EXHIBIT 4
XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer, Securities Administrator and Custodian,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
WMC MORTGAGE CORP.,
Responsible Party,
DECISION ONE MORTGAGE COMPANY, LLC,
Responsible Party,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Custodian
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2007
---------------------------------
XXXXXX XXXXXXX ABS CAPITAL I INC. TRUST 2007-HE5
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-HE5
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Custodians 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, the
Master Servicer and the Trustee..............................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Master Servicer..............................................
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 Master Servicer 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 Master Servicer 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 Custodians.....
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
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's
Obligations..................................................
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................
Section 9.03 Representations and Warranties of the Master Servicer........
Section 9.04 Master Servicer Events of Default............................
Section 9.05 Waiver of Default............................................
Section 9.06 Successor to the Master Servicer.............................
Section 9.07 Compensation of the Master Servicer..........................
Section 9.08 Merger or Consolidation......................................
Section 9.09 Resignation of the Master Servicer...........................
Section 9.10 Assignment or Delegation of Duties by the Master Servicer....
Section 9.11 Limitation on Liability of the Master Servicer...............
Section 9.12 Indemnification; Third Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator...........................
Section 10.02 Certain Matters Affecting the Securities Administrator.......
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans...............................................
Section 10.04 Securities Administrator May Own Certificates................
Section 10.05 Securities Administrator's Fees and Expenses.................
Section 10.06 Eligibility Requirements for Securities Administrator........
Section 10.07 Resignation and Removal of Securities Administrator..........
Section 10.08 Successor Securities Administrator...........................
Section 10.09 Merger or Consolidation of Securities Administrator..........
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator................................................
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................
Section 11.02 Final Distribution on the Certificates.......................
Section 11.03 Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment....................................................
Section 12.02 Recordation of Agreement; Counterparts.......................
Section 12.03 Governing Law................................................
Section 12.04 Intention of Parties.........................................
Section 12.05 Notices......................................................
Section 12.06 Severability of Provisions...................................
Section 12.07 Assignment; Sales; Advance Facilities........................
Section 12.08 Limitation on Rights of Certificateholders...................
Section 12.09 Inspection and Audit Rights..................................
Section 12.10 Certificates Nonassessable and Fully Paid....................
Section 12.11 Rule of Construction.........................................
Section 12.12 Waiver of Jury Trial.........................................
Section 12.13 Opinions of Internal Counsel of WMC..........................
Section 12.14 Rights of the Third Parties..................................
Section 12.15 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 Representations and Warranties of WMC, as to the WMC
Mortgage Loans
Schedule V Representations and Warranties of WMC, as to WMC
Schedule VI Representations and Warranties of Decision One, as to
the Decision One Mortgage Loans
Schedule VII Representations and Warranties of LaSalle, as Custodian
Schedule VIII Representations and Warranties of Countrywide Servicing,
as Servicer
Schedule IX Representations and Warranties of Xxxxx Fargo, as
Custodian
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
Exhibit F Form of Document Certification and Exception Report of
Custodian
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 Annual Certification to be provided to the
Master Servicer
Exhibit N [Reserved]
Exhibit O WMC Purchase Agreement
Exhibit P Decision One Purchase Agreement
Exhibit Q [Reserved]
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 Saxon Standard File Layout - Delinquency Reporting
Exhibit Z Countrywide Servicing Standard File Layout - Delinquency
Reporting
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 April 1, 2007
among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association ("Xxxxx Fargo"), as master servicer (in such capacity, the "Master
Servicer"), securities administrator (in such capacity, the "Securities
Administrator") and a custodian, SAXON MORTGAGE SERVICES, INC., a Texas
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"), WMC MORTGAGE CORP., a California corporation, as a
responsible party ("WMC"), DECISION ONE MORTGAGE COMPANY, LLC, a North Carolina
limited liability company, as a responsible party ("Decision One" and, together
with WMC, the "Responsible Parties"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a
national banking association, as trustee (the "Trustee"), and LASALLE BANK
NATIONAL ASSOCIATION, as a custodian ("LaSalle" and, together with Xxxxx Fargo
in its capacity as a custodian, the "Custodians").
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 Securities Administrator, on behalf of 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.
Initial Pooling-Tier
Pooling-Tier Pooling-Tier REMIC-1 REMIC-1 Principal
REMIC-1 Interest Interest Rate Amount
---------------- -------------------- --------------------
Class PT1-I-1 (1) $ 65,380,565.15
Class PT1-I-2A (2) $ 1,866,176.92
Class PT1-I-2B (3) $ 1,866,176.92
Class PT1-I-3A (2) $ 1,797,009.87
Class PT1-I-3B (3) $ 1,797,009.87
Class PT1-I-4A (2) $ 1,723,437.96
Class PT1-I-4B (3) $ 1,723,437.96
Class PT1-I-5A (2) $ 1,646,699.74
Class PT1-I-5B (3) $ 1,646,699.74
Class PT1-I-6A (2) $ 1,576,185.12
Class PT1-I-6B (3) $ 1,576,185.12
Class PT1-I-7A (2) $ 1,508,710.20
Class PT1-I-7B (3) $ 1,508,710.20
Class PT1-I-8A (2) $ 1,444,143.20
Class PT1-I-8B (3) $ 1,444,143.20
Class PT1-I-9A (2) $ 1,389,099.65
Class PT1-I-9B (3) $ 1,389,099.65
Class PT1-I-10A (2) $ 3,252,177.42
Class PT1-I-10B (3) $ 3,252,177.42
Class PT1-I-11A (2) $ 5,519,474.44
Class PT1-I-11B (3) $ 5,519,474.44
Class PT1-I-12A (2) $ 990,758.76
Class PT1-I-12B (3) $ 990,758.76
Class PT1-I-13A (2) $ 891,419.29
Class PT1-I-13B (3) $ 891,419.29
Class PT1-I-14A (2) $ 853,963.09
Class PT1-I-14B (3) $ 853,963.09
Class PT1-I-15A (2) $ 824,938.10
Class PT1-I-15B (3) $ 824,938.10
Class PT1-I-16A (2) $ 2,741,407.09
Class PT1-I-16B (3) $ 2,741,407.09
Class PT1-I-17A (2) $ 5,063,499.48
Class PT1-I-17B (3) $ 5,063,499.48
Class PT1-I-18A (2) $ 500,031.50
Class PT1-I-18B (3) $ 500,031.50
Class PT1-I-19A (2) $ 419,003.17
Class PT1-I-19B (3) $ 419,003.17
Class PT1-I-20A (2) $ 402,151.35
Class PT1-I-20B (3) $ 402,151.35
Class PT1-I-21A (2) $ 391,055.00
Class PT1-I-21B (3) $ 391,055.00
Class PT1-I-22A (2) $ 1,518,722.68
Class PT1-I-22B (3) $ 1,518,722.68
Class PT1-I-23A (2) $ 2,957,698.66
Class PT1-I-23B (3) $ 2,957,698.66
Class PT1-I-24A (2) $ 220,474.70
Class PT1-I-24B (3) $ 220,474.70
Class PT1-I-25A (2) $ 165,531.52
Class PT1-I-25B (3) $ 165,531.52
Class PT1-I-26A (2) $ 159,618.19
Class PT1-I-26B (3) $ 159,618.19
Class PT1-I-27A (2) $ 155,096.20
Class PT1-I-27B (3) $ 155,096.20
Class PT1-I-28A (2) $ 179,380.99
Class PT1-I-28B (3) $ 179,380.99
Class PT1-I-29A (2) $ 287,150.46
Class PT1-I-29B (3) $ 287,150.46
Class PT1-I-30A (2) $ 142,685.38
Class PT1-I-30B (3) $ 142,685.38
Class PT1-I-31A (2) $ 124,989.57
Class PT1-I-31B (3) $ 124,989.57
Class PT1-I-32A (2) $ 120,598.40
Class PT1-I-32B (3) $ 120,598.40
Class PT1-I-33A (2) $ 117,034.91
Class PT1-I-33B (3) $ 117,034.91
Class PT1-I-34A (2) $ 129,931.95
Class PT1-I-34B (3) $ 129,931.95
Class PT1-I-35A (2) $ 190,447.82
Class PT1-I-35B (3) $ 190,447.82
Class PT1-I-36A (2) $ 106,406.68
Class PT1-I-36B (3) $ 106,406.68
Class PT1-I-37A (2) $ 96,274.91
Class PT1-I-37B (3) $ 96,274.91
Class PT1-I-38A (2) $ 92,933.52
Class PT1-I-38B (3) $ 92,933.52
Class PT1-I-39A (2) $ 89,707.30
Class PT1-I-39B (3) $ 89,707.30
Class PT1-I-40A (2) $ 86,592.32
Class PT1-I-40B (3) $ 86,592.32
Class PT1-I-41A (2) $ 83,584.76
Class PT1-I-41B (3) $ 83,584.76
Class PT1-I-42A (2) $ 80,680.94
Class PT1-I-42B (3) $ 80,680.94
Class PT1-I-43A (2) $ 77,877.32
Class PT1-I-43B (3) $ 77,877.32
Class PT1-I-44A (2) $ 75,170.46
Class PT1-I-44B (3) $ 75,170.46
Class PT1-I-45A (2) $ 73,438.73
Class PT1-I-45B (3) $ 73,438.73
Class PT1-I-46A (2) $ 167,309.65
Class PT1-I-46B (3) $ 167,309.65
Class PT1-I-47A (2) $ 87,706.56
Class PT1-I-47B (3) $ 87,706.56
Class PT1-I-48A (2) $ 59,989.57
Class PT1-I-48B (3) $ 59,989.57
Class PT1-I-49A (2) $ 57,954.73
Class PT1-I-49B (3) $ 57,954.73
Class PT1-I-50A (2) $ 55,986.54
Class PT1-I-50B (3) $ 55,986.54
Class PT1-I-51A (2) $ 54,974.54
Class PT1-I-51B (3) $ 54,974.54
Class PT1-I-52A (2) $ 150,761.53
Class PT1-I-52B (3) $ 150,761.53
Class PT1-I-53A (2) $ 70,804.74
Class PT1-I-53B (3) $ 70,804.74
Class PT1-I-54A (2) $ 43,387.07
Class PT1-I-54B (3) $ 43,387.07
Class PT1-I-55A (2) $ 41,966.73
Class PT1-I-55B (3) $ 41,966.73
Class PT1-I-56A (2) $ 40,591.36
Class PT1-I-56B (3) $ 40,591.36
Class PT1-I-57A (2) $ 39,765.70
Class PT1-I-57B (3) $ 39,765.70
Class PT1-I-58A (2) $ 94,094.82
Class PT1-I-58B (3) $ 94,094.82
Class PT1-I-59A (2) $ 48,329.29
Class PT1-I-59B (3) $ 48,329.29
Class PT1-I-60A (2) $ 32,458.68
Class PT1-I-60B (3) $ 32,458.68
Class PT1-I-61A (2) $ 952,388.04
Class PT1-I-61B (3) $ 952,388.04
Class PT1-II-1 (4) $ 438,878,057.90
Class PT1-II-2A (5) $ 12,527,026.96
Class PT1-II-2B (6) $ 12,527,026.96
Class PT1-II-3A (5) $ 12,062,731.47
Class PT1-II-3B (6) $ 12,062,731.47
Class PT1-II-4A (5) $ 11,568,867.65
Class PT1-II-4B (6) $ 11,568,867.65
Class PT1-II-5A (5) $ 11,053,749.44
Class PT1-II-5B (6) $ 11,053,749.44
Class PT1-II-6A (5) $ 10,580,408.16
Class PT1-II-6B (6) $ 10,580,408.16
Class PT1-II-7A (5) $ 10,127,471.39
Class PT1-II-7B (6) $ 10,127,471.39
Class PT1-II-8A (5) $ 9,694,054.52
Class PT1-II-8B (6) $ 9,694,054.52
Class PT1-II-9A (5) $ 9,324,565.44
Class PT1-II-9B (6) $ 9,324,565.44
Class PT1-II-10A (5) $ 21,830,788.80
Class PT1-II-10B (6) $ 21,830,788.80
Class PT1-II-11A (5) $ 37,050,402.02
Class PT1-II-11B (6) $ 37,050,402.02
Class PT1-II-12A (5) $ 6,650,635.07
Class PT1-II-12B (6) $ 6,650,635.07
Class PT1-II-13A (5) $ 5,983,802.19
Class PT1-II-13B (6) $ 5,983,802.19
Class PT1-II-14A (5) $ 5,732,371.09
Class PT1-II-14B (6) $ 5,732,371.09
Class PT1-II-15A (5) $ 5,537,535.95
Class PT1-II-15B (6) $ 5,537,535.95
Class PT1-II-16A (5) $ 18,402,156.95
Class PT1-II-16B (6) $ 18,402,156.95
Class PT1-II-17A (5) $ 33,989,593.25
Class PT1-II-17B (6) $ 33,989,593.25
Class PT1-II-18A (5) $ 3,356,545.72
Class PT1-II-18B (6) $ 3,356,545.72
Class PT1-II-19A (5) $ 2,812,629.36
Class PT1-II-19B (6) $ 2,812,629.36
Class PT1-II-20A (5) $ 2,699,508.68
Class PT1-II-20B (6) $ 2,699,508.68
Class PT1-II-21A (5) $ 2,625,022.56
Class PT1-II-21B (6) $ 2,625,022.56
Class PT1-II-22A (5) $ 10,194,681.83
Class PT1-II-22B (6) $ 10,194,681.83
Class PT1-II-23A (5) $ 19,854,050.51
Class PT1-II-23B (6) $ 19,854,050.51
Class PT1-II-24A (5) $ 1,479,973.59
Class PT1-II-24B (6) $ 1,479,973.59
Class PT1-II-25A (5) $ 1,111,158.22
Class PT1-II-25B (6) $ 1,111,158.22
Class PT1-II-26A (5) $ 1,071,464.02
Class PT1-II-26B (6) $ 1,071,464.02
Class PT1-II-27A (5) $ 1,041,109.39
Class PT1-II-27B (6) $ 1,041,109.39
Class PT1-II-28A (5) $ 1,204,125.08
Class PT1-II-28B (6) $ 1,204,125.08
Class PT1-II-29A (5) $ 1,927,545.83
Class PT1-II-29B (6) $ 1,927,545.83
Class PT1-II-30A (5) $ 957,799.67
Class PT1-II-30B (6) $ 957,799.67
Class PT1-II-31A (5) $ 839,013.56
Class PT1-II-31B (6) $ 839,013.56
Class PT1-II-32A (5) $ 809,537.10
Class PT1-II-32B (6) $ 809,537.10
Class PT1-II-33A (5) $ 785,616.53
Class PT1-II-33B (6) $ 785,616.53
Class PT1-II-34A (5) $ 872,190.13
Class PT1-II-34B (6) $ 872,190.13
Class PT1-II-35A (5) $ 1,278,413.09
Class PT1-II-35B (6) $ 1,278,413.09
Class PT1-II-36A (5) $ 714,272.73
Class PT1-II-36B (6) $ 714,272.73
Class PT1-II-37A (5) $ 646,261.55
Class PT1-II-37B (6) $ 646,261.55
Class PT1-II-38A (5) $ 623,831.92
Class PT1-II-38B (6) $ 623,831.92
Class PT1-II-39A (5) $ 602,175.40
Class PT1-II-39B (6) $ 602,175.40
Class PT1-II-40A (5) $ 581,265.53
Class PT1-II-40B (6) $ 581,265.53
Class PT1-II-41A (5) $ 561,076.77
Class PT1-II-41B (6) $ 561,076.77
Class PT1-II-42A (5) $ 541,584.42
Class PT1-II-42B (6) $ 541,584.42
Class PT1-II-43A (5) $ 522,764.64
Class PT1-II-43B (6) $ 522,764.64
Class PT1-II-44A (5) $ 504,594.38
Class PT1-II-44B (6) $ 504,594.38
Class PT1-II-45A (5) $ 492,969.81
Class PT1-II-45B (6) $ 492,969.81
Class PT1-II-46A (5) $ 1,123,094.25
Class PT1-II-46B (6) $ 1,123,094.25
Class PT1-II-47A (5) $ 588,745.08
Class PT1-II-47B (6) $ 588,745.08
Class PT1-II-48A (5) $ 402,690.09
Class PT1-II-48B (6) $ 402,690.09
Class PT1-II-49A (5) $ 389,030.90
Class PT1-II-49B (6) $ 389,030.90
Class PT1-II-50A (5) $ 375,819.05
Class PT1-II-50B (6) $ 375,819.05
Class PT1-II-51A (5) $ 369,025.84
Class PT1-II-51B (6) $ 369,025.84
Class PT1-II-52A (5) $ 1,012,012.14
Class PT1-II-52B (6) $ 1,012,012.14
Class PT1-II-53A (5) $ 475,288.77
Class PT1-II-53B (6) $ 475,288.77
Class PT1-II-54A (5) $ 291,243.02
Class PT1-II-54B (6) $ 291,243.02
Class PT1-II-55A (5) $ 281,708.74
Class PT1-II-55B (6) $ 281,708.74
Class PT1-II-56A (5) $ 272,476.34
Class PT1-II-56B (6) $ 272,476.34
Class PT1-II-57A (5) $ 266,933.98
Class PT1-II-57B (6) $ 266,933.98
Class PT1-II-58A (5) $ 631,627.33
Class PT1-II-58B (6) $ 631,627.33
Class PT1-II-59A (5) $ 324,418.49
Class PT1-II-59B (6) $ 324,418.49
Class PT1-II-60A (5) $ 217,884.35
Class PT1-II-60B (6) $ 217,884.35
Class PT1-II-61A (5) $ 6,393,065.15
Class PT1-II-61B (6) $ 6,393,065.15
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 9.60%.
(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) 9.60%.
(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 9.60%.
(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) 9.60%.
(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 Corresponding
Pooling-Tier Pooling-Tier Corresponding Pooling-Tier Scheduled
Pooling-Tier REMIC-2 REMIC-2 REMIC-2 Initial Pooling-Tier REMIC-1 Regular Crossover
Interest Interest Rate Principal Amount REMIC-2 IO Interest Interest Distribution Date
-------------------- ------------- ---------------- ------------------- ---------------- -----------------
Class PT2-I-1 (1) $ 65,380,565.15 N/A N/A N/A
Class PT2-I-2A (2) $ 1,866,176.92 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 1,866,176.92 N/A N/A N/A
Class PT2-I-3A (2) $ 1,797,009.87 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 1,797,009.87 N/A N/A N/A
Class PT2-I-4A (2) $ 1,723,437.96 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 1,723,437.96 N/A N/A N/A
Class PT2-I-5A (2) $ 1,646,699.74 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 1,646,699.74 N/A N/A N/A
Class PT2-I-6A (2) $ 1,576,185.12 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 1,576,185.12 N/A N/A N/A
Class PT2-I-7A (2) $ 1,508,710.20 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 1,508,710.20 N/A N/A N/A
Class PT2-I-8A (2) $ 1,444,143.20 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 1,444,143.20 N/A N/A N/A
Class PT2-I-9A (2) $ 1,389,099.65 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 1,389,099.65 N/A N/A N/A
Class PT2-I-10A (2) $ 3,252,177.42 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 3,252,177.42 N/A N/A N/A
Class PT2-I-11A (2) $ 5,519,474.44 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 5,519,474.44 N/A N/A N/A
Class PT2-I-12A (2) $ 990,758.76 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 990,758.76 N/A N/A N/A
Class PT2-I-13A (2) $ 891,419.29 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 891,419.29 N/A N/A N/A
Class PT2-I-14A (2) $ 853,963.09 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 853,963.09 N/A N/A N/A
Class PT2-I-15A (2) $ 824,938.10 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 824,938.10 N/A N/A N/A
Class PT2-I-16A (2) $ 2,741,407.09 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 2,741,407.09 N/A N/A N/A
Class PT2-I-17A (2) $ 5,063,499.48 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 5,063,499.48 N/A N/A N/A
Class PT2-I-18A (2) $ 500,031.50 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 500,031.50 N/A N/A N/A
Class PT2-I-19A (2) $ 419,003.17 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 419,003.17 N/A N/A N/A
Class PT2-I-20A (2) $ 402,151.35 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 402,151.35 N/A N/A N/A
Class PT2-I-21A (2) $ 391,055.00 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 391,055.00 N/A N/A N/A
Class PT2-I-22A (2) $ 1,518,722.68 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 1,518,722.68 N/A N/A N/A
Class PT2-I-23A (2) $ 2,957,698.66 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 2,957,698.66 N/A N/A N/A
Class PT2-I-24A (2) $ 220,474.70 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 220,474.70 N/A N/A N/A
Class PT2-I-25A (2) $ 165,531.52 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 165,531.52 N/A N/A N/A
Class PT2-I-26A (2) $ 159,618.19 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 159,618.19 N/A N/A N/A
Class PT2-I-27A (2) $ 155,096.20 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 155,096.20 N/A N/A N/A
Class PT2-I-28A (2) $ 179,380.99 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 179,380.99 N/A N/A N/A
Class PT2-I-29A (2) $ 287,150.46 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 287,150.46 N/A N/A N/A
Class PT2-I-30A (2) $ 142,685.38 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 142,685.38 N/A N/A N/A
Class PT2-I-31A (2) $ 124,989.57 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 124,989.57 N/A N/A N/A
Class PT2-I-32A (2) $ 120,598.40 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 120,598.40 N/A N/A N/A
Class PT2-I-33A (2) $ 117,034.91 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 117,034.91 N/A N/A N/A
Class PT2-I-34A (2) $ 129,931.95 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 129,931.95 N/A N/A N/A
Class PT2-I-35A (2) $ 190,447.82 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 190,447.82 N/A N/A N/A
Class PT2-I-36A (2) $ 106,406.68 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 106,406.68 N/A N/A N/A
Class PT2-I-37A (2) $ 96,274.91 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 96,274.91 N/A N/A N/A
Class PT2-I-38A (2) $ 92,933.52 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 92,933.52 N/A N/A N/A
Class PT2-I-39A (2) $ 89,707.30 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 89,707.30 N/A N/A N/A
Class PT2-I-40A (2) $ 86,592.32 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 86,592.32 N/A N/A N/A
Class PT2-I-41A (2) $ 83,584.76 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 83,584.76 N/A N/A N/A
Class PT2-I-42A (2) $ 80,680.94 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 80,680.94 N/A N/A N/A
Class PT2-I-43A (2) $ 77,877.32 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 77,877.32 N/A N/A N/A
Class PT2-I-44A (2) $ 75,170.46 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 75,170.46 N/A N/A N/A
Class PT2-I-45A (2) $ 73,438.73 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 73,438.73 N/A N/A N/A
Class PT2-I-46A (2) $ 167,309.65 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 167,309.65 N/A N/A N/A
Class PT2-I-47A (2) $ 87,706.56 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 87,706.56 N/A N/A N/A
Class PT2-I-48A (2) $ 59,989.57 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 59,989.57 N/A N/A N/A
Class PT2-I-49A (2) $ 57,954.73 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 57,954.73 N/A N/A N/A
Class PT2-I-50A (2) $ 55,986.54 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 55,986.54 N/A N/A N/A
Class PT2-I-51A (2) $ 54,974.54 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 54,974.54 N/A N/A N/A
Class PT2-I-52A (2) $ 150,761.53 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 150,761.53 N/A N/A N/A
Class PT2-I-53A (2) $ 70,804.74 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 70,804.74 N/A N/A N/A
Class PT2-I-54A (2) $ 43,387.07 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 43,387.07 N/A N/A N/A
Class PT2-I-55A (2) $ 41,966.73 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 41,966.73 N/A N/A N/A
Class PT2-I-56A (2) $ 40,591.36 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56B (3) $ 40,591.36 N/A N/A N/A
Class PT2-I-57A (2) $ 39,765.70 Class PT2-I-IO-57 N/A N/A
Class PT2-I-57B (3) $ 39,765.70 N/A N/A N/A
Class PT2-I-58A (2) $ 94,094.82 Class PT2-I-IO-58 N/A N/A
Class PT2-I-58B (3) $ 94,094.82 N/A N/A N/A
Class PT2-I-59A (2) $ 48,329.29 Class PT2-I-IO-59 N/A N/A
Class PT2-I-59B (3) $ 48,329.29 N/A N/A N/A
Class PT2-I-60A (2) $ 32,458.68 Class PT2-I-IO-60 N/A N/A
Class PT2-I-60B (3) $ 32,458.68 N/A N/A N/A
Class PT2-I-61A (2) $ 952,388.04 Class PT2-I-IO-61 N/A N/A
Class PT2-I-61B (3) $ 952,388.04 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A May 2007
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A April 2008
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A May 2008
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A June 2008
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A July 2008
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A August 2008
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A September 2008
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A October 2008
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A November 2008
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A December 2008
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A January 2009
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A February 2009
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A March 2009
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A April 2009
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A May 2009
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A June 2009
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A July 2009
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A August 2009
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A September 2009
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A October 2009
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A November 2009
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A December 2009
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A January 2010
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A February 2010
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A March 2010
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A April 2010
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A May 2010
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A June 2010
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A July 2010
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A August 2010
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A September 2010
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A October 2010
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A November 2010
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A December 2010
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A January 2011
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A February 2011
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A March 2011
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A April 2011
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A May 2011
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A June 2011
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A July 2011
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A August 2011
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A September 2011
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A October 2011
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A November 2011
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A December 2011
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A January 2012
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A February 2012
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A March 2012
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A April 2012
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A May 2012
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A June 2012
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A July 2012
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A August 2012
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A September 2012
Class PT2-I-IO-57 (4) (4) N/A Class PT1-I-57A October 2012
Class PT2-I-IO-58 (4) (4) N/A Class PT1-I-58A November 2012
Class PT2-I-IO-59 (4) (4) N/A Class PT1-I-59A December 2012
Class PT2-I-IO-60 (4) (4) N/A Class PT1-I-60A January 2013
Class PT2-I-IO-61 (4) (4) N/A Class PT1-I-61A February 2013
Class PT2-II-1 (5) $ 438,878,057.90 N/A N/A N/A
Class PT2-II-2A (6) $ 12,527,026.96 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 12,527,026.96 N/A N/A N/A
Class PT2-II-3A (6) $ 12,062,731.47 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 12,062,731.47 N/A N/A N/A
Class PT2-II-4A (6) $ 11,568,867.65 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 11,568,867.65 N/A N/A N/A
Class PT2-II-5A (6) $ 11,053,749.44 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 11,053,749.44 N/A N/A N/A
Class PT2-II-6A (6) $ 10,580,408.16 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 10,580,408.16 N/A N/A N/A
Class PT2-II-7A (6) $ 10,127,471.39 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 10,127,471.39 N/A N/A N/A
Class PT2-II-8A (6) $ 9,694,054.52 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 9,694,054.52 N/A N/A N/A
Class PT2-II-9A (6) $ 9,324,565.44 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 9,324,565.44 N/A N/A N/A
Class PT2-II-10A (6) $ 21,830,788.80 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 21,830,788.80 N/A N/A N/A
Class PT2-II-11A (6) $ 37,050,402.02 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 37,050,402.02 N/A N/A N/A
Class PT2-II-12A (6) $ 6,650,635.07 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 6,650,635.07 N/A N/A N/A
Class PT2-II-13A (6) $ 5,983,802.19 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 5,983,802.19 N/A N/A N/A
Class PT2-II-14A (6) $ 5,732,371.09 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 5,732,371.09 N/A N/A N/A
Class PT2-II-15A (6) $ 5,537,535.95 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 5,537,535.95 N/A N/A N/A
Class PT2-II-16A (6) $ 18,402,156.95 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 18,402,156.95 N/A N/A N/A
Class PT2-II-17A (6) $ 33,989,593.25 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 33,989,593.25 N/A N/A N/A
Class PT2-II-18A (6) $ 3,356,545.72 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 3,356,545.72 N/A N/A N/A
Class PT2-II-19A (6) $ 2,812,629.36 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 2,812,629.36 N/A N/A N/A
Class PT2-II-20A (6) $ 2,699,508.68 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 2,699,508.68 N/A N/A N/A
Class PT2-II-21A (6) $ 2,625,022.56 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 2,625,022.56 N/A N/A N/A
Class PT2-II-22A (6) $ 10,194,681.83 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 10,194,681.83 N/A N/A N/A
Class PT2-II-23A (6) $ 19,854,050.51 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 19,854,050.51 N/A N/A N/A
Class PT2-II-24A (6) $ 1,479,973.59 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 1,479,973.59 N/A N/A N/A
Class PT2-II-25A (6) $ 1,111,158.22 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 1,111,158.22 N/A N/A N/A
Class PT2-II-26A (6) $ 1,071,464.02 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 1,071,464.02 N/A N/A N/A
Class PT2-II-27A (6) $ 1,041,109.39 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 1,041,109.39 N/A N/A N/A
Class PT2-II-28A (6) $ 1,204,125.08 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 1,204,125.08 N/A N/A N/A
Class PT2-II-29A (6) $ 1,927,545.83 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 1,927,545.83 N/A N/A N/A
Class PT2-II-30A (6) $ 957,799.67 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 957,799.67 N/A N/A N/A
Class PT2-II-31A (6) $ 839,013.56 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 839,013.56 N/A N/A N/A
Class PT2-II-32A (6) $ 809,537.10 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 809,537.10 N/A N/A N/A
Class PT2-II-33A (6) $ 785,616.53 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 785,616.53 N/A N/A N/A
Class PT2-II-34A (6) $ 872,190.13 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 872,190.13 N/A N/A N/A
Class PT2-II-35A (6) $ 1,278,413.09 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 1,278,413.09 N/A N/A N/A
Class PT2-II-36A (6) $ 714,272.73 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 714,272.73 N/A N/A N/A
Class PT2-II-37A (6) $ 646,261.55 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 646,261.55 N/A N/A N/A
Class PT2-II-38A (6) $ 623,831.92 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 623,831.92 N/A N/A N/A
Class PT2-II-39A (6) $ 602,175.40 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 602,175.40 N/A N/A N/A
Class PT2-II-40A (6) $ 581,265.53 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 581,265.53 N/A N/A N/A
Class PT2-II-41A (6) $ 561,076.77 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 561,076.77 N/A N/A N/A
Class PT2-II-42A (6) $ 541,584.42 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 541,584.42 N/A N/A N/A
Class PT2-II-43A (6) $ 522,764.64 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 522,764.64 N/A N/A N/A
Class PT2-II-44A (6) $ 504,594.38 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 504,594.38 N/A N/A N/A
Class PT2-II-45A (6) $ 492,969.81 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 492,969.81 N/A N/A N/A
Class PT2-II-46A (6) $ 1,123,094.25 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 1,123,094.25 N/A N/A N/A
Class PT2-II-47A (6) $ 588,745.08 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 588,745.08 N/A N/A N/A
Class PT2-II-48A (6) $ 402,690.09 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 402,690.09 N/A N/A N/A
Class PT2-II-49A (6) $ 389,030.90 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 389,030.90 N/A N/A N/A
Class PT2-II-50A (6) $ 375,819.05 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 375,819.05 N/A N/A N/A
Class PT2-II-51A (6) $ 369,025.84 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 369,025.84 N/A N/A N/A
Class PT2-II-52A (6) $ 1,012,012.14 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 1,012,012.14 N/A N/A N/A
Class PT2-II-53A (6) $ 475,288.77 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 475,288.77 N/A N/A N/A
Class PT2-II-54A (6) $ 291,243.02 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 291,243.02 N/A N/A N/A
Class PT2-II-55A (6) $ 281,708.74 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 281,708.74 N/A N/A N/A
Class PT2-II-56A (6) $ 272,476.34 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $ 272,476.34 N/A N/A N/A
Class PT2-II-57A (6) $ 266,933.98 Class PT2-II-IO-57 N/A N/A
Class PT2-II-57B (7) $ 266,933.98 N/A N/A N/A
Class PT2-II-58A (6) $ 631,627.33 Class PT2-II-IO-58 N/A N/A
Class PT2-II-58B (7) $ 631,627.33 N/A N/A N/A
Class PT2-II-59A (6) $ 324,418.49 Class PT2-II-IO-59 N/A N/A
Class PT2-II-59B (7) $ 324,418.49 N/A N/A N/A
Class PT2-II-60A (6) $ 217,884.35 Class PT2-II-IO-60 N/A N/A
Class PT2-II-60B (7) $ 217,884.35 N/A N/A N/A
Class PT2-II-61A (6) $ 6,393,065.15 Class PT2-II-IO-61 N/A N/A
Class PT2-II-61B (7) $ 6,393,065.15 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A May 2007
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A April 2008
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A May 2008
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A June 2008
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A July 2008
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A August 2008
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A September 2008
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A October 2008
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A November 2008
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A December 2008
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A January 2009
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A February 2009
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A March 2009
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A April 2009
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A May 2009
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A June 2009
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A July 2009
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A August 2009
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A September 2009
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A October 2009
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A November 2009
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A December 2009
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A January 2010
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A February 2010
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A March 2010
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A April 2010
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A May 2010
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A June 2010
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A July 2010
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A August 2010
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A September 2010
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A October 2010
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A November 2010
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A December 2010
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A January 2011
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A February 2011
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A March 2011
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A April 2011
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A May 2011
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A June 2011
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A July 2011
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A August 2011
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A September 2011
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A October 2011
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A November 2011
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A December 2011
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A January 2012
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A February 2012
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A March 2012
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A April 2012
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A May 2012
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A June 2012
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A July 2012
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A August 2012
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A September 2012
Class PT2-II-IO-57 (4) (4) N/A Class PT1-II-57A October 2012
Class PT2-II-IO-58 (4) (4) N/A Class PT1-II-58A November 2012
Class PT2-II-IO-59 (4) (4) N/A Class PT1-II-59A December 2012
Class PT2-II-IO-60 (4) (4) N/A Class PT1-II-60A January 2013
Class PT2-II-IO-61 (4) (4) N/A Class PT1-II-61A February 2013
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 (which, for the avoidance of doubt, shall not include any
Distribution Date prior to the Distribution Date in April 2008), 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 Distribution
Date in March 2008, 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) the Pooling Tier REMIC-1
Interest Rate for the Corresponding Pooling-Tier REMIC-1 Regular Interest.
From and including the Distribution Date in April 2008 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 Initial Lower-Tier Upper-Tier REMIC
REMIC Interest 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-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 N/A
Balance of Group I Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated Principal N/A
Balance 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-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 Upper-Tier Initial Principal Corresponding Class
REMIC Interest Interest Rate Upper-Tier Amount of Certificates
-------------- ------------- ----------------- -------------------
Class A-1 (1) $119,919,000 Class A-1
Class A-2a (2) $408,820,000 Class A-2a
Class A-2b (2) $122,420,000 Class A-2b
Class A-2c (2) $169,910,000 Class A-2c
Class A-2d (2) $103,826,000 Class A-2d
Class M-1 (3) $ 40,290,000 Class M-1
Class M-2 (3) $ 36,735,000 Class M-2
Class M-3 (3) $ 23,108,000 Class M-3
Class M-4 (3) $ 20,145,000 Class M-4
Class M-5 (3) $ 19,553,000 Class M-5
Class M-6 (3) $ 18,368,000 Class M-6
Class B-1 (3) $ 17,775,000 Class B-1
Class B-2 (3) $ 16,590,000 Class B-2
Class B-3 (3) $ 14,813,000 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 $52,735,113.44
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(10) (1) $119,919,000
Class A-2a(10) (2) $408,820,000
Class A-2b(10) (3) $122,420,000
Class A-2c(10) (4) $169,910,000
Class A-2d(10) (5) $103,826,000
Class M-1(10) (6) $ 40,290,000
Class M-2(10) (6) $ 36,735,000
Class M-3(10) (6) $ 23,108,000
Class M-4(10) (6) $ 20,145,000
Class M-5(10) (6) $ 19,553,000
Class M-6(10) (6) $ 18,368,000
Class B-1(10) (6) $ 17,775,000
Class B-2(10) (6) $ 16,590,000
Class B-3(10) (6) $ 14,813,000
Class X (7) $ 0(7)
Class R (8) $ 0(8)
Class RX (9) (9)
-----------------
(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-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.
(3) 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.
(4) 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.
(5) 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.
(6) 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.
(7) 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
Securities Administrator 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.
(8) The Class R Certificates do not have an interest rate or a principal
balance.
(9) The Class RX Certificates do not have an interest rate or a principal
balance.
(10) 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 Securities Administrator 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-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 12.07.
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 12.07.
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.
Agent: With respect to the Sponsor, the Depositor or any Affiliate
of either of them, a Person that acts for and on behalf of such Person.
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 Securities Administrator 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 Securities Administrator (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 11.01; 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 Master Servicer, the Securities Administrator,
the Custodians 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
California, Delaware, Florida, Maryland, Minnesota, New Jersey, New York, North
Carolina, Utah or Texas, (b) a State in which any Servicer's servicing
operations are located, or (c) the State in which the Securities Administrator'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
Securities Administrator 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 Sponsor, the Depositor or any Affiliate or Agent of any of them
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 the Sponsor (together with its Affiliates
and Agents) or the Depositor (together with its Affiliates and Agents) 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 Securities
Administrator is entitled to rely conclusively on a certification of the
Sponsor, the Depositor or any such Agent or Affiliate in determining which
Certificates are registered in the name of an Agent or Affiliate of the Sponsor
or 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) 56.10% 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 $5,925,036.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
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) 85.80% 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 $5,925,036.
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) 88.60% 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
$5,925,036.
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) 91.10% 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 $5,925,036.
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) 62.90%
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 $5,925,036.
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) 69.10% 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
$5,925,036.
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) 73.00% 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 $5,925,036.
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) 76.40% 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
$5,925,036.
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) 79.70% 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 $5,925,036.
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) 82.80% 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
$5,925,036.
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: April 26, 2007.
Closing Date Deposit Amount: $1,272.03 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $4.70 of the Closing Date Deposit Amount shall be attributable to
the Group I Mortgage Loans and $1,267.33 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 (excluding any Principal Payments in Full
made upon liquidation of a Mortgage Loan) 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: With respect to the Securities
Administrator, the principal office of the Securities Administrator at 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client Manager MSAC
2007-HE5 (or, for the purposes of the registration of transfers or exchanges of
Certificates, as set forth in Section 5.06), or such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders. 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-MS07H5, facsimile no. (714)
247-6329, 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-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 WMC Mortgage Loans
purchased by the Sponsor pursuant to the WMC Purchase Agreement for which
Countrywide Servicing is identified as the Servicer on the Mortgage Loan
Schedule and 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.
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
------------------------------ ----------------------------------------------
May 2009 through April 2010 1.600% for the first month, plus an additional
1/12th of 1.950% for each month thereafter
(e.g., 2.575% in November 2009)
May 2010 through April 2011 3.550% for the first month, plus an additional
1/12th of 1.950% for each month thereafter
(e.g., 4.525% in November 2010)
May 2011 through April 2012 5.500% for the first month, plus an additional
1/12th of 1.600% for each month thereafter
(e.g., 6.300% in November 2011)
May 2012 through April 2013 7.100% for the first month, plus an additional
1/12th of 0.850% for each month thereafter
(e.g., 7.525% in November 2012)
May 2013 and thereafter 7.950%
Custodial File: With respect to each Mortgage Loan, the file -
retained by the applicable Custodian, consisting of items (a) - (h) as listed on
Exhibit K hereto.
Custodian: With respect to the WMC Mortgage Loans, Xxxxx Fargo,
and 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 each Custodian is entitled to receive, pursuant
to the fee schedule related to the WMC Mortgage Loans or the Decision One
Mortgage Loans, as applicable, to which the Depositor and the applicable
Custodian have previously agreed, for custodial services rendered with respect
to the WMC Mortgage Loans or the Decision One Mortgage Loans, as applicable,
during the related Due Period. Each Custodian shall inform the Securities
Administrator of its Custodian Fee on or prior to the related Determination Date
pursuant to Section 3.07(h). The Custodian Fee shall be first received by the
Master Servicer and the Master Servicer shall then pay the Custodians the
Custodian Fee to which they are entitled.
Custodian Fee Rate: As to any Distribution Date, the applicable
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 May 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: April 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 36.44% 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 43.12% 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 Securities Administrator, 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 Moody's, "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 Securities Administrator pursuant to Section 3.07(d) in the
name of the Securities Administrator for the benefit of the Certificateholders
and designated "Xxxxx Fargo Bank, National Association in trust for registered
Holders of Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5 Mortgage
Pass-Through Certificates, Series 2007-HE5." 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 May
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
Securities Administrator. 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 Moody's 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 Securities Administrator) (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.
ERISA-Qualifying 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 Securities Administrator pursuant to Sections 3.07(b) and
3.07(c) in the name of the Securities Administrator for the benefit of the
Regular Certificateholders and designated "Xxxxx Fargo Bank, National
Association, in trust for registered Holders of Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-HE5, Mortgage Pass-Through Certificates, Series 2007-HE5." 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 Master Servicer Fee Rate and the
Custodian Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Master Servicer 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 Mae: 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
March 2037.
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 12.05(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-HE5, or such other address as Fitch may
hereafter furnish to the Depositor, the Securities Administrator, the Trustee
and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Xxxxxxx 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 1972, 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-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 Securities Administrator (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 Securities
Administrator (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 Custodians and the Master Servicer, 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 Securities Administrator 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 Reuters Page LIBOR01 as of 11:00 a.m.
(London time) on such date; provided that if such rate does not appear on
Reuters Page LIBOR01, 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 Securities Administrator 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 Securities
Administrator (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 Securities
Administrator 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 Master Servicer 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-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.
Master Servicer: Xxxxx Fargo, and if a successor master servicer is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the related Master Servicing
Fee Rate on the 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 (or as of the Closing Date in the case of the first Distribution Date)
or, in the event of any payment of interest which accompanies a Principal
Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.
Master Servicing Fee Rate: With respect to any Mortgage Loan, a per
annum rate equal to 0.01%.
Master Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and master servicing of
the Mortgage Loans.
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 12.05(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
Securities Administrator, 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 Master Servicer 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. The Master Servicer, upon request, shall provide a copy of the
Mortgage Loan Schedule, and any amendments, supplements or modifications
thereto, to the Trustee and the Custodians promptly upon receipt of such
request.
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.
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 Scheduled 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.
NMWHFIT: A "Non-Mortgage Widely Held Fixed Investment Trust" as that
term is defined in Treasury Regulations section 1.671-5(b)(12) or successor
provisions.
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 11.02 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 Master Servicer 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 the Securities Administrator, as applicable (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 Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities Administrator
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, 0.2150%; Class A-2a Certificates, 0.1100%;
Class A-2b Certificates, 0.1800%; Class A-2c Certificates, 0.2500%; Class A-2d
Certificates, 0.3400%; Class M-1 Certificates, 0.4200%; Class M-2 Certificates,
0.4700%; Class M-3 Certificates, 0.6500%; Class M-4 Certificates, 1.1500%; Class
M-5 Certificates, 1.5000%; Class M-6 Certificates, 1.9000%; Class B-1
Certificates, 2.0000%; Class B-2 Certificates, 2.0000%; and Class B-3
Certificates, 2.0000%. On the first Distribution Date after the Optional
Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.4300%; Class A-2a Certificates, 0.2200%; Class A-2b
Certificates, 0.3600%; Class A-2c Certificates, 0.5000%; Class A-2d
Certificates, 0.6800%; Class M-1 Certificates, 0.6300%; Class M-2 Certificates,
0.7050%; Class M-3 Certificates, 0.9750%; Class M-4 Certificates, 1.7250%; Class
M-5 Certificates, 2.2500%; Class M-6 Certificates, 2.8500%; Class B-1
Certificates, 3.0000%; Class B-2 Certificates, 3.0000%; and Class B-3
Certificates, 3.0000%.
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 Securities Administrator 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 Moody's, "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 Securities Administrator or an
Affiliate thereof, that have been rated "Aaa" by Moody's, "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 Securities
Administrator, 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 7721 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Xxxxxxx Mac, a majority
of its board of directors is not selected by such government unit.
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 the 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
May 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 11.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated April 24,
2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the WMC Purchase Agreement and
the Decision One 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 Securities
Administrator. 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 12.05(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 Securities
Administrator, 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, 72 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 April 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
Securities Administrator to the date of repurchase, (iii) all unreimbursed
Servicing Advances, (iv) all costs and expenses incurred by the Master Servicer
or the Trustee, as the case may be, arising out of or based upon such breach,
including without limitation, costs and expenses relating to the Master
Servicer's or 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(p) in this Agreement.
Request for Release: The Request for Release submitted by the
applicable Servicer to the applicable Custodian, substantially in the form of
Exhibit J.
Reuters Page LIBOR01: The display page currently so designated on
the Reuters 3000 Xtra Service (or such other page as may replace that page on
that service or any successor service for the purpose of displaying comparable
rates or prices).
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator, the Master Servicer, 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, the Securities
Administrator or the Master Servicer 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: WMC 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.
Securities Administrator: Xxxxx Fargo Bank, National Association,
and its successors in interest, if any, and, if a successor securities
administrator is appointed hereunder, such successor.
Securities Administrator 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.
Securities Administrator Information: As defined in Section 8.12(d).
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, 43.90%.
Servicer: Countrywide Servicing or Saxon, and if a successor
Servicer 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 and liquidation of any REO Property
(including, with respect to Saxon, reasonable fees paid to any independent
contractor in connection therewith) 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 applicable
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 Master Servicer by such Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Servicing Transfer Date: With respect to each Mortgage Loan, the
date on which servicing of such Mortgage Loan was transferred to the applicable
Servicer (as set forth in the Mortgage Loan Schedule).
Significant Change to a Permitted Activity: With respect to any
amendment or other instrument entered into pursuant to Section 12.01, a change
to the activities of the Trust that would significantly change its permitted
activities and thus cause the Trust to cease to be a "qualifying special purpose
entity" under accounting principles generally accepted in the United States.
This definition shall be interpreted in a manner consistent with the
requirements of Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, or any successor to that accounting standard, and any other
relevant authoritative accounting literature, as such requirements are
applicable from time to time.
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 4.45% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 8.90% 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 12.05(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-HE5, or such other address as Standard & Poor's may hereafter furnish
to the Depositor, the Securities Administrator, 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 Securities Administrator 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 May 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 Securities
Administrator or a 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
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).
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.
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.
Xxxxx Fargo: Xxxxx Fargo Bank, National Association, a national
banking association, and its successors in interest.
WHFIT: A "Widely Held Fixed Investment Trust" as that term is
defined in Treasury Regulations section 1.671-5(b)(22) or successor provisions.
WHFIT Regulations: Treasury Regulations section 1.671-5, as
amended.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Mortgage Loans: The Mortgage Loans purchased by the Sponsor
pursuant to the WMC Purchase Agreement for which WMC is identified as
Responsible Party on the Mortgage Loan Schedule.
WMC Purchase Agreement: The Fifth Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of November 1, 2006, by and between
WMC and the Sponsor, a copy of which is attached hereto as Exhibit O.
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 Xxxxx Fargo, in
its capacity as a Custodian, with respect to the WMC Mortgage Loans and to
LaSalle with respect to the Decision One 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 applicable Custodian 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 applicable Custodian, 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 applicable
Custodian 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, except with respect to the WMC Mortgage
Loans, 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 applicable Custodian 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
applicable Custodian 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 applicable Custodian 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 applicable Custodian as to each Mortgage Loan shall constitute the
"Custodial File".
On or prior to the Closing Date, each Responsible Party shall
deliver to the applicable 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 Custodians
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 April
1, 2007, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5." 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 applicable 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 applicable 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 Custodians, 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 Custodians, 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-HE5" 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 (aaa) of Schedule IV and paragraph (yy) of Schedule VI 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 Securities Administrator
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 Custodians of the Mortgage Loans.
Each Custodian shall acknowledge, on the Closing Date, receipt 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 Custodians 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
Custodians 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. No
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, each 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 a custodian, are in its possession, and shall deliver to the
Depositor, the Servicers and the Trustee, 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. No 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 Custodians 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 applicable Custodian, 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
applicable Custodian, 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, the Master Servicer, the Securities Administrator
and the Trustee. Countrywide Servicing in its capacity as Servicer hereby makes
the representations and warranties set forth in Schedule VIII hereto to the
Depositor, the Master Servicer, the Securities Administrator and the Trustee as
of the dates set forth in such Schedule.
(b) WMC hereby makes the representations and warranties set forth in
Schedule IV and Schedule V hereto to the Depositor, the Servicers, the Master
Servicer, the Securities Administrator and the Trustee as of the dates set forth
in such Schedules. Decision One hereby makes the representations and warranties
set forth in Schedule VI hereto to the Depositor, the Servicers, the Master
Servicer, the Securities Administrator and the Trustee as of the dates set forth
in such Schedule.
(c) Xxxxx Fargo in its capacity as a Custodian hereby makes the
representations and warranties, set forth in Schedule IX hereto to the Trustee
as of the dates set forth in such Schedule. LaSalle in its capacity as a
Custodian hereby makes the representations and warranties, set forth in Schedule
VII hereto to the Trustee and the Securities Administrator as of the dates set
forth in such Schedule.
(d) The Depositor hereby makes the representations and warranties
set forth in Schedule III hereto to the Master Servicer, the Securities
Administrator and the Trustee as of the dates set forth in such Schedule.
(e) 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.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor or a Responsible Party, as
applicable, 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 (identifying, by section reference the representation or warranty
breached) to the other applicable parties (including, without limitation, the
Depositor, the Securities Administrator pursuant to Section 12.05, the Trustee
and the applicable Responsible Party). 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 Securities Administrator shall in turn notify the applicable
Responsible Party in writing to correct or cure any such breach of a
representation or warranty made by the applicable Responsible Party under this
Agreement, or if the Responsible Party cannot correct or cure such defect or
breach, 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, within
sixty (60) days from the date of notice from the Securities Administrator. If
the applicable Responsible Party fails to correct or cure the defect or breach,
or to repurchase or substitute such Mortgage Loan within such period, the
Securities Administrator (upon receiving such notice or having actual knowledge)
shall notify the Depositor of such failure to correct or cure such defect or
breach, or to repurchase or substitute such Mortgage Loan. Notwithstanding the
foregoing, in the event that the Securities Administrator receives written
notice of a breach of any of the representations and warranties referred to in
Schedules IV or VI as a "Deemed Material and Adverse Representation", the
Securities Administrator 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. On the last Business
Day of the month of a Distribution Date, the Securities Administrator shall
provide to the Trustee and the Depositor written notice of each Mortgage Loan in
breach of a representation or warranty (i) for which cure, repurchase or
substitution has been requested and (ii) for which cure, repurchase or
substitution has been requested, but which has not been satisfactorily cured,
repurchased or substituted for within sixty (60) days of receipt of a request to
do so. If, by the end of such sixty (60) day period, such Responsible Party
fails to repurchase such Mortgage Loan, the Securities Administrator shall
notify the Depositor and the Trustee in writing of such failure. The Trustee
shall pursue all legal remedies available to the Trustee against the applicable
Responsible Party under this Agreement as directed in writing by the Depositor.
(g) 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 applicable Custodian 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, upon receipt of a copy of the
Request for Release, the Trustee 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, without recourse, representation or warranty.
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.
(h) Upon the Depositor's discovery of or receipt of notice of a
breach of a representation and warranty of WMC set forth on Schedule IV hereto
that materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan and that has not been cured, repurchased or substituted for by
WMC in accordance with the terms of this Agreement, the Depositor shall have the
option, exercisable in its sole discretion, to repurchase such Mortgage Loan at
the Repurchase Price, or, if permitted hereunder, substitute a Substitute
Mortgage Loan for such Mortgage Loan. The applicable Custodian 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 delivery from
the Depositor of a copy of the Request for Release certifying repurchase, the
Trustee shall assign to the Depositor all of its rights with respect to WMC'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,
without recourse, representation or warranty.
(i) In the event any Mortgage Loan does not conform to the
requirements as determined in the applicable Custodian's review of the related
Custodial File, the applicable Custodian shall notify the applicable Responsible
Party, the applicable Servicer, the Trustee and the Depositor by delivery of the
certification of such Custodian 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
applicable Custodian shall notify the Depositor and the Trustee of such failure
to correct or cure by delivery of a final Document Certification and Exception
Report delivered within 180 days after the Closing Date. 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.
(j) Within 60 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 IV or Schedule VI, 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. Notwithstanding the above sentence,
(i) within sixty (60) days after the earlier of either discovery by, or notice
to, the applicable Responsible Party of any breach of the representation and
warranty set forth in clause (ccc) of Schedule IV or clause (aaa) of Schedule
VI, the applicable Responsible Party shall repurchase such Mortgage Loan at the
Repurchase Price and (ii) any breach of a representation and warranty referred
to in Schedule IV or Schedule VI as a "Deemed Material and Adverse
Representation" shall automatically be deemed to materially and adversely affect
the value of the applicable Mortgage Loan or the interest of the Trustee or
Certificateholders.
(k) 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 applicable Custodian, 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.
(l) 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 Master Servicer pursuant to Section 4.03(e) (with copies
to the applicable Custodian) 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 applicable Custodian (with a
copy to the Trustee) 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 applicable Custodian 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.
(m) 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.
(n) 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 Master Servicer pursuant to Section 4.03(e) (with copies to the
applicable Custodian) 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.
(o) 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 applicable
Custodian shall release (with a copy to the Trustee) 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.
(p) 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 Master Servicer, the
Securities Administrator, the Sponsor, the Trustee, the Custodians 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 (aaa) of
Schedule IV and paragraph (yy) of Schedule VI, as applicable, to this Agreement)
and defective Mortgage Loans set forth in the WMC Purchase Agreement or the
Decision One 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 Master Servicer, the Securities Administrator,
the Sponsor, the Trustee, the Custodians and the Trust. This indemnity shall
survive the termination of this Agreement.
(q) 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 applicable Custodian, 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, the Securities Administrator 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 March 2037,
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, the Master
Servicer, the Securities Administrator 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 12.04.
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 applicable Custodian 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 applicable
Custodian shall execute, at the written request of a Servicer, and furnish to
such Servicer and any Subservicer such documents provided to the applicable
Custodian 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 (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; provided, however, that the
applicable Servicer may take any action set forth in clauses (i) through (iv)
with respect to any Mortgage Loan in default or, which in the judgment of such
Servicer, a default is reasonably foreseeable, and only to the extent such
Servicer determines that 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 12.14, 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; provided that Countrywide Servicing hereby
agrees to provide to the Master Servicer any statements of compliance,
assessments of compliance, accountants reports on assessment of compliance and
any Sarbanes Certifications (as defined in the Countrywide Amendment Regulation
AB) that Countrywide Servicing is required to deliver to the Depositor pursuant
to the Countrywide Amendment Regulation AB, Sections 2(d), (e) and (f), at the
time such documents are provided to the Depositor.
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 Master Servicer 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 Securities Administrator, 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 Master Servicer.
The Master Servicer 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 Xxxxxxx Mac or Xxxxxx Mae 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, the Master Servicer 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, the Master
Servicer 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 or
the Master Servicer 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, the
Master Servicer 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 Master Servicer that contains all information
reasonably necessary to enable the Securities Administrator, 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 Master Servicer
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, the
Master Servicer 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 neither the Trustee nor the
Master Servicer (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
Master Servicer. 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 Master Servicer, or its designee, or another successor Servicer if
the successor is not the Master Servicer, 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 Master
Servicer, or another successor Servicer if the successor is not the Master
Servicer, prior to the Master Servicer, or such other successor Servicer if the
successor is not the Master Servicer, assuming such rights and obligations,
unless the Master Servicer elects to terminate any Subservicing Agreement in
accordance with its terms as provided in Section 3.03.
Upon such assumption, the Master 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 Master Servicer, 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 Master
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 Securities Administrator 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 Securities Administrator shall
deposit the amount of any Basis Risk Payment 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 Securities Administrator
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 Securities Administrator 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 Securities Administrator to the
Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Securities
Administrator to the Offered Certificateholders shall be accounted for by
the Securities Administrator 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 Securities Administrator 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
Securities Administrator 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) and (W).
(d) The Securities Administrator 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 Master Servicer shall, promptly upon receipt,
deposit in the Distribution Account and the Securities Administrator shall
retain therein the following:
(i) the aggregate amounts remitted by the Servicers to the Master
Servicer 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 Master Servicer 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 Master Servicer which describes the amounts deposited in error in
the Distribution Account. All funds deposited in the Distribution Account shall
be held by the Securities Administrator in trust for the Certificateholders
until disbursed in accordance with this Agreement or withdrawn in accordance
with Section 4.02.
In order to comply with its duties under the USA Patriot Act of
2001, the Securities Administrator shall obtain and verify certain information
and documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address and other identifying information.
(e) The Securities Administrator 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 Master Servicer to instruct the
Securities Administrator 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 Securities Administrator Float Period). The
Securities Administrator may withdraw from the Distribution Account any income
or gain earned from the investment of funds deposited therein during the
Securities Administrator Float Period for its own benefit.
(f) Each Servicer shall give notice to the Master Servicer, and the
Master Servicer 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, each Custodian shall
deliver an invoice to the Securities Administrator, setting forth the amount of
each Custodian Fee for the related Distribution Date. On each Distribution Date,
the Securities Administrator shall remit each Custodian Fee to the applicable
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 Master Servicer, 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 (two Business Days in
the case of Saxon) 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 (one Business Day in the case of Saxon) 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 (two Business Days in the case of Saxon) after such
Servicer's receipt thereof, and shall thereafter deposit in the related
Collection Account, in no event more than two Business Days (one Business Day in
the case of Saxon) 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 Master Servicer 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 Master
Servicer all Available Funds (without reduction for amounts owed to the
Depositor, the Securities Administrator, the Master Servicer, the Trustee
or the Custodians 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 Master Servicer, such Servicer or the
Depositor for expenses incurred by or reimbursable to the Master Servicer,
such Servicer or the Depositor, as the case may be, pursuant to Section
6.03 (such Servicer's right for recovery or reimbursement has priority
over the Trust as stated in the definition of "Available Funds");
(ix) to reimburse the Master Servicer, 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 Master Servicer on the Remittance
Date occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse such Servicer for xxxxxxxxxxxx X&X
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.
To the extent that a Servicer does not timely make the remittance
referred to in clause (i) above, such Servicer shall pay the Master Servicer for
the account of the Master Servicer interest on any amount not timely remitted at
the Prime Rate, from and including the applicable Remittance Date to but
excluding the date such remittance is actually made.
(a) 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 Master Servicer, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(b) 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 Securities Administrator
may (but is not obligated to) invest funds in the Distribution Account during
the Securities Administrator Float Period, and, with respect to the portion of
funds in the Distribution Account deposited by a Servicer, shall (except during
the Securities Administrator Float Period) invest such funds in the Distribution
Account at the direction of such Servicer in the Xxxxx Fargo Advantage Prime
Investments Money Market Fund (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 Securities Administrator 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 Securities Administrator
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
Securities Administrator Float Period) shall be made in the name of the
Securities Administrator in Permitted Investments selected by the applicable
Servicer. The applicable Servicer shall be entitled to the income from such
related investment (except with respect to investment direction of funds and any
income and gain realized on any investment in the Distribution Account during
the Securities Administrator Float Period, which shall be for the sole benefit
of the Securities Administrator) 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 Securities Administrator
Float Period, the Securities Administrator or its agent (with a copy to the
Securities Administrator or its agent if related to investment of funds in the
Distribution Account not during the Securities Administrator 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
Securities Administrator Float Period, the Securities Administrator 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 Securities Administrator Float Period,
the Securities Administrator 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
Securities Administrator, 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 Securities Administrator Float Period, which
shall be for the benefit of the Securities Administrator) and shall be subject
to the Securities Administrator'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 Securities Administrator 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 Securities Administrator shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(e) The Securities Administrator 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 Securities Administrator Float Period, the
Securities Administrator 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 Securities Administrator or its Affiliates shall be
permitted to receive additional compensation that could be deemed to be in the
Securities Administrator'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 Master Servicer, 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 Xxxxxxx 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 Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Mae or
Xxxxxxx Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall provide the Master Servicer
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 and the Master Servicer. 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 applicable
Custodian 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 Securities Administrator,
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 Securities
Administrator, 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 xxxxxxxxxxxx X&X 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 Securities Administrator in accordance with the
provisions of Section 4.02, subject to 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 or the Master Servicer 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, the Master
Servicer 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 Saxon 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 Master Servicer 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, the applicable 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 applicable Custodian) to the applicable
Custodian. Upon receipt of such Request for Release, such Custodian 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 applicable Custodian
shall, upon request of a Servicer and delivery to the applicable Custodian of a
Request for Release in written or electronic form (with a copy to the Trustee),
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 applicable Custodian 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 applicable Custodian 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 applicable Custodian to the applicable Servicer or its
designee upon request therefor. Upon receipt of a Request for Release under this
Section 3.16, the applicable Custodian 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 applicable
Custodian 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. An
independent contractor, as the agent of Saxon, may be retained by Saxon to
perform functions relating to the title, management and disposition of REO
Property. Saxon shall be responsible for such independent contractor's fees and
expenses relating to a REO Property and shall be entitled to reimbursement
thereof from the Liquidation Proceeds with respect to the related Mortgaged
Property, as Servicing Advances or, if applicable, as Nonrecoverable Servicing
Advances. 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 an Opinion of Counsel, addressed to the
Depositor, the Trustee, the Master Servicer 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 Master Servicer 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 Master Servicer 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
Master Servicer 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 Securities Administrator 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 Master Servicer to instruct the Securities Administrator to withdraw from
the Distribution Account and remit to the applicable Servicer (except for monies
invested during the Securities Administrator 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, the
Securities Administrator and the Master 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 Master Servicer (and the Master Servicer shall
deliver or otherwise make available to the Depositor, the Securities
Administrator, the Rating Agencies and the Trustee) 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 the Securities Administrator, the Master Servicer, 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, the
Securities Administrator, the Master Servicer, 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 Securities Administrator, the
Master Servicer, the applicable Servicer or Subservicer as to the nature of any
defaults by the Securities Administrator, the Master Servicer, the applicable
Servicer or any related Subservicer in the fulfillment of any of the Securities
Administrator's, the Master Servicer's, such Servicer's or any related
Subservicer's obligations. The obligations of the Securities Administrator, the
Master Servicer, each Servicer and each Subservicer under this Section 3.22
apply to the Securities Administrator, the Master Servicer, each Servicer and
each Subservicer that serviced a Mortgage Loan during the applicable period,
whether or not the Securities Administrator, the Master Servicer, such Servicer
or such Subservicer is acting as Securities Administrator, Master Servicer, a
Servicer or a Subservicer at the time such Officer's Certificate is required to
be delivered. None of the Servicers or Subservicers, the Master Servicer, the
Securities Administrator 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 Securities
Administrator, the Master Servicer, and the Custodians, as applicable, shall
deliver or otherwise make available, and each Servicer, the Securities
Administrator, the Master Servicer and the Custodians, as applicable, shall
cause each Subcontractor utilized by such Servicer (or by any such Subservicer),
the Securities Administrator, the Master Servicer or such Custodian, as
applicable, and determined by such Servicer, the Securities Administrator, the
Master Servicer or such 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 Master Servicer (and the Master Servicer shall
make available to the Securities Administrator and 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 Securities
Administrator pursuant to Section 3.23(c). The Servicers, the Securities
Administrator, the Master Servicer and the Custodians 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 Securities
Administrator, the Master Servicer or the applicable 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 Securities
Administrator, the Master Servicer or the Custodians, as applicable), as the
case may be. None of the Servicers, the Securities Administrator, the Master
Servicer, any Custodian, 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 Custodians 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 Securities
Administrator, the Master Servicer and each Custodian, as applicable, shall
cause, and such Servicer shall cause each Subservicer engaged by such Servicer,
and such Servicer, the Securities Administrator, the Master Servicer and each
Custodian shall cause each Servicing Function Participant utilized by the
Securities Administrator, the Master Servicer, such 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 Master Servicer (and the
Master Servicer shall make available to the Securities Administrator and 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 Master Servicer,
the Securities Administrator or the applicable Custodian as to the nature of any
defaults by the applicable Servicer, the Securities Administrator, the Master
Servicer or the applicable Custodian (and each Subservicer or Servicing Function
Participant engaged or utilized by any Servicer, the Securities Administrator,
the Master Servicer or the applicable 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 Securities Administrator's, the Master Servicer's,
any of the Custodian's, the applicable Subservicer's or Servicing Function
Participant's obligations hereunder or under any applicable sub-servicing
agreement. None of the Securities Administrator, the Master Servicer, the
Servicers, the Custodians 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 Custodians shall not be required to deliver any such assessment, so long
as each of them 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 Securities Administrator 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 Securities
Administrator and the Master Servicer shall notify the Depositor and the
Securities Administrator 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, the
Securities Administrator or the Master Servicer submits its assessment pursuant
to Section 3.23(a), such Servicer, the Securities Administrator or the Master
Servicer, 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 Securities Administrator, the Master
Servicer, the Custodians, each Servicer or Subservicer under this Section 3.23
apply to the Securities Administrator, the Master Servicer, the Custodians and
each Servicer and Subservicer that serviced a Mortgage Loan during the
applicable period, whether or not the Securities Administrator, the Master
Servicer, the Custodians, such Servicer or Subservicer is acting as Securities
Administrator, Master Servicer, a Custodian, a 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 Master Servicer 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 Master
Servicer or its successor shall thereupon assume all of the rights and
obligations of such Servicer hereunder arising thereafter (except that the
Master Servicer 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 Master Servicer (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 Master Servicer (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 Master
Servicer, 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
Master Servicer 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. Either
(i) the applicable Servicer (or its assignee) or (ii) the Holders of a majority
(by Percentage Interest) of the Class X Certificates (or, if the Class X
Certificates have been pledged to secure any NIM Securities, the holders of a
majority of the equity interests in the related NIM Issuer) may, at its or their
option, purchase any 90+ Delinquent Mortgage Loans from the Trust by payment to
the Trust of a purchase price equal to 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 the applicable Servicer; provided, however, that
neither the Depositor nor any Affiliate of the Depositor may exercise the
foregoing option, or have the power to direct either the Holders of the majority
(by Percentage Interest) of the Class X Certificates or of the equity interests
in the related NIM Issuer, as the case may be, to exercise the foregoing option,
under this Section 3.27).
Upon receipt of such purchase price, the applicable Servicer shall
provide to the applicable Custodian a Request for Release (with a copy to the
Trustee) and the applicable Custodian shall promptly release to such Servicer
(or its assignee) or such Class X Certificateholders (or their designee), as
applicable, the Mortgage File relating to the Mortgage Loan being repurchased.
No Person holding the foregoing option under this Section 3.27 shall
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders.
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 Master Servicer 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 Master Servicer.
(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.
(f) On each Remittance Date, the Master Servicer shall deposit in
the Distribution Account all funds remitted to it by the Servicers pursuant to
Sections 3.11(a)(i) and 3.25 and this Section 4.01. The Securities Administrator
may retain or withdraw from the Distribution Account (i) the Master Servicing
Fee, (ii) amounts necessary to reimburse the Master Servicer or any Servicer for
any previously unreimbursed Advances and any Advances the Master Servicer deems
to be nonrecoverable from the related Mortgage Loan proceeds, (iii) an amount
necessary to indemnify the Master Servicer, the Trustee or the Servicers for
amounts due in accordance with this Agreement, and (iv) any other amounts that
each of the Master Servicer, the Trustee and the Securities Administrator is
entitled to receive under this Agreement for reimbursement, indemnification or
otherwise.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator 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 X-0, Xxxxx X-0, 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 those Classes of Certificates, pro rata,
based upon their respective Class Certificate Balances and (b)
second, any remaining amounts to those Classes of 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) (including any remaining Interest Rate Cap
Payments on deposit in such account);
(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-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-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-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-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 sequentially, to the Class A-2a Certificates,
until their Class Certificate Balance has been reduced to zero, then to the
Class A-2b Certificates, until their Class Certificate Balance has been reduced
to zero, then to the Class A-2c Certificates, until their Class Certificate
Balance has been reduced to zero, and then to the Class A-2d Certificates, until
their 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator reasonably believes
are applicable under the Code. The consent of Certificateholders shall not be
required for such withholding. If the Securities Administrator does withhold any
amount from interest or original issue discount payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements, the
Securities Administrator 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 Securities Administrator shall make available
to each Certificateholder, the Servicers, the Depositor, the Master Servicer 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 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 Securities Administrator and the Master Servicer (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 Master Servicer 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 Securities
Administrator pursuant to Section 8.12 shall include the following
information with respect to the related distribution (including to the
extent such information is provided by the Trustee to the Securities
Administrator):
(i) material breaches of Mortgage Loan representations and
warranties under this Agreement of which the Securities Administrator has
actual knowledge or has received written notice; and
(ii) material breaches of any covenants under this Agreement of
which the Securities Administrator has actual knowledge or received
written notice;
provided that, if the Securities Administrator 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 Securities Administrator for
inclusion in the applicable Form 10-D.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the Master
Servicer and the Depositor is limited, if applicable, to the availability,
timeliness and accuracy of the information derived from the Servicers, the
Master Servicer and the Swap Provider. The Securities Administrator shall make
available the above statement via the Securities Administrator's internet
website. The Securities Administrator's website will initially be located at
xxxx://xxx.xxxxxxx.xxx and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at 1-866-846-4526.
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 customer service desk and
indicating such. The Securities Administrator 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
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes. The Securities Administrator will not
be liable for the dissemination of information in accordance with this
Agreement.
The Securities Administrator shall make available to each Analytics
Company, either electronically or via the Securities Administrator's internet
website, each statement to Certificateholders prepared pursuant to Section
4.03(a). The Securities Administrator (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
Securities Administrator shall provide any corrections to such statements to
each Analytics Company as soon as reasonably practicable after the related
Distribution Date.
The Securities Administrator 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 Securities Administrator 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
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
(d) The Securities Administrator 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 Master Servicer, a
monthly remittance advice statement (the "Servicer Remittance Report") in a
format and containing the data fields set forth on Exhibit X-1 attached hereto
(or, in the case of Countrywide Servicing, Exhibit X-2 attached hereto), and a
monthly defaulted loan report containing the data fields set forth on Exhibit Y
attached hereto (or, in the case of Countrywide Servicing, Exhibit Z attached
hereto), or in such other format or containing such other data fields mutually
agreed upon by the applicable Servicer and the Master Servicer, 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 Master
Servicer to enable the Securities Administrator 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 Master Servicer shall promptly make available the Servicer
Remittance Report and the related supplemental statement to the Depositor and
the Securities Administrator.
(f) [Reserved].
(g) For all purposes of this Agreement, with respect to any Mortgage
Loan, delinquencies shall be determined by the Securities Administrator from
information provided by the Servicers and reported by the Securities
Administrator 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 Securities Administrator in accordance with the
definition of LIBOR. Until all of the Offered Certificates are paid in full, the
Securities Administrator shall at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator 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 Securities Administrator 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 Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Securities Administrator 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 Securities Administrator
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 Securities Administrator 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 Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
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 Securities
Administrator 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 Securities Administrator held pursuant to this
Agreement.
On the Business Day immediately preceding each 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 X-0, Xxxxx X-0, 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 X-0, Xxxxx X-0, 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 X-0, Xxxxx X-0, 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 the Trust enters into a replacement interest rate
swap agreement and the Trust is entitled to receive a Replacement Swap Provider
Payment from a replacement swap provider, the Securities Administrator shall
direct the replacement swap provider (or its guarantor) 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 Master Servicer, the Securities
Administrator, any 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 Securities Administrator 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 Securities Administrator to
the Offered Certificateholders shall be accounted for by the Securities
Administrator, 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator shall cause any replacement swap
provider to provide a copy of the related replacement interest rate swap
agreement to the Securities Administrator and the Depositor.
If a Responsible Officer of the Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities
Administrator, the Securities Administrator 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 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such Holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator 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 Securities Administrator 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 Securities
Administrator shall bind the Securities Administrator, 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator 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 Securities
Administrator in accordance with the Securities Administrator'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 Securities Administrator 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 Securities Administrator 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 Securities Administrator a letter in
substantially the form of Exhibit I (the "Rule 144A Letter") or (ii) there shall
be delivered to the Securities Administrator 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 Securities Administrator, the Master Servicer 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, the Securities Administrator, the Master Servicer 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 Securities Administrator shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Securities
Administrator (in the event such Certificate is a Private Certificate or a
Residual Certificate, such requirement is satisfied only by the Securities
Administrator'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
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Servicers, the Depositor, the Securities Administrator or the Trust Fund,
addressed to the Securities Administrator, 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 Securities
Administrator, the Master Servicer 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 Securities Administrator
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 Securities Administrator of an Opinion of Counsel satisfactory
to the Securities Administrator 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 Securities Administrator shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Securities Administrator 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 Securities Administrator 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 Securities Administrator shall not register the
Transfer of any Residual Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator
under subparagraph (b) above, the Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities
Administrator shall be paid and delivered by the Securities Administrator
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 Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is 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 Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund or
the Securities Administrator, 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 Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial interest
in, a Residual Certificate is not transferred, directly or indirectly, to a
Person that is 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
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator 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 Securities Administrator
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 Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
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 Securities Administrator
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 Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. None of the Servicers, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(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 in form
satisfactory to the Securities Administrator, duly executed by the
Certificateholder or its representative or nominee duly authorized in writing.
The Securities Administrator 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,
Attention: NY 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 Securities Administrator 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
Securities Administrator in accordance with its customary practice. No service
charge shall be made for any registration of transfer or exchange of Private
Certificates, but the Securities Administrator 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 Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicers, the Master Servicer and the Securities Administrator
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Securities Administrator that
such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator 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 Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
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 Master
Servicer, the Securities Administrator, the Trustee, the Depositor, and any
agent of a Servicer, the Master Servicer, the Securities Administrator, 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 Master Servicer, the Securities
Administrator, the Trustee, the Depositor, or any agent of a Servicer, the
Master Servicer, the Securities Administrator, 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 Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor, the Trustee or a Servicer shall request such
information in writing from the Securities Administrator, then the Securities
Administrator shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Trustee, such Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Securities Administrator, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator initially designates its Corporate Trust Office for registration
of transfer or exchange purposes located at Xxxxx Fargo Center, Xxxxx Xxxxxx xxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust
Services - MSAC 2007-HE5. The Securities Administrator 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 Mae or Xxxxxxx 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 and the
Master Servicer, all information reasonably necessary to enable the Securities
Administrator, 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).
The Depositor shall forward to the Master Servicer promptly upon receipt thereof
copies of any notices received by it pursuant to this Section 6.02.
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, the Master Servicer and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor, the Master Servicer
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 Master Servicer, the Securities Administrator, the Trustee, the
Custodians, 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
Servicer'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 Master Servicer 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 Master Servicer,
the Securities Administrator, the Sponsor, the Trustee and any director,
officer, employee or agent of the Depositor, the Master Servicer, the Securities
Administrator, 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 Master Servicer, the Securities
Administrator, 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, the Master Servicer, and the
Securities Administrator 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 Master Servicer, the Securities Administrator,
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 Master Servicer, the
Securities Administrator, the Sponsor, the Trustee and any director, officer,
employee or agent of the Depositor, the Master Servicer, the Securities
Administrator, 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 Master Servicer 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, the Securities Administrator, the Master
Servicer or to such Servicer, the Depositor, the Securities Administrator, the
Master Servicer 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, 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,
the Securities Administrator or the Master Servicer, or to such Servicer, the
Securities Administrator, the Master 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 Securities Administrator, the Master Servicer or the
Depositor, or to such Servicer, the Securities Administrator, the Master
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 in 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 Master Servicer may, and at
the direction of a majority of the Voting Rights, the Master Servicer shall, by
notice in writing to the applicable Servicer (with a copy to the Securities
Administrator and 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 Master Servicer
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 Master Servicer has actual
knowledge of the occurrence of such an event. In the event that a Responsible
Officer of the Master Servicer has actual knowledge of the occurrence of an
Event of Default described in clause (a) of this Section 7.01, the Master
Servicer 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 Master Servicer 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 Master Servicer, 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 Master Servicer. Subject to Section 7.02, the Master
Servicer 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 Master Servicer in effecting the termination of such Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Master Servicer 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 Master Servicer 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 Master Servicer shall, subject to a transition
period not to exceed 90 days for the transfer of actual servicing to the
successor servicer, and 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, whether or not this 90 day
transition period has elapsed, and after such transition period, if any, the
obligation to make Servicing Advances pursuant to Section 3.24 or Section 7.01.
As compensation therefor, the Master Servicer 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.
Notwithstanding the foregoing, if the Master Servicer has become the successor
to such Servicer in accordance with Section 7.01, (a) the Master Servicer 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 Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise enable the Master Servicer or other successor Servicer to
service the Mortgage Loans in accordance with Accepted Servicing Practices and
(b) the Master Servicer 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 Xxxxxxx 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 Master Servicer 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
Master Servicer, unless the Master Servicer 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 Master Servicer 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 Master Servicer and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Master Servicer 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 Master Servicer is the predecessor Servicer (except in the
case where the Master Servicer 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 Master Servicer 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 Securities
Administrator 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
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, 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 a Master Servicer Event of Default and after the curing of all
Master Servicer 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 a Master Servicer 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 a Master Servicer 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 not be permitted to utilize Subcontractors for the
performance of certain of its obligations under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians 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 Custodians shall have responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(b) the Trustee and the Custodians 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 Custodians 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 any 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;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default, the Trustee shall not
be deemed to have knowledge of a Master Servicer 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 or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, the Securities Administrator
or a Servicer of any funds paid to the Depositor, the Master Servicer, the
Securities Administrator 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, the Master Servicer, the Securities Administrator 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 shall be paid its fee by the Master
Servicer from the Master Servicer's own funds pursuant to a separate agreement.
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 the Master 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 any Responsible Party's obligations in connection with this Agreement for
which the related 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 the Master 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 Securities Administrator,
the Master Servicer, 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, such person shall notify the Depositor
and the Securities Administrator of such succession or appointment and shall
furnish to the Depositor and the Securities Administrator in writing and in form
and substance reasonably satisfactory to the Depositor and the Securities
Administrator, 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 Master
Servicer under this Agreement to advance funds, if as successor Master Servicer,
it becomes successor Servicer, shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(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
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
each Trust REMIC and that in such capacity it shall:
(a) prepare for the Trustee to sign, and the Trustee shall sign, and
the Securities Administrator shall 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 for the
Trustee to sign, and the Trustee shall sign, and the Securities Administrator
shall 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 the 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 and the Cap
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 the Interest Rate Cap Agreement, and, if
requested by the Swap Provider or the Cap 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 Securities Administrator, or any
other appropriate Person from contesting any such tax in appropriate proceedings
and shall not prevent the Securities Administrator 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 Securities Administrator is
hereby designated as agent of such Certificateholder for such purpose (or if the
Securities Administrator is not so permitted, such Holder shall be the Tax
Matters Person in accordance with the REMIC Provisions). In such capacity, the
Securities Administrator 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 Securities Administrator 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 Securities Administrator
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 Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator 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 Securities Administrator 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 Securities Administrator promptly
upon written request therefor any additional information or data that the
Securities Administrator may, from time to time, reasonably request to enable
the Securities Administrator 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 Securities Administrator pursuant to this Agreement.
The Depositor hereby indemnifies the Securities Administrator for any losses,
liabilities, damages, claims, or expenses of the Securities Administrator
arising from any errors or miscalculations of the Securities Administrator that
result from any failure of the Depositor to provide pursuant to this paragraph
accurate information or data to the Securities Administrator on a timely basis.
None of the Servicers, the Trustee, the Master Servicer or the
Securities Administrator 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 and the
Securities Administrator receive an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense,
and the Securities Administrator determines that taking such action is in the
best interest of the Trust Fund and the Certificateholders, at the expense of
the Trust Fund, but in no event at the expense of the Trustee or the Securities
Administrator) to the effect that the contemplated action will not, with respect
to the Trust Fund, any Trust REMIC created hereunder, endanger such status or,
unless the Trustee determines in its sole discretion to indemnify the Trust Fund
against such tax, 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, the
Master Servicer or the Securities Administrator, respectively, if such tax
arises out of or results from negligence of the Trustee, the Master Servicer or
the Securities Administrator, 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 Securities Administrator, the Master Servicer, 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).
The Grantor Trust shall be treated as a WHFIT that is a NMWHFIT. The
Securities Administrator shall report as required under the WHFIT Regulations to
the extent such information as is reasonably necessary to enable the Securities
Administrator to do so, and is not in its possession, is provided to the
Securities Administrator on a timely basis. The Securities Administrator is
hereby directed to assume that DTC is the only "middleman" (as such term is
defined in the WHFIT Regulations) unless the Depositor provides the Securities
Administrator with the identities of other "middlemen" that are
Certificateholders. The Securities Administrator shall be entitled to rely on
the first sentence of this subparagraph (a) and shall be entitled to
indemnification in accordance with the terms of this Agreement in the event that
the Internal Revenue Service makes a determination that the first sentence of
this subparagraph (a) is incorrect.
The Securities Administrator, in its discretion, shall report
required WHFIT information using either the cash or accrual method, except to
the extent the WHFIT Regulations specifically require a different method. The
Securities Administrator shall be under no obligation to determine whether any
Certificateholder or other beneficial owner of a Certificate, to the extent the
Securities Administrator knows of any other beneficial owner of a Certificate,
uses the cash or accrual method. The Securities Administrator shall make
available information as required by the WHFIT Regulations to Certificateholders
annually. In addition, the Securities Administrator shall not be responsible or
liable for providing subsequently amended, revised or updated information to any
Certificateholder, unless requested by the Certificateholder.
The Securities Administrator shall not be liable for failure to meet
the reporting requirements of the WHFIT Regulations nor for any penalties
thereunder if such failure is due to: (i) the lack of reasonably necessary
information being provided to the Securities Administrator, (ii) incomplete,
inaccurate or untimely information being provided to the Securities
Administrator or (iii) the inability of the Securities Administrator, after good
faith efforts, to alter its existing information reporting systems to capture
information necessary to fully comply with the WHFIT Regulations for the 2007
calendar year. Absent receipt of information regarding any sale of Certificates,
including the price, amount of proceeds and date of sale from the beneficial
owner thereof or the Depositor, the Securities Administrator may assume there is
no secondary market trading of WHFIT interests.
To the extent required by the WHFIT Regulations, the Securities
Administrator shall use reasonable efforts to publish on an appropriate website
the CUSIP Numbers for the Certificates that represent ownership of a WHFIT. The
CUSIP Numbers so published will represent the Rule 144A CUSIP Numbers. The
Securities Administrator shall make reasonable good faith efforts to keep the
website accurate and updated to the extent CUSIP Numbers have been received. The
Securities Administrator shall not be liable for investor reporting delays that
result from the receipt of inaccurate or untimely CUSIP Number information.
The Securities Administrator shall be entitled to additional
reasonable compensation for changes in reporting required in respect of the
WHFIT Regulations that arise as a result of a change in the WHFIT Regulations or
a change in interpretation of the WHFIT Regulations by the Internal Revenue
Service, if such change requires, in the Securities Administrator's sole
discretion, a material increase in the Securities Administrator's reporting
obligations in respect of the related Grantor Trust.
Section 8.12 Periodic Filings. (a) The Securities Administrator, the
Master Servicer and each Servicer shall reasonably cooperate with the Depositor
in connection with the reporting requirements of the Trust under the Exchange
Act. The Securities Administrator shall prepare for execution by the Master
Servicer 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 Securities Administrator
shall file (via the Commission's Electronic Data Gathering and Retrieval System,
or XXXXX) such Forms executed by the Master Servicer. Each of Form 10-D and Form
10-K requires the Depositor to indicate (by checking "yes" or "no") that it "(1)
has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." A "yes" shall be indicated on each
Form 10-D and 10-K unless the Depositor shall notify the Securities
Administration in writing, no later than the fifth calendar day after the
related Distribution Date with respect to the filing of a report on Form 10-D
and no later than March 15th with respect to the filing of a report on Form
10-K, that a "no" should be indicated. The Securities Administrator and the
Master Servicer shall be entitled to rely on such notice (or lack thereof) in
preparing, executing and/or filing any such report.
(b) The Securities Administrator 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 Securities Administrator will utilize
reasonable best efforts to file such Form 10-D on or by the 14th calendar day
after each Distribution Date, but in no event later than the filing deadline for
such Form 10-D (subject to permitted extensions under the Exchange Act). The
Securities Administrator 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 the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. The
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except as
set forth in the next 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 Securities Administrator and the Depositor, in
XXXXX-compatible format, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, to the extent known by such applicable
parties, any Additional Form 10-D Disclosure, if applicable, together with an
Additional Disclosure Notification in the form of Exhibit AA hereto ("Additional
Disclosure Notification"). The Depositor will approve as to form and substance,
or disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure. The Depositor will be responsible for all reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph, including converting any such disclosure to an XXXXX-compatible
format.
The Securities Administrator 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 later than the 11th calendar day after the
related Distribution Date, for the Depositor to review and verify such Form
10-D. In the absence of receipt of any written changes or approval, the
Securities Administrator shall be entitled to assume that such Form 10-D is in
final form and the Securities Administrator may proceed with procuring the
execution of and filing the Form 10-D. No later than 2 Business Days prior to
the 15th calendar day after the related Distribution Date, a duly authorized
representative of the Master Servicer shall sign the Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
8.12(e)(ii). Promptly (but in any case within one Business Day) after filing
with the Commission, the Securities Administrator will make available on its
internet website a final executed copy of each Form 10-D prepared and filed by
the Securities Administrator. The Depositor can be contacted at the Depositor's
address for notices set forth in Section 12.05(b)(ii)(a) or such other address
as to which the Depositor has provided prior written notice to the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator and the Master Servicer of their duties under this Section 8.12(b)
related to the timely preparation, execution and filing of Form 10-D is
contingent, in part, upon each Servicer, 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). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 10-D, where such failure results from the
Securities Administrator's or the Master Servicer's inability or failure to
obtain or receive, on a timely basis, any information from any party hereto
(other than the Securities Administrator, the Master Servicer or any
Subcontractor utilized by the Securities Administrator or the Master Servicer)
needed to prepare, execute or file such Form 10-D, not resulting from their own
negligence, bad faith or willful misconduct.
(c) On any date within 90 days (including the 90th day) 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
Securities Administrator 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 Securities Administrator within the applicable time frames set
forth in this Agreement, (i) an annual compliance statement for the Securities
Administrator, the Master Servicer, each Servicer and each Subservicer engaged
by any Servicer, as described under Section 3.22, (ii)(A) the annual reports on
assessment of compliance with servicing criteria for the Securities
Administrator, the Master Servicer, the Trustee, each Servicer, each Custodian,
each Subservicer engaged by any Servicer and each Servicing Function Participant
utilized by a Servicer, the Master Servicer, the Securities Administrator, each
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 Securities Administrator, the Master
Servicer, each Servicer, the Trustee, each Custodian, each Subservicer engaged
by a Servicer and each Servicing Function Participant utilized by a Servicer,
the Master Servicer or the Securities Administrator, the Trustee, if applicable,
or any 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 Master Servicer 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 the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. The
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except as
set forth in the next 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 Securities
Administrator and the Depositor, in XXXXX-compatible format, or in such other
form as otherwise agreed upon by the Securities Administrator and such party, to
the extent known by such applicable parties, any Additional Form 10-K
Disclosure, if applicable, together with an Additional Disclosure Notification.
The Depositor will approve as to form and substance, or disapprove, as the case
may be, the inclusion of the Additional Form 10-K Disclosure. The Depositor will
be responsible for all reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Additional Form 10-K
Disclosure on Form 10-K pursuant to this paragraph, including converting any
such disclosure to an XXXXX-compatible format. The Securities Administrator
shall compile all such information provided to it in a Form 10-K prepared by it.
The Securities Administrator 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 three (3) Business Days prior to, when
the Master Servicer is required to execute such Form 10-K to permit the
Depositor to review and verify such Form 10-K. In the absence of receipt of any
written changes or approval, the Securities Administrator shall be entitled to
assume that such Form 10-K is in final form and the Securities Administrator may
proceed with procuring the execution of and filing the Form 10-K. No later than
5:00 p.m. Eastern Standard Time on the 4th Business Day prior to the 10-K Filing
Deadline, the senior officer in charge of the servicing function of the Master
Servicer shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if
a previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 8.12(e)(ii). Promptly (but in
any case within one Business Day) after filing with the Commission, the
Securities Administrator will make available on its internet website a final
executed copy of each Form 10-K prepared and filed by the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator and the Master Servicer of their 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. Neither the
Master Servicer nor the Securities Administrator shall have any liability for
any loss, expense, damage or claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 10-K, where such
failure results from the Securities Administrator's or the Master Servicer's
inability or failure to obtain or receive, on a timely basis, any information
from any party hereto (other than the Securities Administrator, the Master
Servicer or any Subcontractor utilized by the Securities Administrator or the
Master Servicer) needed to prepare, execute or file such Form 10-K, not
resulting from their own negligence, bad faith or willful misconduct.
(d) Each of the Securities Administrator, the Master Servicer and
each Servicer shall provide, and each such party shall cause any Servicing
Function Participant engaged by it to provide, to the Person who signs the
Sarbanes Certification (the "Certifying Person"), by March 10th (March 15th with
respect to Saxon) (or if such day is not a Business Day, the immediately
preceding Business Day) of each year in which the Trust is subject to the
reporting requirements of the Exchange Act and otherwise within a reasonable
period of time upon request, a certification (each, a "Back-Up Certification"),
substantially 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) upon which the Certifying Person, the entity for which the
Certifying Person acts as an officer, and such entity's officers, directors and
Affiliates (collectively with the Certifying Person, "Certification Parties")
can reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Trust. Such officer of the Certifying Person can be contacted by e-mail at
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the
event any such party or any Servicing Function Participant engaged by such party
is terminated or resigns pursuant to the terms of this Agreement, or any
applicable sub-servicing agreement, as the case may be, such part shall provide
a Back-Up Certification to the Certifying Person pursuant to this Section
8.12(d) with respect to the period of time it was subject to this Agreement or
any applicable sub-servicing agreement, as the case may be. Notwithstanding the
foregoing, (i) the Master Servicer and the Securities Administrator shall not be
required to deliver a Back-Up Certification to each other if both are the same
Person and the Master Servicer is the Certifying Person and (ii) the Master
Servicer shall not be obligated to sign the Sarbanes Certification in the event
that it does not receive any Back-Up Certification required to be furnished to
it pursuant to this Section 8.12(d). In the event that prior to the filing date
of the Form 10-K in March of each year, a Servicer, the Master Servicer or the
Securities Administrator 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 Securities
Administrator 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 Securities Administrator's obligations under
this Section 8.12(d) or any material misstatement or material omission in (w)
any compliance certificate delivered by the Securities Administrator or any
Subcontractor of the Securities Administrator pursuant to Section 3.22 of this
Agreement, (x) any assessment or attestation delivered by or on behalf of the
Securities Administrator or any Subcontractor of the Securities Administrator
pursuant to Section 3.23 of this Agreement, (y) any Back-Up Certification in the
form of Exhibit M delivered by the Securities Administrator pursuant to Section
8.12(d) of this Agreement or (z) any information about the Securities
Administrator provided by it pursuant to Item 2 (Legal Proceedings) of Exhibit
T, Item 1117 and Item 1119 of Exhibit U or Item 6.02 (Change of Securities
Administrator) of Exhibit V (collectively, the "Securities Administrator
Information"), or the Securities Administrator's negligence, bad faith or
willful misconduct in connection therewith, (ii) each Servicer, severally and
not jointly, shall indemnify and hold harmless the Depositor, the Sponsor, the
Securities Administrator, the Master Servicer 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 such Servicer's obligations under this Section 8.12(d) or any
material misstatement or material omission, negligence, bad faith or willful
misconduct of such Servicer in connection therewith, and (iii) the Master
Servicer shall indemnify and hold harmless the Depositor, the Sponsor, the
Securities Administrator 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
Master Servicer's obligations under this Section 8.12(d) or any material
misstatement or material omission, negligence, bad faith or willful misconduct
of the Master Servicer in connection therewith. If the indemnification provided
for herein is unavailable or insufficient to hold harmless any indemnified
party, then (i) the Securities Administrator agrees in connection with a breach
of the Securities Administrator's obligations under this Section 8.12(d) or any
material misstatement or material omission contained in any Securities
Administrator Information, or any 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 Securities Administrator on the other and (ii) each
Servicer, several and not jointly, 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 such
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of such
Servicer in connection therewith.
The obligations of the Securities Administrator, the Master
Servicer, each Servicer and each Servicing Function Participant and Servicing
under this Section 8.12(d) shall apply to the Securities Administrator, the
Master Servicer, each Servicer and each Servicing Function Participant that
serviced a Mortgage Loan during the applicable period, whether or not such
Securities Administrator, the Master Servicer, such Servicer or such Servicing
Function Participant is acting as Securities Administrator, Master Servicer, a
Servicer or a Servicing Function Participant, 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 Securities
Administrator, the Master Servicer or the applicable Servicer, as applicable.
(e) (i) The obligations set forth in paragraphs (a) through (d) of
this Section 8.12 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 Securities Administrator is able to do
so under applicable law, the Securities Administrator shall prepare and file a
Form 15 Suspension Notification with respect to the Trust, with a copy to the
Depositor. At the beginning of the immediately succeeding calendar year 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 Securities Administrator shall recommence preparing and
filing, and the Master Servicer shall recommence executing, 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 Securities Administrator is unable to
timely file with the Commission all or any required portion of any Form
8-K (other than the initial Form 8-K filed by the Depositor with respect
to this Agreement), 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 (and the expiration
of the applicable grace period with respect to such deadline prior to such
failure to deliver resulting in an Event of Default) set forth in this
Agreement, the Securities Administrator will promptly electronically
notify the Depositor and if necessary, the Servicers. In the case of Form
10-D and 10-K, the Depositor, the Servicers and the Securities
Administrator 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 Securities Administrator
will, upon receipt of all disclosure information required to be included
on Form 8-K and as directed by the Depositor, include such disclosure
information on the next Form 10-D. In the event that any previously filed
Form 8-K, 10-D or 10-K needs to be amended, 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 Securities Administrator and 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 a duly authorized representative or a senior officer
in charge of master servicing, as applicable, of the Master Servicer. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their duties under this
Section 8.12(e) 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 (and the related grace periods thereto) in the performance of
their duties under this Section 8.12 and Sections 3.22 and 3.23. Neither
the Master Servicer nor the Securities Administrator shall have any
liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare and/or timely file any such
Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where
such failure results from the Securities Administrator's inability or
failure to obtain or receive, on a timely basis, any information from any
party hereto (other than the Securities Administrator, the Master Servicer
or any Subcontractor utilized by the Securities Administrator or the
Master Servicer) 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.
(f) 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 Securities Administrator
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 reported and prepared by
the party responsible for preparing such disclosure as set forth on Exhibit V
hereto and compiled by the Securities Administrator pursuant to the following
paragraph. The Securities Administrator will have no duty or liability for any
failure hereunder to determine or prepare any Form 8-K Disclosure Information or
any Form 8-K, except as set forth in the next 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 Securities Administrator, in XXXXX-compatible format, or in
such other form as otherwise agreed upon by the Securities Administrator and
such party, to the extent known by such applicable parties, any Form 8-K
Disclosure Information, if applicable, together with an Additional Disclosure
Notification. The Depositor will be responsible for all reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this
paragraph, including the conversion of any such disclosure into an
XXXXX-compatible format. The Depositor will approve as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information.
The Securities Administrator 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, to permit the Depositor to review and
verify such Form 8-K. Promptly, but no later than the close of business on the
3rd Business Day after the Reportable Event, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 8-K. In the absence of receipt of any
written changes or approval, the Securities Administrator shall be entitled to
assume that such Form 8-K is in final form and the Securities Administrator may
proceed with the execution and filing of the Form 8-K. A duly authorized
representative of the Master Servicer shall sign each Form 8-K 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 Securities Administrator. If a Form 8-K
cannot be filed on time or if a previously filed Form 8-K needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
8.12(e). Promptly (but in any case within one Business Day) after filing with
the Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The Depositor acknowledges that the performance by the
Securities Administrator and the Master Servicer of their 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, the Depositor and any other Person
obligated to provide Form 8-K Disclosure Information as set forth on Exhibit V
hereto, observing all applicable deadlines in the performance of their duties
under this Section 8.12(f). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's or the Master Servicer's inability or failure to obtain or
receive, on a timely basis, any information or signature from any party hereto
(other than the Securities Administrator or the Master Servicer or any
Subcontractor utilized by the Securities Administrator or the Master Servicer)
needed to prepare, execute or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(g) Neither the Master Servicer nor the Securities Administrator
shall have any 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 Securities Administrator or
any Subcontractor utilized by the Securities Administrator) provided to the
Securities Administrator 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 Securities Administrator pursuant to this Section 8.12, in either
case, not resulting from the Securities Administrator'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 Securities Administrator 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator 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) Each Custodian shall
provide access to the Mortgage Loan Documents in possession of such 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 applicable Custodian. Each 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 applicable Custodian shall release within five
Business Days the related Mortgage File in accordance with Section 3.16.
(b) Each 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 Custodians 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 Custodians
pursuant to Section 2.03(o), or (iii) because of willful misfeasance, bad faith,
or negligence in the performance of any of the Custodians' duties under this
Agreement. This indemnity shall survive the termination of this Agreement or the
earlier resignation or removal of such Custodian. Except as otherwise provided
in this Agreement or a separate letter agreement between the Depositor and the
applicable Custodian, such Custodian shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by such Custodian in the
ordinary course of its duties as Custodian under this Agreement or for any other
expenses incurred by such 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) Each 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 Custodian is appointed within 60 days after written notice of the
applicable Custodian's resignation is received by the Trustee, such Custodian
may petition a court of competent jurisdiction to appoint a successor Custodian.
Upon such resignation and appointment of successor Custodian, the
applicable Custodian shall, at such 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 Custodians
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. Each 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 applicable
Custodian of its obligation set forth in the preceding sentence or the failure
of any 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 each 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 such 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
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of each Servicer's obligations under this Agreement, and
(except as set forth below) shall use its reasonable good faith efforts to cause
such Servicer to duly and punctually perform its duties and obligations
hereunder. Upon the occurrence of an Event of Default of which a Responsible
Officer of the Master Servicer has actual knowledge, the Master Servicer shall
promptly notify the Securities Administrator and the Trustee and shall specify
in such notice the action, if any, the Master Servicer plans to take in respect
of such default. So long as an Event of Default shall occur and be continuing,
the Master Servicer shall take the actions specified in Article VII.
If (i) a Servicer reports a delinquency on a monthly report and (ii)
such Servicer, by 4 p.m. (Eastern Standard Time) on the related Remittance Date,
neither makes an Advance nor provides the Securities Administrator and the
Master Servicer with an Officer's Certificate certifying that such an Advance
would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, then
the Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date an Advance in
an amount equal to the difference between (x) with respect to each Monthly
Payment due on a Mortgage Loan that is delinquent (other than Relief Act
Interest Shortfalls) and for which the related Servicer was required to make an
Advance pursuant to this Agreement and (y) amounts deposited in the Collection
Account to be used for Advances with respect to such Mortgage Loan, except to
the extent the Master Servicer determines any such Advance to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. Subject to the
foregoing and Section 7.02, the Master Servicer shall continue to make such
Advances for so long as the related Servicer is required to do so under this
Agreement. If applicable, on the Business Day immediately preceding the
Distribution Date, the Master Servicer shall deliver an Officer's Certificate to
the Trustee and the Securities Administrator stating that the Master Servicer
elects not to make an Advance in a stated amount and detailing the reason(s) it
deems the Advance to be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance. Any amounts deposited by the Master Servicer pursuant to this Section
9.01 shall be net of the Servicing Fee for the related Mortgage Loans.
(b) The Master Servicer shall pay the costs of monitoring the
Servicers as required hereunder (including costs associated with (i) termination
of any Servicer, (ii) the appointment of a successor Servicer or (iii) the
transfer to and assumption of, the servicing by the Master Servicer) and shall,
to the extent permitted hereunder, seek reimbursement therefor initially from
the terminated Servicer. In the event the full costs associated with the
transition of servicing responsibilities to the Master Servicer are not paid for
by the predecessor or successor Servicer (provided such successor Servicer is
not the Master Servicer), the Master Servicer may be reimbursed therefor by the
Trust for out of pocket costs incurred by the Master Servicer associated with
any such transfer of servicing duties from the Servicer to the Master Servicer
or any other successor Servicer.
(c) If the Master Servicer assumes the servicing with respect to any
of the Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for any errors or omissions of such
Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer, rights and obligations under this
Agreement without the prior written consent of the Master Servicer, which
consent shall not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and other
Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Servicers, the
Depositor, the Securities Administrator, the Custodians and the Trustee, for the
benefit of the Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) [Reserved]
(c) It is understood and agreed that the representations and
warranties set forth in this Section 9.03 shall survive the execution and
delivery of this Agreement. The Master Servicer shall indemnify the Servicers,
the Depositor, the Securities Administrator, the Custodians, the Trustee and the
Trust and hold them harmless against any loss, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and other
reasonable costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a material breach of the
Master Servicer's representations and warranties contained in Section 9.03(a)
above. It is understood and agreed that the enforcement of the obligation of the
Master Servicer set forth in this Section 9.03 to indemnify the Servicers, the
Depositor, the Securities Administrator, the Custodians, the Trustee and the
Trust constitutes the sole remedy of the Servicers, the Depositor, the
Securities Administrator, the Custodians, the Trustee and the Trust, respecting
a breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Servicers,
Depositor, the Master Servicer, Securities Administrator, the applicable
Custodian or the Trustee or notice thereof by any one of such parties to the
other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to cause to be deposited in
the Distribution Account any payment received by it from a Servicer or required
to be made by the Master Servicer under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
provided that the thirty (30) day cure period shall not apply so long as the
Depositor is required to file any Forms 8-K, 10-D and 10-K required by the
Exchange Act with respect to the Trust Fund, the failure to comply with the
requirements set forth in Section 8.12, for which the grace period shall not
exceed the lesser of ten (10) calendar days or such period in which any
applicable Form 8-K, 10-D and 10-K required by the Exchange Act can be timely
filed (without taking into account any extensions);
(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, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts 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 for
three (3) Business Days;
(f) except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Securities Administrator, the Trustee and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any Affiliate or any director or employee thereof
that constitutes fraud or criminal activity in the performance of its
obligations under this Agreement, in each case, where such indictment materially
and adversely affects the ability of the Master Servicer to perform its
obligations under this Agreement (subject to the condition that such indictment
is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the Trustee
may have at law or equity to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least a majority
of the Voting Rights shall, terminate with cause all the rights and obligations
of the Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and, place in
such successor's possession all such documents with respect to the master
servicing of the Mortgage Loans and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, at the Master Servicer's sole expense. The Master Servicer shall
cooperate with the Trustee and such successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor master servicer for
administration by it of all cash amounts which shall at the time be credited to
the Distribution Account or are thereafter received with respect to the Mortgage
Loans.
All reasonable out-of-pocket costs and expenses incurred by the
Trustee in connection with the transfer of servicing from a terminated Master
Servicer, including, without limitation, any such costs or expenses associated
with the complete transfer of all servicing data and the completion, correction
or manipulation of such servicing data as may be required by the Trustee to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee (or any other successor Master Servicer appointed pursuant to
Section 9.06) to master service shall be paid by the terminated Master Servicer;
provided, however, that to the extent not previously reimbursed by the
terminated Master Servicer, such fees and expenses shall be payable to the
Trustee pursuant to Section 8.05.
Upon the occurrence of a Master Servicer Event of Default, the
Trustee shall provide the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a successor master servicer in the event the
Trustee should succeed to the duties of the Master Servicer as set forth herein.
Section 9.05 Waiver of Default. By a written notice, the Trustee may
with the consent of a Holders of Certificates evidencing at least a majority of
the Voting Rights waive any default by the Master Servicer in the performance of
its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Master Servicer Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume all
of the responsibilities, duties and liabilities of the Master Servicer under
this Agreement prior to the termination of the Master Servicer. Any successor
shall be a Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good standing and
acceptable to the Depositor and the Rating Agencies. 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 in no event shall the Master
Servicing Fee paid to such successor master servicer exceed that paid to the
Master Servicer hereunder. In the event that the Master Servicer's duties,
responsibilities and liabilities under this Agreement are terminated, the Master
Servicer shall continue to discharge its duties and responsibilities hereunder
until the effective date of such termination with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement and shall
take no action whatsoever that might impair or prejudice the rights of its
successor. The termination of the Master Servicer shall not become effective
until a successor shall be appointed pursuant hereto and shall in no event (i)
relieve the Master Servicer of responsibility for the representations and
warranties made pursuant to Section 9.03(a) hereof and the remedies available to
the Trustee under Section 9.03(b) hereof, it being understood and agreed that
the provisions of Section 9.03 hereof shall be applicable to the Master Servicer
notwithstanding any such sale, assignment, resignation or termination of the
Master Servicer or the termination of this Agreement; or (ii) affect the right
of the Master Servicer to receive payment and/or reimbursement of any amounts
accruing to it hereunder prior to the date of termination (or during any
transition period in which the Master Servicer continues to perform its duties
hereunder prior to the date the successor master servicer fully assumes its
duties).
If no successor Master Servicer has accepted its appointment within
90 days of the time the Trustee receives the resignation of the Master Servicer,
the Trustee shall be the successor Master Servicer in all respects under this
Agreement and shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto, including the
obligation to make Advances as successor Servicer; provided, however, that any
failure to perform any duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In the Trustee's capacity as
such successor, the Trustee shall have the same limitations on liability herein
granted to the Master Servicer. As compensation therefor, the Trustee shall be
entitled to receive the compensation, reimbursement and indemnities otherwise
payable to the Master Servicer, including the fees and other amounts payable
pursuant to Section 9.07 hereof.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or termination of this Agreement shall not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer's actions or failure to act prior to any such
termination or resignation or in connection with the Trustee's assumption as
successor master servicer of such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be paid the
Master Servicing Fee.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer 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 resulting Person to the Master Servicer
shall (i) be a Person (or have an Affiliate) that is qualified and approved to
service mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac (provided further that a
successor Master Servicer that satisfies subclause (i) through an Affiliate
agrees to service the Mortgage Loans in accordance with all applicable Xxxxxx
Mae and Xxxxxxx Mac guidelines) and (ii) have a net worth of not less than
$25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or
another successor master servicer satisfactory to the Trustee and the Depositor
shall have assumed, the Master Servicer's responsibilities and obligations under
this Agreement. Notice of such resignation shall be given promptly by the Master
Servicer and the Depositor to the Trustee.
If at any time, Xxxxx Fargo Bank, National Association, as Master
Servicer, resigns under this Section 9.09, or is removed as Master Servicer
pursuant to Section 9.04, then at such time Xxxxx Fargo Bank, National
Association shall also resign (and shall be entitled to resign) as Securities
Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the Trustee
and the Depositor of a letter from each Rating Agency to the effect that such
action shall not result in a downgrade of the ratings assigned to any of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision hereof,
the duties of the Master Servicer are transferred to a successor master
servicer, the entire compensation payable to the Master Servicer pursuant hereto
shall thereafter be payable to such successor master servicer but in no event
shall the fee payable to the successor master servicer exceed that payable to
the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee, the Securities
Administrator, the Servicers or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such person against any liability
that would otherwise be imposed by reason of willful malfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
for its obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Master Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties as Master Servicer with respect to the Mortgage Loans
under this Agreement and that in its opinion may involve it in any expenses or
liability; provided, however, that the Master Servicer may in its sole
discretion undertake any such action that it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom, shall
be liabilities of the Trust, and the Master Servicer shall be entitled to be
reimbursed therefor out of the Distribution Account in accordance with the
provisions of Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the performance of the obligations of the Servicers as required under this
Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Servicers, Depositor, the Sponsor, the
Securities Administrator, the Custodians, the Trustee and the Trust, and hold
them harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liability, fees
and expenses that the Servicers, Depositor, the Sponsor, the Securities
Administrator, the Custodians, the Trustee or the Trust may sustain as a result
of the Master Servicer's willful malfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement, including any failure by the
Master Servicer or any Subcontractor utilized by the Master Servicer to deliver
any information, report, certification or accountants' letter when and as
required under Sections 3.22, 3.23 or 8.12, including without limitation any
failure by the Master Servicer to identify any Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB. The
Depositor, the Securities Administrator, the applicable Custodian, Sponsor, each
Servicer and the Trustee shall immediately notify the Master Servicer if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans
which would entitle the Depositor, the Securities Administrator, the applicable
Custodian, each Servicer, the Trustee or the Trust to indemnification under this
Section 9.12, whereupon the Master Servicer shall assume 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 them in respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under this
Agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this
Agreement, (ii) resulting from any breach of the applicable Servicer's
obligations in connection with this Agreement for which such Servicer has
performed its obligation to indemnify the Trustee and the Custodians pursuant to
Section 6.05, (iii) 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 obligation to indemnify the Master Servicer
pursuant to this Agreement, or (iv) the Master Servicer's willful malfeasance,
bad faith or negligence or by reason of its reckless disregard of its duties and
obligations under this Agreement; provided that any such loss, liability or
expense constitutes an "unanticipated expense incurred by the REMIC" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer
shall be entitled to reimbursement for any such indemnified amount from funds on
deposit in the Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non-conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates relating
to the time, method and place of conducting any proceeding for any remedy
available to the Securities Administrator, or exercising or omitting to
exercise any trust or power conferred upon the Securities Administrator
under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Servicers or the Trustee.
The Securities Administrator shall be permitted to utilize one or
more Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Securities Administrator complies with Section
3.02(e) as if the Securities Administrator were a "Servicer" pursuant to that
Section. The Securities Administrator shall indemnify the Depositor, such
Sponsor and any director, officer, employee or agent of the Depositor or such
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 Securities Administrator to
perform any of its obligations under Section 3.22 or Section 3.23, including
without limitation any failure by the Securities Administrator 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 Securities Administrator.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Securities Administrator to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of any Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Distribution Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Sponsor, as the case may be,
and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement, the Interest Rate Swap Agreement, the
Interest Rate Cap Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Securities Administrator's
execution and authentication of the Certificates. The Securities Administrator
shall not be accountable for the use or application by the Depositor or any
Servicer of any funds paid to the Depositor or any Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Depositor or any Servicer.
The Securities Administrator executes the Interest Rate Swap
Agreement, the Interest Rate Cap Agreement and the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority conferred
and vested in it by this Agreement. Each of the undertakings and agreements made
on the part of the Securities Administrator on behalf of the Trust Fund in the
Interest Rate Swap Agreement, the Interest Rate Cap Agreement and the
Certificates is made and intended not as a personal undertaking or agreement by
the Trustee but is made and intended for the purpose of binding only the Trust
Fund.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee, agent
or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"), of
the Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement, the Interest Rate Swap Agreement or the Interest Rate Cap Agreement,
(b) the Mortgage Loans or (c) the Certificates, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Securities Administrator's duties hereunder, (ii)
incurred in connection with the performance of any of the Securities
Administrator's duties hereunder or under such other agreements, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of any of the Securities Administrator's duties
hereunder or (iii) incurred by reason of any action of the Securities
Administrator taken at the direction of the Certificateholders, provided that
any such loss, liability or expense constitutes an "unanticipated expense
incurred by the REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Securities Administrator
hereunder. Without limiting the foregoing, and except for any such expense,
disbursement or advance as may arise from the Securities Administrator's
negligence, bad faith or willful misconduct, or which would not be an
"unanticipated expense" within the meaning of the second preceding sentence, the
Securities Administrator shall be reimbursed by the Trust for all reasonable
expenses, disbursements and advances incurred or made by the Securities
Administrator in accordance with any of the provisions of this Agreement with
respect to: (A) the reasonable compensation and the expenses and disbursements
of its counsel not associated with the closing of the issuance of the
Certificates, (B) the reasonable compensation, expenses and disbursements of any
accountant, engineer, appraiser or other agent that is not regularly employed by
the Securities Administrator, to the extent that the Securities Administrator
must engage such Persons to perform acts or services hereunder and (C) printing
and engraving expenses in connection with preparing any Definitive Certificates.
The Trust shall fulfill its obligations under this paragraph from amounts on
deposit from time to time in the Distribution Account. The Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 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 Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator functions are operated through an institutional trust
department of the Securities Administrator, (ii) must be authorized to exercise
corporate trust powers under the laws of its jurisdiction of organization, and
(iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency and
rates such successor, or the equivalent rating by S&P or Xxxxx'x. If no
successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases to
be the Securities Administrator pursuant to Section 10.07, then the Trustee may
(but shall not be obligated to) become the successor Securities Administrator.
The Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 10.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor, the Swap Provider and the Trustee and each Rating
Agency not less than 60 days before the date specified in such notice when,
subject to Section 10.08, such resignation is to take effect, and acceptance by
a successor Securities Administrator in accordance with Section 10.08 meeting
the qualifications set forth in Section 10.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Swap Provider
and the Depositor and to its predecessor Securities Administrator and the
Trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor Securities Administrator shall become
effective and such successor Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as Securities Administrator herein. The Depositor, the Trustee,
the Master Servicer and the predecessor Securities Administrator shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Securities Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor, the Swap
Provider and the Trustee. If, pursuant to any provision hereof, the duties of
the Securities Administrator are transferred to a successor securities
administrator, the entire compensation payable to the Securities Administrator
pursuant hereto shall thereafter be payable to such successor securities
administrator but in no event shall the fee payable to the successor Securities
Administrator exceed that payable to the predecessor Securities Administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Sections 11.02 and 11.03, the obligations and
responsibilities of the Depositor, the Servicers, the Master Servicer, the
Securities Administrator 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 Saxon 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 11.02, 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 11.02 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 Securities Administrator 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 11.01, 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 11.01, by the 25th day of the month
preceding the month of the final distribution, such Servicer or Servicers shall
notify the Depositor, the Master Servicer and the Securities Administrator 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 Securities
Administrator 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 Securities Administrator 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
Securities Administrator 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 applicable Custodian of a
Request for Release therefor, the applicable Custodian shall promptly release to
the applicable Servicer the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicers, the Master
Servicer, the Securities Administrator, 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 Securities Administrator
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
Securities Administrator 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 11.03 Additional Termination Requirements. In the event the
applicable Servicer or both Servicers exercise their purchase option with
respect to the Mortgage Loans as provided in Section 11.01, 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 11.03 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 Securities Administrator 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 Securities Administrator 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 Securities
Administrator sold the assets of the Trust Fund to the applicable Servicer or
Servicers, as the case may be.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicers, the Responsible Parties, the Master
Servicer, the Securities Administrator, the Custodians 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 Master Servicer, the Securities
Administrator, the Custodians 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, the Securities Administrator 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
Custodians, the Depositor, the Responsible Parties, the Master Servicer, the
Securities Administrator 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 and
Grantor Trust under the Code, (ii) avoid or minimize the risk of the imposition
of any tax on any Trust REMIC or Grantor Trust 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 or to facilitate the
administration and reporting of each Trust REMIC or Grantor Trust; 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; provided, however, that any amendment that
would otherwise require the consent of Holders pursuant to the next paragraph
shall be made only pursuant to the terms of the next paragraph.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Responsible Parties, the Master Servicer, the
Securities Administrator, the Custodians 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; provided, further, that,
without the consent of the Holders of a majority of the Certificates then
Outstanding, no such amendment shall result in a Significant Change to a
Permitted Activity.
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.
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 12.01 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, the Master
Servicer or the Securities Administrator to enter into an amendment without
receiving an Opinion of Counsel (which Opinion shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator or the Trust Fund),
satisfactory to the Trustee, the Master Servicer or the Securities Administrator
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 12.01.
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 12.02 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 12.03 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 12.04 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 12.05 Notices. (a) The Securities Administrator 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, the Master
Servicer, the Securities Administrator 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 Securities Administrator shall promptly furnish
to each Rating Agency copies (which may be provided electronically via the
Securities Administrator'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, Xxxxxx.Xxxxxxx@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:
lupe_montero@ xxxxxxxxxxx.xxx; (c) in the case of Saxon, to Saxon Mortgage
Services, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxx 00000 Attention: Xxxxx
Xxxx, President, with a copy to Saxon Capital, Inc., 0000 Xxx Xxxx, Xxxxx 000,
Xxxx Xxxxx, Xxxxxxxx 00000, Attention: Legal Department, or such other address
as may be hereafter furnished to the parties in writing; (d) in the case of
Xxxxx Fargo in its capacity as Securities Administrator and Master Servicer,
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client
Services Manager, MSAC 2007-HE5, or such other address as may be hereafter
furnished to the other parties hereto and the Swap Provider and the Cap Provider
by Xxxxx Fargo in writing or, in the case of Mortgage Loan document release
requests and other document inquiries to 00 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxx 00000, Attention: MSAC 2007-HE5, or such other address as the
Securities Administrator may hereafter furnish to the other parties hereto and
the Swap Provider and the Cap Provider by the Securities Administrator in
writing; provided, however, all reports, statements, certifications and
information required to be provided to the Securities Administrator pursuant to
Section 8.12 for filing shall be electronically forwarded to
xxx.xxx.xxxxxxxxxxxx@xxxxxxxxxx.xxx; (e) in the case of WMC, WMC Mortgage Corp.,
0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxxx,
Facsimile No. (000) 000-0000, with a copy to General Counsel, Facsimile No.
(000) 000-0000, or such other address as may be hereafter furnished to the other
parties hereto and the Swap Provider by WMC in writing; (f) 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 and the
Cap Provider by Decision One in writing; (g) 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 and the Cap Provider by LaSalle in writing;
(h) in the case of the Trustee, to Deutsche Bank National Trust Company, 0000
Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust
Administration-MS07H5 or such other address as the Trustee may hereafter furnish
to the other parties hereto and the Swap Provider and the Cap Provider by the
Trustee in writing; (i) in the case of the Swap Provider and the Cap 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 and the Cap Provider
in writing; and (j) 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 12.06 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 12.07 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 xxxxxxxxxxxx X&X 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 12.07 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 12.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Responsible Parties, the Master
Servicer, the Securities Administrator, the Custodians 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 none of the
Trustee, the Securities Administrator 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) none of the Securities
Administrator, the Master Servicer or the Trustee shall have any responsibility
to track or monitor the administration of the financing arrangement between the
applicable Servicer and the lender.
Section 12.08 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 12.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.09 Inspection and Audit Rights. Each Servicer agrees
that, on 5 Business Days prior notice, it will permit any representative of the
Depositor, the Master Servicer 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, the Master Servicer 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, the Master Servicer or the
Trustee of any right under this Section 12.09 shall be borne by such Servicer.
Section 12.10 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
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 12.11 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 12.12 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 12.13 Opinions of Internal Counsel of WMC. WMC acknowledges
and agrees that, in connection with any legal opinions delivered by any internal
counsel of WMC in connection with the execution, delivery and/or performance by
WMC of this Agreement (including any opinions rendered on the Closing Date), WMC
shall be liable to the addressees thereon for any and all claims or demands
arising out of or based upon any such legal opinion.
Section 12.14 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 12.15 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 Securities Administrator, the Master Servicer, the Trustee and each
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 Securities Administrator, the Master
Servicer, the Trustee and each 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: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer and
President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: 1st Vice President
WMC MORTGAGE CORP.,
as Responsible Party
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: SVP - Capital Markets
DECISION ONE MORTGAGE
COMPANY, LLC,
as Responsible Party
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President Secondary
XXXXX FARGO BANK NATIONAL ASSOCIATION,
as Master Servicer and Securities
Administrator
By: /s/ Xxxxxxxx X.X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X.X. Xxxxx
Title: Vice President
XXXXX FARGO BANK NATIONAL ASSOCIATION,
as Custodian
By: /s/ Xxxxxxxx X.X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X.X. Xxxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signer
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Securities Administrator, the Custodians and the Trustee
and not attached to the Pooling and Servicing Agreement)
SCHEDULE II
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of Saxon
Saxon hereby makes with respect to the Mortgage Loans the following
representations and warranties to the Depositor, the Master Servicer, the
Securities Administrator 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
Xxxxxxx 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 complete
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-HE5
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect to the Mortgage Loans the
following representations and warranties to the Master Servicer, the Securities
Administrator 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 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
Xxxxxxx Mac's and Xxxxxx 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 Xxxxxxx Mac's and Xxxxxx 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 Xxxxxxx Mac's and Xxxxxx Mae's
dollar amount limits for first lien mortgage loans for that property type.
SCHEDULE IV
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of WMC as to the Mortgage Loans
With respect to the Mortgage Loans for which WMC is specific as the
Responsible Party on the Mortgage Loan Schedule, WMC hereby makes the following
representations and warranties set forth in this Schedule IV to the Depositor,
the Servicers, the Master Servicer, the Securities Administrator and the Trustee
as of the Closing Date. Capitalized terms used but not otherwise defined in the
Agreement shall have the meanings ascribed thereto in the WMC Purchase
Agreement.
(a) Mortgage Loans as Described. WMC Mortgage Corp. has delivered to
the Sponsor, as of April 1, 2007, the Data Tape Information and that Data
Tape Information set forth on the Mortgage Loan Schedule (other than
information regarding the Stated Principal Balances or Due Dates) are true
and correct, including, without limitation, the terms of the Prepayment
Charges, if any, as of the Closing Date. As of the Transfer Date (as
defined below) and with respect to each Mortgage Loan, the information
regarding the Stated Principal Balances and Due Dates set forth on the
Data Tape Information and the Mortgage Loan Schedule are true and correct;
(b) Payments Current. Except with respect to WMC Mortgage Loans
representing approximately 1.33% of the aggregate principal balance of the
WMC Mortgage Loans, as of the Cut-Off Date all payments required to be
made up to the 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, exclusive of any period of grace, 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. Except with respect to WMC Mortgage
Loans representing approximately 1.33% of the aggregate principal balance
of the WMC Mortgage Loans, as of the Cut-Off Date there were 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. As of the related Transfer Date, 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. As of the related Transfer Date, 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, subject to bankruptcy, equitable
principles and laws affecting creditor rights;
(f) Hazard Insurance. As of the related Transfer Date, pursuant to
the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by an insurer acceptable in accordance with
Seller's Underwriting Guidelines against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is situated as well as all additional requirements set
forth in Section 2.10 of the Interim Servicing Agreement. As of the
related Transfer Date, 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 Seller's
Underwriting Guidelines as well as all additional requirements set forth
in Section 2.10 of the Interim Servicing Agreement. As of the related
Transfer Date, all individual insurance policies contain a standard
mortgagee clause naming the originator and its successors and assigns as
mortgagee, and all premiums thereon have been paid. As of the related
Transfer Date, 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 Mortgagor'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. As of the related Transfer Date, 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 Trustee 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 or
the Trustee's inspection, and shall deliver to the Purchaser or the
Trustee upon demand, evidence of compliance with all such requirements to
the extent compliance therewith can be demonstrated and if required by
applicable law. This representation and warranty is a Deemed Material and
Adverse Representation;
(h) No Satisfaction of Mortgage. As of the related Transfer Date,
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) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which
the use of a leasehold estate for residential properties is a
widely-accepted practice, that consists of one or more separate and
complete tax parcels of real property improved by a Residential Dwelling;
provided, however, that any condominium unit or planned unit development
(other than a de minimis planned unit development) 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 Mortgagor
occupied the related Manufactured Home as its primary residence, 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. No portion of the Mortgaged Property
is 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. None of the
Mortgaged Properties are log homes, mobile homes, geodesic domes or other
unique property types. Clause (iv) above is a Deemed Material and Adverse
Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting
and enforceable 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 (collectively,
the "Permitted Exceptions"):
(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 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 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 subject to the Permitted Exceptions;
(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), subject to bankruptcy, equitable principles and
laws affecting creditor rights. 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 the Seller in connection with the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan. Notwithstanding the foregoing, but without limiting the
other representations and warranties set forth elsewhere in this
Agreement, if any error, omission or negligence in the origination of such
Mortgage Loan occurred despite Seller's conformance with its Underwriting
Guidelines (as in effect at the time such Mortgage Loan was made), then
there shall be a presumptive conclusion that there was no error, omission
or negligence. No fraud, misrepresentation, or similar occurrence or, to
Seller's knowledge, error, omission, or negligence with respect to a
Mortgage Loan has taken place on the part of any Person (other than
Seller), 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. Immediately prior to the transfer contemplated by the
WMC Purchase Agreement, the Seller was 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 Sponsor, the Seller
retained 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 was not assigned or pledged, and the
Seller had 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;
(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 to the
extent required to ensure enforceability of the Mortgage Loan, 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 or a CLTV greater than 100%;
(p) Title Insurance. As of the related Transfer Date, 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 pursuant to
Seller's Underwriting Guidelines and each such title insurance policy is
issued by a title insurer acceptable to prudent lenders in the secondary
mortgage market and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the originator, 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 Permitted Exceptions, 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 (or its
predecessor in interest), its successors 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. As of the related Transfer Date, 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. Except with respect to WMC Mortgage Loans
representing approximately 1.33% of the aggregate principal balance of the
WMC Mortgage Loans, as of the Cut-Off Date there was 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. As of the related Transfer Date, 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. 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, except with respect to a
Mortgage Loan purchased from a correspondent as indicated on the Mortgage
Loan Schedule. Principal payments on the Mortgage Loan commenced no more
than seventy 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. Unless specified
on the related Mortgage Loan Schedule as an interest-only loan or a
Balloon Mortgage Loan, 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 (or forty years for Mortgage Loans identified
on the Mortgage Loan Schedule as a Balloon Mortgage Loan with a forty year
amortization period). Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month
and the Mortgage Loan does not require a balloon payment on its stated
maturity date;
(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, as may be amended from time to time by the Seller (a copy of
which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to prudent mortgage
lenders in the secondary mortgage market and no representations have been
made 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. As
of the related Transfer Date, 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. As of the related Transfer Date, 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 this 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 Seller's
Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated 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 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 subject to applicable bankruptcy,
equitable principles and laws affecting creditors' rights;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents do not allow an assumption of such
Mortgage Loan by any other party;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. As of the related Transfer Date, 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 applicable 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 to prudent mortgage lenders in the secondary market.
The consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the related Transfer Date, there is no proceeding pending or, to
Seller's knowledge, 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 at least the same condition or
better than its condition at the time of its appraisal. Since the time of
its appraisal, there have not been any condemnation proceedings with
respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
the Seller and the Interim Servicer 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. As of the related Transfer Date, 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 Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. As of the related Transfer Date, all
Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage.
As of the related Transfer Date, 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. As of the related Transfer Date, the Seller or the Interim Servicer
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. As of the
related Transfer Date, 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. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the
Mortgage Interest Rate from adjustable rate to a fixed rate;
(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 Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, PMI 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. As of the related Transfer
Date and to the best of the Seller's knowledge, (i) 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; and
(ii) there is no violation of any environmental law, rule or regulation
with respect to the Mortgaged 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 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 Seller's Underwriting Guidelines 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 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) 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;
(rr) Credit Reporting. As of the related Transfer Date, the Seller
(or its sub-servicer) has caused to be fully furnished, in accordance with
the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (i.e., 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;
(ss) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect
to each MERS Designated Mortgage Loan;
(tt) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder
on the MERS(R) System;
(uu) No Default Under First Lien. As of the related Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and as of the related Transfer Date,
there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and as
of the related Transfer Date, 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;
(vv) 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;
(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 leasehold
estate, such lease conforms to the requirements required by Xxxxxx Xxx
pursuant to the Xxxxxx Mae Guide;
(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. 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. The
second and third sentences of this representation and warranty are 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" under Section 860G(a)(3) of the Code;
(ddd) 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;
(eee) 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;
(fff) 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;
(ggg) Mortgagor Bankruptcy. As of the related Transfer Date, 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;
(hhh) No Prior Offer. The Mortgage Loan has not been previously
rejected by a third-party purchaser;
(iii) [Reserved];
(jjj) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Mae Guides. This representation and
warranty is a Deemed Material and Adverse Representation;
(kkk) Mortgagor Selection. No Mortgagor was 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 account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Seller or any Affiliate of the Seller
with which the Seller has a referral relationship or mechanism in place.
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 Seller with which the Seller has a referral relationship or
mechanism in place, the Seller referred the related Mortgagor's
application to such Affiliate for underwriting consideration. This
representation and warranty is a Deemed Material and Adverse
Representation;
(lll) 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;
(mmm) 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) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium; provided, that such offer may have been
evidenced by the Seller's rate sheet/pricing grid relating to such
Mortgage Loan, which provided that the Mortgage Loan had a full prepayment
premium buy-out pricing adjustment available, (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 Seller, 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;
(nnn) 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;
(ooo) 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 Xxxxxx Mae's anti-predatory lending requirements as set
forth in the Xxxxxx Mae 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;
(ppp) 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;
(qqq) No Arbitration. No Mortgage Loan originated on or after August
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; and
(rrr) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property was the Mortgagor's principal residence at
the time of the origination of such Second Lien Loan. This representation
and warranty is a Deemed Material and Adverse Representation.
"Transfer Date" shall have the following meaning:
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.
SCHEDULE V
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of WMC as to WMC
WMC hereby makes the representations and warranties set forth in
this Schedule V to the Depositor, the Servicers, the Master Servicer, the
Securities Administrator 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 V is attached.
(a) Due Organization and Authority. WMC is a corporation, 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 the states where the Mortgaged Properties are located if
the laws of such state require licensing or qualification in order
to conduct business of the type conducted by WMC. WMC 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 WMC and the
consummation of the transactions contemplated hereby have been duly
and validly authorized; this Agreement has been duly executed and
delivered and constitutes the valid, legal, binding and enforceable
obligation of WMC, 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 WMC to make this
Agreement valid and binding upon WMC in accordance with its terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition or origination of the Mortgage Loans by WMC, the
sale of the Mortgage Loans to the Sponsor, 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 WMC's charter, by-laws or other organizational
documents or any legal restriction or any agreement or instrument to
which WMC 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 WMC 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 Sponsor to
realize on the Mortgage Loans, impair the value of the Mortgage
Loans, or impair the ability of the Sponsor to realize the full
amount of any insurance benefits accruing pursuant to this
Agreement;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to WMC's knowledge, threatened against
WMC, 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,
would likely result in any material adverse change in the business,
operations, financial condition, properties or assets of WMC, or in
any material impairment of the right or ability of WMC to carry on
its business substantially as now conducted, or in any material
liability on the part of WMC, 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 WMC
contemplated herein, or which would be likely to impair materially
the ability of WMC to perform under the terms of this Agreement;
(d) 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 WMC is required or, if
required, such consent, approval, authorization or order has been or
will, prior to the Closing Date, be obtained;
(e) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of
business of WMC, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by WMC pursuant to this Agreement
are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction; and
(f) Ability to Perform; Solvency. WMC 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. WMC is solvent and the
sale of the Mortgage Loans will not cause WMC to become insolvent.
The sale of the Mortgage Loans is not undertaken with the intent to
hinder, delay or defraud any of WMC's creditors.
SCHEDULE VI
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates,
Series 2007-HE5
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. Except with respect to Decision One Mortgage
Loans representing approximately 0.54% of the aggregate principal balance
of the Decision One Mortgage Loans, as of the Cut-Off Date all payments
required to be made up to the 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. Except with respect to Decision One
Mortgage Loans representing approximately 0.54% of the aggregate principal
balance of the Decision One Mortgage Loans, as of the Cut-Off Date there
were 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 Mortgagor'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 Xxxxxxx Mac and each such
title insurance policy is issued by a title insurer acceptable to Xxxxxx
Mae or Xxxxxxx 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. Except with respect to Decision One Mortgage Loans
representing approximately 0.54% of the aggregate principal balance of the
Decision One Mortgage Loans, as of the Cut-Off Date, 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 Xxxxxxx Mac or Xxxxxx Mae 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 Mae 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 Mortgagor 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-HE5
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of LaSalle, as Custodian
LaSalle hereby makes the representations and warranties set forth in
this Schedule VII to the Master Servicer, the Securities Administrator 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
VII 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 LaSalle 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, LaSalle has
obtained the same.
SCHEDULE VIII
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of Countrywide Servicing, as Servicer
Countrywide Servicing hereby makes the representations and
warranties set forth in this Schedule VIII to the Depositor, the Master
Servicer, the Securities Administrator 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 Xxxxxxx 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 Mae, Xxxxxxx 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 IX
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates,
Series 2007-HE5
Representations and Warranties of Xxxxx Fargo, as Custodian
Xxxxx Fargo hereby makes the representations and warranties set
forth in this Schedule IX 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 IX is attached.
(a) Xxxxx Fargo 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 Xxxxx Fargo 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) Xxxxx Fargo 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 Xxxxx Fargo 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 Xxxxx Fargo, enforceable against
Xxxxx Fargo 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 Xxxxx Fargo, 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 Xxxxx Fargo and will not (i) result
in a material breach of any term or provision of the articles of
incorporation or by laws of Xxxxx Fargo, (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 Xxxxx Fargo is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or regulation
applicable to Xxxxx Fargo of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Xxxxx Fargo; and
Xxxxx Fargo 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 Xxxxx Fargo's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or threatened against Xxxxx Fargo that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Xxxxx Fargo to perform
any of its obligations under this Agreement in accordance with the terms
thereof. For purposes of the foregoing, Xxxxx Fargo does not regard any
actions, proceedings or investigations "threatened" unless the potential
litigants or governmental authority has manifested to a member of the
Xxxxx Fargo & Company Law Department having responsibility for litigation
matters involving the corporate trust activities of Xxxxx Fargo its
present intention to initiate such proceedings.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Xxxxx Fargo of, or compliance by Xxxxx Fargo with, this
Agreement or the consummation of the transactions contemplated thereby, or
if any such consent, approval, authorization or order is required, Xxxxx
Fargo has obtained the same.
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") 00-00, XXXX 00-0, XXXX 00-00, XXXX 00-00 XX XXXX 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[__]
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 : April 1, 2007
First Distribution Date : May 25, 2007
Initial Certificate Balance of this
Certificate ("Denomination") : $[____________________]
Initial Certificate Balances of all
Certificates of this Class :
[A-1] $119,919,000
[A-2a] $408,820,000
[A-2b] $122,420,000
[A-2c] $169,910,000
[A-2d] $103,826,000
[M-1] $40,290,000
[M-2] $36,735,000
[M-3] $23,108,000
[M-4] $20,145,000
[M-5] $19,553,000
[M-6] $18,368,000
[B-1] $17,775,000
[B-2] $16,590,000
[B-3] $14,813,000
CUSIP :
[A-1] 61753K AA4
[A-2a] 61753K XX0
[X-0x] 61753K AC0
[A-2c] 61753K AD8
[A-2d] 61753K AE6
[M-1] 61753K AF3
[M-2] 61753K AG1
[M-3] 61753K AH9
[M-4] 61753K AJ5
[M-5] 61753K AK2
[M-6] 61753K XX0
[X-0] 61753K AM8
[B-2] 61753K AN6
[B-3] 61753K AP1
ISIN :
[A-1] US61753KAA43
[A-2a] US61753KAB26
[A-2b] US61753KAC09
[A-2c] US61753KAD81
[A-2d] US61753KAE64
[M-1] US61753KAF30
[M-2] US61753KAG13
[M-3] US61753KAH95
[M-4] US61753KAJ51
[M-5] US61753KAK25
[M-6] US61753KAL08
[B-1] US61753KAM80
[B-2] US61753KAN63
[B-3] US61753KAP12
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates, Series 2007-HE5
[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 Master Servicer, the Securities Administrator, 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"), Xxxxx Fargo Bank, National Association,
as master servicer (the "Master Servicer"), as securities administrator (the
"Securities Administrator") and as a custodian, Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., 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 a 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 Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
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-HE5 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 neither the Trustee nor the Securities Administrator
is 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, 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
Securities Administrator, 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 11.01 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 Securities Administrator 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 SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR 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 SECURITIES ADMINISTRATOR 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 SECURITIES ADMINISTRATOR
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 SECURITIES ADMINISTRATOR 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 SECURITIES ADMINISTRATOR 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates, Series 2007-HE5
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 Master
Servicer, the Securities Administrator, 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"), Xxxxx Fargo Bank, National Association,
as master servicer (the "Master Servicer"), as securities administrator (the
"Securities Administrator") and as a custodian, Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., 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 a 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, 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 Securities Administrator.
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 Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
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-HE5 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 neither the Trustee nor the Securities Administrator
is 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, 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
Securities Administrator, 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 11.01 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 Securities Administrator 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 SECURITIES ADMINISTRATOR 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 SECURITIES
ADMINISTRATOR 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates, Series 2007-HE5
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 Master Servicer, the Securities Administrator,
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"), Xxxxx Fargo Bank, National
Association, as master servicer (the "Master Servicer"), as securities
administrator (the "Securities Administrator") and as a custodian, Saxon
Mortgage Services, Inc., as a servicer, Countrywide Home Loans Servicing LP, as
a servicer, WMC Mortgage Corp., 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 a 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 Securities Administrator 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
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, 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 Securities
Administrator, 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 Securities Administrator 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 Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator 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 Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By ____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
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-HE5 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 neither the Trustee nor the Securities Administrator
is 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, 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
Securities Administrator, 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 11.01 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 Securities Administrator 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 SECURITIES ADMINISTRATOR 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 SECURITIES
ADMINISTRATOR 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates, Series 2007-HE5
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 Master Servicer, the Securities
Administrator, 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"), Xxxxx Fargo Bank, National
Association, as master servicer (the "Master Servicer"), as securities
administrator (the "Securities Administrator") and as a custodian, Saxon
Mortgage Services, Inc., as a servicer, Countrywide Home Loans Servicing LP, as
a servicer, WMC Mortgage Corp., 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 a 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 Securities Administrator 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
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, 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 Securities
Administrator, 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 Securities Administrator 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 Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator 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 Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By ____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
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-HE5 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 neither the Trustee nor the Securities Administrator
is 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, 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
Securities Administrator, 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 11.01 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 Securities Administrator 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 SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND
EITHER (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR 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 SECURITIES ADMINISTRATOR 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 SECURITIES ADMINISTRATOR, 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 SECURITIES ADMINISTRATOR, THE MASTER SERVICER, 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 SECURITIES ADMINISTRATOR 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 SECURITIES ADMINISTRATOR
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 SECURITIES ADMINISTRATOR 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 SECURITIES ADMINISTRATOR 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 : April 1, 2007
First Distribution Date : May 25, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
Mortgage Pass-Through Certificates, Series 2007-HE5
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 Master
Servicer, the Securities Administrator, 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"), Xxxxx Fargo Bank, National Association,
as master servicer (the "Master Servicer"), securities administrator (the
"Securities Administrator") and as a custodian, Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, 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 Securities Administrator, 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 Securities Administrator, which Opinion
of Counsel shall not be an expense of the Trustee, the Securities Administrator,
the Servicers or the Trust Fund, addressed to the Securities Administrator, 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 Securities Administrator 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 Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5
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-HE5 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 neither the Trustee nor the Securities Administrator
is 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator, 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
Securities Administrator, 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 11.01 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 Securities Administrator 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
April 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
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: MSAC 2007-HE5
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-HE5
LaSalle Bank, National Association
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of April 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Master Servicer, Securities Administrator
and a Custodian, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, WMC Mortgage
Corp., 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 a Custodian,
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5
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 (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 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 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
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.
[XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Custodian]
By:____________________________________
Name:__________________________________
Title:_________________________________
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF CUSTODIAN
[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
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: MSAC 2007-HE5
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-HE5
LaSalle Bank, National Association
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of April 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Master Servicer, Securities Administrator
and a Custodian, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, WMC Mortgage
Corp., 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 a Custodian,
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5
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, 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 copy of 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;
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 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
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 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.
[XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Custodian]
By:____________________________________
Name:__________________________________
Title:_________________________________
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5,
Mortgage Pass-Through Certificates,
Series 2007-HE5
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, Xxxxx
Fargo Bank, National Association ("Xxxxx Fargo"), as
Securities Administrator, Master Servicer and a Custodian,
Saxon Mortgage Services, Inc., as a Servicer, Countrywide Home
Loans Servicing LP, as a Servicer, WMC Mortgage Corp., 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 a Custodian (together with Xxxxx Fargo in its
capacity as a custodian, the "Custodians"). 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
7721(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: [__]
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: MSAC 2007-HE5
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5, Mortgage
Pass-Through Certificates, Series 2007-HE5, 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: [______]
Xxxxxx Xxxxxxx Capital Services Inc.,
as Swap Provider and Cap Provider
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: NY ISD SPV Team
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: MSAC 2007-HE5
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5, Mortgage
Pass-Through Certificates, Series 2007-HE5, 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 X-0, Xxxxx X-0x,
Xxxxx X-0x, 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-HE5 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-HE5 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 Custodian)
To: [Custodian]
Re: In connection with the administration of the Mortgage Loans held by
you as the Custodian on behalf of the Certificateholders, pursuant
to the Pooling and Servicing Agreement, dated as of April 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo
Bank, National Association, as Master Servicer, Securities
Administrator and a Custodian, Saxon Mortgage Services, Inc., as a
Servicer, Countrywide Home Loans Servicing LP, as a Servicer, WMC
Mortgage Corp., 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 a
Custodian, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5,
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, 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:
[XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Custodian]
By:____________________________________
Name:
Title:
Date:
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
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 applicable Custodian:
(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 applicable
Custodian 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
applicable Custodian 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 applicable Custodian 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 applicable Custodian 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-HE5 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE5, issued pursuant
to the Pooling and Servicing Agreement, dated as of April 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo
Bank, National Association, as Master Servicer, Securities
Administrator and a Custodian, Saxon Mortgage Services, Inc., as a
Servicer, Countrywide Home Loans Servicing LP, as a Servicer, WMC
Mortgage Corp., 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 a
Custodian, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5
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 Master Servicer,
the Securities Administrator, the Servicers and the Custodians.
Date: ________________________________
______________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF ANNUAL CERTIFICATION TO BE
PROVIDED TO THE MASTER SERVICER
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE5, issued pursuant
to the Pooling and Servicing Agreement, dated as of April 1, 2007,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo
Bank, National Association, as Master Servicer, Securities
Administrator and a Custodian, Saxon Mortgage Services, Inc., as a
Servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC
Mortgage Corp., 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 a
Custodian, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2007-HE5
I, ________________________________, the _______________________ of [NAME
OF COMPANY], certify to [the Purchaser], [the Depositor], and the Master
Servicer, and their 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 Xxxxx Fargo 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 Xxxxx Fargo;
(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 in all material respects; and
(5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer and
Subcontractor pursuant to the Agreement, have been provided to Xxxxx
Fargo. Any material instances of noncompliance described in such reports
have been disclosed to [Xxxxx Fargo]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date: _________________________
By:
Name: ________________________________
EXHIBIT N
[Reserved]
EXHIBIT O
WMC PURCHASE AGREEMENT
================================================================================
FIFTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
---------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
WMC MORTGAGE CORP.,
Seller
---------------
Dated as of November 1, 2006
Subprime,
Fixed and Adjustable Rate, Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
Page
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. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS........
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
FIFTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
This FIFTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of November 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 WMC Mortgage Corp., a California corporation, having an office at 0000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Fourth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of May 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 first
and second lien, adjustable-rate and fixed-rate residential 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");
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 Xxxxxxx Mac Transfer.
Agreement: This Fifth 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: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made, if any, for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made, if any, at the time of origination of such
refinanced Mortgage Loan, and (ii) with respect to any Second Lien Loan, the
value, determined pursuant to the Seller's Underwriting Guidelines, of the
related Mortgaged Property as of the origination of the Second Lien Loan.
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.
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 Interim Servicer'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.
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 Subsection 2.04 of the Interim 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, a New York banking
corporation, and 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 Section 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 Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 11.
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 Subsection 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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13.
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.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
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 currently in effect 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 for the purpose of calculating the Mortgage
Interest Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property
and received on or after the applicable Cut-off Date.
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(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer 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(R) 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 (other than Insurance Proceeds or
Condemnation Proceeds) 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 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, (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS(R)
System, and (c) the Seller has designated or will designate the Custodian as the
Custodian on the MERS(R) 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(R) 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 the Mortgaged Property.
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 Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest remitted to the Purchaser, which shall be equal to
the Mortgage Interest Rate minus the Servicing Fee Rate.
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's race
and/or ethnicity is (i) native American or Alaskan native, (ii) Asian/Pacific
islander, (iii) African American, (iv) white, (v) Hispanic or Latino, (vi) other
minority, (vii) not provided by the Mortgagor, (viii) not applicable (if the
Mortgagor is an entity) or (ix) unknown or missing; (5) a code indicating
whether the Mortgagor is self-employed; (6) a code indicating whether the
Mortgaged Property is owner-occupied; (7) the number and type of residential
units constituting the Mortgaged Property; (8) 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; (9)
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; (10) the
Mortgage Interest Rate as of the related Cut-off Date; (11) 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; (12) the stated
maturity date; (13) the first payment date; (14) the amount of the Monthly
Payment as of the related Cut-off Date; (15) the last payment date on which a
payment was actually applied to the outstanding principal balance; (16) the
original principal amount of the Mortgage Loan; (17) 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; (18) delinquency status as of the related Cut-off Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Interest Rate Adjustment
Date; (20) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(21) with respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap
under the terms of the Mortgage Note; (22) with respect to each Adjustable Rate
Mortgage Loan, a code indicating the type of Index; (23) the product type of
Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage Loan, First or Second
Lien Loan) and with respect to each Second Lien Loan, the product type of the
related First Lien Loan; (24) a code indicating the purpose of the loan (i.e.,
purchase, rate and term refinance, equity take-out refinance); (25) a code
indicating the documentation style (i.e., full, alternative or reduced); (26)
asset verification (Y/N); (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 Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period; (33) [reserved];
(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) with respect to each
Adjustable Rate Mortgage Loan, a code indicating whether the Mortgage Loan
provides for negative amortization; (38) with respect to each Adjustable Rate
Mortgage Loan with negative amortization, the negative amortization limit; (39)
a code indicating whether the Mortgage Loan is a High Cost Loan; (40) a code
indicating whether the Mortgage Loan is a Balloon Mortgage Loan; (41) the Due
Date for the first Monthly Payment; (42) the original Monthly Payment due; (43)
a code indicating the PMI Policy provider and percentage of coverage, if
applicable; (44) Appraised Value; (45) appraisal type; (46) automated valuation
model (AVM); (47) appraisal date; (48) with respect to the related Mortgagor,
the debt-to-income ratio; (49) with respect to each MERS Designated Mortgage
Loan, the MERS Identification Number; (50) a code indicating whether the
Mortgage Loan was purchased from a correspondent; (51) a code indicating whether
the Mortgage Loan does not comply with Subsection 9.02 (ooo), (52) a code
indicating whether the Mortgage Loan is a Home Loan and (53) whether the
Mortgage Loan has Monthly Payments that are interest-only for a period of time,
and the interest-only period, if applicable (and with respect to each Second
Lien Loan, whether the related First Lien Loan has monthly payments that are
interest-only for a period of time, and the interest-only period, 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 one
or more separate and complete tax 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.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
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 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 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 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 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.
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 Transfer.
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 Transfer 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 Transfer.
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, (iv) a one-family dwelling in
a planned unit development, or (v) a Manufactured Home, none of which is a
dwelling unit in a residential cooperative housing corporation or mobile home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Act of 1934, as
amended.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
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
Interim Servicer 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 Interim Servicer, 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 Interim Servicer 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 (other than any payments or monies received
by Seller during any interim servicing period for servicing any Mortgage Loan);
(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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
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: As defined in Section 13.
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.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
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 percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the Stated Principal Balance. 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 Stated Principal
Balance of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans from the related
date on which interest was last paid through the day prior to the applicable
Closing Date, inclusive. 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 (1) 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 during the period that the
Interim Servicer is servicing the Mortgage Loans (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 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 (except with respect to each MERS Designated 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 good
faith 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.
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 and with the payment of the Purchase Price by the Purchaser,
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 the Interim Servicer 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 Interim
Servicer to 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, beneficial ownership of each Mortgage and related
Mortgage Note shall be vested solely in 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 or the Interim Servicer
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 Interim Servicer shall 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 Interim Servicer shall maintain in its possession,
available for inspection by the Purchaser and in accordance with Accepted
Servicing Practices, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations,
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. 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 the Interim Servicer
may be in the form of microfilm or microfiche.
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
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto 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 for the related Closing Date, as evidenced by
the Initial Certification of the Custodian. The Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer 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 one hundred twenty days of its submission
for recordation.
In the event any document required to be delivered to the Custodian
pursuant to this 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 120 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 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, or shall cause the Interim Servicer 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 Seller's loan production and the servicing
activities of the Interim Servicer. 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.
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 Interim Servicer 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
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer 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 until
the applicable Transfer Date. The Interim Servicer shall conduct such servicing
in accordance with the Interim Servicing Agreement.
The Interim Servicer may enter into subservicing agreements with
subservicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Interim Servicer as
provided in the Interim Servicing Agreement. The Purchaser hereby acknowledges
that the Seller shall assign its obligation to service the Mortgage Loans for
the benefit of the Purchaser to its interim subservicer, which, on the date of
this Agreement, is either Option One Mortgage Corporation or Xxxxxx Loan
Servicing, LP.
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 Interim Servicer 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 6.02 of the Interim
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, 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 Interim
Servicer 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 Interim Servicer 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 Interim Servicer 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 Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer'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 cause the Interim Servicer 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 Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, 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
Interim Servicer 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 Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer 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 Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Interim Servicer or
the Seller, as applicable, 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 Transfer Date
shall be forwarded to the Purchaser by overnight mail on 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 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
cause the Interim Servicer to comply with the foregoing requirements with
respect to all Monthly Payments received by the Interim Servicer after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer Date
shall immediately notify the other party;
(iii) 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 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;
(iv) 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
(v) 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) [Reserved].
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments reasonably
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 or shall cause the Interim Servicer
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 shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties reasonably incurred by the Purchaser due to the Seller's failure to
comply with this paragraph.
(l) MERS. With respect to each MERS Designated Mortgage Loan, the
Seller shall, on or before the Transfer Date, designate, as directed by the
Purchaser, the Purchaser, or its designee, as the servicer on the MERS(R)
System. In addition, the Seller shall promptly take all other actions reasonably
requested by Purchaser with respect to MERS Designated Mortgage Loans and the
MERS(R) System to effectuate and evidence the transfer of servicing in
accordance with the terms of this Agreement and the Interim Servicing Agreement.
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,
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 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 has been duly executed and delivered and constitutes
the valid, legal, binding and enforceable obligation 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 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, to Seller's knowledge, 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, would likely 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) 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;
(h) 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"); as and to the extent applicable to the Seller,
the Seller has established an anti-money laundering compliance program as
required by the Anti-Money Laundering Laws and has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan to the extent
required by and 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 Mortgagor 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;
(i) 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;;
(j) Selection Process. The Mortgage Loans were selected from among
the 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;
(k) 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 this Agreement shall be delivered to
the Custodian all in compliance with the specific requirements hereunder. 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;
(l) 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;
(m) [Reserved];
(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) [Reserved];
(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) 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; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish
(or cause to be 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. Additionally, the Seller, as servicer, will transmit (or cause to
be transmitted) 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, as servicer, agrees it shall report (or cause to be reported) 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 has
any payment under the Mortgage Loan been 30 days or more delinquent, exclusive
of any period of grace, 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, subject to bankruptcy, equitable principles and laws affecting
creditor rights;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by an
insurer acceptable in accordance with Seller's Underwriting Guidelines against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is situated as well as all
additional requirements set forth in Section 2.10 of the Interim 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 which policy conforms to Seller's Underwriting Guidelines 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 originator 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 Mortgagor'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 to the
extent compliance therewith can be demonstrated and if required by applicable
law. 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) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of one or more separate and complete tax parcels of real property
improved by a Residential Dwelling; provided, however, that any condominium unit
or planned unit development (other than a de minimis planned unit development)
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. No portion of the
Mortgaged Property is 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. None of the Mortgaged Properties are log
homes, mobile homes, geodesic domes or other unique property types. Clause (iv)
above is a Deemed Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting
and enforceable 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 (collectively, the "Permitted Exceptions"):
(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 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 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 subject to the Permitted
Exceptions;
(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), subject to bankruptcy, equitable principles and laws affecting
creditor rights. 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 the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. Notwithstanding the foregoing, but without
limiting the other representations and warranties set forth elsewhere in this
Agreement, if any error, omission or negligence in the origination of such
Mortgage Loan occurred despite Seller's conformance with its Underwriting
Guidelines (as in effect at the time such Mortgage Loan was made), then there
shall be a presumptive conclusion that there was no error, omission or
negligence. No fraud, misrepresentation, or similar occurrence or, to Seller's
knowledge, error, omission, or negligence with respect to a Mortgage Loan has
taken place on the part of any Person (other than Seller), 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. From
and after the related Closing Date, 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 to the extent required to ensure
enforceability of the Mortgage Loan, 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 or a CLTV 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 pursuant to Seller's Underwriting Guidelines and each such title
insurance policy is issued by a title insurer acceptable to prudent lenders in
the secondary mortgage market and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring the originator, 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 Permitted Exceptions, 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 (or its predecessor in interest), its successors
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. 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. 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, except with respect to a Mortgage Loan purchased from a
correspondent as indicated on the Mortgage Loan Schedule. Principal payments on
the Mortgage Loan commenced no more than seventy 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. Unless
specified on the related Mortgage Loan Schedule as an interest-only loan or a
Balloon Mortgage Loan, 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 (or forty or fifty
years for Mortgage Loans identified on the Mortgage Loan Schedule as a Balloon
Mortgage Loan with a forty or fifty year amortization period). Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month and the Mortgage Loan does not require a balloon
payment on its stated maturity date;
(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,
as may be amended from time to time by the Seller (a copy of which is attached
to each related Assignment and Conveyance Agreement). The Mortgage Note and
Mortgage are on forms acceptable to prudent mortgage lenders in the secondary
mortgage market and no representations have been made 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 this 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 Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated 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 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 subject to applicable bankruptcy, equitable principles and laws
affecting creditors' rights;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents do not allow an assumption of such Mortgage
Loan by any other party;
(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 applicable 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 to prudent mortgage
lenders in the secondary market. 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, to Seller's knowledge, 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 at least the same condition or
better than its condition at the time of its appraisal. Since the time of its
appraisal, there have not been any condemnation proceedings with respect to the
Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer 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 Interim 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. 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 Interim Servicer 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. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from adjustable rate to a fixed rate;
(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 Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI 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. To the best of the Seller's
knowledge, (i) 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; and (ii) there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged 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 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 Seller's
Underwriting Guidelines 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 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) 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;
(rr) Credit Reporting. The Seller (or its sub-servicer) has caused
to be fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e., 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;
(ss) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect to
each MERS Designated Mortgage Loan;
(tt) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder on
the MERS(R) System;
(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) 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;
(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 leasehold
estate, such lease conforms to the requirements required by Xxxxxx Xxx pursuant
to the Xxxxxx Mae Guide;
(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. 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. The second and third sentences of this representation
and warranty are 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" under Section 860G(a)(3) of the Code;
(ddd) 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, Land America Tax Services or another national company providing such
services, and such contract is transferable;
(eee) 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;
(fff) 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;
(ggg) 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;
(hhh) No Prior Offer. The Mortgage Loan has not been previously
rejected by a third-party purchaser;
(iii) [Reserved];
(jjj) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Mae Guides. This representation and warranty is
a Deemed Material and Adverse Representation;
(kkk) 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 or any
Affiliate of the Seller. 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 Seller, the Seller 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;
(lll) 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;
(mmm) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a 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 and (iii) the Prepayment Penalty was adequately disclosed to the
Mortgagor in the mortgage loan documents pursuant to applicable state, local and
federal law. This representation and warranty is a Deemed Material and Adverse
Representation;
(nnn) 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;
(ooo) Points and Fees. Except as set forth on the related Mortgage
Loan Schedule, 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 Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Mae 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;
(ppp) 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;
(qqq) No Arbitration. No Mortgage Loan originated on or after August
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; and
(rrr) 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 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 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, the Seller shall
use commercially reasonable 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 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, 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 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) 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 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 with the Mortgage Note endorsed as required by Subsection 6.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall cause the Interim Servicer 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. Accordingly, on the date of such substitution, the
Seller will deposit from its own funds into the Custodial Account an amount
equal to the amount of such shortfall plus one month's interest thereon at the
Mortgage Loan Remittance Rate.
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, reasonable and
necessary 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 within
sixty (60) days of the related Due Date (the "Breach Date"), the Seller, at the
Purchaser's option, shall repurchase such Mortgage Loan from the Purchaser at
the Repurchase Price. The Purchaser shall have one hundred eighty (180) days
following the Breach Date to notify the Seller and request a repurchase and the
Seller shall repurchase such delinquent Mortgage Loan within thirty (30) days of
such request unless the Seller can provide evidence reasonably acceptable to the
Purchaser in its good faith discretion that such delinquency was due to a
servicing error.
Notwithstanding the foregoing, the Purchaser may, in its sole
discretion, elect to submit for the Seller's consideration a revised Purchase
Price Percentage (as defined in the related Purchase Price and Terms Agreement)
(in each case, a "Revised Pricing Offer") with respect to any such Mortgage
Loan. Thereafter, the Seller shall accept or reject such Revised Pricing Offer.
In the event the Seller rejects a Revised Pricing Offer, the applicable Mortgage
Loan shall be repurchased pursuant to the previous paragraph. In the event the
Seller accepts a Revised Pricing Offer with respect to any such Mortgage Loan
(such loan, a "Repriced Mortgage Loan") the Seller shall refund to the Purchaser
an amount equal to (i) the product of (x) the difference between the original
related Purchase Price Percentage and (y) the applicable Revised Pricing Offer,
and (ii) the outstanding principal balance of such Repriced Mortgage Loan as of
the related Cut-off Date (such product, in each case, the "Repricing
Adjustment"), plus accrued interest on such Repricing Adjustment calculated at
the federal funds rate as of the related Closing Date. Such amount shall be paid
by the Seller to the Purchaser within thirty (30) days thereof.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without a prepayment penalty, in the event that any such Mortgage Loan prepays
in full during the first three months following the related Closing Date, the
Seller shall pay the Purchaser, within ten (10) Business Days of such prepayment
in full, an amount equal to the product of the applicable percentage of par as
stated in the related Purchase Price and Terms Agreement (subject to adjustment
as provided therein) and the Stated Principal Balance of such Mortgage Loan as
of the related Cut-off Date; provided, however, that the Purchaser must request
in writing that Seller pay such amount within six (6) months of the related
Closing 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 Interim Servicer 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 this 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 Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) the related Mortgage Loan Schedule (one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
(4) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(5) 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, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(6) 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;
(7) 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(s);
(8) 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;
(9) 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;
(10) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto;
(11) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance; and
(12) a MERS Report reflecting the Purchaser as Investor,
the Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
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 Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx 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 Transfers.
The Seller, on behalf of itself and the Interim Servicer, agrees to
execute in connection with any Agency Transfer, any and all pool purchase
contracts, and/or agreements reasonably acceptable to the Seller and the Interim
Servicer, if applicable, among the Purchaser, the Seller and/or the Interim
Servicer, Xxxxxx Xxx or Xxxxxxx 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 parties, and in connection with a Securitization
Transfer, 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"), together with an opinion of
counsel with respect to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller, on behalf of itself and the
Interim Servicer, 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 (provided Seller and Interim Servicer, if
applicable, shall be given adequate time to review and negotiate in good faith
such agreements);
(3) to restate the representations and warranties set forth in
Subsections 9.01 and 9.02 as of the Reconstitution Date or make the
representations and warranties set forth in the related selling/servicing guide
of the servicer or issuer, as the case may be, or such representations or
warranties as may be required by any rating agency or prospective purchaser of
the related securities or such Mortgage Loans in connection with such
Reconstitution; provided, that the representations and warranties contained in
Subsection 9.02(m) shall be made as of the related Closing Date; and provided,
further, that the representation and warranty contained in Subsection 9.02(a)
(with respect to information regarding stated principal balances and due dates),
(b), the first sentence of (c), (d), (f) (other than the fifth and the seventh
sentences), the first sentence of (h), the first and last sentences of (p), the
first sentence of (q), (r), the first two sentences of (w), (x), (ff), (hh),
(ii) (other than the first and fourth sentences), (ll), (rr), (uu) and (ggg)
shall be made only as of the related Transfer Date. Notwithstanding the provisos
set forth in this clause (3), the Seller shall remain liable for any breaches
following the date of its restatement of the representations and warranties set
forth in Subsections 9.01 and 9.02 to the extent the actions of the Seller,
Interim Servicer or any of their Affiliates contributed to such breaches;
(4) to deliver to Purchaser and any prospective purchaser within
five (5) Business Days after written request by Purchaser or prospective
purchaser, information, in form and substance satisfactory to Purchaser
(provided with respect to (a) and (b) below only if the Mortgage Loans are 20%
or more of the pool of assets included in such Securitization Transfer) and such
prospective purchaser, with respect to each originator of the Mortgage Loans,
required by Item 1110 of Regulation AB, which as of the date hereof requires the
following information: (a) the originator's form of organization; and (b) to the
extent material in the good faith judgment of the Purchaser, a description of
the originator's origination program and how long the originator has been
engaged in originating residential mortgage loans, which description must
include a discussion of the originator's experience in originating mortgage
loans of the same type as the Mortgage Loans and, if material in the good faith
judgment of the Purchaser, information regarding the size and composition of the
originator's origination portfolio as well as information that may be material,
in the good faith judgment of the Purchaser, to an analysis of the performance
of the Mortgage Loans, such as the originators' credit-granting or underwriting
criteria for mortgage loans of the same type as the Mortgage Loans; and
(5) to deliver to the Purchaser and any prospective purchaser within
five (5) Business Days after written request by the Purchaser, static pool
information deliverable pursuant to Regulation AB relating to the mortgage loans
that were originated by the Seller, which are of the same type as the Mortgage
Loans, and (i) for the period during which such mortgage loans were serviced by
the Seller or its agent, or (ii) were previously securitized and publicly
offered by the Seller or its affiliate as the sponsor, or (iii) were included in
static pool information provided by the Seller in connection with a public
securitization of mortgage loans by the Seller or its affiliate, or (iv) such
information as provided to the Seller by any third party purchaser or servicer
(other than the Purchaser or a servicer designated by such Purchaser) together
with indemnification therefor (collectively, the "Static Pool Information").
Such Static Pool Information shall be prepared by the Seller in accordance with
the requirements of Regulation AB. To the extent that there is reasonably
available to the Seller 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 clause (5)
above. A vintage origination year represents mortgage loans originated during
the same year. Such Static Pool Information shall be for the prior five years or
for so long as the originator has been originating (in the case of data by
vintage origination year) or securitizing (in the case of data by prior
securitized pools) such mortgage loans, if originating for less than five years.
The Static Pool Information for each vintage origination year or prior
securitized pools, as applicable, shall be presented no less frequently than
quarterly increments, to the extent material in the good faith judgment of the
Purchaser, over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The content of such Static Pool
Information may be in the form customarily provided by the Seller, and need not
be customized for the Purchaser or any assignee or designee thereof. The Seller
and the Purchaser agree that either (i) the Seller shall provide all Static Pool
Information, as described above, or (ii) solely with respect to the period of
time prior to January 1, 2006, the Seller shall represent and warrant that it is
unable without unreasonable effort or expense to provide Static Pool
Information.
The Seller and the Interim Servicer shall provide to the Purchaser's
servicer or issuer, as the case may be, and any other participants or purchasers
in such Reconstitution: (i) any and all information and appropriate verification
of information which may be reasonably available to the Seller, the Interim
Servicer or their 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 Interim Servicer 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, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B as agreed upon by the parties thereto. Moreover, the Seller,
on behalf of itself and the Interim Servicer, agrees to cooperate with all
reasonable requests made by the Purchaser to effect such Reconstitution
Agreements. The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser participating in the Reconstitution and each Person who controls the
Purchaser or such affiliate 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 expenses and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain arising out of or based upon any
untrue statement or alleged untrue statement of a material fact, or arising out
of or 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 provided by or on behalf of the Seller
regarding the Seller, the Seller's or other originator's Static Pool Information
or the unavailability of such Static Pool Information (based upon a breach of
the representation and warranty set forth in clause (ii) of the final sentence
of the previous paragraph), the Mortgage Loans or the Underwriting Guidelines
set forth in any offering document prepared in connection with any
Reconstitution. By way of clarification, an omission or alleged omission as
described in the prior sentence shall be construed solely by reference to the
information the Seller is indemnifying for as required to be provided pursuant
to Regulation AB under clauses (4) and (5) above (the "Indemnified Information")
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Indemnified Information or
any portion thereof is presented together with or separately from such other
information. For purposes of the indemnification set forth above, "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.
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 within five (5) Business Days after written
request by the Seller (or such other time as is reasonably required by the
Purchaser, but in any event in a timely manner in order for the Seller to comply
with Regulation AB), cause the related servicer (or another party) to be
obligated to provide such 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, including, without limitation, providing to the
Seller static pool information deliverable pursuant to Regulation AB (such
information provided by the servicer or such other party, the "Loan Performance
Information").
The Purchaser shall indemnify the Seller, each Person who controls
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
(or other party) to deliver any Loan Performance Information as
required above.
For purposes of all Regulation AB provisions above, the term
"Purchaser" shall refer to the Purchaser hereunder and its successors in
interest and assigns. In addition, any notice or request that must be "in
writing" or "written" may be made by electronic mail.
The Purchaser will reimburse to the Seller up to $15,000 of the
Seller's out-of-pocket expenses incurred in connection with a Securitization
Transfer.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer 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 Interim
Servicer, 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 Interim Servicer
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 Interim
Servicer 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 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.
(a) 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 this 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 the
Interim Servicer to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representations, warranties and
covenants set forth in this Agreement (provided that such costs shall not
include any lost profits or special or consequential damages). Except as set
forth above, the Seller shall not be liable to any Person for any action taken
or omitted to be taken by it hereunder in good faith and believed by it to be
within the purview of this Agreement. 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.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
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
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (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
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
(c) The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its obligation
to sell or duty to service the Mortgage Loans in accordance with this Agreement
and which in its opinion may result in its incurring any expenses or liability;
provided, however, that the Seller may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Purchaser shall
be liable, and the Seller shall be entitled to reimbursement therefor from the
Purchaser upon written demand except when such expenses, costs and liabilities
are subject to the Seller's indemnification under Subsections 14.01(a) or
14.01(b).
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. 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:
WMC Mortgage Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Email: xxxxxxxx@xxxxxxxxx.xxx
With a copy to:
WMC Mortgage Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Email: xxxxxxxx@xxxxxxxxx.xxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
1221 Avenue of the 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, conditioned or delayed. 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. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. 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 subsidiaries, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail (via electronic means or otherwise),
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that the
Seller, or any of its respective affiliates:
(i) 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
(ii) 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. In addition, the solicitation of any
Mortgagor under a Mortgage Loan for the purpose of offering, selling and/or
making other financial products, including, without limitation, credit cards and
personal loans, shall not constitute solicitation under this Section 29;
provided such solicitations may not involve products related to the Mortgaged
Property in whole or in part, without the prior written consent of the
Purchaser.
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. Governing Law Jurisdiction; Consent to Service of
Process. 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. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
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:
WMC MORTGAGE CORP.
(Seller)
By:
-------------------------------------
Name:
Title:
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 Fifth Amended and Restated 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. 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;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, 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. 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]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or MERS, with respect to each MERS Designated Mortgage Loan)
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
Officer's 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;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a true copy of the
related policy binder or commitment for title issued by the title
insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(i) 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 120 days of the related 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; provided, however, that any recorded
document shall in no event be delivered later than one year following the
related Closing Date. 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
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and WMC Mortgage
Corp., a [______________] corporation (the "Indemnifying Party").
W I T N E S S E T H:
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.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party "The Mortgage Loan
Pool--Underwriting Guidelines" 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 of a
material fact 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 static pool information
regarding mortgage loans originated or acquired by the seller [and included in
the Prospectus Supplement, the Offering Circular or the Comp
Materials][incorporated by reference from the Seller's website at [________]].
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.
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
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.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among 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 and the Underwriter 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 Private Placement Memorandum 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 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 0000 Xxx) 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:
WMC Mortgage Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx - Secondary Marketing
Telephone: (000) 000-0000
with a copy to:
WMC Mortgage Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
[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:
WMC MORTGAGE CORP.
By:
-------------------------------------
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], corporation organized under the
laws of the [state of ____________] [United States] (the "Company") and further
as follows:
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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 Fifth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of _______ __, 200_ (the "Purchase Agreement"),
by and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser") and the Company and (b) the Amended and Restated
Interim Servicing Agreement, dated as of _______ __, 200_ (the
"Interim Servicing Agreement"), by and between the Purchaser and
___________ (the "Interim Servicer"), and such resolutions are in
effect on the date hereof.
(v) 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 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.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Purchase 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.
(vii) 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 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.
(viii) Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) 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.
(ix) The Company is duly authorized to engage in the
transactions described and contemplated in the Purchase 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
Xxxx Xxxxxxx Executive Vice President
-------------------- --------------------------------- -----------------------
Xxxx Xxxxxx Executive Vice President
-------------------- --------------------------------- -----------------------
Executive Vice
Xxxx Xxxxxxxxxx President/CFO
-------------------- --------------------------------- -----------------------
Executive Vice
Xxxxxx Xxxxxxxxx President/General Counsel
-------------------- --------------------------------- -----------------------
Xxxxx Xxxxxxxx Senior Vice President
-------------------- --------------------------------- -----------------------
-------------------- --------------------------------- -----------------------
-------------------- --------------------------------- -----------------------
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
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 Fifth 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
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 Fifth 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, 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
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this __th day of ____, 200_, WMC Mortgage Corp. ("Seller"), as
the Seller under (i) that certain Purchase Price and Terms Agreement, dated as
of _____, 200_ (the "PPTA"), (ii) that certain Fifth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of November 1, 2006
(the "Purchase Agreement"), and (iii) that certain Amended and Restated Interim
Servicing Agreement, dated as of November 1, 2005 (the "Interim Servicing
Agreement" and, together with the PPTA and the Purchase Agreement, the
"Agreements") does hereby sell, transfer, assign, set over and convey to Xxxxxx
Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as the Purchaser under the
Agreements 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 as set forth in the Purchase Agreement. The
contents of each Servicing File required to be retained by WMC Mortgage Corp. or
its designee, as interim servicer ("Interim Servicer") to service the Mortgage
Loans pursuant to the Interim Servicing Agreement and thus not delivered to the
Purchaser are and shall be held in trust by the Interim Servicer in its capacity
as interim servicer for the benefit of the Purchaser as the owner thereof. The
Interim 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 Interim Servicing Agreement, and such
retention and possession by the Interim Servicer shall be in a custodial
capacity only. 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 or the Interim
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 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]
WMC MORTGAGE CORP.
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
[to be provided under separate cover by Purchaser as agreed to by Seller]
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
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 Fifth Amended
and Restated Mortgage Loan Purchase Agreement (the "Purchase Agreement"), dated
as of [DATE], 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 to the
same extent as Assignor would have been able to enforce such obligations, 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). From the date hereof, 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, to
the Company's knowledge, 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, other than ______, 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.
WMC MORTGAGE CORP.
By:_____________________________________
Name:________________________________
Its:_________________________________
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:_____________________________________
Name:________________________________
Its:_________________________________
ASSIGNEE
By:_____________________________________
Name:________________________________
Its:_________________________________
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
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 0000 X.X. 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 Xxxxxxx 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 Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
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.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx 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, Moody's 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 Mortgagor 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 Mortgagor'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 Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx 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 Xxxxxxx Mac or Xxxxxx
Mae 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 Mae 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 Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx 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 Xxxxxxx 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 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx./Xxxxxxx X. Xxxxxxx, Xx.
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
1221 Avenue of the 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 XXX 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
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
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 0000 Xxx) 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
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
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
DECISION ONE MORTGAGE COMPANY, LLC
EXHIBIT 2
BYLAWS
DECISION ONE MORTGAGE COMPANY, LLC
EXHIBIT 3
CERTIFICATE OF GOOD STANDING - NORTH CAROLINA
DECISION ONE MORTGAGE COMPANY, LLC
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
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, Xxxxxxx X. Xxxxxxx
Treasurer & Secretary
Senior Vice President & Assistant Secretary Parkes 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 III
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 Kourney
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 Sterlita 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
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
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
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
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
UNDERWRITING GUIDELINES
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
[Reserved]
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, Attention: Trust Administration MSAC
2007-HE5, as Trustee (the "Trustee"), pursuant to that Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5 Pooling and Servicing Agreement, dated as of April
1, 2007, among Xxxxxx Xxxxxxx ABS Capital I Inc., as depositor (the
"Depositor"), Xxxxx Fargo Bank, National Association ("Xxxxx Fargo"), as master
servicer (the "Master Servicer"), securities administrator (the "Securities
Administrator") and a custodian, Saxon Mortgage Services, Inc., as a servicer
("Saxon"), Countrywide Home Loans Servicing LP, as a servicer ("Countrywide
Servicing"), Decision One Mortgage Company, LLC, as a responsible party
("Decision One"), WMC Mortgage Corp., as a responsible party ("WMC"), LaSalle
Bank National Association, as a custodian (together with Xxxxx Fargo in its
capacity as a custodian, the "Custodians") 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 [Saxon] [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;
d. escrow 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 hereby does ratify and confirm to all that said Attorney-in-fact shall
be effective as of April 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 [Saxon] [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
[Saxon Mortgage Services, Inc.]
[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-HE5, 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 Securities
Administrator], [Master Servicer], [the Servicer], [each Subservicer] and [each
Subcontractor] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
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APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
------------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or Securities
other triggers and events of default in accordance with the transaction Administrator/Servicer
1122(d)(1)(i) agreements.
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If any material servicing activities are outsourced to third parties, Securities
policies and procedures are instituted to monitor the third party's Administrator/Servicer
1122(d)(1)(ii) performance and compliance with such servicing activities.
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Any requirements in the transaction agreements to maintain a back-up N/A
1122(d)(1)(iii) servicer for the mortgage loans are maintained.
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A fidelity bond and errors and omissions policy is in effect on the party Servicer/Master Servicer
participating in the servicing function throughout the reporting period
in the amount of coverage required by and otherwise in accordance with
1122(d)(1)(iv) the terms of the transaction agreements.
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Cash Collection and Administration
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Payments on mortgage loans are deposited into the appropriate custodial Servicer/Master Servicer
bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified
1122(d)(2)(i) in the transaction agreements.
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Disbursements made via wire transfer on behalf of an obligor or to an Servicer/Securities
1122(d)(2)(ii) investor are made only by authorized personnel. Administrator/Master Servicer
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Advances of funds or guarantees regarding collections, cash flows or Servicer/Master Servicer
distributions, and any interest or other fees charged for such advances,
are made, reviewed and approved as specified in the transaction
1122(d)(2)(iii) agreements.
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The related accounts for the transaction, such as cash reserve accounts Servicer/Securities
or accounts established as a form of overcollateralization, are Administrator/Master Servicer
separately maintained (e.g., with respect to commingling of cash) as set
1122(d)(2)(iv) forth in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured depository Servicer/Securities
institution as set forth in the transaction agreements. For purposes of Administrator/Master Servicer
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
1122(d)(2)(v) Exchange Act.
------------------------------------------------------------------------------------------------------------------------------------
Servicer/Securities
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. Administrator/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all asset-backed Servicer/Securities
securities related bank accounts, including custodial accounts and Administrator/Master Servicer
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
1122(d)(2)(vii) days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
------------------------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the Commission, Servicer/Securities
are maintained in accordance with the transaction agreements and Administrator/Master Servicer
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
1122(d)(3)(i) principal balance and number of mortgage loans serviced by the Servicer.
------------------------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in accordance with Servicer/Securities
timeframes, distribution priority and other terms set forth in the Administrator/Master Servicer
1122(d)(3)(ii) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business days to Servicer/Securities
the Servicer's investor records, or such other number of days specified Administrator/Master Servicer
1122(d)(3)(iii) in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with Servicer/Securities
1122(d)(3)(iv) cancelled checks, or other form of payment, or custodial bank statements. Administrator/Master Servicer
------------------------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
------------------------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required by Custodian/Servicer/
1122(d)(4)(i) the transaction agreements or related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as required by the Custodian/Servicer/
1122(d)(4)(ii) transaction agreements
------------------------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool are made, Securities
reviewed and approved in accordance with any conditions or requirements Administrator/Servicer
1122(d)(4)(iii) in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in accordance Servicer
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
1122(d)(4)(iv) accordance with the related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree with the Servicer
1122(d)(4)(v) Servicer's records with respect to an obligor's unpaid principal balance.
------------------------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's mortgage Servicer
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
1122(d)(4)(vi) agreements and related pool asset documents.
------------------------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans, Servicer
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
1122(d)(4)(vii) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the period a Servicer
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
1122(d)(4)(viii) unemployment).
------------------------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for mortgage loans with Servicer
1122(d)(4)(ix) variable rates are computed based on the related mortgage loan documents.
------------------------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow Servicer
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
1122(d)(4)(x) agreements.
------------------------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance payments) Servicer
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
1122(d)(4)(xi) transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to be made on Servicer
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.
------------------------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two business Servicer
days to the obligor's records maintained by the servicer, or such other
1122(d)(4)(xiii) number of days specified in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are recognized and Servicer/Securities
1122(d)(4)(xiv) recorded in accordance with the transaction agreements. Administrator
------------------------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item 1114(a)(1) Securities Administrator
through (3) or Item 1115 of Regulation AB, is maintained as set forth in
1122(d)(4)(xv) the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT T
Additional Form 10-D Disclosure
-------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
-------------------------------------------------------------------------------------------------------
Item 1: Distribution and Pool Performance
Information
-------------------------------------------------------------------------------------------------------
Information included in the Monthly Statement Servicers/
Master Servicer/
Securities Administrator
-------------------------------------------------------------------------------------------------------
Any information required by Item 1121 of Regulation Depositor
AB which is 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 Master Servicer/Securities Administrator/Servicers
-------------------------------------------------------------------------------------------------------
o Sponsor Sponsor (if a party to the Pooling and Servicing
Agreement) or Depositor
-------------------------------------------------------------------------------------------------------
o Depositor Depositor
-------------------------------------------------------------------------------------------------------
o Trustee Trustee
-------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
-------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
-------------------------------------------------------------------------------------------------------
o Any Responsible Party Responsible Parties
-------------------------------------------------------------------------------------------------------
o Any Item 1110(b) of Regulation AB Originator Depositor
(other than a Responsible Party)
-------------------------------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation Servicer (other Servicers
than the Master Servicer or Securities
Administrator)
-------------------------------------------------------------------------------------------------------
o Any other party contemplated by Item 1100(d)(1) Depositor
of Regulation AB
-------------------------------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds Depositor
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 721 of Regulation S-K.
Pricing information can be omitted if
securities were not registered.
-------------------------------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
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 Depositor/Securities Administrator
Vote of Security Holders
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 1114(b)(2) of Regulation AB - Credit
Enhancement Provider Financial Information*
-------------------------------------------------------------------------------------------------------
o Determining applicable disclosure threshold Depositor
-------------------------------------------------------------------------------------------------------
o Requesting required financial information Depositor
(including any required accountants' consent to
the use thereof) or effecting incorporation by reference
-------------------------------------------------------------------------------------------------------
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 information Depositor
(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 this 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 Securities Administrator
-------------------------------------------------------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, Depositor
such as material agreements
-------------------------------------------------------------------------------------------------------
EXHIBIT U
Additional Form 10-K Disclosure
------------------------------------------------------------------------------------------------------------------------------
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
Disclose any information required to be reported on Form 8-K on Form 8-K
during the fourth quarter covered by the Form 10-K but not
reported
------------------------------------------------------------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules Securities Administrator
Depositor
------------------------------------------------------------------------------------------------------------------------------
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 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.
------------------------------------------------------------------------------------------------------------------------------
Item 1117 of Regulation AB: 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 Master Servicer/Securities Administrator/Servicers and
Depositor
------------------------------------------------------------------------------------------------------------------------------
o Sponsor Sponsor (if a party to the Pooling and Servicing Agreement)
or Depositor
------------------------------------------------------------------------------------------------------------------------------
o Depositor Depositor
------------------------------------------------------------------------------------------------------------------------------
o Trustee Trustee
------------------------------------------------------------------------------------------------------------------------------
Custodian Custodian
------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------------------------------------------------------------------------------------
o Any Responsible Party Responsible Party
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1110(b) of Regulation AB Originator (other than a Depositor
Responsible Party)
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1108(a)(2) of Regulation AB Servicer (other than Servicers
the Master Servicer or Securities Administrator)
------------------------------------------------------------------------------------------------------------------------------
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 Entity is an Depositor as to (a)
affiliate of the following parties, and (b) to the extent Sponsor (if a party to this Agreement) as to (a)
known and material, any of the following parties are
affiliated with one another:
------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------------------------------------------------------------------------------------
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/Sponsor (if a party to this Agreement)
Provider
------------------------------------------------------------------------------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
Whether there are any "outside the ordinary course business Depositor as to (a)
arrangements" other than would be obtained in an arm's length Sponsor as to (a) (if a party to this Agreement)
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 Master Servicer Master Servicer
------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------------------------------------------------------------------------------------
o Trustee Depositor
------------------------------------------------------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
------------------------------------------------------------------------------------------------------------------------------
o Any Responsible Party Responsible Party
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Originator (other than a Depositor/Sponsor (if a party to this Agreement)
Responsible Party)
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor/Sponsor (if a party to this Agreement)
Provider
------------------------------------------------------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Regulation AB material party Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
Whether there are any specific relationships involving the Depositor as to (a)
transaction or the pool assets between (a) the Sponsor, Sponsor as to (a) (if a party to this Agreement)
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 Master Servicer Master Servicer
------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------------------------------------------------------------------------------------
o Trustee Depositor
------------------------------------------------------------------------------------------------------------------------------
o Any other Item 1108(a)(3) of Regulation AB servicer Servicer
------------------------------------------------------------------------------------------------------------------------------
o Any Responsible Party Responsible Party
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1110 of Regulation AB Originator (other than a Depositor/Sponsor (if a party to this Agreement)
Responsible Party)
------------------------------------------------------------------------------------------------------------------------------
o Any Item 1115 of Regulation AB Derivate Counterparty Depositor/Sponsor (if a party to this Agreement)
Provider
------------------------------------------------------------------------------------------------------------------------------
o Any other Item 1101(d)(1) of Regulation AB material party Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
EXHIBIT V
Form 8-K Disclosure Information
------------------------------------------------------------------------------------------------------------------------------
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 Depositor
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
------------------------------------------------------------------------------------------------------------------------------
o Issuing Entity Securities Administrator/Servicer
------------------------------------------------------------------------------------------------------------------------------
o Sponsor Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
o Depositor Depositor
------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------------------------------------------------------------------------------------
o Any affiliated Servicer The applicable Servicer
------------------------------------------------------------------------------------------------------------------------------
o Other Servicer servicing 20% or more of the pool assets at The applicable Servicer
the time of the report
------------------------------------------------------------------------------------------------------------------------------
o Other material servicers Servicers
------------------------------------------------------------------------------------------------------------------------------
o Trustee Trustee
------------------------------------------------------------------------------------------------------------------------------
Custodian Custodian
------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------------------------------------------------------------------------------------
o Derivative Counterparty Depositor/Sponsor (if a party to this Agreement)
------------------------------------------------------------------------------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Increase a Master Servicer/Securities Administrator/Depositor
Direct Financial Obligation or an Obligation under an
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 Securities Administrator/Depositor
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 Securities Administrator Master Servicer/Securities Administrator/Depositor/
applicable successor Servicer/applicable successor 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.
------------------------------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new servicer or master applicable successor Servicer/applicable successor Master
servicer is also required. Servicers/Depositor
------------------------------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new Trustee is also applicable successor Trustee
required.
------------------------------------------------------------------------------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Support Depositor/Securities Administrator
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.
------------------------------------------------------------------------------------------------------------------------------
Regulation AB disclosure about any new enhancement provider Depositor
is also required.
------------------------------------------------------------------------------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator
------------------------------------------------------------------------------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or more at
the time of issuance of the securities from the description
in the final prospectus, provide updated Regulation AB
disclosure about the actual asset pool.
------------------------------------------------------------------------------------------------------------------------------
If there are any new servicers or originators required to be Depositor
disclosed under Regulation AB as a result of the foregoing,
provide the information called for in Items 1108 and 1110
respectively.
------------------------------------------------------------------------------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties to this Agreement (excluding the Trustee)
------------------------------------------------------------------------------------------------------------------------------
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 April 26, 2007
XXXXXX XXXXXXX CAPITAL and XXXXX FARGO BANK, NATIONAL ASSOCIATION, a
SERVICES INC. national banking association, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates, Series
2007-HE5
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
of 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 full
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, reorganisation, 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 any 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 he entered into as soon as practicable and
may he 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 telex, 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 Xxx 0000 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 case 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)(1) 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 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 documentation 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) in 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 case) 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 and XXXXX FARGO BANK, NATIONAL ASSOCIATION, a
SERVICES INC. national banking association, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates, Series
2007-HE5
By: /s/ Xxxxxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
--------------------------- --------------------------------------
Name: Xxxxxxxxx Xxxxxx Name: Xxxxx Xxxxxx
Title: Authorized Signatory Title: Vice President
Date: Date:
SCHEDULE
TO THE
1992 ISDA MASTER AGREEMENT
dated as of April 26, 2007
between
XXXXXX XXXXXXX CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
a national banking association, not individually, but solely as
Securities Administrator for Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2007-HE5 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE5
("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 or Deliver Applicable Applicable
(ii) Section 5(a)(ii), Breach of Agreement Applicable Not Applicable
(iii) Section 5(a)(iii), Credit Support Default Applicable Applicable
(iv) Section 5(a)(iv), Misrepresentation Applicable Not Applicable
(v) Section 5(a)(v), Default Under Specified Transaction Not Applicable Not 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 Without Assumption Applicable Applicable
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 Upon Merger Applicable Applicable
(iv) Section 5(b)(iv), Credit Event Upon Merger Not Applicable Not Applicable
(v) Section 5(b)(v), Additional Termination Event Applicable (as Applicable (as set
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 Xxxxx'x 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 11.01 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 duly executed (i) Upon entering into this Agreement, (ii)
IRS Form W-9. 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 duly (a) With respect to (i), the Securities
executed IRS Form W-9 (or any Administrator shall apply for the employer
successor thereto) that eliminates identification number of the Trust promptly
U.S. federal withholding and backup upon entering into this Agreement and
withholding tax on payments under deliver the related correct, complete and
this Agreement, (ii) if requested by duly executed IRS Form W-9 promptly upon
Party A, a correct, complete and duly receipt, and in any event, no later than the
executed Form W-8IMY, and (iii) a first Payment Date of this Transaction; (b)
complete and executed IRS Form W-9, in the case of a W-8ECI, W-8IMY, and X-0XXX
X-0XXX, X-0XXX, or W-8IMY (with that does not include a U.S. taxpayer
attachments) (as appropriate) from identification number in line 6, before
each Certificateholder that is not an December 31 of each third succeeding
"exempt recipient" as that term is calendar year, (c) promptly upon reasonable
defined in Treasury regulations demand by Party A, and (d) promptly upon
section 1.6049-4(c)(ii), that actual knowledge that any such Form
eliminates U.S. federal withholding previously provided by Party B has become
and backup withholding tax on obsolete or incorrect.
payments under this Agreement.
(b) Other documents to be delivered are:-
Party required Covered by
to deliver Section 3(d)
document Form/Document/Certificate Date by which to be delivered Representation
--------------- ------------------------------------- ------------------------------- --------------
Party A Either (1) a signature booklet The earlier of the fifth Yes
and containing secretary's certificate Business Day after the
Party B and resolutions ("authorizing Trade Date of the first
resolutions") authorizing the party Transaction or upon
to enter into derivatives execution of this Agreement
transactions of the type contemplated and as deemed necessary for
by the parties or (2) a secretary's any further documentation.
certificate, 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 Pooling and Upon execution of this Yes
Servicing Agreement ("PSA"), dated as Agreement.
of April 1, 2007, among Xxxxxx
Xxxxxxx ABS Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer,
Securities Administrator and
Custodian, Saxon Mortgage Services,
Inc., as Servicer, Countrywide Home
Loans Servicing LP, as Servicer,
LaSalle Bank National Association, as
Custodian, WMC Mortgage Corp. and
Decision One Mortgage Company, LLC,
as Responsible Parties, and Deutsche
Bank National Trust Company, as
Trustee.
Party A A duly executed copy of the Credit As soon as practicable No
and Support Document specified in Part 4 after the execution of this
Party B of this Schedule. Agreement.
Party A and An opinion of counsel reasonably As soon as practicable No
Party B satisfactory in form and substance to after the execution of this
the other party. 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 00000-0000
Attention: CHIEF LEGAL OFFICER
Fax No: 000 000 000 0000
(ii) Address for notices or communications to Party B:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager - MSAC 2007-HE5
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 Securities Administrator is acting on behalf of the
Trust. Party A has made its own independent decisions to
enter into each Transaction under this Agreement and as
to whether such 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, it has entered into each Transaction under this
Agreement 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 such 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 each such
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 00-00, 00-0,
00-00, 00-00 xx 00-00 xx (xx) 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; 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 Moody's 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 Xxxxx Fargo Bank, National Association, not
individually, but solely as Securities Administrator, 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) Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Agreement is
executed by Xxxxx Fargo Bank, National Association (i) this
Agreement is executed and delivered by Xxxxx Fargo Bank, National
Association not in its individual capacity but solely as Securities
Administrator under the PSA in the exercise of the powers and
authority conferred and vested in it as securities administrator
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 Securities Administrator but is
made and intended for the purpose of binding only the Trust, and
(iii) under no circumstances shall Xxxxx Fargo Bank, National
Association 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 and XXXXX FARGO BANK, NATIONAL ASSOCIATION, a
SERVICES INC. national banking association, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates, Series
2007-HE5
By: /s/ Xxxxxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
--------------------------- --------------------------------------
Name: Xxxxxxxxx Xxxxxx Name: Xxxxx Xxxxxx
Title: Authorized Signatory Title: Vice President
Date: Date:
EXHIBIT A
Credit Support Annex
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 Moody's, (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 Securities
Administrator.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will
not apply to Party B, but the provisions of Paragraph 6(c)(ii) will
apply to Party B.
(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:
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager - MSAC 2007-HE5
Facsimile No.: 000-000-0000
Telephone No.: 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: Xxxxx Fargo Bank, N.A.
ABA No.: 121 000 248
Account No.: 0000000000
Account Name: SAS Clearing
FFC: 53144801, MSAC 2007-HE5
(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) Securities Administrator Capacity. It is expressly understood and agreed
by the parties hereto that insofar as this Annex is executed by Xxxxx
Fargo Bank, National Association (i) this Annex is executed and delivered
by Xxxxx Fargo Bank, National Association not in its individual capacity
but solely as Securities Administrator under the PSA in the exercise of
the powers and authority conferred and invested in it as Securities
Administrator 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 Securities Administrator but is made
and intended for the purpose of binding only the Trust, and (iii) under no
circumstances shall Xxxxx Fargo Bank, National Association 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: /s/ Xxxxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Authorized Signatory
Date:
XXXXX FARGO BANK, NATIONAL ASSOCIATION, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates, Series 2007-HE5
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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
Eligible Collateral Party A Valuation Percentage
--------------------------------------------------------------------- ------- --------------------
(A) Cash X 100.0%
(B) Treasury Securities with a remaining maturity of 52 weeks or less X 98.5%
(C) Treasury Securities with a remaining maturity of more than 52 weeks X 93.6%
but no more than 5 years
(D) Treasury Securities with a remaining maturity of more than 5 years X 89.9%
but no more than 10 years
(E) Treasury Securities with a remaining maturity of more than 10 years X 83.9%
but no more than 30 years
(F) Agency Notes with a remaining maturity of no more than 15 years X 81.3%
(G) Agency Notes with a remaining maturity of more than 15 years but no X 74.8%
more than 30 years
(H) Commercial Paper rated "A-1+" by S&P and "P-1" by Xxxxx'x, with a X 98.0%
remaining maturity of 180 days or less
(I) Commercial Paper rated "A-1" by S&P and P-1 by Xxxxx'x, with a X 97.0%
remaining maturity of 180 days or less
(J) Commercial Paper rated "A-1" by S&P and "P-1" by Xxxxx'x, with a X 94.0%
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%
XXXXX XXXXXXX
DATE: April 26, 2007
TO: Xxxxx Fargo Bank, National Association, not
individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates, Series 2007-HE5
ATTENTION: Client Manager - MSAC 2007-HE5
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: HRA47
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 Xxxxx Fargo Bank, National Association, not individually, but
solely as Securities Administrator (the "Securities Administrator") under the
Pooling and Servicing Agreement, dated and effective as of April 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer, Securities Administrator and Custodian, Saxon
Mortgage Services, Inc., as Servicer, Countrywide Home Loans Servicing LP, as
Servicer, LaSalle Bank National Association, as Custodian, WMC Mortgage Corp.
and Decision One Mortgage Company, LLC, as Responsible Parties, and Deutsche
Bank National Trust Company, as Trustee (the "PSA") for the Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage Pass-Through Certificates, Series
2007-HE5 ("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 April 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:........................ April 11, 2007
Effective Date:.................... Xxxxx 00, 0000
Xxxxxxxxxxx Date:.................. March 25, 2013, 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 Following Business
Day Convention.
Fixed Amounts:
Fixed Rate Payer:............ Party B
Fixed Rate Payer Payment
Dates:..................... The 24th calendar day of each
month during the Term of this
Transaction, commencing
April 24, 2008, subject to
adjustment in accordance with
the Preceding Business Day
Convention.
Fixed Rate Payer
Period End
Dates:..................... The 25th calendar day of each
month during the Term of this
Transaction, commencing April
25, 2008, subject to No
Adjustment.
Fixed Rate:.................. 4.80%
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 24th calendar day of each
month during the Term of this
Transaction, commencing April
24, 2008, subject to
adjustment in accordance with
the Preceding Business Day
Convention.
Floating Rate
Payer Period End
Dates:..................... The 25th calendar day of each
month during the Term of this
Transaction, commencing April
25, 2008, subject to
adjustment in accordance with
the Following 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
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:
Xxxxx Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: 0000000000
Acct Name: SAS Clearing
Ref: FFC: 53144801, MSAC 2007-HE5 (swap)
3. Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Confirmation is
executed by Xxxxx Fargo Bank, National Association (i) this
Confirmation is executed and delivered by Xxxxx Fargo Bank,
National Association not in its individual capacity but solely as
Securities Administrator of the Trust under the PSA in the
exercise of the powers and authority conferred and invested in it
as Securities Administrator 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 Securities Administrator but is made and
intended for the purpose of binding only the Trust, and (iii)
under no circumstances shall Xxxxx Fargo Bank, National
Association 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
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: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees
to, accepts and confirms the terms of the foregoing as of the Trade
Date.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not
individually, but solely as
Securities Administrator for
Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates,
Series 2007-HE5
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
SCHEDULE I
Calculation
Line Period Notional Amount ($) Multiplier
---- --------------------------------- -------------------- ----------
1 Effective Date 4/25/2008 68,074,849.04 10
2 4/25/2008 5/25/2008 65,196,208.26 10
3 5/25/2008 6/25/2008 62,424,260.00 10
4 6/25/2008 7/25/2008 59,765,798.87 10
5 7/25/2008 8/25/2008 57,225,709.04 10
6 8/25/2008 9/25/2008 54,794,390.38 10
7 9/25/2008 10/25/2008 52,467,154.06 10
8 10/25/2008 11/25/2008 50,239,514.52 10
9 11/25/2008 12/25/2008 48,096,781.50 10
10 12/25/2008 1/25/2009 43,080,188.25 10
11 1/25/2009 2/25/2009 34,566,212.96 10
12 2/25/2009 3/25/2009 33,037,934.20 10
13 3/25/2009 4/25/2009 31,662,889.90 10
14 4/25/2009 5/25/2009 30,345,623.07 10
15 5/25/2009 6/25/2009 29,073,128.26 10
16 6/25/2009 7/25/2009 24,844,415.45 10
17 7/25/2009 8/25/2009 17,033,796.90 10
18 8/25/2009 9/25/2009 16,262,481.46 10
19 9/25/2009 10/25/2009 15,616,154.95 10
20 10/25/2009 11/25/2009 14,995,822.95 10
21 11/25/2009 12/25/2009 14,392,607.44 10
22 12/25/2009 1/25/2010 12,049,926.53 10
23 1/25/2010 2/25/2010 7,487,576.70 10
24 2/25/2010 3/25/2010 7,147,487.04 10
25 3/25/2010 4/25/2010 6,892,149.09 10
26 4/25/2010 5/25/2010 6,645,932.65 10
27 5/25/2010 6/25/2010 6,406,691.53 10
28 6/25/2010 7/25/2010 6,129,990.32 10
29 7/25/2010 8/25/2010 5,687,051.06 10
30 8/25/2010 9/25/2010 5,466,954.05 10
31 9/25/2010 10/25/2010 5,274,153.42 10
32 10/25/2010 11/25/2010 5,088,126.32 10
33 11/25/2010 12/25/2010 4,907,596.04 10
34 12/25/2010 1/25/2011 4,707,171.62 10
35 1/25/2011 2/25/2011 4,413,399.44 10
36 2/25/2011 3/25/2011 4,249,263.56 10
37 3/25/2011 4/25/2011 4,100,756.26 10
38 4/25/2011 5/25/2011 3,957,403.17 10
39 5/25/2011 6/25/2011 3,819,026.63 10
40 6/25/2011 7/25/2011 3,685,455.06 10
41 7/25/2011 8/25/2011 3,556,522.76 10
42 8/25/2011 9/25/2011 3,432,069.69 10
43 9/25/2011 10/25/2011 3,311,941.30 10
44 10/25/2011 11/25/2011 3,195,988.33 10
45 11/25/2011 12/25/2011 3,082,706.62 10
46 12/25/2011 1/25/2012 2,824,625.84 10
47 1/25/2012 2/25/2012 2,689,335.51 10
48 2/25/2012 3/25/2012 2,596,799.58 10
49 3/25/2012 4/25/2012 2,507,402.45 10
50 4/25/2012 5/25/2012 2,421,041.33 10
51 5/25/2012 6/25/2012 2,336,241.26 10
52 6/25/2012 7/25/2012 2,103,686.52 10
53 7/25/2012 8/25/2012 1,994,467.82 10
54 8/25/2012 9/25/2012 1,927,541.80 10
55 9/25/2012 10/25/2012 1,862,806.71 10
56 10/25/2012 11/25/2012 1,800,193.17 10
57 11/25/2012 12/25/2012 1,738,853.23 10
58 12/25/2012 1/25/2013 1,593,708.80 10
59 1/25/2013 2/25/2013 1,519,159.24 10
60 2/25/2013 Termination Date 1,469,090.64 10
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx
Xxxxx 26, 2007
Xxxxx Fargo Bank, National Association, a national
banking association, not individually, but solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE5
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement dated as of
April 26, 2007 between Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation (hereinafter "MSCS") and Xxxxx Fargo Bank, National Association, a
national banking association, not individually, but solely as Securities
Administrator for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2007-HE5 (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 hereby 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: /s/ Xxxxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxxxx X. Xxxxx
Title: Assistant Treasurer
Address: 0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
Fax No.: 000-000-0000
Phone: (000) 000-0000
Xxxxxx Xxxxxxx
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:
[/s/ Xxxxx X. Xxxx] [/s/ Xxxxxxxxxx X. Xxxxx]
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal
of the Corporation as of the 27th day of March, 2007.
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
Assistant Secretary
[SEAL]
Xxxxxx Xxxxxxx
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 SAXON REPORTS
Standard Loan Level File Layout - Master Servicing
Exhibit 1: Layout
-------------------------------------------------------------------------------------------------------------------------------
Column Name Description Decimal Format Comment Max
Size
-------------------------------------------------------------------------------------------------------------------------------
Each file requires the
following fields:
-------------------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to Text up to 20 digits
define a group of loans. 20
-------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to Text up to 10 digits
each loan by the investor. 10
-------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan Text up to 10 digits
by the Servicer. This may be 10
different than the LOAN_NBR.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and 2 No commas(,) or dollar signs ($)
scheduled interest payment that a 11
borrower is expected to pay, P&I
constant.
-------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported 4 Max length of 6
by the Servicer. 6
-------------------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less 4 Max length of 6
the service fee rate as reported by 6
the Servicer.
-------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan 4 Max length of 6
as reported by the Servicer. 6
-------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a 2 No commas(,) or dollar signs ($)
loan as reported by the Servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by 4 Max length of 6
the Servicer. 6
-------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6
calculate a forecasted rate. 6
-------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar signs ($)
balance at the beginning of the 11
processing cycle.
-------------------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal 2 No commas(,) or dollar signs ($)
balance at the end of the 11
processing cycle.
-------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing MM/DD/YYYY
cycle that the borrower's next 10
payment is due to the Servicer, as
reported by Servicer.
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be 2 No commas(,) or dollar signs ($)
applied. 11
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated MM/DD/YYYY
with the first curtailment amount. 10
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the 2 No commas(,) or dollar signs ($)
first curtailment amount, if 11
applicable.
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be 2 No commas(,) or dollar signs ($)
applied. 11
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated MM/DD/YYYY
with the second curtailment amount. 10
-------------------------------------------------------------------------------------------------------------------------------
Standard Loan Level File Layout
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the 2 No commas(,) or dollar signs ($)
second curtailment amount, if 11
applicable.
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be 2 No commas(,) or dollar signs ($)
applied. 11
-------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated MM/DD/YYYY
with the third curtailment amount. 10
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the 2 No commas(,) or dollar signs ($)
third curtailment amount, if 11
applicable.
-------------------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported MM/DD/YYYY
by the Servicer. 10
-------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used Action Code Key: 15=Bankruptcy, 30=Foreclosure,
to indicate the default/delinquent 60=PIF, 63=Substitution, 65=Repurchase,72=REO 2
status of a particular loan.
-------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest 2 No commas(,) or dollar signs ($)
adjustment as reported by the 11
Servicer.
-------------------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment 2 No commas(,) or dollar signs ($)
amount, if applicable. 11
-------------------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar signs ($)
applicable. 11
-------------------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing 2 No commas(,) or dollar signs ($)
as a loss, if applicable. 11
-------------------------------------------------------------------------------------------------------------------------------
Plus the following
applicable fields:
-------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal 2 No commas(,) or dollar signs ($)
amount due at the beginning of the 11
cycle date to be passed through to
investors.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due 2 No commas(,) or dollar signs ($)
to investors at the end of a 11
processing cycle.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as 2 No commas(,) or dollar signs ($)
reported by the Servicer for the 11
current cycle -- only applicable
for Scheduled/Scheduled Loans.
-------------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount 2 No commas(,) or dollar signs ($)
less the service fee amount for the 11
current cycle as reported by the
Servicer -- only applicable for
Scheduled/Scheduled Loans.
-------------------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount 2 No commas(,) or dollar signs ($)
collected by the Servicer for the 11
current reporting cycle -- only
applicable for Actual/Actual Loans.
-------------------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount 2 No commas(,) or dollar signs ($)
less the service fee amount for the 11
current reporting cycle as reported
by the Servicer -- only applicable
for Actual/Actual Loans.
-------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a 2 No commas(,) or dollar signs ($)
borrower prepays on his loan as 11
reported by the Servicer.
-------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for 2 No commas(,) or dollar signs ($)
the loan waived by the servicer. 11
-------------------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan. 10
-------------------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha or numeric
30
-------------------------------------------------------------------------------------------------------------------------------
Standard Loan Level File Layout
-------------------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal 2 No commas(,) or dollar signs ($)
and interest advances made by 11
Servicer.
-------------------------------------------------------------------------------------------------------------------------------
BREACH_FLAG Flag to indicate if the repurchase Y=Breach
of a loan is due to a breach of N=NO Breach 1
Representations and Warranties Let blank if N/A
-------------------------------------------------------------------------------------------------------------------------------
Exhibit 2: Monthly Summary Report by Single Investor
MONTHLY SUMMARY REPORT
For Month Ended: mm/dd/yyyy Servicer Name _______________________
Prepared by: __________________ Investor Nbr ________________________
Section 1. Remittances and Ending Balances - Required Data
-------------------------------------------------------------------------------------------
Beginning Ending Total Monthly Total Ending Unpaid Total Monthly Principal
Loan Count Loan Count Remittance Amount Principal Balance Balance
-------------------------------------------------------------------------------------------
0 0 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------
Principal Calculation
---------------------
1. Monthly Principal Due + $0.00
--------
2. Current Curtailments + $0.00
--------
3. Liquidations + $0.00
--------
4. Other (attach explanation) + $0.00
--------
5. Principal Due $0.00
--------
6. Interest (reported "gross") + $0.00
--------
7. Interest Adjustments on Curtailments + $0.00
--------
8. Servicing Fees - $0.00
--------
9. Other Interest (attach explanation) + $0.00
--------
10. Interest Due (need to subtract ser fee) $0.00
========
Remittance Calculation
----------------------
11. Total Principal and Interest Due (lines 5+10) + $0.00
--------
12. Reimbursement of Non-Recoverable Advances - $0.00
--------
13. Total Realized gains + $0.00
--------
14. Total Realized Losses - $0.00
--------
15. Total Prepayment Penalties + $0.00
--------
16. Total Non-Supported Compensating Interest - $0.00
--------
17. Other (attach explanation) $0.00
--------
18. Net Funds Due on or before Remittance Date $ $0.00
--------
Section 2. Delinquency Report - Optional Data for Loan Accounting
------------------------------------------------------------------------------------------
Installments Delinquent
------------------------------------------------------------------------------------------
Total No. Total No. 90 or In Real Estate Total Dollar
of of 30- 60- more Foreclosure Owned Amount of
Loans Delinquencies Days Days Days (Optional) (Optional) Delinquencies
------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 $0.00
------------------------------------------------------------------------------------------
Section 3. REG AB Summary Reporting - REPORT ALL APPLICABLE FIELDS
REG XX XXXXXX LOAN COUNT BALANCE
PREPAYMENT PENALTY AMT 0 $0.00
PREPAYMENT PENALTY AMT WAIVED 0 $0.00
DELINQUENCY P&I AMOUNT 0 $0.00
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance
report date. Late submissions may result in claims not being passed until
the following month. The Servicer is responsible to remit all funds
pending loss approval and /or resolution of any disputed items.
(a)
(b) The numbers on the 332 form correspond with the numbers listed
below.
Liquidation and Acquisition Expenses:
-------------------------------------
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax, interest,
penalty. Advances prior to default require evidence of servicer
efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
(c) Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial
proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
Servicer Loan No. Servicer Name Servicer Address
XXXXX FARGO BANK, N.A. Loan No._____________________________
Borrower's Name:_______________________________________________________
Property Address:______________________________________________________
Liquidation Type: REO Sale 3rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If "Yes", provide deficiency or cramdown amount___________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ________ (1)
(2) Interest accrued at Net Rate __________ (2)
(3) Accrued Servicing Fees __________ (3)
(4) Attorney's Fees __________ (4)
(5) Taxes (see page 2) __________ (5)
(6) Property Maintenance __________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) __________ (7)
(8) Utility Expenses __________ (8)
(9) Appraisal/BPO __________ (9)
(10) Property Inspections __________ (10)
(11) FC Costs/Other Legal Expenses __________ (11)
(12) Other (itemize) __________ (12)
Cash for Keys________________________ __________ (12)
HOA/Condo Fees_______________________ __________ (12)
_____________________________________ __________ (12)
Total Expenses $ ________ (13)
Credits:
(14) Escrow Balance $ ________ (14)
(15) HIP Refund __________ (15)
(16) Rental Receipts __________ (16)
(17) Hazard Loss Proceeds __________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance __________ (18a)
HUD Part A
__________ (18b)
HUD Part B
(19) Pool Insurance Proceeds __________ (19)
(20) Proceeds from Sale of Acquired Property __________ (20)
(21) Other (itemize) __________ (21)
_________________________________________ __________ (21)
Total Credits $_________ (22)
Total Realized Loss (or Amount of Gain) $_________ (23)
Escrow Disbursement Detail
Type Date Paid Period of Total Base Amount Penalties Interest
(Tax /Ins.) Coverage Paid
----------- --------- --------- ----- ----------- --------- --------
EXHIBIT X-2
FORM OF COUNTRYWIDE SERVICING SERVICER REPORTS
Standard File Layout - Scheduled/Scheduled
----------------------------------------------------------------------------------------------------------------------
Column Name Description Decimal Format Comment
----------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 10 digits
group of loans.
----------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by Text up to 10 digits
the investor.
----------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits
Servicer. This may be different than the
LOAN_NBR.
----------------------------------------------------------------------------------------------------------------------
BORROWER_NAME The borrower name as received in the file. Maximum length of 30 (Last,
It is not separated by first and last name. First)
----------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or dollar signs ($)
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 4 Max length of 6
service fee rate as reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as 4 Max length of 6
reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported by 2 No commas(,) or dollar signs ($)
the Servicer.
----------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6
Servicer.
----------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to calculate 4 Max length of 6
a forecasted rate.
----------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or dollar signs ($)
the beginning of the processing cycle.
----------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or dollar signs ($)
the 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 ($)
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the MM/DD/YYYY
first curtailment amount.
----------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the MM/DD/YYYY
second curtailment amount.
----------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the MM/DD/YYYY
third curtailment amount.
----------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar signs ($)
curtailment amount, if applicable.
----------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as reported 2 No commas(,) or dollar signs ($)
by the Servicer.
----------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer.
----------------------------------------------------------------------------------------------------------------------
Action Code Key: 15=Bankruptcy,
30=Foreclosure, 60=PIF,
63=Substitution,
65=Repurchase,70=REO
----------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used to
indicate the default/delinquent status of
a particular loan.
----------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or dollar signs ($)
reported by the Servicer.
----------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar signs ($)
applicable.
----------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar signs ($)
applicable.
----------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a 2 No commas(,) or dollar signs ($)
loss, if applicable.
----------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount 2 No commas(,) or dollar signs ($)
due at the beginning of the cycle date to be
passed through to investors.
----------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or dollar signs ($)
investors at the end of a processing cycle.
----------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as reported 2 No commas(,) or dollar signs ($)
by 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 ($)
service fee amount for the current reporting
cycleas reported by the Servicer -- only
applicable for Actual/Actual Loans.
----------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or dollar signs ($)
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 ($)
waived by the servicer.
----------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan.
----------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha or
numeric
----------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar signs ($)
interest advances made by Servicer.
----------------------------------------------------------------------------------------------------------------------
EXHIBIT Y
Saxon Standard File Layout - Delinquency Reporting
------------------------------------------------------------------------------------------------------------------
Column/Header Name Description Decimal Format Comment
------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by the
originator.
------------------------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as assigned
by an external servicer to identify a
group of loans in their system.
------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
------------------------------------------------------------------------------------------------------------------
PROP_STATE The state where the property located.
------------------------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is located.
------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next
payment is due to MM/DD/YYYY the
servicer at the end of processing
cycle, as reported by Servicer.
------------------------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either MM/DD/YYYY
by Dismissal, Discharged and/or a Motion For Relief
Was Granted.
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such
As;
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To MM/DD/YYYY
End/Close
------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal
possession of the MM/DD/YYYY property
from the borrower.
------------------------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
------------------------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property is occupied.
------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
------------------------------------------------------------------------------------------------------------------
If applicable:
------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why the
loan is in default for this cycle.
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The MM/DD/YYYY
Pool Insurer
------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
FRCLSR_BID_AMT The foreclosure sale bid amount No commas(,)
or dollar
11 signs ($)
------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party,
Conveyance to HUD/VA
------------------------------------------------------------------------------------------------------------------
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------
BPO_DATE The date the BPO was done.
------------------------------------------------------------------------------------------------------------------
CURRENT_FICO The current FICO score
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the Hazard MM/DD/YYYY
Insurance Company. 10
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. No commas(,)
or dollar
11 signs ($)
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the MM/DD/YYYY
claim payment. 10
------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company paid on the No commas(,)
claim. or dollar
11 signs ($)
------------------------------------------------------------------------------------------------------------------
ACTION_CODE Indicates loan status Number
------------------------------------------------------------------------------------------------------------------
NOD_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
NOI_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_ PLAN_END_DATE
------------------------------------------------------------------------------------------------------------------
ACTUAL_REO_START_DATE MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------
REO_SALES_PRICE Number
------------------------------------------------------------------------------------------------------------------
REALIZED_LOSS/GAIN As defined in the Servicing Agreement Number
------------------------------------------------------------------------------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
Delinquency Code Delinquency Description
---------------- -----------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:
Status Code Status Description
----------- ------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
EXHIBIT Z
COUNTRYWIDE SERVICING STANDARD FILE LAYOUT - DELINQUENCY REPORTING
REPORTING DATA FOR DEFAULTED LOANS
Data must be submitted to Xxxxx Fargo Bank in an Excel spreadsheet format with
fixed field names and data type. The Excel spreadsheet should be used as a
template consistently every month when submitting data.
Table: Delinquency
Name Type Size
----------------------------------------------------------------------------
Servicer Loan # Number 8
(Double)
Investor Loan # Number 8
(Double)
Borrower Name Text 20
Address Text 30
State Text 2
Due Date Date/Time 8
Action Code Text 2
FC Received Date/Time 8
File Referred to Atty Date/Time 8
NOD Date/Time 8
Complaint Filed Date/Time 8
Sale Published Date/Time 8
Target Sale Date Date/Time 8
Actual Sale Date Date/Time 8
Loss Mit Approval Date Date/Time 8
Loss Mit Type Text 5
Loss Mit Estimated Completion Date Date/Time 8
Loss Mit Actual Completion Date Date/Time 8
Loss Mit Broken Plan Date Date/Time 8
BK Chapter Text 6
BK Filed Date Date/Time 8
Post Petition Due Date/Time 8
Motion for Relief Date/Time 8
Lift of Stay Date/Time 8
RFD Text 10
Occupant Code Text 10
Eviction Start Date Date/Time 8
Eviction Completed Date Date/Time 8
List Price Currency 8
List Date Date/Time 8
Accepted Offer Price Currency 8
Accepted Offer Date Date/Time 8
Estimated REO Closing Date Date/Time 8
Actual REO Sale Date Date/Time 8
o Items in bold are MANDATORY FIELDS. We must receive information in those
fields every month in order for your file to be accepted.
The Action Code Field should show the applicable numeric code to indicate that a
special action is being taken. The Action Codes are the following:
12-Relief Provisions
15-Bankruptcy/Litigation
20-Referred for Deed-in-Lieu
30-Referred fore Foreclosure
00-Xxxxxx
00-Xxxxxxxxxx
00-XXX-Xxxx for Sale
71-Third Party Sale/Condemnation
72-REO-Pending Conveyance-Pool Insurance claim filed
Xxxxx Fargo Bank will accept alternative Action Codes to those above, provided
that the Codes are consistent with industry standards. If Action Codes other
than those above are used, the Servicer must supply Xxxxx Fargo Bank with a
description of each of the Action Codes prior to sending the file.
Description of Action Codes:
Action Code 12 - To report a Mortgage Loan for which the Borrower has been
granted relief for curing a delinquency. The Action Date is the date the relief
is expected to end. For military indulgence, it will be three months after the
Borrower's discharge from military service.
Action Code 15 - To report the Borrower's filing for bankruptcy or instituting
some other type of litigation that will prevent or delay liquidation of the
Mortgage Loan. The Action Date will be either the date that any repayment plan
(or forbearance) instituted by the bankruptcy court will expire or an additional
date by which the litigation should be resolved.
Action Code 20 - To report that the Borrower has agreed to a deed-in-lieu or an
assignment of the property. The Action Date is the date the Servicer decided to
pursue a deed-in-lieu or the assignment.
Action Code 30 - To report that the decision has been made to foreclose the
Mortgage Loan. The Action Date is the date the Servicer referred the case to the
foreclosure attorney.
Action Code 60 - To report that a Mortgage Loan has been paid in full either at,
or prior to, maturity. The Action Date is the date the pay-off funds were
remitted to the Master Servicer.
Action Code 65 - To report that the Servicer is repurchasing the Mortgage Loan.
The Action Date is the date the repurchase proceeds were remitted to the Master
Servicer.
Action Code 70 - To report that a Mortgage Loan has been foreclosed or a
deed-in-lieu of foreclosure has been accepted, and the Servicer, on behalf of
the owner of the Mortgage Loan, has acquired the property and may dispose of it.
The Action Date is the date of the foreclosure sale or, for deeds-in-lieu, the
date the deed is recorded on behalf of the owner of the Mortgage Loan.
Action Code 71 - To report that a Mortgage Loan has been foreclosed and a third
party acquired the property, or a total condemnation of the property has
occurred. The Action Date is the date of the foreclosure sale or the date the
condemnation award was received.
Action Code 72 - To report that a Mortgage Loan has been foreclosed, or a
deed-in-lieu has been accepted, and the property may be conveyed to the mortgage
insurer and the pool insurance claim has been filed. The Action Date is the date
of the foreclosure sale, or, for deeds-in-lieu, the date of the deed for
conventional mortgages.
The Loss Mit Type field should show the approved Loss Mitigation arrangement.
The following are acceptable:
ASUM-Approved Assumption
BAP- Borrower Assistance Program
CO- Charge Off
DIL- Deed-in-Lieu
FFA- Formal Forbearance Agreement
MOD- Loan Modification
PRE- Pre-Sale
SS- Short Sale
MISC-Anything else approved by the PMI or Pool Insurer
Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply Xxxxx Fargo Bank
with a description of each of the Loss Mitigation Types prior to sending the
file.
The Occupant Code field should show the current status of the property. The
acceptable codes are:
Mortgagor
Tenant
Unknown
Vacant
REALIZED LOSS CALCULATION INFORMATION
XXXXX FARGO BANK, N.A. Form 332
Calculation of Realized Loss
Purpose
To provide the Servicer with a form for the calculation of any Realized Loss (or
gain) as a result of a Mortgage Loan having been foreclosed and Liquidated.
Distribution
The Servicer will prepare the form in duplicate and send the original together
with evidence of conveyance of title and appropriate supporting documentation to
the Master Servicer with the Monthly Accounting Reports which supports the
Mortgage Loan's removal from the Mortgage Loan Activity Report. The Servicer
will retain the duplicate for its own records.
Due Date
With respect to any liquidated Mortgage Loan, the form will be submitted to the
Master Servicer no later than the date on which statements are due to the Master
Servicer under Section 4.02 of this Agreement (the "Statement Date") in the
month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage Loan,
then the form will be submitted on the first Statement Date occurring after the
30th day following receipt of final liquidation proceeds and supporting
documentation.
Preparation Instructions
The numbers on the form correspond with the numbers listed below.
1. The actual Unpaid Principal Balance of the Mortgage Loan.
2. The Total Interest Due less the aggregate amount of servicing fee that
would have been earned if all delinquent payments had been made as agreed.
3-7. Complete as necessary. All line entries must be supported by copies of
appropriate statements, vouchers, receipts, canceled checks, etc., to
document the expense. Entries not properly documented will not be
reimbursed to the Servicer.
8. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis.
10. The total of lines 1 through 9.
Credits
11-17.Complete as necessary. All line entries must be supported by copies of
the appropriate claims forms, statements, payment checks, etc. to document
the credit. If the Mortgage Loan is subject to a Bankruptcy Deficiency,
the difference between the Unpaid Principal Balance of the Note prior to
the Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by
the Bankruptcy Deficiency should be input on line 16.
18. The total of lines 11 through 17.
Total Realized Loss (or Amount of Any Gain)
19. The total derived from subtracting line 18 from 10. If the amount
represents a realized gain, show the amount in parenthesis ( ).
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS
XXXXX FARGO BANK, N.A. Trust: ___________________________
Prepared by: __________________ Date: _______________
Phone: ______________________
Servicer Loan No. Servicer Name Servicer Address
XXXXX FARGO BANK, N.A.
Loan No._____________________________
Borrower's Name:________________________________________________________
Property
Address:________________________________________________________________
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Mortgage Loan $ _______________(1)
Interest accrued at Net Rate ________________(2)
Attorney's Fees ________________(3)
Taxes ________________(4)
Property Maintenance ________________(5)
MI/Hazard Insurance Premiums ________________(6)
Hazard Loss Expenses ________________(7)
Accrued Servicing Fees ________________(8)
Other (itemize) ________________(9)
$__________________
Total Expenses $ ______________(10)
Credits:
Escrow Balance $ ______________(11)
HIP Refund ________________(12)
Rental Receipts ________________(13)
Hazard Loss Proceeds ________________(14)
Primary Mortgage Insurance Proceeds ________________(15)
Proceeds from Sale of Acquired Property ________________(16)
Other (itemize) ________________(17)
______________
______________
Total Credits $________________(18)
Total Realized Loss (or Amount of Gain) $________________
EXHIBIT AA
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx AND VIA OVERNIGHT
MAIL TO THE ADDRESS IMMEDIATELY BELOW
Xxxxx Fargo Bank, National Association, as Securities Administrator
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Corporate Trust Services - MSAC 2007-HE5 - SEC REPORT PROCESSING
**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 April 1, 2007, among Xxxxxx Xxxxxxx ABS Capital I
Inc., as depositor, Xxxxx Fargo Bank, National Association, as master servicer,
securities administrator, and a custodian, Saxon Mortgage Services, Inc., as a
servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., 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 a custodian, 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:_______________________________
Title:______________________________
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 April 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, pursuant to that certain xxxx of sale, dated as of the
Closing Date, between the Sponsor and the Depositor, the Mortgage Loans are to
be transferred by the Sponsor to the Depositor;
WHEREAS, pursuant to that certain Pooling and Servicing Agreement,
dated as of April 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"),
WMC Mortgage Corp., as a responsible party ("WMC"), Decision One Mortgage
Company, LLC, as a responsible party ("Decision One", and together with WMC, the
"Responsible Parties" and each a "Responsible Party"), Xxxxx Fargo Bank,
National Association ("Xxxxx Fargo"), as securities administrator, as master
servicer and a as custodian, Deutsche Bank National Trust Company, as trustee
(the "Trustee"), and LaSalle Bank National Association, as a custodian (together
with Xxxxx Fargo in its capacity as a custodian, the "Custodians"), Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2007-HE5 (the "Trust") shall issue its Mortgage
Pass-Through Certificates, Series 2007-HE5 (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 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) Each loan at the time it was made complied in all material
respects with applicable local, state and federal laws, including, but not
limited to, all applicable laws relating to prepayment penalties and predatory
and abusive lending.
(b) 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).
(c) 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 or in
the related mortgage loan purchase and warranties agreement, as applicable,
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 Custodians 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 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, LaSalle 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 and repurchase, the Trustee 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: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
XXXXXX XXXXXXX ABS CAPITAL I INC.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Custodians 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 September Third full paragraph of Section 6
28, 2006, between Decision One and the Sponsor. (titled "Purchase Agreements; Interim
Servicing Agreements").
2. Purchase Price and Terms Agreement, dated as of November Third full paragraph of Section 6
2, 2006, between Decision One and the Sponsor. (titled "Purchase Agreements; Interim
Servicing Agreements").
3. Purchase Price and Terms Agreement, dated as of January Third full paragraph of Section 6
22, 2007, between Decision One and the Sponsor. (titled "Purchase Agreements; Interim
Servicing Agreements").
4. Purchase Price and Terms Agreement, dated as of September The first paragraph of Section 9.04 of
19, 2006 and the Fifth Amended and Restated Mortgage Loan the Fifth Amended and Restated
Purchase and Warranties Agreement, dated as of November Mortgage Loan Purchase and Warranties
1, 2006, each between WMC and the Sponsor. Agreement (titled "Repurchase of
Mortgage Loans with First Payment
Default").
5. Purchase Price and Terms Agreement, dated as of November The first paragraph of Section 9.04 of
29, 2006 and the Fifth Amended and Restated Mortgage Loan the Fifth Amended and Restated
Purchase and Warranties Agreement, dated as of November Mortgage Loan Purchase and Warranties
1, 2006, each between WMC and the Sponsor. Agreement (titled "Repurchase of
Mortgage Loans with First Payment
Default").
EXHIBIT DD
INTEREST RATE CAP AGREEMENT
XXXXXX XXXXXXX
DATE: April 26, 2007
TO: Xxxxx Fargo Bank, National Association, not
individually, but solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2007-HE5,
Mortgage Pass-Through Certificates, Series 2007-HE5
ATTENTION: Client Manager - MSAC 2007-HE5
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: HRBH9
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 Xxxxx Fargo Bank, National Association, not individually, but
solely as Securities Administrator (the "Securities Administrator") under the
Pooling and Servicing Agreement, dated and effective as of April 1, 2007, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer, Securities Administrator and Custodian, Saxon
Mortgage Services, Inc., as Servicer, Countrywide Home Loans Servicing LP, as
Servicer, LaSalle Bank National Association, as Custodian, WMC Mortgage Corp.
and Decision One Mortgage Company, LLC, as Responsible Parties, and Deutsche
Bank National Trust Company, as Trustee (the "PSA") for the Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2007-HE5, Mortgage Pass-Through Certificates, Series
2007-HE5 ("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 April 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:........................ April 11, 2007
Effective Date:.................... April 26, 2007
Termination Date:.................. March 25, 2008
Fixed Amounts:
Fixed Rate Payer:............ Party B
Fixed Rate Payer Payment
Dates:..................... April 26, 2007
Fixed Amount:................ None
Floating Amounts:
Floating Rate Payer:......... Party A
Cap Rate:.................... 7.00%
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 May 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:
Xxxxx Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: 0000000000
Acct Name: SAS Clearing
Ref: FFC: 53144801, XXXX 0000-XX0 (xxx)
3. Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Confirmation is
executed by Xxxxx Fargo Bank, National Association (i) this
Confirmation is executed and delivered by Xxxxx Fargo Bank, National
Association not in its individual capacity but solely as Securities
Administrator of the Trust under the PSA in the exercise of the powers
and authority conferred and invested in it as securities administrator
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 Securities Administrator but is made
and intended for the purpose of binding only the Trust, and (iii) under
no circumstances shall Xxxxx Fargo Bank, National Association 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
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: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Securities Administrator
for Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2007-HE5, Mortgage
Pass-Through Certificates, Series
2007-HE5
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
SCHEDULE I
Notional
Line Calculation Period Amount ($) Multiplier
---- --------------------------------- -------------------- ----------
1 Effective Date 5/25/2007 106,650,640.21 10
2 5/25/2007 6/25/2007 102,531,432.85 10
3 6/25/2007 7/25/2007 98,545,554.64 10
4 7/25/2007 8/25/2007 94,701,795.34 10
5 8/25/2007 9/25/2007 90,985,396.46 10
6 9/25/2007 10/25/2007 87,390,245.93 10
7 10/25/2007 11/25/2007 83,910,712.35 10
8 11/25/2007 12/25/2007 80,541,627.52 10
9 12/25/2007 1/25/2008 77,270,390.09 10
10 1/25/2008 2/25/2008 74,108,812.08 10
11 2/25/2008 Termination Date 71,044,753.90 10
