messaging system" and before the ")" the
words, "; provided, however, any such notice or other communication
may be given by facsimile transmission if telex is unavailable, no
telex number is supplied to the party providing notice, or if answer
back confirmation is not received from the party to whom the telex
is sent."
(c) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(d) Offices. The provisions of Section 10(a) will not apply to Party A
and to Party B.
(e) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(f) "Calculation Agent" means Party A.
(g) "Credit Support Document" means (a) with respect to Party A, (1) the
Credit Support Annex between Party A and Party B dated as of the
date hereof (the "Credit Support Annex") and (2) the guarantee of
Xxxxxx Xxxxxxx and (b) with respect to Party B, the Credit Support
Annex.
(h) Credit Support Provider means in relation to Party A: Xxxxxx
Xxxxxxx, a Delaware corporation.
Credit Support Provider means in relation to Party B: None
(i) Governing Law; Jurisdiction. This Agreement, each Credit Support
Document and each Confirmation will be governed by and construed in
accordance with the laws of the State of New York without regard to
conflict of law provisions thereof other than New York General
Obligations Law Sections 5-1401 and 5-1402. Section 13(b) is amended
by: (1) deleting "non-" from the second line of clause (i); and (2)
deleting the final paragraph.
(j) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any
Credit Support Document.
(k) Netting of Payments. Clause (ii) of Section 2(c) will apply to any
amounts payable with respect to Transactions from the date of this
Agreement.
(l) "Affiliate". Party A and Party B shall be deemed not to have any
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii). For the avoidance of doubt, with respect to Party
A, such definition shall be understood to exclude Xxxxxx Xxxxxxx
Derivative Products Inc.
(m) Additional Definitions. All capitalized terms used but not otherwise
defined in this Agreement shall have the meanings given thereto in
the PSA.
Part 5. Other Provisions
(a) Additional Representations.
(i) The introductory clause of Section 3 of this Agreement is
hereby amended to read in its entirety as follows:
"Each party represents to the other party (which
representations will be deemed to be repeated by each party on
each date on which a Transaction is entered into and, in the
case of the representations in Section 3(f) and Section
3(g)(4), at all times until the termination of this Agreement)
that:--"
(ii) Section 3 of this Agreement is hereby amended by adding at the
end thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding a Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) Evaluation and Understanding.
(i) Non-Reliance. In the case of Party A, it is
acting for its own account, and in the case of Party B,
the Trustee is acting on behalf of the Trust. It has
made its own independent decisions to enter into that
Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment
and upon advice from such advisers as it has deemed
necessary and, with respect to Party B, as directed
under the PSA. It is not relying on any communication
(written or oral) of the other party as investment
advice or as a recommendation to enter into that
Transaction; it being understood that information and
explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or
a recommendation to enter into that Transaction. No
communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as
to the expected results of that Transaction.
(ii) Assessment and Understanding. It is capable
of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and
assumes, the risks of that Transaction.
(iii) Status of Parties. The other party is not
acting as a fiduciary for or an adviser to it in respect
of that Transaction.
(3) Purpose. It is an "eligible swap participant" as
such term is defined in Section 35.1(b)(2) of the regulations
(17 C.F.R 35) promulgated under, and an "eligible contract
participant" as defined in Section 1a(12) of, the Commodity
Exchange Act, as amended, and it is entering into the
Transaction for the purposes of managing its borrowings or
investments, hedging its underlying assets or liabilities or
in connection with a line of business.
(4) ERISA Representation.
(i) Party A represents and warrants at all times
hereunder that it is not a pension plan or employee
benefit plan and that it is not using assets of any such
plan or assets deemed to be assets of such a plan in
connection with any Transaction under this Agreement,
and
(ii) Party B represents and warrants at all times
hereunder that (x) it is not a pension plan or employee
benefit plan, and (y) (1) that it is not acting on
behalf of any such plan or using assets of any such plan
or assets deemed to be assets of any such plan in
connection with any Transaction under this Agreement or
(2) any pension plan or employee benefits plan subject
to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any
person who is acting on behalf of such a plan, or using
assets of such plan or assets deemed to be "plan assets"
of such plan for purposes of ERISA or the Code, who
purchases a certificate issued by the Trust while this
Agreement is in existence (i) shall represent or shall
be deemed to represent that the purchase and holding of
such certificate is in reliance on at least one of the
Prohibited Transaction Class Exemptions of 84-14, 90-1,
91-38, 95-60 or 96-23 or (ii) shall provide an opinion
of counsel which states that such purchase and holding
is permissible under applicable law and will not result
in a prohibited transaction under ERISA or Section 4975
of the Code."
(b) Set-off. Subject to Section 2(c), Paragraphs 8(a) and 8(b) of the
Credit Support Annex and Part 1(f)(ii)(8) hereof, notwithstanding
any other provision of this Agreement or any other existing or
future agreement, each party irrevocably waives any and all rights
it may have to set off, net, recoup or otherwise withhold, suspend
or condition payment or performance of any obligation between it and
the other party hereunder against any obligation between it and the
other party under any other agreements. Section 6(e) is hereby
amended by the deletion of the following sentence at the end of the
first paragraph thereof: "The amount, if any, payable in respect of
an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off."
(c) Confirmations. Party A will deliver to Party B a Confirmation
relating to each Transaction.
(d) Form of Agreement. The parties hereby agree that the text of the
body of this Agreement is intended to be the printed form of 1992
ISDA Master Agreement (Multicurrency--Cross Border) as published and
copyrighted by the International Swaps and Derivatives Association,
Inc.
(e) Transfer, Termination, Amendment and Assignment.
(i) This Agreement may not be amended unless prior written notice
is given to Moody's and Rating Agency Confirmation from S&P is
obtained.
(ii) Notwithstanding any other provision of this Agreement, no
Early Termination Date shall be effectively designated by
Party B (other than an Early Termination Date designated under
Part 5(f)(ii)(3)) unless Moody's has been given prior written
notice of such designation.
(iii) Party B may, with the prior written consent of Party A and
subject prior written notice to Moody's and Rating Agency
Confirmation from S&P, assign, novate or transfer its rights
and obligations under the Agreement to a third party.
Notwithstanding Section 7 of this Agreement, Party A may, at
its own discretion and at its own expense, subject to giving
reasonable notice of transfer to Moody's and subject to Rating
Agency Confirmation with respect to S&P, assign, novate or
transfer its rights and obligations under this Agreement
(including any Transactions hereunder) to any third party
including, without limitation, another of Party A's offices,
branches or affiliates (the "Transferee"), provided that:
(1) such third party agrees to be bound by, inter alia,
the payment, transfer and collateral terms of this Agreement
(including any Transactions hereunder) and substantially all
other terms as the party which it replaces;
(2) such third party is an Eligible Replacement;
(3) a Termination Event or an Event of Default does not
occur under this Agreement as a result of such transfer;
(4) if the Transferee is domiciled in a different
jurisdiction from both Party A and Party B, the rating of the
Certificates assigned by S&P are not adversely affected;
(5) as of the date of the transfer the Transferee will
not, as a result of such transfer, be required to withhold or
deduct on account of tax under this Agreement; and
(6) as of the date of such transfer, neither the
Transferee nor Party B will be required to withhold or deduct
any increased amount on account of any Taxes under this
Agreement as a result of such transfer, unless, as of the date
of such transfer, (x) Party B is entitled to additional
amounts under Section 2(d)(i)(4) on account of any such Taxes
required to be deducted or withheld by the Transferee and (y)
Party B is not required to pay Transferee additional amounts
under Section 2(d)(i)(4) on account of any such Taxes required
to be deducted or withheld by Party B.
Following such transfer, all references herein to Party
A shall be deemed to be references to the Transferee.
(f) Rating Agency Downgrade.
(i) Moody's First Tier Downgrade. In the event the Relevant Entity
is downgraded below the Moody's First Tier Required Swap
Counterparty Ratings (a "Moody's First Tier Downgrade Event")
then, within 30 Business Days after the occurrence of such
Moody's First Tier Downgrade Event, Party A shall, at its
option and at its own expense, either:
(A) cause an Eligible Replacement to replace Party A as
party to this Agreement; provided that if such Eligible
Replacement or its Credit Support Provider, as
applicable, is rated below the Moody's First Tier
Required Swap Counterparty Rating, such Eligible
Replacement shall immediately Transfer Eligible Credit
Support to Party B pursuant to the Credit Support Annex;
(B) obtain an Eligible Guarantee in respect of Party A's
obligations under this Agreement that is provided by an
entity with the Moody's First Tier Required Swap
Counterparty Rating; or
(C) Transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex.
(ii) Moody's Second Tier Downgrade. (1) In the event that no
Relevant Entity has the Moody's Second Tier Required Swap
Counterparty Rating (a "Moody's Second Tier Downgrade Event")
then, Party A shall, at its option and at its own expense, use
commercially reasonable efforts to as soon as reasonably
practicable either:
(A) cause an Eligible Replacement to replace Party A as
party to this Agreement; or
(B) obtain an Eligible Guarantee in respect of Party A's
obligations under this Agreement that is provided by an
entity with the Moody's Second Tier Required Swap
Counterparty Rating.
(2) If no Eligible Replacement or Eligible Guarantee has been
effected in accordance with Part 5(f)(ii)(1)(A) or (B) above
within 30 Business Days of such Moody's Second Tier Downgrade
Event then:
(A) Party A shall Transfer Eligible Credit Support to Party
B pursuant to the Credit Support Annex until such
replacement or Eligible Guarantee takes effect or, if
sooner, no Moody's Second Tier Downgrade Event is
occurring; and
(B) without prejudice to Party A's right to continue to seek
an Eligible Replacement or an Eligible Guarantee
pursuant to Part 5(f)(ii)(1)(A) and (B), Party B shall
also have the right (but not the obligation) on any
Business Day thereafter to obtain Firm Offers (such day
a "Firm Offer Solicitation Date") by giving Party A
written notice of its intention to seek Firm Offers no
later than 12:00 p.m., New York time, on the Business
Day prior to the Firm Offer Solicitation Date. Such
notice shall indicate the day and time as of which each
Eligible Replacement will be requested to provide its
Firm Offer; provided that Eligible Replacements shall
not provide Firm Offers prior to 12:00 p.m. New York
time, on the Firm Offer Solicitation Date. Party B shall
undertake to use reasonable efforts to seek at least 5
Firm Offers and Party B shall request each entity
providing a Firm Offer to do so to the extent reasonably
practicable as of the same day and time (without regard
to different time zones). If more than one Firm Offer
remains capable of becoming legally binding upon
acceptance, Party B shall accept the Firm Offer that
constitutes (1) the highest Firm Offer in the case of a
payment by an Eligible Replacement to Party B or (2) the
lowest Firm Offer in the case of a payment by Party B to
an Eligible Replacement; provided, however, if Party B
fails to make such determination promptly, Party A shall
have the right to make such determination. If only one
Firm Offer is provided, Party B shall accept the single
Firm Offer. Party B shall be obligated to accept the
Firm Offer upon determination; provided however, prior
to accepting such Firm Offer, Party B shall (1) on a day
that is a Business Day, provide Party A with at least 24
hours prior written notice of its intent to accept such
Firm Offer (which acceptance, in all cases, shall be on
a Business Day) and (2) confirm that Party A has not
identified an Eligible Replacement. If at anytime prior
to Party B's acceptance of a Firm Offer, Party A has
identified an Eligible Replacement then, in its sole
discretion, Party A may transfer its rights and
obligations under this Agreement to such Eligible
Replacement and an Early Termination Date will not
occur. If a Firm Offer is accepted by Party B, then,
notwithstanding Section 6 of the ISDA Master Agreement,
an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon such acceptance
by Party B and the Settlement Amount will equal the Firm
Offer so accepted by Party B.
(3) Notwithstanding Part 5(f)(ii)(1) and (2) above, an
Additional Termination Event under this Part 5(f)(ii) shall
only occur with Party A as the sole Affected Party if:
(A) a Moody's Second Tier Downgrade Event has occurred and
has been continuing for 30 or more Business Days; and
(B) at least one Eligible Replacement has made a Firm Offer
in accordance with Part 5(f)(ii)(2)(B) above which
remains capable of becoming legally binding upon
acceptance by the offeree.
(iii) S&P First Tier Downgrade. In the event the Relevant Entity is
downgraded below the S&P First Tier Required Swap Counterparty
Rating (an "S&P First Tier Downgrade Event") then, within 30
calendar days after the occurrence of such S&P First Tier
Downgrade Event, Party A shall, subject to Rating Agency
Confirmation, at its option and at its own expense, either:
(A) cause an Eligible Replacement to replace Party A as
party to this Agreement; provided that if such Eligible
Replacement or its Credit Support Provider, as
applicable, is rated below the S&P First Tier Required
Swap Counterparty Rating, such Eligible Replacement
shall immediately Transfer Eligible Credit Support to
Party B pursuant to the Credit Support Annex;
(B) obtain an Eligible Guarantee in respect of Party A's
obligations under this Agreement that is provided by an
entity with the S&P First Tier Required Swap
Counterparty Rating;
(C) transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex; or
(D) take other steps, if any, to enable Party B to remedy a
downgrade by S&P below the S&P First Tier Required Swap
Counterparty Rating.
(iv) S&P Second Tier Downgrade. (1) In the event that no Relevant
Entity has the S&P Second Tier Required Swap Counterparty
Rating (an "S&P Second Tier Downgrade Event") then, within 10
calendar days after such S&P Second Tier Downgrade Event,
Party A shall, subject to Rating Agency Confirmation, at its
option and at its own expense, use commercially reasonable
efforts to as soon as reasonably practicable either:
(A) cause an Eligible Replacement to replace Party A as
party to this Agreement; provided that if such Eligible
Replacement or its Credit Support Provider, as
applicable, is rated below the S&P First Tier Required
Swap Counterparty Rating, such Eligible Replacement
shall immediately Transfer Eligible Credit Support to
Party B pursuant to the Credit Support Annex; or
(B) obtain an Eligible Guarantee in respect of Party A's
obligations under this Agreement that is provided by an
entity with the S&P First Tier Required Swap
Counterparty Rating.
(2) Pending compliance with Part 5(f)(iv)(1)(A) or (B) Party A
shall Transfer Eligible Credit Support to Party B pursuant to
the Credit Support Annex immediately upon the occurrence of an
S&P Second Tier Downgrade Event.
(v) Failure to act in accordance with this Part 5(f), including
any failure by Party A to comply with or perform any
obligation to be complied with or performed by Party A under
the Credit Support Annex, shall constitute an Additional
Termination Event with Party A as the sole Affected Party;
provided that, failure by Party A to Transfer Eligible Credit
Support to Party B in accordance with Part 5(f)(ii)(2) above
shall constitute an Event of Default under Section
5(a)(iii)("Credit Support Default") if such failure is not
remedied on or before the third Business Day after notice of
such failure is given to Party A.
(vi) For purposes of this Part 5(f), but subject to Part
5(f)(ii)(3), Party A shall be responsible for (1) posting
collateral in accordance with such Credit Support Annex at its
own cost; and (2) any cost incurred by it in complying with
its obligations.
(g) Rating Agency Downgrade Definitions.
(i) For purposes of this Agreement,
"Eligible Guarantee" means an unconditional and irrevocable
guarantee, letter of credit or other arrangement that is
provided by a party as principal obligor rather than surety
and is directly enforceable by Party B.
"Eligible Replacement" means an entity (1) with the Moody's
First Tier Required Swap Counterparty Ratings and/or the
Moody's Second Tier Required Swap Counterparty Ratings or
whose present and future obligations owing to Party B are
supported pursuant to an Eligible Guarantee provided by a
party with the Moody's First Tier Required Swap Counterparty
Ratings and/or the Moody's Second Tier Required Swap
Counterparty Ratings, and (2) with the S&P First Tier Required
Swap Counterparty Ratings and/or the S&P Second Tier Required
Swap Counterparty Ratings or whose present and future
obligations owing to Party B are supported pursuant to an
Eligible Guarantee provided by a party with the S&P First Tier
Required Swap Counterparty Ratings and/or the S&P Second Tier
Required Swap Counterparty Ratings; provided that no entity
shall be an Eligible Replacement unless (A) a legal opinion
confirms that none of such Eligible Replacement's payments to
Party B under this Agreement will be subject to deduction or
withholding for or on account of any Tax or (B)
notwithstanding the definition of "Indemnifiable Tax" in
Section 14 of this Agreement, all Taxes in relation to
payments by such Eligible Replacement shall be Indemnifiable
Taxes unless such Taxes (x) are assessed directly against
Party B and not by deduction or withholding by such Eligible
Replacement or (y) arise as a result of a Change in Tax Law
(in which case such Tax shall be an Indemnifiable Tax only if
such Tax satisfies the definition of Indemnifiable Tax
provided in Section 14).
"Firm Offer" means an offer which, when made, was capable of
becoming legally binding upon acceptance.
"Moody's" means Xxxxx'x Investor Services, Inc. and any
successor to its rating business.
"Moody's First Tier Required Swap Counterparty Rating" means
(i) if such counterparty or entity has only Long-Term Rating
by Moody's, a Long-Term Rating of at least "A1" by Moody's or
(ii) if such counterparty or entity has both a Long-Term
Rating and a Short-Term Rating by Moody's, a Long-Term Rating
of at least "A2" by Moody's and a Short-Term Rating of at
least "P-1" by Moody's.
"Moody's Second Tier Required Swap Counterparty Rating" means
(i) if such counterparty or entity has only a Long-Term Rating
by Moody's, a Long-Term Rating of at least "A3" by Moody's or
(ii) if such counterparty or entity has both a Long-Term
Rating and a Short-Term Rating by Moody's, a Long-Term Rating
of at least "A3" by Xxxxx'x and a Short-Term Rating of at
least "P-2" by Xxxxx'x.
"Rating Agencies" means Moody's and S&P.
"Rating Agency Confirmation" means, with respect to any
particular proposed act or omission to act hereunder, that the
party acting or failing to act must consult with S&P and
receive from S&P a prior written confirmation that the
proposed action or inaction would not cause a downgrade or
withdrawal of the then current rating of the Certificates;
provided that S&P is then providing a rating of the
Certificates.
"Relevant Entity" means Party A, Party A's Credit Support
Provider and any principal obligor under an Eligible Guarantee
in respect of Party A's obligations under this Agreement.
"S&P" means Standard and Poor's Ratings Services, a
division of the XxXxxx-Xxxx Companies, Inc. and any
successor to its rating business.
"S&P First Tier Required Swap Counterparty Rating" means (i) a
Short-Term Rating of at least "A-1" by S&P or (ii) if such
counterparty or entity does not have a Short-Term Rating by
S&P, a Long-Term Rating of at least "A+" by S&P.
"S&P Second Tier Required Swap Counterparty Rating" means a
Short-Term Rating of at least "A-3" by S&P and a Long-Term
Rating of at least "BBB-" by S&P.
(h) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance,
shall be held to be invalid or unenforceable (in whole or in part)
for any reason, the remaining terms, provisions, covenants, and
conditions hereof shall continue in full force and effect as if this
Agreement had been executed with the invalid or unenforceable
portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement
and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the
parties; provided, however, that nothing in this provision shall
adversely affect the rights of each party under this Agreement; and
provided further that this severability provision shall not be
applicable if any provision of Section 1, 2, 5, 6, or 13 (or any
definition or provision in Section 14 to the extent it relates to,
or is used in or connection with any such Section) shall be so held
to be invalid or unenforceable. The parties shall endeavor to engage
in good faith negotiations to replace any invalid or unenforceable
term, provision, covenant or condition with a valid or enforceable
term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable
term, provision, covenant or condition.
(i) Consent to Recording. Each party hereto consents to the monitoring
or recording, at any time and from time to time, by the other party
of any and all communications between trading and marketing
personnel of the parties, waives any further notice of such
monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(j) Proceedings. Party A shall not institute against or cause any other
person to institute against, or join any other person in instituting
against, the Trust or Deutsche Bank National Trust Company, not
individually, but solely as Trustee, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law for
a period of one year and one day (or, if longer, the applicable
preference period) following payment in full of the Certificates;
provided, however, that this shall not restrict or prohibit Party A
from joining in any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings or other analogous
proceedings under applicable laws.
(k) Regulation AB. Upon request by the Depositor, Party A may, at its
option, but is not required to, (A) (a) provide the financial
information required by Item 1115(b)(1) or (b)(2) of Regulation AB
(as specified by the Depositor to Party A) with respect to Party A
(or any guarantor of Party A if providing the financial data of a
guarantor is permitted under Regulation AB) and any affiliated
entities providing derivative instruments to Party B (the "Company
Financial Information"), in a form appropriate for use in the
Exchange Act Reports and in an XXXXX-compatible form; (b) if
applicable, cause its accountants to issue their consent to filing
or incorporation by reference of such financial statements in the
Exchange Act Reports of Party B and (c) within 5 Business Days of
the release of any updated financial information, provide current
Company Financial Information as required under Item 1115(b) of
Regulation AB to the Depositor in an XXXXX-compatible form and, if
applicable, cause its accountants to issue their consent to filing
or incorporation by reference of such financial statements in the
Exchange Act Reports of Party B or (B) assign this Agreement at its
own cost to another entity that has agreed to take the actions
described in clause (A) of this sentence with respect to itself (and
which has the Required Swap Counterparty Rating and the assignment
to which would satisfy the Rating Agency Condition). For the
avoidance of doubt, Party A is not required to take any action
pursuant to this paragraph and the failure of Party A to take any
such action will not constitute an Event of Default under this
Agreement.
As used in this Agreement the following words shall have the
following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Depositor" shall mean Xxxxxx Xxxxxxx ABS Capital I Inc.
"XXXXX" shall mean the Commission's Electronic Data Gathering,
Analysis and Retrieval system.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder
"Exchange Act Reports" shall mean all Distribution Reports on Form
10-D, Current Reports on Form 8-K and Annual Reports on Form 10-K
that are to be filed with respect to Party B pursuant to the
Exchange Act.
"Regulation AB" shall mean the Asset Backed Securities
Regulation AB, 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from time to time, and subject to such clarification
and interpretation as have been provided by the Commission in
the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
(l) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Agreement is executed by
Deutsche Bank National Trust Company (i) this Agreement is executed
and delivered by Deutsche Bank National Trust Company not in its
individual capacity but solely as Trustee under the PSA in the
exercise of the powers and authority conferred and vested in it as
trustee thereunder, (ii) each of the representations, undertakings
and agreements herein made on behalf of Party B is made and intended
not as personal representations of the Trustee but is made and
intended for the purpose of binding only the Trust, and (iii) under
no circumstances shall Deutsche Bank National Trust Company in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made
or undertaken under this Agreement.
(m) "Indemnifiable Tax" Notwithstanding the definition of "Indemnifiable
Tax" in Section 14 of this Agreement, in relation to payments by
Party A, no Tax shall be an Indemnifiable Tax.
(n) If Party A consolidates or amalgamates with, merges with or into, or
transfers all or substantially all its assets to, another entity,
where such action does not constitute an event described in Section
5(a)(viii), Party A shall either (A) provide a legal opinion that
none of Party A's payments to Party B under this Agreement will be
subject to deduction or withholding for or on account of any Tax or
(B) notwithstanding the definition of "Indemnifiable Tax" in Section
14 of this Agreement, all Taxes in relation to payments by Party A
shall be Indemnifiable Taxes unless such Taxes (x) are assessed
directly against Party B and not by deduction or withholding by such
Eligible Replacement or (y) arise as a result of a Change in Tax Law
(in which case such Tax shall be an Indemnifiable Tax only if such
Tax satisfies the definition of Indemnifiable Tax provided in
Section 14).
IN WITNESS WHEREOF, the parties have executed this Schedule by their
duly authorized officers as of the date hereof:
XXXXXX XXXXXXX CAPITAL SERVICES INC. DEUTSCHE BANK NATIONAL TRUST COMPANY,
not individually, but solely as
Trustee for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE1,
Mortgage Pass-Through Certificates,
Series 2007-HE1
By: By:
------------------------------------ ------------------------------------
Name: Name:
Title: Title:
Date: Date:
EXHIBIT A
(Bilateral Form) (ISDA Agreements Subject to New York Law Only)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of January 26, 2007
between
XXXXXX XXXXXXX CAPITAL SERVICES and DEUTSCHE BANK NATIONAL TRUST COMPANY,
INC. ("Party A") a national banking association, not
individually, but solely as Trustee
for Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2007-HE1, Mortgage Pass-Through
Certificates, Series 2007-HE1
("Party B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows:--
Paragraph 1. Interpretation
(a) Definitions and Inconsistency. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) Secured Party and Pledgor. All references in this Annex to the "Secured
Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
Paragraph 2. Security Interest
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
Paragraph 3. Credit Support Obligations
(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified
in Paragraph 13, the "Delivery Amount" applicable to the Pledgor for any
Valuation Date will equal the amount by which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party.
(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds Secured Party's Minimum Transfer Amount, then
the Secured Party will Transfer to the Pledgor Posted Credit Support specified
by the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to Paragraph
13). Unless otherwise specified in Paragraph 13, the "Return Amount" applicable
to the Secured Party for any Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party
exceeds
(ii) the Credit Support Amount.
"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions
(a) Conditions Precedent. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified Condition
has occurred and is continuing with respect to the other party; and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the other party.
(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, then the relevant Transfer will be
made not later than the close of business on the second Local Business Day
thereafter.
(c) Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
(d) Substitutions.
(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured
Party specifying the items of Posted Credit Support to be exchanged, the
Pledgor may, on any Local Business Day, Transfer to the Secured Party
substitute Eligible Credit Support (the "Substitute Credit Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the
Pledgor the items of Posted Credit Support specified by the Pledgor in its
notice not later than the Local Business Day following the date on which
the Secured Party receives the Substitute Credit Support, unless otherwise
specified in Paragraph 13 (the "Substitution Date"); provided that the
Secured Party will only be obligated to Transfer Posted Credit Support
with a Value as of the date of Transfer of that Posted Credit Support
equal to the Value as of that date of the Substitute Credit Support.
Paragraph 5. Dispute Resolution
If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in case of
(I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to
Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the
other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:
(i) In the case of a dispute involving a Delivery Amount or Return Amount,
unless otherwise specified in Paragraph 13, the Valuation Agent will
recalculate the Exposure and the Value as of the Recalculation Date by:
(A) utilizing any calculations of Exposure for the Transactions (or
Swap Transactions) that the parties have agreed are not in dispute;
(B) calculating the Exposure for the Transactions (or Swap
Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of calculating
Market Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not available for a
particular Transaction (or Swap Transaction), then fewer than four
quotations may be used for that Transaction (or Swap Transaction);
and if no quotations are available for a particular Transaction (or
Swap Transaction), then the Valuation Agent's original calculations
will be used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for
calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, the Valuation Agent will
recalculate the Value as of the date of Transfer pursuant to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
Paragraph 6. Holding and Using Posted Collateral
(a) Care of Posted Collateral. Without limiting the Secured Party's rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
(b) Eligibility to Hold Posted Collateral; Custodians.
(i) General. Subject to the satisfaction of any conditions specified in
Paragraph 13 for holding Posted Collateral, the Secured Party will be
entitled to hold Posted Collateral or to appoint an agent (a "Custodian")
to hold Posted Collateral for the Secured Party. Upon notice by the
Secured Party to the Pledgor of the appointment of a Custodian, the
Pledgor's obligations to make any Transfer will be discharged by making
the Transfer to that Custodian. The holding of Posted Collateral by a
Custodian will be deemed to be the holding of that Posted Collateral by
the Secured Party for which the Custodian is acting.
(ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian
fails to satisfy any conditions for holding Posted Collateral, then upon a
demand made by the Pledgor, the Secured Party will, not later than five
Local Business Days after the demand, Transfer or cause its Custodian to
Transfer all Posted Collateral held by it to a Custodian that satisfies
those conditions or to the Secured Party if it satisfies those conditions.
(iii) Liability. The Secured Party will be liable for the acts or
omissions of its Custodian to the same extent that the Secured Party would
be liable hereunder for its own acts or omissions.
(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under Paragraphs 3,
4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an
Affected Party with respect to a Specified Condition and no Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party
will, notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds, free from any claim or right of any nature whatsoever
of the Pledgor, including any equity or right of redemption by the
Pledgor; and
(ii) register any Posted Collateral in the name of the Secured Party, its
Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) Distributions and Interest Amount.
(i) Distributions. Subject to Paragraph 4(a), if the Secured Party
receives or is deemed to receive Distributions on a Local Business Day, it
will Transfer to the Pledgor not later than the following Local Business
Day any Distributions it receives or is deemed to receive to the extent
that a Delivery Amount would not be created or increased by that Transfer,
as calculated by the Valuation Agent (and the date of calculation will be
deemed to be a Valuation Date for this purpose).
(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and
subject to Paragraph 4(a), in lieu of any interest, dividends or other
amounts paid or deemed to have been paid with respect to Posted Collateral
in the form of Cash (all of which may be retained by the Secured Party),
the Secured Party will Transfer to the Pledgor at the times specified in
Paragraph 13 the Interest Amount to the extent that a Delivery Amount
would not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose). The Interest Amount or portion thereof
not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.
Paragraph 7. Events of Default
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when due,
any Transfer of Eligible Collateral, Posted Collateral or the Interest
Amount, as applicable, required to be made by it and that failure
continues for two Local Business Days after notice of that failure is
given to that party;
(ii) that party fails to comply with any restriction or prohibition
specified in this Annex with respect to any of the rights specified in
Paragraph 6(c) and that failure continues for five Local Business Days
after notice of that failure is given to that party; or
(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii) and
that failure continues for 30 days after notice of that failure is given
to that party.
Paragraph 8. Certain Rights and Remedies
(a) Secured Party's Rights and Remedies. If at any time (1) an Event of Default
or Specified Condition with respect to the Pledgor has occurred and is
continuing or (2) an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under applicable
law with respect to Posted Collateral held by the Secured Party;
(ii) any other rights and remedies available to the Secured Party under
the terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with respect
to any Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation of the
Secured Party to Transfer that Posted Collateral); and
(iv) the right to liquidate any Posted Collateral held by the Secured
Party through one or more public or private sales or other dispositions
with such notice, if any, as may be required under applicable law, free
from any claim or right of any nature whatsoever of the Pledgor, including
any equity or right of redemption by the Pledgor (with the Secured Party
having the right to purchase any or all of the Posted Collateral to be
sold) and to apply the proceeds (or the Cash equivalent thereof) from the
liquidation of the Posted Collateral to any amounts payable by the Pledgor
with respect to any Obligations in that order as the Secured Party may
elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) Xxxxxxx's Rights and Remedies. If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a
Pledgor under applicable law with respect to Posted Collateral held by the
Secured Party;
(ii) the Pledgor may exercise any other rights and remedies available to
the Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to Transfer all
Posted Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation
of the Secured Party to Transfer that Posted Collateral); and
(B) to the extent that the Pledgor does not Set-off under (iv)(A)
above, withhold payment of any remaining amounts payable by the
Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.
(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation,
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) Final Returns. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.
Paragraph 9. Representations
Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any
Eligible Collateral it Transfers as the Pledgor and has taken all
necessary actions to authorize the granting of that security interest and
lien;
(ii) it is the sole owner of or otherwise has the right to Transfer all
Eligible Collateral it Transfers to the Secured Party hereunder, free and
clear of any security interest, lien, encumbrance or other restrictions
other than the security interest and lien granted under Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured Party
under the terms of this Annex, the Secured Party will have a valid and
perfected first priority security interest therein (assuming that any
central clearing corporation or any third-party financial intermediary or
other entity not within the control of the Pledgor involved in the
Transfer of that Eligible Collateral gives the notices and takes the
action required of it under applicable law for perfection of that
interest); and
(iv) the performance by it of its obligations under this Annex will not
result in the creation of any security interest, lien or other encumbrance
on any Posted Collateral other than the security interest and lien granted
under Paragraph 2.
Paragraph 10. Expenses
(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit Support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party's rights under
Paragraph 6(c).
(c) Liquidation/Application of Posted Credit Support. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.
Paragraph 11. Miscellaneous
(a) Default Interest. A Secured Party that fails to make, when due, any Transfer
of Posted Collateral or the Interest Amount will be obliged to pay the Pledgor
(to the extent permitted under applicable law) an amount equal to interest at
the Default Rate multiplied by the Value of the items of property that were
required to be Transferred, from (and including) the date that the Posted
Collateral or Interest Amount was required to be Transferred to (but excluding)
the date of Transfer of that Posted Collateral or Interest Amount. This interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.
(b) Further Assurances. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.
(c) Further Protection. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph 6(c).
(d) Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) Demands and Notices. All demands and notices made by a party under this
Annex will be made as specified in the Notices Section of this Agreement, except
as otherwise provided in Paragraph 13.
(f) Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
Paragraph 12. Definitions
As used in this Annex:--
"Cash" means the lawful currency of the United States of America.
"Credit Support Amount" has the meaning specified in Paragraph 3.
"Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13.
"Delivery Amount" has the meaning specified in Paragraph 3(a).
"Disputing Party" has the meaning specified in Paragraph 5.
"Distributions" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"Eligible Collateral" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Eligible Credit Support" means Eligible Collateral and Other Eligible Support.
"Exposure" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").
"Independent Amount" means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.
"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of Cash on that day; multiplied by
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"Interest Rate" means the rate specified in Paragraph 13.
"Local Business Day", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"Notification Time" has the meaning specified in Paragraph 13.
"Obligations" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"Other Eligible Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Other Posted Support" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"Pledgor" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"Posted Collateral" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
"Posted Credit Support" means Posted Collateral and Other Posted Support.
"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"Resolution Time" has the meaning specified in Paragraph 13.
"Return Amount" has the meaning specified in Paragraph 3(b).
"Secured Party" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"Specified Condition" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i).
"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
"Threshold" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
"Transfer" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one or
more bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical form
to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any
other documents necessary to constitute a legally valid transfer to the
recipient;
(iii) in the case of securities that can be paid or delivered by
book-entry, the giving of written instructions to the relevant depository
institution or other entity specified by the recipient, together with a
written copy thereof to the recipient, sufficient if complied with to
result in a legally effective transfer of the relevant interest to the
recipient; and
(iv) in the case of Other Eligible Support or Other Posted Support, as
specified in Paragraph 13.
"Valuation Agent" has the meaning specified in Paragraph 13.
"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"Valuation Percentage" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"Valuation Time" has the meaning specified in Paragraph 13.
"Value" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified as
Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified in
Paragraph 13.
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations with respect to
Party A and Party B: None.
(b) Credit Support Obligations.
(i) "Delivery Amount" and "Return Amount" each has the meaning specified
in Paragraph 3; provided that, in the event that Party A elects or
is required to post collateral pursuant to a ratings downgrade by
S&P and Xxxxx'x, (1) the Delivery Amount shall be calculated by
reference to the requirements set forth by the rating agency that
would result in Party A transferring the greater amount of Eligible
Credit Support and (2) the Return Amount shall be calculated by
reference to the requirements set forth by the rating agency that
would result in Party B transferring the least amount of Posted
Credit Support. "Credit Support Amount" has the meaning specified
below:
(A) in the event Party A elects or is required to post collateral
pursuant to Part 5(f)(iii) or (iv) of the Schedule due to a
ratings downgrade or withdrawal by S&P, "Credit Support
Amount" shall have the meaning specified in Table 1 attached
hereto; and
(B) in the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
Xxxxx'x below the Xxxxx'x First Tier Required Swap
Counterparty Rating, "Credit Support Amount" shall have the
meaning specified in Table 2A or Table 2B, as applicable,
attached hereto; and
(C) in the event Party A is required to post collateral pursuant
to Part 5(f)(ii) of the Schedule due to a ratings downgrade or
withdrawal by Xxxxx'x below the Xxxxx'x Second Tier Required
Swap Counterparty Rating, "Credit Support Amount" shall have
the meaning specified in Table 3A or 3B, as applicable,
attached hereto.
In the event Party A or its Credit Support Provider does not have a
Long-Term Rating of at least "BBB+" from S&P, the Valuation Agent
shall verify its calculation of the Secured Party's Exposure on a
quarterly basis by seeking two quotations from Reference
Market-makers. If two Reference Market-makers are not available to
provide a quotation, then fewer than two Reference Market-makers may
be used for such purpose. If no Reference Market-makers are
available, then the Valuation Agent's estimates at mid-market will
be used. The Valuation Agent may not obtain the quotations referred
to above from the same person in excess of four times during any 12
month period. Where more than one quotation is obtained, the
quotation representing the greatest amount of Exposure shall be used
by the Valuation Agent. In the event the verification procedures set
forth above indicate that there is a deficiency in the amount of
Eligible Collateral that has been Transferred to the Secured Party,
the Pledgor shall Transfer the amount of Eligible Collateral
necessary to cure such deficiency to the Secured Party within three
Local Business Days. The Valuation Agent shall provide to S&P its
calculations of the Secured Party's Exposure for that Valuation
Date. The Valuation Agent shall also provide to S&P any external
marks received pursuant to this paragraph.
(ii) Eligible Collateral.
(A) In the event Party A elects or is required to post collateral
pursuant to Part 5(f) of the Schedule due to a ratings
downgrade or withdrawal by S&P, the items specified in Table 4
attached hereto will qualify as "Eligible Collateral" for
Party A.
(B) In the event Party A elects to post collateral pursuant to
Part 5(f)(i) of the Schedule due to a ratings downgrade by
Xxxxx'x below the Xxxxx'x First Tier Required Swap
Counterparty Rating, the items specified in Table 5 attached
hereto will qualify as "Eligible Collateral" for Party A.
(C) In the event Party A is required to post collateral pursuant
to Part 5(f)(ii) of the Schedule due to a ratings downgrade or
withdrawal by Xxxxx'x below the Xxxxx'x Second Tier Required
Swap Counterparty Rating, the items specified in Table 6
attached hereto will qualify as "Eligible Collateral" for
Party A.
(iii) Other Eligible Support: Not applicable.
(iv) Thresholds.
(A) "Independent Amount" means, with respect to Party A, not
applicable in the event Party A elects or is required to post
collateral pursuant to Part 5(f) of the Schedule due to a
ratings downgrade or withdrawal by S&P or Xxxxx'x.
"Independent Amount" means, with respect to Party B, zero.
(B) "Threshold" means with, respect to Party A, not applicable in
the event Party A elects or is required to post collateral
pursuant to Part 5(f) of the Schedule due to a ratings
downgrade or withdrawal by S&P or Xxxxx'x.
"Threshold" means with respect to Party B: Infinite.
"Minimum Transfer Amount" means with respect to Party A: USD
50,000; and with respect to Party B: USD 50,000; provided,
however, that if such party is a Defaulting Party at the time,
"Minimum Transfer Amount" shall mean zero with respect to such
party.
(C) Rounding. The Delivery Amount will be rounded up to the
nearest multiple of $1000 and the Return Amount will be
rounded down to the nearest multiple of $1000.
(v) "Exposure" has the meaning specified in Paragraph 12, except that
after the word "Agreement" in the fourth line thereof the words
"(assuming, for this purpose only, that Part 1(f)(ii) of the
Schedule is deleted)" shall be inserted.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A.
(ii) "Valuation Date" means (A) each and every Wednesday commencing on
the first such date following the date hereof or if any Wednesday is
not a Local Business Day, the next succeeding Local Business Day and
(B) any other Local Business Day on which notice is made before
12:00 noon, New York time on the immediately preceding Local
Business Day.
(iii) "Valuation Time" means the close of business in New York on the New
York Banking Day before the Valuation Date or date of calculation,
as applicable, or any time on the Valuation Date or date of
calculation, as applicable; provided that the calculations of Value
and Exposure will be made as of approximately the same time on the
same date.
(iv) "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.
(v) The Valuation Agent's calculations pursuant to the terms hereof
shall be made in accordance with standard market practice, using
commonly accepted third party sources that comply with S&P's
criteria (e.g. Bloomberg, Bridge Information Services, Reuters and
Telerate).
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the party
specified (that party being the Affected Party of the Termination Event
occurs with respect to that party): Not Applicable.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. The Pledgor need not obtain the Secured Party's consent for
any substitution pursuant to Paragraph 4(d).
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice of the dispute
is given under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support or of any Transfer of Eligible Credit Support
or Posted Credit Support, as the case may be, will be calculated by
the Valuation Agent in accordance with standard market practice
using third party sources (such as, by way of example only,
Bloomberg or Reuters) where available.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodian.
Party B and its Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(A) Party B is not a Defaulting Party.
(B) Posted Collateral may be held only in the following
jurisdictions: the United States of America.
(C) Party B's Custodian (or its parent) shall have a Long Term
Rating by S&P of at least "A" and a Short Term Rating by S&P
of at least "A-1" by S&P.
Initially, the Custodian for Party B is the Trustee.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will
apply.
(h) Distributions and Interest Amount.
(i) "Interest Rate". The "Interest Rate" shall be the rate actually
earned by Party B on Posted Collateral in the form of Cash.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the last Local Business Day of each calendar month
and on any Local Business Day that Posted Collateral in the form of
Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). None.
(j) Other Eligible Support and Other Posted Support. "Value" and "Transfer"
with respect to Other Eligible Support and Other Posted Support each
means: Not applicable.
(k) Demands and Notices.
(i) All demands, specifications and notices to Party A under this Annex
will be made to:
Xxxxxx Xxxxxxx Capital Services Inc.
0000 Xxxxxxxx
XXX Xxxxxxxxxxx
Xxx Xxxx, XX 00000
Attn: FID Collateral Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxxxxx.xxx
and all demands, specifications and notices to Party B under this Annex
will be to:
Deutsche Bank National Trust Company, as trustee of the Trust
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-4934
Attention: Trust Administration - MS07H1
Facsimile: (000) 000-0000
Phone: (000) 000-0000
; provided that any demand, specification or notice may be made by
telephone ("Telephone Notice") between employees of each party if such
Telephone Notice is confirmed by a subsequent written instruction (which
may be delivered via facsimile or email) by the close of business on the
same day that such Telephone Notice is given.
(ii) Demand for Collateral. Without prejudice to any provision of this
Agreement, if a Delivery Amount for a Valuation Date equals or
exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor
will, without prior demand by the Secured Party, Transfer to the
Secured Party Eligible Credit Support in accordance with Paragraph
3(a).
(l) Addresses for Transfers.
Party A:
Cash: CITIBANK, New York
ABA No.: 021 000 089
Account No.: 4072 - 4601
Treasury Securities
and Agency Notes: Bank of New York, New York/Xxxxxx Xxxxxxx & Co.
Incorporated
ABA No.: 000000000
Other Forms of Eligible Collateral: As provided by Party A.
Party B:
Cash: Deutsche Bank
ABA No.: 000000000
Account No.: 00000000
Account Name: NYLTD Funds Control - Stars West
Ref: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1
DTC Eligible Securities: As provided by Party B
(m) Other Provisions.
(i) Notwithstanding any other provision in this Agreement to the
contrary, no full or partial failure to exercise and no delay in
exercising, on the part of Party A or Party B, any right, remedy,
power or privilege permitted hereunder shall operate in any way as a
waiver thereof by such party, including without limitation any
failure to exercise or any delay in exercising to any or to the full
extent of such party's rights with respect to transfer timing
pursuant to Paragraph 4(b), regardless of the frequency of such
failure or delay.
(ii) In all cases, in order to facilitate calculation of the Delivery
Amount and the Return Amount for a particular Valuation Date in
accordance with Paragraph 3 of this Annex:
(A) Eligible Collateral;
(B) Exposure; and
(C) Posted Collateral
shall each be expressed in US Dollars. If any of these items are
expressed in a currency other than US Dollars, then they shall be
converted into US Dollar amounts at the spot exchange rate
determined by the Valuation Agent on that Valuation Date.
(iii) Form of Annex. The parties hereby agree that the text of the body of
this Annex is intended to be the printed form of 1994 ISDA Credit
Support Annex (Bilateral Form - ISDA Agreements Subject to New York
Law Only version) as published and copyrighted by the International
Swaps and Derivatives Association, Inc.
(n) Agreement as to Single Secured Party and Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to
this Annex, Paragraph 1(b) or Paragraph 2 or the definitions of Paragraph
12, (a) the term "Secured Party" as used in this Annex shall mean only
Party B, (b) the term "Pledgor" as used in this Annex shall mean only
Party A, (c) only Party A makes the pledge and grant in Paragraph 2, the
acknowledgement in the final sentence of Paragraph 8(a) and the
representations in paragraph 9 and (d) only Party A will be required to
make Transfers of Eligible Credit Support hereunder.
(o) Events of Default. Paragraph 7(ii) and (iii) will not apply to Party B.
(p) Expenses. For the avoidance of doubt, Party A shall be responsible for
posting collateral in accordance with this Credit Support Annex at its own
cost and any cost incurred by it in complying with its obligations
hereunder.
(q) Additional Definitions
"Agency Notes" means U.S. Dollar-denominated fixed rate, non-amortising,
non-mortgage-backed, senior debt securities of fixed maturity, rated Aaa
by Xxxxx'x and AAA by S&P issued by any of the Federal Home Loan Banks
(including their consolidated obligations issued through the Office of
Finance of the Federal Home Loan Bank System), the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Federal Farm Credit Bank.
"Commercial Paper" means U.S. Dollar-denominated, coupon-bearing,
commercial paper issued by a corporation, finance company, partnership or
limited liability company.
"Treasury Securities" means U.S. Dollar-denominated, coupon-bearing,
senior debt securities of the United States of America issued by the U.S.
Treasury Department and backed by the full faith and credit of the United
States of America.
(r) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Annex is executed by Deutsche Bank National
Trust Company (i) this Annex is executed and delivered by Deutsche Bank
National Trust Company not in its individual capacity but solely as
Trustee under the PSA in the exercise of the powers and authority
conferred and invested in it as trustee thereunder, (ii) each of the
representations, undertakings and agreements herein made on behalf of the
Trust is made and intended not as personal representations of the Trustee
but is made and intended for the purpose of binding only the Trust, and
(iii) under no circumstances shall Deutsche Bank National Trust Company in
its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
under this Annex.
IN WITNESS WHEREOF, the parties have executed this Credit Support
Annex by their duly authorized officers as of the date hereof.
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By:
--------------------------------------
Name:
Title:
Date:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not individually, but solely as
Trustee for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE1,
Mortgage Pass-Through Certificates,
Series 2007-HE1
By:
--------------------------------------
Name:
Title:
Date:
TABLE 1
CREDIT SUPPORT AMOUNT
DOWNGRADE BY S&P
In the event Party A elects or is required to post collateral pursuant to Part
5(f) of the Schedule due to a ratings downgrade or withdrawal by S&P:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to the greater of (1) the sum of (a) the MTM and (b) the Volatility Buffer
multiplied by the Notional Amount * 10 and (2) zero.
"MTM" means the Secured Party's Exposure for that Valuation Date.
"Volatility Buffer" means (a) if, on the date of determination, Party A has a
short-term credit rating of "A-2" by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 3.25%, (b) if, on the date of
determination, Party A has a short-term credit rating of "A-2" by S&P and the
Termination Date of the Transaction will occur in less than 10 years but more
than 5 years, 4.00%, (c) if, on the date of determination, Party A has a
short-term credit rating of "A-3" by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 4.00%, (d) if, on the date of
determination, Party A has a short-term credit rating of "A-3" by S&P and the
Termination Date of the Transaction will occur in less than 10 years but more
than 5 years, 5.00%, (e) if, on the date of determination, Party A has a
long-term credit rating of "BB+" or lower by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 4.50%, or (f) if, on the date of
determination, Party A has a long-term credit rating of "BB+" or lower by S&P
and the Termination Date of the Transaction will occur in less than 10 years but
more than 5 years, 6.75%.
TABLE 2A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY XXXXX'X BELOW XXXXX'X FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A elects to post collateral pursuant to Part 5(f)(i) of the
Schedule due to a ratings downgrade by Xxxxx'x below the Xxxxx'x First Tier
Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to either:
(A) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the lesser of
(x) 25 multiplied by DV01 and (y) 4% multiplied by the Notional Amount * 10; or
(B) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the Notional
Amount * 10 multiplied by the amount specified in Table 2B attached hereto.
Party A shall, in its sole discretion, have the option to determine the Credit
Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith and
in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 2B
Weighted
Average
Life of Hedge
in Years
-------------
1 0.25%
2 0.50%
3 0.70%
4 1.00%
5 1.20%
6 1.40%
7 1.60%
8 1.80%
9 2.00%
10 2.20%
11 2.30%
12 2.50%
13 2.70%
14 2.80%
15 3.00%
16 3.20%
17 3.30%
18 3.50%
19 3.60%
20 3.70%
21 3.90%
22 4.00%
23 4.00%
24 4.00%
25 4.00%
26 4.00%
27 4.00%
28 4.00%
29 4.00%
30 4.00%
TABLE 3A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY XXXXX'X BELOW XXXXX'X SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A is required to post collateral pursuant to Part 5(f)(ii) of
the Schedule due to a ratings downgrade by Xxxxx'x below the Xxxxx'x Second Tier
Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to either:
(A) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the lesser of (x) 60 multiplied by DV01 and (y) 9% multiplied by the
Notional Amount * 10; or
(B) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the Notional Amount * 10 multiplied by the amount specified in Table 3B
attached hereto.
Party A shall, in its sole discretion, have the option to determine the Credit
Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith and
in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 3B
Weighted
Average
Life of Hedge
in Years
-------------
1 0.60%
2 1.20%
3 1.70%
4 2.30%
5 2.80%
6 3.30%
7 3.80%
8 4.30%
9 4.80%
10 5.30%
11 5.60%
12 6.00%
13 6.40%
14 6.80%
15 7.20%
16 7.60%
17 7.90%
18 8.30%
19 8.60%
20 9.00%
21 9.00%
22 9.00%
23 9.00%
24 9.00%
25 9.00%
26 9.00%
27 9.00%
28 9.00%
29 9.00%
30 9.00%
TABLE 4
ELIGIBLE COLLATERAL
S&P
Valuation
Eligible Collateral Party A Percentage
------------------------------------------------- ------- ----------
(A) Cash X 100.0%
(B) Treasury Securities with a remaining maturity of X 98.5%
52 weeks or less
(C) Treasury Securities with a remaining maturity of X 93.6%
more than 52 weeks but no more than 5 years
(D) Treasury Securities with a remaining maturity of X 89.9%
more than 5 years but no more than 10 years
(E) Treasury Securities with a remaining maturity of X 83.9%
more than 10 years but no more than 30 years
(F) Agency Notes with a remaining maturity of no more X 81.3%
than 15 years
(G) Agency Notes with a remaining maturity of more X 74.8%
than 15 years but no more than 30 years
(H) Commercial Paper rated "A-1+" by S&P and "P-1" by X 98.0%
Xxxxx'x, with a remaining maturity of 180 days or
less
(I) Commercial Paper rated "A-1" by S&P and P-1 by X 97.0%
Xxxxx'x, with a remaining maturity of 180 days or
less
(J) Commercial Paper rated "A-1" by S&P and "P-1" by X 94.0%
Xxxxx'x, with a remaining maturity of more than
180 days or but no more than 360 days
Notwithstanding the above, Commercial Paper will qualify as Eligible Collateral
for Party A only if the aggregate amount of Commercial Paper Transferred as
Eligible Collateral under this Annex constitutes the obligations of 10 or more
issuers.
TABLE 5
ELIGIBLE COLLATERAL
DOWNGRADE BY XXXXX'X BELOW XXXXX'X FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
------------------- --------------------
U.S. Dollar Cash 100%
EURO Cash 97%
Sterling Cash 97%
Fixed-Rate Negotiable Treasury Debt Issued by
The U.S. Treasury Department with Remaining
Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate Negotiable Treasury Debt issued
by The U.S. Treasury Department
All Maturities 100%
Fixed-Rate U.S. Agency Debentures with
Remaining Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate U.S. Agency Debentures
- All Maturities 100%
Fixed-Rate Euro-Zone Government Bonds Rated
Aa3 or Above with Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate Euro-Zone Government Bonds
Rated Aa3 or Above
All Maturities 97%
Fixed-Rate United Kingdom Gilts with
Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate United Kingdom Gilts
All Maturities 97%
TABLE 6
ELIGIBLE COLLATERAL
DOWNGRADE BY XXXXX'X BELOW XXXXX'X SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
------------------- --------------------
U.S. Dollar Cash 100%
EURO Cash 93%
Sterling Cash 94%
Fixed-Rate Negotiable Treasury Debt Issued by
The U.S. Treasury Department with Remaining
Maturity
< 1 Year 100%
1 to 2 Years 99%
2 to 3 Years 98%
3 to 5 Years 97%
5 to 7 Years 95%
7 to 10 Years 94%
10 to 20 Years 89%
> 20 Years 87%
Floating-Rate Negotiable Treasury Debt issued
by The U.S. Treasury Department
All Maturities 99%
Fixed-Rate U.S. Agency Debentures with
Remaining Maturity
< 1 Year 99%
1 to 2 Years 98%
2 to 3 Years 97%
3 to 5 Years 96%
5 to 7 Years 94%
7 to 10 Years 93%
10 to 20 Years 88%
> 20 Years 86%
Floating-Rate U.S. Agency Debentures
- All Maturities 98%
Fixed-Rate Euro-Zone Government Bonds Rated
Aa3 or Above with Remaining Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 89%
5 to 7 Years 87%
7 to 10 Years 86%
10 to 20 Years 82%
> 20 Years 80%
Floating-Rate Euro-Zone Government Bonds Rated
Aa3 or Above
All Maturities 92%
Fixed-Rate United Kingdom Gilts with Remaining
Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 90%
5 to 7 Years 89%
7 to 10 Years 88%
10 to 20 Years 84%
> 20 Years 82%
Floating-Rate United Kingdom Gilts
All Maturities 93%
[Xxxxxx Xxxxxxx logo]
--------------------------------------------------------------------------------
DATE: January 26, 2007
TO: Deutsche Bank National Trust Company, not individually,
but solely as Trustee for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-HE1, Mortgage Pass-Through Certificates,
Series 2007-HE1
ATTENTION: Trust Administration - MS07H1
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
FROM: New York Derivative Client Services Group
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: FS09U
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between Xxxxxx Xxxxxxx Capital Services Inc.
("Party A") and Deutsche Bank National Trust Company, not individually, but
solely as Trustee (the "Trustee") under the Pooling and Servicing Agreement,
dated and effective as of January 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as Depositor, Deutsche Bank National Trust Company, as Trustee and
Custodian, Saxon Mortgage Services, Inc., as Servicer, Countrywide Home Loans
Servicing LP, as Servicer, LaSalle Bank National Association, as Custodian, and
NC Capital Corporation and Decision One Mortgage Company, LLC, as Responsible
Parties (the "PSA") for the Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1,
Mortgage Pass-Through Certificates, Series 2007-HE1 ("Party B").
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of January 26, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:........................... With respect to any
Calculation Period, the
notional amount set forth
for such Calculation Period
in Schedule I attached
hereto.
Trade Date:................................ January 12, 2007
Effective Date:............................ December 25, 2007
Termination Date:.......................... December 25, 2012, which for
the purpose of the final
Fixed Rate Payer Calculation
Period is subject to No
Adjustment, and for the
purpose of the final
Floating Rate Payer
Calculation Period is
subject to adjustment in
accordance with the Business
Day Convention.
Fixed Amounts:
Fixed Rate Payer:................. Party B
Fixed Rate Payer Payment Dates:... The 25th calendar day of
each month during the Term
of this Transaction,
commencing January 25, 2008,
subject to adjustment in
accordance with the Business
Day Convention.
Fixed Rate Payer Period
End Dates:...................... The 25th calendar day of
each month during the Term
of this Transaction,
commencing January 25, 2008,
subject to No Adjustment.
Fixed Rate:....................... 4.90%
Fixed Amount:..................... To be determined in
accordance with the
following formula:
10 * Fixed Rate *
Notional Amount * Fixed
Rate Day Count Fraction.
Fixed Rate Day Count Fraction:.... 30/360
Floating Amounts:
Floating Rate Payer:.............. Party A
Floating Rate Payer
Payment Dates:.................. The 25th calendar day of
each month during the Term
of this Transaction,
commencing January 25, 2008,
subject to adjustment in
accordance with the Business
Day Convention.
Floating Rate Payer Period
End Dates:...................... The 25th calendar day of
each month during the Term
of this Transaction,
commencing January 25, 2008,
subject to adjustment in
accordance with the Business
Day Convention.
Floating Rate Option:............. USD-LIBOR-BBA
Floating Amount:.................. To be determined in
accordance with the
following formula:
10 * Floating Rate *
Notional Amount *
Floating Rate Day Count
Fraction.
Designated Maturity:.............. One month
Floating Rate Day Count
Fraction:....................... Actual/360
Reset Dates:...................... The first day of each
Calculation Period.
Compounding:...................... Inapplicable
Business Days:............................. New York and Los Angeles
Business Day Convention:................... Following
2. Account Details and Settlement Information:
Payments to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: Xxxxxx Xxxxxxx Capital Services Inc.
Payments to Party B:
Deutsche Bank
ABA No.: 000000000
Account No: 00000000
Acct Name: NYLTD Funds Control - Stars West
Ref: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (swap)
3. Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed by Deutsche Bank
National Trust Company (i) this Confirmation is executed and delivered by
Deutsche Bank National Trust Company not in its individual capacity but
solely as Trustee under the PSA in the exercise of the powers and
authority conferred and invested in it as trustee thereunder, (ii) each of
the representations, undertakings and agreements herein made on behalf of
Party B is made and intended not as personal representations of the
Trustee but is made and intended for the purpose of binding only the
Trust, and (iii) under no circumstances shall Deutsche Bank National Trust
Company in its individual capacity be personally liable for the payment of
any indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken under this Confirmation.
[Xxxxxx Xxxxxxx logo]
--------------------------------------------------------------------------------
We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By:
-----------------------------------------
Name:
Title:
Party B, acting through its duly authorized signatory, xxxxxx agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
DEUTSCHE BANK NATIONAL TRUST COMPANY, not
individually, but solely as Trustee for
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust
2007-HE1, Mortgage Pass-Through
Certificates, Series 2007-HE1
By:
-----------------------------------------
Name:
Title:
[Xxxxxx Xxxxxxx logo]
--------------------------------------------------------------------------------
SCHEDULE 1
Line Calculation Period Notional Amount ($) Multiplier
---- ------------------------------------- ------------------- ----------
1 Effective Date 1/25/2008 79,717,525.22 10
2 1/25/2008 2/25/2008 76,324,912.38 10
3 2/25/2008 3/25/2008 73,077,471.00 10
4 3/25/2008 4/25/2008 69,969,200.92 10
5 4/25/2008 5/25/2008 66,994,099.50 10
6 5/25/2008 6/25/2008 64,146,424.44 10
7 6/25/2008 7/25/2008 61,420,682.46 10
8 7/25/2008 8/25/2008 58,811,618.39 10
9 8/25/2008 9/25/2008 55,671,909.00 10
10 9/25/2008 10/25/2008 45,452,354.19 10
11 10/25/2008 11/25/2008 43,514,143.72 10
12 11/25/2008 12/25/2008 41,689,783.00 10
13 12/25/2008 1/25/2009 39,942,577.11 10
14 1/25/2009 2/25/2009 38,269,236.81 10
15 2/25/2009 3/25/2009 36,014,408.99 10
16 3/25/2009 4/25/2009 26,541,083.66 10
17 4/25/2009 5/25/2009 25,422,165.51 10
18 5/25/2009 6/25/2009 24,381,844.52 10
19 6/25/2009 7/25/2009 23,380,722.24 10
20 7/25/2009 8/25/2009 22,388,601.71 10
21 8/25/2009 9/25/2009 18,681,549.14 10
22 9/25/2009 10/25/2009 13,306,938.68 10
23 10/25/2009 11/25/2009 12,773,093.67 10
24 11/25/2009 12/25/2009 12,279,584.52 10
25 12/25/2009 1/25/2010 11,801,458.31 10
26 1/25/2010 2/25/2010 11,309,156.04 10
27 2/25/2010 3/25/2010 8,420,163.20 10
28 3/25/2010 4/25/2010 8,031,417.91 10
29 4/25/2010 5/25/2010 7,735,862.88 10
30 5/25/2010 6/25/2010 7,452,222.23 10
31 6/25/2010 7/25/2010 7,176,804.23 10
32 7/25/2010 8/25/2010 6,892,791.30 10
33 8/25/2010 9/25/2010 5,241,402.37 10
34 9/25/2010 10/25/2010 5,015,484.97 10
35 10/25/2010 11/25/2010 4,842,346.66 10
36 11/25/2010 12/25/2010 4,675,673.28 10
37 12/25/2010 1/25/2011 4,514,660.36 10
38 1/25/2011 2/25/2011 4,359,118.68 10
39 2/25/2011 3/25/2011 4,208,865.18 10
40 3/25/2011 4/25/2011 4,063,722.84 10
41 4/25/2011 5/25/2011 3,923,520.43 10
42 5/25/2011 6/25/2011 3,788,092.35 10
43 6/25/2011 7/25/2011 3,657,060.78 10
44 7/25/2011 8/25/2011 3,530,716.18 10
45 8/25/2011 9/25/2011 3,408,676.72 10
46 9/25/2011 10/25/2011 3,290,288.50 10
47 10/25/2011 11/25/2011 3,176,451.92 10
48 11/25/2011 12/25/2011 3,066,494.69 10
49 12/25/2011 1/25/2012 2,960,074.86 10
50 1/25/2012 2/25/2012 2,857,516.16 10
51 2/25/2012 3/25/2012 2,758,465.67 10
52 3/25/2012 4/25/2012 2,662,301.60 10
53 4/25/2012 5/25/2012 2,569,938.90 10
54 5/25/2012 6/25/2012 2,480,740.16 10
55 6/25/2012 7/25/2012 2,394,473.27 10
56 7/25/2012 8/25/2012 2,311,291.03 10
57 8/25/2012 9/25/2012 2,230,962.41 10
58 9/25/2012 10/25/2012 2,153,103.28 10
59 10/25/2012 11/25/2012 2,078,208.22 10
60 11/25/2012 Termination Date 2,005,886.09 10
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
[Xxxxxx Xxxxxxx Logo]
January 26,2007
Deutsche Bank National Trust Company
a national banking association, not individually, but solely as Trustee for
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (the "Trust) Mortgage
Pass-Through Certificates, Series 2007-HE1
c/o Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000-0000
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement dated as of
January 26, 2007 between Xxxxxx Xxxxxxx Capital Services inc., a Delaware
corporation (hereinafter "MSCS") and Deutsche Bank National Trust Company a
national banking association, not individually, but solely as Trustee for Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (the "Trust"), Mortgage Pass-Through
Certificates, Series 2007-HE1 (hereinafter "Counterparty") (such ISDA Master
Agreement, together with each Confirmation exchanged between the parties
pursuant thereto, hereinafter the "Agreement"), Xxxxxx Xxxxxxx, a Delaware
corporation (hereinafter "MS"), hereby irrevocably and unconditionally
guarantees to Counterparty, with effect from the date of the Agreement, the due
and punctual payment of all amounts payable by MSCS under the Agreement when the
same shall become due and payable, whether on Scheduled Payment Dates, upon
demand, upon declaration of termination or otherwise, in accordance with the
terms of the Agreement and giving effect to any applicable grace period. Upon
failure of MSCS punctually to pay any such amounts, and upon written demand by
Counterparty to MS at its address set forth in the signature block of this
Guarantee (or to such other address as MS may specify in writing), MS agrees to
pay or cause to be paid such amounts; provided that delay by Counterparty in
giving such demand shall in no event affect MS's obligations under this
Guarantee.
MS xxxxxx agrees that its obligations hereunder shall be
unconditional and will not be discharged except by complete payment of the
amounts payable under the Agreement, irrespective of any claim as to the
Agreement's validity, regularity or enforceability or the lack of authority of
MSCS to execute or deliver the Agreement; or any change in or amendment to the
Agreement; or any waiver or consent by Counterparty with respect to any
provisions thereof; or the absence of any action to enforce the Agreement or the
recovery of any judgment against MSCS or of any action to enforce a judgment
against MSCS under the Agreement; or any similar circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor
generally. MS hereby waives diligence, presentment, demand on MSCS for payment
or otherwise (except as provided hereinabove), filing of claims, requirement of
a prior proceeding against MSCS and protest or notice, except as provided for in
the Agreement with respect to amounts payable by MSCS. If at any time payment
under the Agreement is rescinded or must be otherwise restored or returned by
Counterparty upon the insolvency, bankruptcy or reorganization of MSCS or MS or
otherwise, MS's obligations hereunder with respect to such payment shall be
reinstated upon such restoration or return being made by Counterparty.
MS represents to Counterparty as of the date hereof, which
representations will be deemed to be repeated by MS on each date on which a
Transaction is entered into, that:
1. it is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full power and legal right to execute
and deliver this Guarantee and to perform the provisions of this Guarantee on
its part to be performed;
2. its execution, delivery and performance of this Guarantee have
been and remain duly authorized by all necessary corporate action and do not
contravene any provision of its certificate of incorporation or by-laws or any
law, regulation or contractual restriction binding on it or its assets;
3. all consents, authorizations, approvals and clearances
(including, without limitation, any necessary exchange control approval) and
notifications, reports and registrations requisite for its due execution,
delivery and performance of this Guarantee have been obtained from or, as the
case may be, filed with the relevant governmental authorities having
jurisdiction and remain in full force and effect and all conditions thereof have
been duly complied with and no other action by, and no notice to or filing with,
any governmental authority having jurisdiction is required for such execution,
delivery or performance; and
4. this Guarantee is its legal, valid and binding obligation
enforceable against it in accordance with its terms except as enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights or by general equity
principles.
By accepting this Guarantee and entering into the Agreement,
Counterparty agrees that MS shall be subrogated to all rights of Counterparty
against MSCS in respect of any amounts paid by MS pursuant to this Guarantee,
provided that MS shall be entitled to enforce or to receive any payment arising
out of or based upon such right of subrogation only to the extent that it has
paid all amounts payable by MSCS under the Agreement.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York. All capitalized terms not otherwise defined
herein shall have the respective meanings assigned to them in the Agreement.
XXXXXX XXXXXXX
By.
------------------------------
Name:
Title:
Address: 0000 Xxxxxxxx
Xxx Xxxx, New York
Address: 0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
Fax No.: 000-000-0000
Phone: (000) 000-0000
[Xxxxxx Xxxxxxx Logo]
SECRETARY'S CERTIFICATE
I, Xxxxx X. Xxxxxx, a duly elected and acting Assistant Secretary of
Xxxxxx Xxxxxxx, a corporation organized and existing under the laws of the State
of Delaware (the "Corporation"), certify that (i) Xxxxx X. Xxxx is the duly
elected Treasurer and Xxxxxxxxxx X. Xxxxx is a duly elected Assistant Treasurer
of the Corporation; (ii) pursuant to Section 7.01 of the Bylaws of the
Corporation and resolutions adopted by a Unanimous Consent of Directors in Lieu
of a Meeting, dated as of May 31, 1997, both of which are attached as an
exhibit, the Treasurer and the Assistant Treasurers are authorized to enter into
agreements and other instruments on behalf of the Corporation; and (iii) the
signatures of Xxxxx X. Xxxx and Xxxxxxxxxx X. Xxxxx appearing below are copies
of their genuine signatures:
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal
of the Corporation as of the 14th day of December, 2006.
------------------------------------
Xxxxx X. Xxxxxx
Assistant Secretary
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
[Xxxxxx Xxxxxxx Logo]
EXHIBIT
XXXXXX XXXXXXX
Section 7.01 of the Bylaws
--------------------------
SECTION 7.01. Contracts. Except as otherwise required by law, the
Amended and Restated Certificate of Incorporation or these Amended and Restated
Bylaws, any contracts or other instruments may be executed and delivered in the
name and on the behalf of the Corporation by such officer or officers of the
Corporation as the Board of Directors may from time to time direct. Such
authority may be general or confined to specific instances as the Board may
determine. Subject to the control and direction of the Board of Directors, the
Chairman of the Board, the President, the Chief Financial Officer, the Chief
Risk Officer, the Chief Legal Officer and the Treasurer may enter into, execute,
deliver and amend bonds, promissory notes, contracts, agreements, deeds, leases,
guarantees, loans, commitments, obligations, liabilities and other instruments
to be made or executed for or on behalf of the Corporation. Subject to any
restrictions imposed by the Board of Directors, such officers of the Corporation
may delegate such powers to others under his or her jurisdiction, it being
understood, however, that any such delegation of power shall not relieve such
officer of responsibility with respect to the exercise of such delegated power.
Resolution adopted by a Unanimous Consent of
Directors in Lieu of a Meeting, dated as of May 31, 1997
RESOLVED FURTHER, that the Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of the
Corporation and shall be authorized to deposit all such funds in the
name of the Corporation in banks or other depositories. In addition,
the Treasurer shall perform all other necessary acts and duties in
connection with the financial affairs of the Corporation, shall
generally perform all duties appertaining to the office of treasurer
of a corporation and shall perform such other duties and have such
other powers as may be prescribed by the Board, subject to the
supervision of the Chief Financial Officer; and
RESOLVED FURTHER, that the Assistant Treasurer, if any, or, if
there shall be more than one, the Assistant Treasurers, shall, under
the supervision of the Treasurer, perform the duties and exercise
the powers of an assistant treasurer and, in the absence or
disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. In addition, each Assistant Treasurer is
authorized to enter into, execute, deliver and amend on behalf of
the Corporation any and all letters of credit, uncommitted
short-term credit obligations and short-term promissory notes (as
defined by generally accepted accounting principles), such
authorization to cease automatically upon termination of employment
with the Corporation.
EXHIBIT X-1
FORM OF SERVICER REPORTS FOR SAXON
----------- --------------------------------- ----------------------------------
FIELD FIELD FIELD
# NAME DEFINITION
----------- --------------------------------- ----------------------------------
--------------------------------------------------------------------------------
Current Monthly Remit File reported by Investor Services to Master Servicers &
Investors:
--------------------------------------------------------------------------------
1 S50YDATE Cutoff Date
2 CLIENT WF Client Number
3 INVNUM WF Investor Number
4 CATNUM WF Category Number
5 POOLNUM Pool Number
6 LOANNUMBER WF Loan Number
7 INVLNNO Investor Loan Number
8 SCHPRIN Scheduled Principal Payment
9 SCHNETINT Scheduled Net Interest Amount
10 CURTDATE Curtailment Date
11 CURTCOL Total Curtailment Amount
12 CURTADJ Total Curtailment Int Adjustment Amount
13 CURTREMIT Total Curtailment Remittance Amount
14 INTRATE Interest Rate
15 SFRATE Service Fee Rate
16 YIELD Pass Through Rate
17 PANDI Principal and Interest Payment
18 BEGSCHPB Beginning Scheduled Balance
19 ENDSCHPB Ending Scheduled Balance
20 BEGPB Beginning Principal Balance
21 ENDPB Ending Principal Balance
22 DUEDATE Due Date
23 PRINCOL Principal Collected
24 INTCOL Interest Collected
25 SFCOL Service Fee Collected
26 BUYDOWN Buydown Amount
27 SCHREMIT Schedule Principal and Net Interest
Remittance Amount
28 TYPE Populated if "ARM" loan
29 PIFDATEPAID Payoff Date
30 PIFPRINPAID Payoff Principal Paid
31 PIFNETINTPAID Payoff Net Interest Paid
32 PIFPENALTYINTPAID Payoff Prepayment Penalty Paid
33 PIFREMIT Total Payoff Remittance Amount
34 PENDING Pending Transfer Flag
35 MESSAGE Messages
36 SORTABLELOANNUMBER Loan Number
37 NOTES Loan Notes from Reporter
38 PRINDIFF Loan Sale Difference
39 PRINADJ Loan Sale Difference Interest Adjustment
--------------------------------------------------------------------------------
Additional Fields to be added as a result of REG AB (per CTS):
--------------------------------------------------------------------------------
40 SSCRAREMIT Soldiers and Sailors Remittance Amount
41 CLAIMSREMIT Claims Remittance Amount
42 MISCREMIT Miscellaneous Remittance Amount
43 TOTALREMIT Total Remittance Amount
44 PPPAMOUNT Prepayment Penalty Calculated Amount
45 PPPWAIVED Prepayment Penalty Waived Amount
46 PPPPAIDBYBORROWER Prepayment Penalty Paid by the Borrower
47 PPPPAIDBYSERVICER Prepayment Penalty Paid by the Servicer
48 MODEFFDATE Modification Effective Date
49 MODTYPE Modification Type (See Mod Type tab)
50 ACTIONCODE Action Code (See Action Code Tab -
Just 63 & 65)
---------------------------------------------------------------------------------
Calculation:
TotalRemit = Remit + PIFRemit + CurtRemit + SSCRARemit + ClaimsRemit + MiscRemit
--------------------------------------------------------------------------------
EXHIBIT X-2
FORM OF COUNTRYWIDE SERVICING SERVICER REPORTS
Standard File Layout - Scheduled/Scheduled
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
Column Name Description Decimal Format Comment
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 10 digits
group of loans.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
LOAN_NBR A unique identifier assigned to each loan by the Text up to 10 digits
investor.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits
Servicer. This may be different than the
LOAN_NBR.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
BORROWER_NAME The borrower name as received in the file. It Maximum length of 30 (Last, First)
is not separated by first and last name.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or dollar signs ($)
interest payment that a borrower is expected to
pay, P&I constant.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6
Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
NET_INT_RATE The loan gross interest rate less the service 4 Max length of 6
fee rate as reported by the Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as reported 4 Max length of 6
by the Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as reported 2 No commas(,) or dollar signs ($)
by the Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or dollar signs ($)
Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6
forecasted rate.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar signs ($)
beginning of the processing cycle.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar signs ($)
end of the processing cycle.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that MM/DD/YYYY
the borrower's next payment is due
to the Servicer, as reported by Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY
curtailment amount.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY
curtailment amount.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY
curtailment amount.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
PIF_AMT The loan "paid in full" amount as reported by 2 No commas(,) or dollar signs ($)
the Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
Action Code Key: 15=Bankruptcy,
30=Foreclosure, , 60=PIF,
63=Substitution,
65=Repurchase,70=REO
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
ACTION_CODE The standard FNMA numeric code used to
indicate the default/delinquent status of a
particular loan.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar signs ($)
applicable.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or dollar signs ($)
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,) or dollar signs ($)
applicable.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due 2 No commas(,) or dollar signs ($)
at the beginning of the cycle date to be passed
through to investors.
--------------------------------- -------------------------------------------------- ----------- -----------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to investors 2 No commas(,) or dollar signs ($)
at the end of a processing cycle.
SCHED_PRIN_AMT The scheduled principal amount as reported by 2 No commas(,) or dollar signs ($)
the Servicer for the current cycle -- only
applicable for Scheduled/Scheduled Loans.
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or dollar signs ($)
service fee amount for the current cycle as
reported by the Servicer -- only applicable
for Scheduled/Scheduled Loans.
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or dollar signs ($)
Servicer for the current reporting cycle --
only applicable for Actual/Actual Loans.
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or dollar signs ($)
service fee amount for the current reporting
cycle as reported by the Servicer -- only
applicable for Actual/Actual Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or dollar signs ($)
prepays on his loan as reported by the
Servicer.
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or dollar signs ($)
waived by the servicer.
MOD_DATE The Effective Payment Date of the Modification MM/DD/YYYY
for the loan.
MOD_TYPE The Modification Type. Varchar - value can be alpha or
numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or dollar signs ($)
advances made by Servicer.
EXHIBIT Y
[Reserved]
EXHIBIT Z
[Reserved]
EXHIBIT AA
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO XXXxx.Xxxxxxxxxxxxx@xx.xxx AND VIA OVERNIGHT MAIL TO THE
ADDRESS IMMEDIATELY BELOW
Deutsche Bank National Trust Company, as trustee
0000 Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Email: XXXxx.Xxxxxxxxxxxxx@xx.xxx
--------------------------
Attn.: Trust & Securities Services- MS07H1
**Additional Form [10-D] [10-K] [8-K] Disclosure** Required
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 8.12 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of January 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as depositor, Countrywide Home Loans Servicing LP, as servicer, Saxon
Mortgage Services, as servicer, NC Capital Corporation, as a responsible party,
Decision One Mortgage Company, LLC, as a responsible party and Deutsche Bank
National Trust Company, as trustee, the undersigned, as
[_________________________] hereby notifies you that certain events have come to
our attention that we are required to report to you for disclosure on Form
[10-D] [10-K] [8-K].
Description of additional Form [10-D] [10-K] [8-K] Disclosure:
List of any attachments hereto to be included in the Additional Form [10-D]
[10-K] [8-K] Disclosure:
Each of the attachments hereto is being transmitted to the Trustee in an
XXXXX-compatible format.
Any inquiries related to this notification should be directed to
[_________________] phone number [___________________]; email address
[______________________].
[NAME OF PARTY],
As [Role]
By:
Name:
EXHIBIT BB
COUNTRYWIDE AMENDMENT REGULATION AB
Capitalized terms used in this Exhibit BB but not defined in
this Exhibit BB shall have the meanings given to such terms in this Agreement,
except the term "Mortgage Loan" shall mean the "Countrywide Serviced Mortgage
Loans" as defined in this Agreement.
AMENDMENT REG AB
TO THE MORTGAGE LOAN SALE AND SERVICING AGREEMENT
This is Amendment Reg AB ("Amendment Reg AB"), dated as of January 26, 2006, by
and among Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"), Countrywide
Home Loans, Inc. (the "Seller") and Countrywide Home Loans Servicing LP (the
"Servicer", and collectively with the Seller, the "Company") to (i) that certain
Second Amended and Restated Mortgage Sale and Servicing Agreement, dated as of
September 1, 2005, by and among the Seller, the Servicer and the Purchaser, and
(ii) that certain Mortgage Sale and Servicing Agreement, dated as of October 1,
2005, by and among the Seller, the Servicer and the Purchaser (collectively, as
amended, modified or supplemented, the "Existing Agreements").
W I T N E S S E T H
WHEREAS, the Company and the Purchaser have agreed, subject to the
terms and conditions of this Amendment Reg AB that the Existing Agreements be
amended to reflect agreed upon revisions to the terms of the Existing Agreement.
Accordingly, the Company and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that each Existing Agreement is hereby amended as follows:
1. Capitalized terms used herein but not otherwise defined shall
have the meanings set forth in the Existing Agreements. Each Existing Agreement
is hereby amended by adding the following definitions in their proper
alphabetical order:
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 2(g)(i)(A)(1).
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were either (x) originated pursuant to an agreement between the
Company and such Person that contemplated that such Person would underwrite
mortgage loans from time to time, for sale to the Company, in accordance with
underwriting guidelines designated by the Company ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines or (y)
individually re-underwritten by the Company to the Designated Guidelines at the
time such Mortgage Loans were acquired by the Company; (ii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Company; and (iii) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that either Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Company or the Mortgage Loans purchased by the Company substantially
comply with the Designated Guidelines.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: An agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties in connection with a
Reconstitution with respect to any or all of the Mortgage Loans serviced under
the Agreement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction subject to Regulation AB
involving either (1) a sale or other transfer of some or all of the Mortgage
Loans directly or indirectly to an issuing entity in connection with an issuance
of publicly offered, rated mortgage-backed securities or (2) an issuance of
publicly offered, rated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans.
Servicer: As defined in Section 2(c)(iii).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1105.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer, or any special servicer engaged at the request
of a Depositor, Purchaser or investor in a Securitization Transaction, nor any
"back-up servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
2. The Purchaser and the Company agree that each Existing Agreement is
hereby amended by adding the following provisions:
(a) Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose of
Article 2 of this Agreement is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. Neither the Purchaser nor any Depositor shall exercise its
right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder. The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, and agrees to negotiate in
good faith with the Purchaser or any Depositor with regard to any reasonable
requests for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary to permit the Purchaser or such Depositor to comply with
the provisions of Regulation AB, together with such disclosures relating to the
Company, and any parties or items identified in writing by the Purchaser,
including, any Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans necessary in order to effect such
compliance.
The Purchaser agrees that it will cooperate with the Company and
provide sufficient and timely notice of any information requirements pertaining
to a Securitization Transaction. The Purchaser will make all reasonable efforts
to contain requests for information, reports or any other materials to items
required for compliance with Regulation AB, and shall not request information
which is not required for such compliance.
(b) Additional Representations and Warranties of the Company.
(i) The Company shall be deemed to represent to the Purchaser
and to any Depositor, as of the date on which information is first
provided to the Purchaser or any Depositor under Section 2(c) that,
except as disclosed in writing to the Purchaser or such Depositor prior
to such date: (i) the Company is not aware and has not received notice
that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or
failure to act of the Company; (ii) the Company has not been terminated
as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential
mortgage loans involving the Company as servicer has been disclosed or
reported by the Company; (iv) no material changes to the Company's
policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for
mortgage loans of a type similar to the Mortgage Loans have occurred
during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Company's
financial condition that could have a material adverse effect on the
performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material
legal or governmental proceedings pending (or known to be contemplated)
against the Company, any Subservicer or any Third-Party Originator; and
(vii) there are no affiliations, relationships or transactions relating
to the Company, any Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and any party thereto
identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(ii) If so requested by the Purchaser or any Depositor on any
date following the date on which information is first provided to the
Purchaser or any Depositor under Section 2(c), the Company shall,
within ten Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph
(i) of this Section or, if any such representation and warranty is not
accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
(c) Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall (1)
within ten Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing reasonably
required for compliance with Regulation AB, the information and materials
specified in paragraphs (i), (ii), (iii) and (vi) of this Section 2(c), and (2)
as promptly as practicable following notice to or discovery by the Company,
provide to the Purchaser and any Depositor (as required by Regulation AB) the
information specified in paragraph (iv) of this Section.
(i) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding (x) the Company, as
originator of the Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), or (y) as
applicable, each Third-Party Originator, and (z) as applicable, each
Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105 (subject to paragraph (b) below), 1110, 1117 and 1119
of Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) to the extent material, a description of the
originator's origination program and how long the originator
has been engaged in originating residential mortgage loans,
which description shall include a discussion of the
originator's experience in originating mortgage loans of a
similar type as the Mortgage Loans; if material, information
regarding the size and composition of the originator's
origination portfolio; and information that may be material to
an analysis of the performance of the Mortgage Loans,
including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage
Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a brief description of any material legal or
governmental proceedings pending (or known to be contemplated
by a governmental authority) against the Company, each
Third-Party Originator, if applicable, and each Subservicer;
and
(D) a description of any affiliation or relationship
between the Company, each Third-Party Originator, if
applicable, each Subservicer and any of the following parties
to a Securitization Transaction, as such parties are
identified to the Company by the Purchaser or any Depositor in
writing within ten days in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support
provider; and
(9) any other material transaction
party.
(ii) If so requested by the Purchaser or any Depositor, and if
required by Regulation AB, the Company shall provide (or, as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as
provided below) originated by (a) the Company, if the Company is an
originator of Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), and/or (b) as
applicable, each Third-Party Originator. Such Static Pool Information
shall be prepared by the Company (or, if applicable, the Third-Party
Originator) on the basis of its reasonable, good faith interpretation
of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent that there is reasonably available to the Company (or
Third-Party Originator, as applicable) Static Pool Information with
respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content
of such Static Pool Information may be in the form customarily provided
by the Company, and need not be customized for the Purchaser or any
Depositor. Such Static Pool Information for each vintage origination
year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the
mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a
date no later than 135 days prior to the date of the prospectus or
other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information
shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format
(pdf) file, or other such electronic format mutually agreed upon by the
Purchaser and the Company.
Promptly following notice or discovery of a material error (as
determined in the judgment of the Company) in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an
omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static
Pool Information to the Purchaser or any Depositor, as applicable, in
the same format in which Static Pool Information was previously
provided to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to
this Agreement), agreed-upon procedures letters of certified public
accountants pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1,
2006 or, in the case of Static Pool Information with respect to the
Company's or, if applicable, Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the
Purchaser or such Depositor shall reasonably request. Such statements
and letters shall be addressed to and be for the benefit of such
parties as the Purchaser or such Depositor shall designate, which shall
be limited to any Sponsor, any Depositor, any broker dealer acting as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction or any other party that is reasonably and
customarily entitled to receive such statements and letters in a
Securitization Transaction. Any such statement or letter may take the
form of a standard, generally applicable document accompanied by a
reliance letter authorizing reliance by the addressees designated by
the Purchaser or such Depositor.
(iii) If reasonably requested by the Purchaser or any
Depositor, the Company shall provide such information regarding the
Company, as servicer of the Mortgage Loans, and each Subservicer (each
of the Company and each Subservicer, for purposes of this paragraph, a
"Servicer"), as is reasonably requested for the purpose of compliance
with Items 1108 of Regulation AB. Such information shall include, at a
minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general discussion of
the Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Servicer's
experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution
Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage
loans of a type similar to the Mortgage Loans and information
on factors related to the Servicer that may be material, in
the reasonable determination of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or
experienced an early amortization or other
performance triggering event because of servicing
during the three-year period immediately preceding
the related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous
disclosure of material noncompliance with the
applicable servicing criteria with respect to other
securitizations of residential mortgage loans
involving the Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Servicer has been terminated
as servicer in a residential mortgage loan
securitization, either due to a servicing default or
to application of a servicing performance test or
trigger; and
(5) such other information as the Purchaser
or any Depositor may reasonably request for the
purpose of compliance with Item 1108(b)(2) of
Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Servicer's policies or
procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreements
for mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material risk that an
adverse financial event or circumstance involving the Servicer
could have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(E) information regarding advances made by the
Servicer on the Mortgage Loans and the Servicer's overall
servicing portfolio of residential mortgage loans for the
three-year period immediately preceding the related
Securitization Transaction, which may be limited to a
statement by an authorized officer of the Servicer to the
effect that the Servicer has made all advances required to be
made on residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate,
information regarding the percentage and type of advances not
made as required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique factors
involved in servicing loans of a similar type as the Mortgage
Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries,
such as through liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts; and
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect
of any grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to
delinquency and loss experience.
(iv) For the purpose of satisfying its reporting obligation
under the Exchange Act with respect to any class of asset-backed
securities, the Company shall (or shall cause each Subservicer and, if
applicable, any Third-Party Originator to) (a) provide prompt notice to
the Purchaser, any Master Servicer and any Depositor in writing of (1)
any merger, consolidation or sale of substantially all of the assets of
the Company, (2) the Company's entry into an agreement with a
Subservicer to perform or assist in the performance of any of the
Company's obligations under the Agreement or any Reconstitution
Agreement, (3) any Event of Default under the terms of the Agreement or
any Reconstitution Agreement, and (4) any material litigation or
governmental proceedings involving the Company, any Subservicer or any
Third Party Originator.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or subservicer under this Agreement or any
applicable Reconstitution Agreement related thereto by any Person (i)
into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the
Company or any Subservicer, the Company shall provide to the Purchaser
and any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the
Purchaser and any Depositor of such succession or appointment and (y)
in writing, all information reasonably requested by the Purchaser or
any Depositor in order to comply with its reporting obligation under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(vi) If reasonably requested by the Purchaser or the Master
Servicer, the Company shall provide to the Purchaser or the Master
Servicer, evidence of the authorization of the person signing any
certification or statement.
(vii) The Company shall provide to the Purchaser and any
Depositor a description of any affiliation or relationship required to
be disclosed under Item 1119 of Regulation AB between the Company and
any of the parties listed in Items 1119(a)(1)-(6) of Regulation AB that
develops following the closing date of a Securitization Transaction
(other than an affiliation or relationship that the Purchaser, the
Depositor or any issuing entity has with any of such parties listed in
Items 1119(a)(1)-(6) of Regulation AB) no later than 15 calendar days
prior to the date the Depositor is required to file its Form 10-K
disclosing such affiliation or relationship. For purposes of the
foregoing, the Company (1) shall be entitled to assume that the parties
to the Securitization Transaction with whom affiliations or relations
must be disclosed are the same as on the closing date if it provides a
written request (which may be by e-mail) to the Depositor or Master
Servicer, as applicable, requesting such confirmation and either
obtains such confirmation or receives no response within three (3)
Business Days, (2) shall not be obligated to disclose any affiliations
or relationships that may develop after the closing date for the
Securitization Transaction with any parties not identified to the
Company pursuant to clause (D) of paragraph (i) of this Section 2(c),
and (3) shall be entitled to rely upon any written identification of
parties provided by the Depositor, the Purchaser or any master
servicer.
(viii) Not later than ten days prior to the deadline for the
filing of any distribution report on Form 10-D in respect of any
Securitization Transaction that includes any of the Mortgage Loans
serviced by the Company or any Subservicer, the Company or such
Subservicer, as applicable, shall, to the extent the Company or such
Subservicer has knowledge, provide to the party responsible for filing
such report (including, if applicable, the Master Servicer) notice of
the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to
be included in the related distribution report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(a) any material modifications, extensions or waivers of
Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have cumulatively become material over time
(Item 1121(a)(11) of Regulation AB;
(b) material breaches of Mortgage Loan representations or
warranties or transaction covenants under the applicable Existing
Agreement, as amended herein (Item 1121(a)(12) of Regulation AB); and
(c) information regarding any Mortgage Loan changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or
selection of pool assets (Item 1121(a)(14) of Regulation AB).
(d) Servicer Compliance Statement.
On or before March 5 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, to the effect that (i) a review of the
Company's servicing activities during the immediately preceding calendar year
(or applicable portion thereof) and of its performance under the servicing
provisions of this Agreement and any applicable Reconstitution Agreement during
such period has been made under such officer's supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Company has fulfilled all
of its servicing obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar year
(or applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
(e) Report on Assessment of Compliance and Attestation.
(i) On or before March 5 of each calendar year, commencing in
2007, the Company shall:
(A) deliver to the Purchaser and any Depositor a
report regarding the Company's assessment of compliance with
the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of
the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Purchaser and such Depositor and
signed by an authorized officer of the Company, and shall
address each of the Servicing Criteria specified on Exhibit A
hereto (wherein "Investor" shall mean the master servicer);
(B) deliver to the Purchaser and any Depositor a
report of a registered public accounting firm that attests to,
and reports on, the assessment of compliance made by the
Company and delivered pursuant to the preceding paragraph.
Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act;
(C) cause each Subservicer and each Subcontractor
determined by the Company pursuant to Section 2(f)(ii) to be
"participating in the servicing function" within the meaning
of Item 1122 of Regulation AB (each, a "Participating
Entity"), to deliver to the Purchaser and any Depositor an
assessment of compliance and accountants' attestation as and
when provided in paragraphs (i) and (ii) of this Section 2(e);
and
(D) deliver to the Purchaser, Depositor or any other
Person that will be responsible for signing the certification
(a "Sarbanes Certification") required by Rules 13a-14(d) and
15d-14(d) under the Exchange Act (pursuant to Section 302 of
the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a
certification, signed by an appropriate officer of the
Company, in the form attached hereto as Exhibit B; provided
that such certification delivered by the Company may not be
filed as an exhibit to, or included in, any filing with the
Commission.
The Company acknowledges that the party identified in clause (i)(D)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
(ii) Each assessment of compliance provided by a Subservicer
pursuant to Section 2(e)(i)(A) shall address each of the Servicing
Criteria specified on Exhibit A hereto or, in the case of a Subservicer
subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Participating
Entity pursuant to Section 2(e)(i)(C) need not address any elements of
the Servicing Criteria other than those specified by the Company
pursuant to Section 2(f).
(f) Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any related Reconstitution Agreement unless the Company
complies with the provisions of paragraph (i) of this Subsection (f). The
Company shall not hire or otherwise utilize the services of any Subcontractor,
and shall not permit any Subservicer to hire or otherwise utilize the services
of any Subcontractor, to fulfill any of the obligations of the Company as
servicer under this Agreement or any related Reconstitution Agreement unless the
Company complies with the provisions of paragraph (ii) of this Subsection (f).
(i) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subservicer. If required by Regulation AB, the Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit
of the Purchaser and any Depositor to comply with the provisions of
this Section and with Sections 2(b), 2(c)(iii), 2(c)(v), 2(d), and 2(e)
of this Agreement , and to provide the information required with
respect to such Subservicer under Section 2(c)(iv) of this Agreement.
The Company shall be responsible for obtaining from each Subservicer
and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under
Section 2(d), any assessment of compliance and attestation required to
be delivered by such Subservicer under Section 2(e) and any
certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2(e)
as and when required to be delivered.
(ii) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. If required by Regulation AB, the Company shall after
engagement of such Subcontractor, promptly provide a written
description of the role and function of each Subcontractor utilized by
the Company or any Subservicer, specifying (A) the identity of each
such Subcontractor, (B) which (if any) of such Subcontractors are
Participating Entities, and (C) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by
each Participating Entity identified pursuant to clause (B) of this
paragraph.
The Company shall cause any such Participating Entity used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Section 2(e) of this Agreement. The
Company shall be responsible for obtaining from each Participating Entity and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Participating Entity under Section
2(e), in each case as and when required to be delivered.
(g) Indemnification; Remedies.
(i) The Company shall indemnify the Purchaser and the
Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each
Person responsible for the execution or filing of any report required
to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each Person who controls any of such
parties (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act); and the respective present and former
directors, officers and employees of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(A) (1) any untrue statement of a material fact
contained or alleged to be contained in any information,
report, certification or other material provided in written or
electronic form under this Amendment Reg AB by or on behalf of
the Company, or provided under this Amendment Reg AB by or on
behalf of any Subservicer, Participating Entity or, if
applicable, Third-Party Originator (collectively, the "Company
Information"), or (2) the omission or alleged omission to
state in the Company Information a material fact required to
be stated in the Company Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way
of clarification, that clause (2) of this paragraph shall be
construed solely by reference to the Company Information and
not to any other information communicated in connection with a
sale or purchase of securities, without regard to whether the
Company Information or any portion thereof is presented
together with or separately from such other information;
(B) any failure by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator to deliver
any information, report, certification, accountants' letter or
other material when and as required under this Amendment Reg
AB, including any failure by the Company to identify pursuant
to Section 2(f)(ii) any Participating Entity;
(C) any breach by the Company of a representation or
warranty set forth in Section 2(b)(i) or in a writing
furnished pursuant to Section 2(b)(ii) and made as of a date
prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to
Section 2(b)(ii) to the extent made as of a date subsequent to
such closing date.
If the indemnification provided for in this Section 2(g)(i) is
unavailable or insufficient to hold harmless the indemnified parties
set forth in this Section 2(g)(i) above, then the Company agrees that
it shall contribute to the amount paid or payable by such indemnified
party as a result of any claims, losses, damages or liabilities
incurred by such indemnified party in such proportion as is appropriate
to reflect the relative fault of such indemnified party on the one hand
and the Company on the other.
In the case of any failure of performance described in clause (i)(B) of
this Section, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the execution
or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all
costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other
material not delivered as required by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator.
(ii) (A) Any failure by the Company to deliver or, if required
by Regulation AB, any Subservicer, any Participating Entity or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and
as required under this Amendment Reg AB, which continues
unremedied for three Business Days after receipt by the
Company and by the applicable Subservicer, Subcontractor, or
Third-Party Originator, so long as their addresses for notices
has been provided, in writing, previously to the Purchaser or
the Depositor, of written notice of such failure from the
Purchaser or Depositor shall, except as provided in clause (B)
of this paragraph, constitute an Event of Default with respect
to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement
related thereto without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement
related thereto to the contrary) of any compensation to the
Company; provided, however it is understood that the Company
shall remain entitled to receive reimbursement for all
unreimbursed Monthly Advances and Servicing Advances made by
the Company under this Agreement and/or any applicable
Reconstitution Agreement. Notwithstanding anything to the
contrary set forth herein, to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or
obligations following termination of the Company as servicer,
such provision shall be given effect.
(B) Any failure by the Company, or, if required under
Regulation AB, any Subservicer or any Participating Entity to
deliver any information, report, certification or accountants'
letter when and as required under Section 2(d) or 2(e),
including any failure by the Company to identify a
Participating Entity, which continues unremedied for ten
calendar days after the date on which such information,
report, certification or accountants' letter was required to
be delivered shall constitute an Event of Default with respect
to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement
without payment (notwithstanding anything in this Agreement to
the contrary) of any compensation to the Company; provided,
however it is understood that the Company shall remain
entitled to receive reimbursement for all unreimbursed Monthly
Advances and Servicing Advances made by the Company under this
Agreement and/or any applicable Reconstitution Agreement.
Notwithstanding anything to the contrary set forth herein, to
the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following
termination of the Company as servicer, such provision shall
be given effect.
(C) The Company shall promptly reimburse the
Purchaser (or any affected designee of the Purchaser, such as
a master servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor as such are incurred, in
connection with the termination of the Company as servicer and
the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit
whatever rights the Company, the Purchaser or any Depositor
may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific
performance or injunctive relief.
(iii) The indemnification and contribution obligations set
forth in this Section 2(g) shall survive the termination of
this Agreement or the termination of any party to this
Agreement.
3. Notwithstanding any other provision of this Amendment Reg AB, the
Company shall seek the consent of the Purchaser for the utilization of all
Subservicers and Participating Entities, when required by and in accordance with
the terms of the applicable Existing Agreement.
4. Each Existing Agreement is hereby amended by adding the Exhibit
attached hereto as Exhibit A to the end thereto. References in this Amendment
Reg AB to "this Agreement" or words of similar import (including indirect
references to the Agreement) shall be deemed to be references to the applicable
Existing Agreement as amended by this Amendment Reg AB. Except as expressly
amended and modified by this Amendment Reg AB, each Existing Agreement shall
continue to be, and shall remain, in full force and effect in accordance with
its terms. In the event of a conflict between this Amendment Reg AB and any
other document or agreement, including without limitation the applicable
Existing Agreement, this Amendment Reg AB shall control.
5. This Amendment Reg AB may be executed in one or more counterparts
and by different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement. This Amendment Reg AB
will become effective as of the date first mentioned above. This Amendment Reg
AB shall bind and inure to the benefit of and be enforceable by the Company and
the Purchaser and the respective permitted successors and assigns of the Company
and the successors and assigns of the Purchaser.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:___________________________________
Name:_________________________________
Title:
COUNTRYWIDE HOME LOANS, INC.
By:___________________________________
Name:_________________________________
Title:
COUNTRYWIDE HOME LOANS SERVICING LP
By:___________________________________
Name:_________________________________
Title:
Signature page to Amendment Reg AB
EXHIBIT A
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
Applicable Servicing
Servicing Criteria Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
General Servicing Considerations Policies
-----------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities. X
-----------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
-----------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction X
1122(d)(1)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days following
receipt, or such other number of days specified in the
1122(d)(2)(i) transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or to X
1122(d)(2)(ii) an investor are made only by authorized personnel.
-----------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for
such advances, are made, reviewed and approved as specified
1122(d)(2)(iii) in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with X
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the X
1122(d)(2)(v) Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent unauthorized X
1122(d)(2)(vi) access.
-----------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff date, or such other
number of days specified in the transaction agreements;
(C) reviewed and approved by someone other than the person who
prepared the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved within 90 X
calendar days of their original identification, or such other
1122(d)(2)(vii) number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid X
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
-----------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X
1122(d)(3)(iii) days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X
1122(d)(3)(iv) statements.
-----------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required X
1122(d)(4)(i) by the transaction agreements or related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements X
-----------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage X
1122(d)(4)(iv) loan documents.
-----------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance. X
-----------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi) the transaction agreements and related pool asset documents. X
-----------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements X
1122(d)(4)(vii) established by the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency X
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
1122(d)(4)(ix) the related mortgage loan documents. X
-----------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 X
calendar days of full repayment of the related mortgage loans, or
1122(d)(4)(x) such other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such X
1122(d)(4)(xi) other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with
any payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the obligor,
unless the late payment was due to the obligor's error or
1122(d)(4)(xii) omission. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction X
1122(d)(4)(xiii) agreements.
-----------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements. X
-----------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
EXHIBIT B
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES]
I, ________________________________, the _______________________ of
Countrywide Home Loans, Inc., certify to [the Purchaser], [the Depositor],
[Master Servicer], [Securities Administrator] or [Trustee], and its officers,
with the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[_] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities Administrator]
or [Trustee] pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on my knowledge, the Company Servicing Information,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements
were made, not misleading with respect to the period of time covered by
the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the Agreement
has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] or [Trustee];
(4) I am responsible for reviewing the activities performed by
the Company as servicer under the Agreement, and based on my knowledge
and the compliance review conducted in preparing the Compliance
Statement and except as disclosed in the Compliance Statement, the
Servicing Assessment or the Attestation Report, the Company has
fulfilled its obligations under the Agreement; and
[Intentionally Left Blank]
(5) The Compliance Statement required to be delivered by the
Company pursuant to this Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by each
Subservicer and Participating Entity pursuant to the Agreement, have
been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:
By:________________________________
Name:______________________________
Title:
EXHIBIT CC
REPRESENTATIONS AND WARRANTIES AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT (this "Agreement"),
dated as of January 26, 2007 (the "Closing Date"), is between XXXXXX XXXXXXX
MORTGAGE CAPITAL INC. (the "Sponsor") and XXXXXX XXXXXXX ABS CAPITAL I INC. (the
"Depositor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sponsor acquired certain mortgage loans (the
"Mortgage Loans") set forth on the mortgage loan schedule attached hereto as
Schedule I (the "Mortgage Loan Schedule") from various mortgage loan sellers
pursuant to certain purchase agreements;
WHEREAS, the Sponsor subsequently sold certain of the Mortgage
Loans (the "MSSA Mortgage Loans") to Xxxxxx Xxxxxxx Securitized Assets LLC
("MSSA");
WHEREAS, pursuant to that certain bill of sale, dated as of the
Closing Date, between MSSA and the Depositor, the MSSA Mortgage Loans are to be
transferred by MSSA to the Depositor;
WHEREAS, pursuant to that certain bill of sale, dated as of the
Closing Date, between the Sponsor and the Depositor, the remaining Mortgage
Loans are to be transferred by the Sponsor to the Depositor;
WHEREAS, pursuant to that certain Pooling and Servicing
Agreement, dated as of January 1, 2007 (the "Pooling and Servicing Agreement"),
among the Depositor, Saxon Mortgage Services, Inc., as a servicer ("Saxon"),
Countrywide Home Loans Servicing LP, as a servicer (together with Saxon, the
"Servicers"), NC Capital Corporation, as a responsible party ("NC Capital"),
Decision One Mortgage Company, LLC, as a responsible party (together with NC
Capital, the "Responsible Parties" and each a "Responsible Party"), LaSalle Bank
National Association, as a custodian, (the "Custodian") and Deutsche Bank
National Trust Company, as a trustee, (the "Trustee"), Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE1 (the "Trust") shall issue its Mortgage
Pass-Through Certificates, Series 2007-HE1 (the "Certificates"), representing
beneficial ownership interest in a trust, the assets of which include, but are
not limited to, the Mortgage Loans transferred by the Depositor to the Trust
pursuant to the Pooling and Servicing Agreement;
WHEREAS, in connection with the sale of the Mortgage Loans by the
Sponsor and MSSA to the Depositor, the Sponsor shall make various
representations and warranties to the Depositor regarding the Mortgage Loans;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants herein contained, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Defined Terms.
Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement.
Section 2. Representations and Warranties of the Sponsor.
The Sponsor represents and warrants to the Depositor as of the
date hereof that:
(a) No Mortgage Loan is a "High Cost Loan" or "Covered Loan", as
applicable (as such terms are defined in the then current Standard & Poor's
LEVELS(R) Glossary Appendix E).
(b) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
Section 3. Assignment and Assumption of EPD Provision.
(a) The Sponsor hereby assigns, conveys, transfers and sets over
to the Depositor all of the Sponsor's right, title and interest (except as
otherwise set forth in Section 3(b) below) in, to and under the Sponsor's rights
to require any Responsible Party to repurchase a Mortgage Loan as a result of a
scheduled payment of principal and interest not being made during the period of
time specified in the early payment default provision (the "EPD Provision")
specified on Schedule II attached hereto in the related letter agreement listed
on Schedule II attached hereto (each a "Purchase Price and Terms Agreement"),
each between the Sponsor and the applicable Responsible Party, but only to the
extent such provision relates to any Mortgage Loans that are the subject of this
Agreement.
(b) Notwithstanding the foregoing set forth in Section 3(a), the
Sponsor specifically reserves and does not assign to the Depositor any and all
right, title and interest in, to and under the right to receive as part of the
repurchase price for any such Mortgage Loan repurchased pursuant to any EPD
Provision the excess (the "Repurchase Premium") of the Purchase Price Percentage
(as defined in the applicable Purchase Price and Terms Agreement) over 100%
multiplied by the unpaid principal balance of such Mortgage Loan. In the event
any Mortgage Loan is required to be repurchased by the applicable Responsible
Party pursuant to the provisions of the applicable Purchase Price and Terms
Agreement specified in Section 3(a) above, the Depositor shall require the
applicable Responsible Party to repurchase such Mortgage Loan at the Repurchase
Price (as defined in such Purchase Price and Terms Agreement), and the Depositor
shall cause the applicable Responsible Party to pay such Repurchase Premium to
the Sponsor or its designee as instructed by the Sponsor.
Section 4. Remedies for Breach of Representations and Warranties
of the Sponsor; the Repurchase Price.
(a) Within ninety (90) days of the earlier of either discovery by
or notice to the Sponsor of any breach of a representation or warranty set forth
in Section 2 of this Agreement that materially and adversely affects the value
of any Mortgage Loan or the interest of the Trustee or the holders of the
Certificates therein, the Sponsor shall use its best efforts to promptly cure
such breach in all material respects and, if such breach cannot be remedied, the
Sponsor shall repurchase such Mortgage Loan at a repurchase price (the
"Repurchase Price") equal to the sum of: (i) the unpaid principal balance of
such Mortgage Loan as of the date of repurchase, (ii) interest on such unpaid
principal balance of such Mortgage Loan at the mortgage interest rate of such
Mortgage Loan from the last date through which interest has been paid and
distributed to the Trustee to the date of repurchase, (iii) all unreimbursed
Servicing Advances (as defined in the Pooling and Servicing Agreement), (iv) all
costs and expenses incurred by the Trustee arising out of or based upon such
breach, including without limitation, costs and expenses relating to the
Trustee's enforcement of the repurchase obligation of the Sponsor under this
Agreement, and (v) any costs and damages incurred by the Trust in connection
with any violation by such Mortgage Loan of any predatory lending law or abusive
lending law. Any repurchase of a Mortgage Loan pursuant to the foregoing
provisions of this Section 3 shall be accomplished by direct remittance of the
Repurchase Price to the Depositor or its designee in accordance with the
Depositor's instructions.
(b) At the time of repurchase, the Depositor and the Sponsor
shall arrange for the reassignment of the repurchased Mortgage Loan to the
Sponsor and the delivery to the Sponsor of any documents held by the Trustee or
the Custodian of such Mortgage Loan, as the case may be, relating to the
repurchased Mortgage Loan. In the event of a repurchase, the Sponsor shall,
simultaneously with such reassignment, give written notice to the Depositor that
such repurchase has taken place and amend the Mortgage Loan Schedule to reflect
the withdrawal of the repurchased Mortgage Loan from this Agreement.
(c) Any cause of action against the Sponsor relating to or
arising out of the breach of any representations and warranties made in Section
2 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Depositor or notice thereof by the Sponsor to the Depositor, (ii) failure by the
Sponsor to cure such breach, repurchase such Mortgage Loan as specified above,
and (iii) demand upon the Sponsor by the Depositor for compliance with this
Agreement.
(d) It is understood and agreed that the obligation of the
Sponsor set forth in Section 4(a) to repurchase for a Mortgage Loan in breach of
a representation or warranty contained in Section 2 constitutes the sole remedy
of the Depositor or any other person or entity with respect to such breach.
(e) The representations and warranties of the Sponsor set forth
in Section 2 shall inure to the benefit of the Depositor and its successors and
assigns until all amounts payable to the holders of the Certificates under the
Pooling and Servicing Agreement have been paid in full.
Section 5. Obligations of the Sponsor with Respect to Decision
One Mortgage Loans.
Within 90 days of the earlier of discovery by the Sponsor or
receipt of notice by the Sponsor of the breach of a representation and warranty
set forth in Schedule VI to the Pooling and Servicing Agreement (with respect to
the Decision One Mortgage Loans) that (1) materially and adversely affects the
interests of the Certificateholders in any Decision One Mortgage Loan and (2)
has not been cured, repurchased or substituted for by the Decision One in
accordance with the terms of the Pooling and Servicing Agreement, (i) the
Sponsor shall, within the time period permitted therefor under the Pooling and
Servicing Agreement, take such action described in Section 2.03(g) of the
Pooling and Servicing Agreement in respect of such Decision One Mortgage Loan,
as if the Sponsor were Decision One, and (ii) unless such breach is cured, the
Trustee shall promptly deliver to the Sponsor or its designee the related
Mortgage File in accordance with the applicable Servicer's direction in a
Request for Release and, upon the Sponsor's request, shall assign to the Sponsor
all of its rights with respect to Decision One's breach under the Pooling and
Servicing Agreement, which assignment shall be evidenced by a writing prepared
by the Sponsor and executed by the Trustee in favor of the Sponsor. Any
obligation of the Sponsor under this Section 5 shall terminate upon receipt by
the Trustee of a confirmation from each Rating Agency that such termination will
not cause a downgrade, qualification or withdrawal of the rating then assigned
to any Class of Certificates by any Rating Agency.
Section 6. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same Agreement.
Section 7. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO CONFLICTS OF LAWS
PRINCIPLES.
Section 8. Severability of Provisions.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 9. Captions.
The captions in this Agreement are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.
Section 10. Successors and Assigns.
This Agreement shall inure to the benefit of the parties hereto
and their respective successors and assigns. Any entity into which the Sponsor
or the Depositor may be merged or consolidated shall, without the requirement
for any further writing, be deemed the Sponsor or the Depositor, respectively,
hereunder.
Section 11. Amendments
This Agreement may be amended from time to time by the parties
hereto.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:__________________________________
Name:
Title:
XXXXXX XXXXXXX ABS CAPITAL I INC.
By:__________________________________
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Custodian and the Trustee and not attached
to the Pooling and Servicing Agreement)
SCHEDULE II
List of Purchase Price and Terms Agreements and EPD Provisions
Purchase Price and Terms Agreements EPD Provision
------------------------------------------------------- ---------------------------------
1. Purchase Price and Terms Agreement, dated as of Third full paragraph of Section 6
July 18, 2006, between Decision One and the (titled "Purchase Agreements;
Sponsor. Interim Servicing Agreements").
2. Purchase Price and Terms Agreement, dated as of Third full paragraph of Section 6
May 25, 2006, between Decision One and the (titled "Purchase Agreements;
Sponsor. Interim Servicing Agreements").
3. Purchase Price and Terms Agreement, dated as of Third full paragraph of Section 6
May 8, 2006, between NC Capital and the Sponsor. (titled "Purchase Agreement").
4. Purchase Price and Terms Agreement, dated as of Third full paragraph of Section 6
May 24, 2006, between NC Capital and the Sponsor (titled "Purchase Agreement").
5. Purchase Price and Terms Agreement, dated as of Third full paragraph of Section 6
August 25, 2006, between NC Capital and the (titled "Purchase Agreement").
Sponsor.
6. Purchase Price and Terms Agreement, dated as of Third full paragraph of Section 6
July 24, 2006, between NC Capital and the Sponsor. (titled "Purchase Agreement").
EXHIBIT DD
INTEREST RATE CAP AGREEMENT
[Xxxxxx Xxxxxxx Logo]
--------------------------------------------------------------------------------
DATE: January 26, 2007
TO: Deutsche Bank National Trust Company, not individually,
but solely as Trustee for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-HE1, Mortgage Pass-Through Certificates,
Series 2007-HE1
ATTENTION: Trust Administration - MS07H1
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
FROM: New York Derivative Client Services Group
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HR3HZ
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between Xxxxxx Xxxxxxx Capital Services Inc.
("Party A") and Deutsche Bank National Trust Company, not individually, but
solely as Trustee (the "Trustee") under the Pooling and Servicing Agreement,
dated and effective as of January 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as Depositor, Deutsche Bank National Trust Company, as Trustee and
Custodian, Saxon Mortgage Services, Inc., as Servicer, Countrywide Home Loans
Servicing LP, as Servicer, LaSalle Bank National Association, as Custodian, and
NC Capital Corporation and Decision One Mortgage Company, LLC, as Responsible
Parties (the "PSA") for the Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1,
Mortgage Pass-Through Certificates, Series 2007-HE1 ("Party B").
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of January 26, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:........................... With respect to any
Calculation Period, the
notional amount set forth
for such Calculation Period
in Schedule I attached
hereto.
Trade Date:................................ January 24, 2007
Effective Date:............................ January 26, 2007
Termination Date:.......................... December 25, 2007
Fixed Amounts:
Fixed Rate Payer:................. Party B
Fixed Rate Payer Payment Dates:... January 26, 2007
Fixed Amount:..................... None
Floating Amounts:
Floating Rate Payer:.............. Party A
Cap Rate:......................... 7.350%
Floating Rate Payer Payment
Dates:.......................... Early Payment--For each
Calculation Period, the
first Business Day prior to
each Floating Rate Payer
Period End Date.
Floating Rate Payer Period End
Dates:.......................... The 25th calendar day of
each month during the Term
of this Transaction,
commencing February 25,
2007, subject to adjustment
in accordance with the
Business Day Convention.
Floating Rate Option:............. USD-LIBOR-BBA
Floating Amount:.................. To be determined in
accordance with the
following formula:
10 * Floating Rate *
Notional Amount * Floating
Rate Day Count Fraction.
Designated Maturity:.............. One month
Floating Rate Day Count
Fraction:....................... Actual/360
Reset Dates:...................... The first day of each
Calculation Period.
Compounding:...................... Inapplicable
Business Days:............................. New York and Los Angeles
Business Day Convention:................... Following
2. Account Details and Settlement Information:
Payment to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: Xxxxxx Xxxxxxx Capital Services Inc.
Payments to Party B:
Deutsche Bank
ABA No.: 000000000
Account No: 00000000
Acct Name: NYLTD Funds Control - Stars West
Ref: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE1 (cap)
3. Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed by Deutsche Bank
National Trust Company (i) this Confirmation is executed and delivered by
Deutsche Bank National Trust Company not in its individual capacity but
solely as Trustee of the Trust under the PSA in the exercise of the powers
and authority conferred and invested in it as trustee thereunder, (ii)
each of the representations, undertakings and agreements herein made on
behalf of Party B is made and intended not as personal representations of
the Trustee but is made and intended for the purpose of binding only the
Trust, and (iii) under no circumstances shall Deutsche Bank National Trust
Company in its individual capacity be personally liable for the payment of
any indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken under this Confirmation.
4. Modifications to the Agreement. For purposes of this Transaction only, the
Agreement is modified as follows: Part 1(f)(ii), Part 1(h)(A) and Part
5(f) of the Schedule to the ISDA Master Agreement are hereby deleted in
their entirety.
[Xxxxxx Xxxxxxx Logo]
--------------------------------------------------------------------------------
We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By:
----------------------------------------------------
Name:
Title:
Party B, acting through its duly authorized signatory, xxxxxx agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not individually, but solely as Trustee
for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-
HE1, Mortgage Pass-Through Certificates, Series
2007-HE1
By:
----------------------------------------------------
Name:
Title:
[Xxxxxx Xxxxxxx Logo]
--------------------------------------------------------------------------------
SCHEDULE I
Line Calculation Period Notional Amount ($) Multiplier
---- ------------------------------------- ------------------- ----------
1 Effective Date 2/25/2007 125,491,833.33 10
2 2/25/2007 3/25/2007 120,611,379.31 10
3 3/25/2007 4/25/2007 115,895,470.04 10
4 4/25/2007 5/25/2007 111,336,036.66 10
5 5/25/2007 6/25/2007 106,925,618.39 10
6 6/25/2007 7/25/2007 102,657,341.67 10
7 7/25/2007 8/25/2007 98,524,898.45 10
8 8/25/2007 9/25/2007 94,522,523.45 10
9 9/25/2007 10/25/2007 90,644,970.46 10
10 10/25/2007 11/25/2007 86,887,487.50 10
11 11/25/2007 Termination Date 83,246,182.10 10
