Exhibit 4.1
CHASE MORTGAGE FINANCE CORPORATION,
DEPOSITOR,
JPMORGAN CHASE BANK, N.A.,
SERVICER,
JPMORGAN CHASE BANK, N.A.,
CUSTODIAN,
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
PAYING AGENT
AND
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2007
$1,075,181,900
Multi-Class Mortgage Pass-Through Certificates
Series 2007-S3
ARTICLE I DEFINITIONS...................................................................................................... 1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TRUST FUND......................................................................... 45
Section 2.01 Conveyance of Mortgage Loans.............................................................................. 45
Section 2.02 Acceptance by Trustee..................................................................................... 49
Section 2.03 Trust Fund; Authentication of Certificates................................................................ 50
Section 2.04 REMIC Elections........................................................................................... 50
Section 2.05 Permitted Activities of Trust............................................................................. 57
Section 2.06 Qualifying Special Purpose Entity......................................................................... 57
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE SERVICER; REPURCHASE OF MORTGAGE LOANS.................. 57
Section 3.01 Representations and Warranties of the Depositor with respect to the Mortgage Loans........................ 57
Section 3.02 Representations and Warranties of the Servicer............................................................ 65
Section 3.03 Option to Substitute...................................................................................... 65
ARTICLE IV THE CERTIFICATES................................................................................................. 66
Section 4.01 The Certificates.......................................................................................... 66
Section 4.02 Registration of Transfer and Exchange of Certificates..................................................... 69
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates......................................................... 73
Section 4.04 Persons Deemed Owners..................................................................................... 73
Section 4.05 Appointment of Paying Agent and Certificate Registrar; Certificate Account................................ 73
Section 4.06 Authenticating Agents..................................................................................... 74
ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................................................................... 75
Section 5.01 Servicer to Service Mortgage Loans........................................................................ 75
Section 5.02 Sub-Servicing Agreements Between Servicer and Sub-Servicers; Enforcement of Sub-Servicer's Obligations.... 76
Section 5.03 Successor Sub-Servicers................................................................................... 76
Section 5.04 Liability of the Servicer................................................................................. 76
Section 5.05 No Contractual Relationship Between Sub-Servicer and Trustee or Certificateholders........................ 77
Section 5.06 Termination of Sub-Servicing Agreement.................................................................... 77
Section 5.07 Collection of Mortgage Loan Payments...................................................................... 77
Section 5.08 Establishment of Collection Account; Deposit in Collection Account........................................ 77
Section 5.09 Permitted Withdrawals from the Collection Account......................................................... 78
Section 5.10 Establishment of Escrow Account; Deposits in Escrow Account............................................... 79
Section 5.11 Permitted Withdrawals from Escrow Account................................................................. 79
Section 5.12 Payment of Taxes, Insurance and Other Charges............................................................. 80
Section 5.13 Transfer of Accounts...................................................................................... 80
Section 5.14 [Reserved]................................................................................................ 80
Section 5.15 Maintenance of the Primary Insurance Policies............................................................. 80
Section 5.16 Maintenance of Standard Hazard Policies................................................................... 80
Section 5.17 [Reserved]................................................................................................ 81
Section 5.18 [Reserved]................................................................................................ 81
Section 5.19 Fidelity Bond and Errors and Omissions Insurance.......................................................... 81
Section 5.20 Collections under Insurance Policies; Enforcement of Due-On-Sale Clauses; Assumption Agreements........... 81
Section 5.21 Income and Realization from Defaulted Mortgage Loans...................................................... 82
Section 5.22 Trustee to Cooperate; Release of Mortgage Files........................................................... 83
Section 5.23 Servicing and Other Compensation.......................................................................... 85
Section 5.24 1934 Act Reports.......................................................................................... 85
Section 5.25 Annual Statement as to Compliance......................................................................... 87
Section 5.26 Assessment of Compliance and Independent Public Accountants' Attestation; Financial Statements ........... 87
Section 5.27 Access to Certain Documentation; Rights of the Depositor in Respect of the Servicer....................... 89
Section 5.28 REMIC-Related Covenants................................................................................... 90
Section 5.29 Reserve Fund; Yield Maintenance Agreement................................................................. 91
ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS............................................................................... 93
Section 6.01 Distributions............................................................................................. 93
Section 6.02 Statements to the Certificateholders...................................................................... 100
Section 6.03 Advances by the Servicer.................................................................................. 103
Section 6.04 Allocation of Realized Losses............................................................................. 103
Section 6.05 Compensating Interest; Allocation of Certain Interest Shortfalls.......................................... 105
Section 6.06 Subordination............................................................................................. 107
Section 6.07 Determination of LIBOR.................................................................................... 107
ARTICLE VII REPORTS TO BE PREPARED BY THE SERVICER.......................................................................... 108
Section 7.01 Servicer Shall Provide Information as Reasonably Required................................................. 108
Section 7.02 Federal Information Returns and Reports to Certificateholders............................................. 108
ARTICLE VIII THE DEPOSITOR AND THE SERVICER................................................................................. 109
Section 8.01 Indemnification; Third Party Claims....................................................................... 109
Section 8.02 Merger or Consolidation of the Depositor or the Servicer.................................................. 109
ii
Section 8.03 Limitation on Liability of the Depositor, the Servicer, the Trustee and Others............................ 110
Section 8.04 Depositor and Servicer Not to Resign...................................................................... 110
Section 8.05 Successor to the Servicer................................................................................. 111
Section 8.06 Maintenance of Ratings.................................................................................... 112
ARTICLE IX DEFAULT.......................................................................................................... 112
Section 9.01 Events of Default......................................................................................... 112
Section 9.02 Waiver of Defaults........................................................................................ 113
Section 9.03 Trustee to Act; Appointment of Successor.................................................................. 113
Section 9.04 Notification to Certificateholders and the Rating Agencies................................................ 113
ARTICLE X CONCERNING THE TRUSTEE............................................................................................ 114
Section 10.01 Duties of Trustee......................................................................................... 114
Section 10.02 Certain Matters Affecting the Trustee.................................................................... 114
Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans..................................................... 115
Section 10.04 Trustee May Own Certificates.............................................................................. 116
Section 10.05 Fees and Expenses......................................................................................... 116
Section 10.06 Eligibility Requirements for Trustee...................................................................... 116
Section 10.07 Resignation and Removal of the Trustee.................................................................... 116
Section 10.08 Successor Trustee......................................................................................... 117
Section 10.09 Merger or Consolidation of Trustee........................................................................ 117
Section 10.10 Appointment of Co-Trustee or Separate Trustee............................................................. 118
Section 10.11 Appointment of Office or Agency........................................................................... 118
Section 10.12 Indemnification........................................................................................... 118
ARTICLE XI TERMINATION...................................................................................................... 119
Section 11.01 Termination............................................................................................... 119
ARTICLE XII MISCELLANEOUS PROVISIONS........................................................................................ 121
Section 12.01 Severability of Provisions................................................................................ 121
Section 12.02 Limitation on Rights of Certificateholders................................................................ 121
Section 12.03 Amendment................................................................................................. 121
Section 12.04 Counterparts.............................................................................................. 122
Section 12.05 Duration of Agreement..................................................................................... 122
Section 12.06 Governing Law............................................................................................. 122
Section 12.07 Notices................................................................................................... 122
Section 12.08 Further Assurances........................................................................................ 123
iii
EXHIBIT A MORTGAGE LOAN SCHEDULES
EXHIBIT B CONTENTS OF MORTGAGE FILE
EXHIBIT C FORM OF CLASS A CERTIFICATE
EXHIBIT D FORM OF CLASS M CERTIFICATE
EXHIBIT E FORM OF CLASS B CERTIFICATE
EXHIBIT F FORM OF CLASS A-R CERTIFICATE
EXHIBIT G FORM OF TRUSTEE CERTIFICATION
EXHIBIT H FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT J FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
EXHIBIT K FORM OF CLASS A-R TRANSFEREE LETTER
EXHIBIT K-1 FORM OF CLASS A-R TRANSFEROR LETTER
EXHIBIT L REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT M FORM OF TRANSFEREE ERISA REPRESENTATION LETTER
EXHIBIT N PERMITTED EXCHANGEABLE CERTIFICATE COMBINATIONS
EXHIBIT O FORM OF OFFICER'S CERTIficate (PAYING AGENT)
EXHIBIT P LETTER OF REPRESENTATIONS
EXHIBIT Q FORM OF TRUST AGREEMENT
EXHIBIT R SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
EXHIBIT S FORM OF XXXXXXXX-XXXXX CERTIFICATION
EXHIBIT T FORM OF ITEM 1123 CERTIFICATION OF SERVICER
EXHIBIT U FORM OF CLASS 1-A1 YIELD MAINTENANCE AGREEMENT
EXHIBIT U-1 FORM OF CLASS 1-A8 YIELD MAINTENANCE AGREEMENT
EXHIBIT V PLANNED PRINCIPAL BALANCES FOR THE CLASS 1-A16, CLASS 1-A18,
CLASS 1-A19, CLASS 1-A21, CLASS 1-A22, CLASS 1-A23 AND CLASS
1-A24 CERTIFICATES
EXHIBIT W TARGETED PRINCIPAL BALANCES FOR THE CLASS 1-A1 AND CLASS 1-A3
CERTIFICATES
SCHEDULE X 1934 ACT FORM 8-K REPORTING OBLIGATIONS
SCHEDULE Y 1934 ACT FORM 10-D REPORTING OBLIGATIONS
SCHEDULE Z 1934 ACT FORM 10-K REPORTING OBLIGATIONS
iv
This Pooling and Servicing Agreement, dated as of April 1, 2007, is
executed among Chase Mortgage Finance Corporation, as depositor (together with
its permitted successors and assigns, the "Depositor"), JPMorgan Chase Bank,
N.A. ("Chase"), as servicer (in such capacity, together with its permitted
successors and assigns, the "Servicer"), JPMorgan Chase Bank, N.A., as custodian
(in such capacity, together with its permitted successors and assigns, the
"Custodian"), The Bank of New York Trust Company, N.A., as paying agent (in such
capacity, together with its permitted successors and assigns, the "Paying
Agent") and The Bank of New York Trust Company, N.A., as trustee (in such
capacity, together with its permitted successors and assigns, the "Trustee").
In consideration of the premises and the mutual agreements hereinafter set
forth, the Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, 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 (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) is located, and
which are in accordance with FNMA servicing practices and procedures for MBS
pool mortgages (as defined in the FNMA Guides including future updates).
ACCOUNTANT'S ATTESTATION: As defined in Section 5.26(b).
ADDITIONAL FORM 10-D DISCLOSURE: As defined in Section 5.24(b).
ADDITIONAL FORM 10-K DISCLOSURE: As defined in Section 5.24(d).
ADVANCE: The aggregate of the advances made by the Servicer with respect
to a particular Distribution Date pursuant to Section 6.03.
AFFILIATE: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGENCY & TRUST OFFICE: With respect to the Trustee, the office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this instrument is
located at 000 Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000; and, with respect to
the Paying Agent, the office of the Paying Agent at which at any particular time
its corporate trust business shall be administered, which office at the date of
execution of this instrument is located at 000 Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxx 00000.
AGGREGATE SUBORDINATED PERCENTAGE: As defined in Section
6.01(I)(b)(vii)(A).
AGREEMENT: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
APPRAISED VALUE: The value set forth in an appraisal or recertification
document made in connection with the origination of the related Mortgage Loan as
the value of the Mortgaged Property (or the related residential dwelling unit in
the Underlying Mortgaged Property, in the case of a Co-op Loan).
ASSESSMENT OF COMPLIANCE: As defined in Section 5.26(a).
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of transfer
(or UCC-3 assignment (or equivalent instrument) with respect to each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of a Co-op
Loan), sufficient under the laws of the jurisdiction where the related Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan) is
located to reflect of record the sale and assignment of the Mortgage Loan to the
Trustee, which assignment, notice of transfer or equivalent instrument may, if
permitted by law, be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county.
AUTHENTICATING AGENT: The meaning specified in Section 4.06(a).
AVAILABLE DISTRIBUTION AMOUNT: As to either Mortgage Group or, as the
context requires, both Mortgage Groups, on any Distribution Date, an amount
equal to the amount on deposit in the Collection Account with respect to such
Mortgage Group as of the close of business two Business Days immediately
preceding the related Distribution Date (but prior to making any deposits into
the Certificate Account on such date) except:
(a) amounts received on particular Mortgage Loans in such Mortgage Group
as late payments or other recoveries of principal or interest (including any
Subsequent Recoveries, Liquidation Proceeds, Insurance Proceeds and condemnation
awards) and respecting which the Servicer previously made an unreimbursed
Advance of such amounts;
(b) reimbursement for Nonrecoverable Advances and other amounts permitted
to be withdrawn by the Servicer pursuant to Section 5.09 from, or not required
to be deposited in, the Collection Account attributable, in each case, to
Mortgage Loans in such Mortgage Group;
(c) amounts representing the Servicing Fee attributable in each case to
the Mortgage Loans in such Mortgage Group with respect to such Distribution
Date;
(d) amounts representing all or part of a Monthly Payment with respect to
a Mortgage Loan in such Mortgage Group due (i) after the related Due Period or
(ii) on or prior to the Cut-off Date;
(e) all Repurchase Proceeds, Principal Prepayments, Liquidation Proceeds,
Insurance Proceeds, Subsequent Recoveries and condemnation awards with respect
to Mortgage Loans in such Mortgage Group received after the related Principal
Prepayment Period, and all related payments of interest representing interest
for any period of time after the last day of the related Due Period for such
Mortgage Loans; and
(f) all income from Eligible Investments held in the Collection Account
for the account of the Servicer.
BANKRUPTCY AMOUNT: As of any date of determination, $333,052.65 minus all
Bankruptcy Losses on the Mortgage Loans, if any, previously allocated to the
Certificates in accordance with Section 6.04.
2
BANKRUPTCY CODE: Title 11 of the United States Code, as the same may be
amended from time to time.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
BASIS RISK SHORTFALL CARRYOVER AMOUNT: For any Distribution Date and the
Class 1-A1 and Class 1-A8 Certificates, an amount equal to the sum of (i) the
excess, if any, of (x) the amount of interest such Class of Certificates accrued
for such Distribution Date at the related Certificate Rate over (y) the amount
such Class of Certificates accrued for such Distribution Date at the per annum
rate of 6.00%, in the case of the Class 1-A1 Certificates, and 5.75%, in the
case of the Class 1-A8 Certificates, and (ii) the unpaid portion of any Basis
Risk Shortfall Carryover Amount for such Class of Certificates from prior
Distribution Dates together with interest accrued on such unpaid portion for the
most recently ended Accrual Period at the related Certificate Rate.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate through a Participant or an Indirect Participant or a
Person holding a beneficial interest in any Definitive Certificate.
BOOK-ENTRY CERTIFICATES: The Class A Certificates (other than the Class
A-R, Class 1-AX and Class 2-AX Certificates), Class M Certificates, Class B-1
Certificates, Class B-2 Certificates and Class B-3 Certificates, referred to
collectively.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a legal
holiday in the States of New York and Louisiana or (c) a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to be closed.
CAP STRIKE RATE: With respect to any Distribution Date and the Class 1-A1
or Class 1-A8 Yield Maintenance Agreement, the rate set forth under the heading
"Cap Strike Rate" in Exhibit U or Exhibit U-1, respectively.
CARRY-OVER SUBORDINATED PRINCIPAL AMOUNT: As of any Distribution Date,
with respect to any Class of Subordinated Certificates, an amount, if any, equal
to the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed and is not attributable to a Realized
Loss.
CASH LIQUIDATION: Recovery of all cash proceeds by the Servicer with
respect to the liquidation of any Mortgage Loan, including Insurance Proceeds
and other payments or recoveries (whether made at one time or over a period of
time) which the Servicer deems to be finally recoverable, in connection with the
sale, assignment or satisfaction of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, but only if title to the related Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
was not acquired by foreclosure or deed in lieu of foreclosure by the Servicer
pursuant to Section 5.21.
CERTIFICATE: Any Class A, Class M or Class B Certificate.
CERTIFICATE ACCOUNT: The account created and maintained pursuant to
Section 4.05.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Servicer, any
Sub-Servicer, or any of their respective Affiliates shall be disregarded and the
undivided Percentage
3
Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests necessary to effect any
such consent, waiver, request or demand has been obtained. The Trustee and the
Paying Agent shall be entitled to conclusively rely upon the certificate of the
Depositor or the Servicer as to the determination of which Certificates are
registered in the name of such Affiliates.
CERTIFICATE GROUP: Each of (i) the Class 1-A Certificates, collectively
and (ii) the Class 2-A Certificates, collectively.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a Book-Entry
Certificate registered in the name of the Depository or its nominee.
CERTIFICATE RATE: The per annum rate of interest borne by each Class of
Certificates (other than the Class A-P Certificates), which (i) in the case of
the Class 1-A3, Class 1-A4, Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A9,
Class 1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A17,
Class 1-A19, Class 1-A20, Class 1-AX and Class A-R Certificates will be 6.00%,
(ii) in the case of the Class 1-A16 Certificates will be 5.875%, (iii) in the
case of the Class 1-A10 Certificates will be 5.750% and (iv) in the case of the
Class 1-A21, Class 2-A1 and Class 2-AX Certificates will be 5.50%. In the case
of the Class 1-A1 Certificates, the Certificate Rate with respect to the first
Distribution Date will be 5.92%, and as to any Distribution Date thereafter, the
Certificate Rate on the Class 1-A1 Certificates will equal the lesser of (A)
0.60% plus LIBOR and (B) 20.00%, but not less than 0.60%. In the case of the
Class 1-A2 Certificates, the Certificate Rate with respect to the first
Distribution Date will be 0.08%, and as to any Distribution Date thereafter, the
Certificate Rate on the Class 1-A2 Certificates will equal the greater of (A)
5.40% minus LIBOR and (B) 0.00%. In the case of the Class 1-A8 Certificates, the
Certificate Rate (i) with respect to the first Distribution Date will be 6.07%,
(ii) with respect to any Distribution Date thereafter but prior to the interest
accrual period relating to the Distribution Date in May 2010, the Certificate
Rate on the Class 1-A8 Certificates will equal the lesser of (A) 0.75% plus
LIBOR and (B) 9.50%, but not less than 5.75% and (iii) commencing with the
interest accrual period relating to the Distribution Date in May 2010 and with
respect to any Distribution Date thereafter, 5.75%. In the case of the Class
1-A18, Class 1-A22, Class 1-A23 and Class 1-A24 Certificates, the Certificate
Rates will equal a per annum rate equal to , for any Distribution Date (i) prior
to the Credit Support Depletion Date, 6.000%, 5.625%, 5.750% and 5.875%,
respectively, or (ii) on or after the Credit Support Depletion Date, the sum of
(A) 5.50% and (B) a fraction, the numerator of which is the product of (1) 12,
(2) the interest accrued on the Class 1-A17 Certificates (without taking account
of any exchanges) for such Distribution Date and (3)(a) 14,881,000, (b)
3,720,250, (c) 7,440,500 and (d) 11,160,750, respectively, and the denominator
of which is the product of (1) the Outstanding Certificate Principal Balance of
the Class 1-A18, Class 1-A22, Class 1-A23 or Class 1-A24 Certificates, as
applicable, and (2) 16,443,500. If the Outstanding Certificate Principal Balance
of the Class 1-A18, Class 1-A22, Class 1-A23 or Class 1-A24 Certificates is
reduced to zero while any such Class of Certificates is entitled to receive
interest amounts from the portion of the Class 1-A17 Certificates exchanged for
such Class, such interest entitlement will not be expressed as a Certificate
Rate and such Class will be entitled to interest amounts that would otherwise be
paid to the Class 1-A17 Certificates exchanged for such Class. With respect to
each Class of Subordinated Certificates, the per annum rate of interest will
equal the fraction, expressed as a percentage, (I) the numerator of which will
equal the sum of (i) the product of (x) 6.00% and (y) the Group One Subordinated
Amount, and (ii) the product of (x) 5.50% and (y) the Group Two Subordinated
Amount and (II) the denominator of which will equal the sum of the Group One
Subordinated Amount and the Group Two Subordinated Amount. For federal income
tax purposes, the Certificate Rate on each Class of Subordinate Certificates can
be expressed as a per annum rate equal to the weighted average of the interest
rates on the Lower-Tier REMIC Regular Interests ending with the designation "A"
weighted on the basis of their principal amounts immediately prior to such
Distribution Date. Interest with respect
4
to each Class of Certificates (other than the Class A-P Certificates) shall be
calculated based on a 360 day year comprised of twelve 30-day months.
CERTIFICATE REGISTER: The register maintained pursuant to Section 4.02.
CERTIFICATE REGISTRAR: The Person appointed by the Trustee as Certificate
Registrar pursuant to Section 4.05.
CHASE: JPMorgan Chase Bank, N.A., a national banking association, or its
successor in interest.
CHF: Chase Home Finance LLC, a Delaware limited liability company, or its
successor in interest.
CLASS: Pertaining to the Class 1-A1, Class 1-A2, Class 1-A3, Class 1-A4,
Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8, Class 1-A9, Class 1-A10, Class
1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A16, Class
1-A17, Class 1-A18, Class 1-A19, Class 1-A20, Class 1-A21, Class 1-A22, Class
1-A23, Class 1-A24, Class 1-AX, Class A-P, Class A-R, Class 2-A1, Class 2-AX,
Class A-M, Class M-1, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5,
Class B-6 Certificates or any Lower-Tier REMIC Interest or any Middle-Tier REMIC
Interest, as the case may be.
CLASS 1-A CERTIFICATES: Class 1-A1, Class 1-A2, Class 1-A3, Class 1-A4,
Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8, Class 1-A9, Class 1-A10, Class
1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A16, Class
1-A17, Class 1-A18, Class 1-A19, Class 1-A20, Class 1-A21, Class 1-A22, Class
1-A23, Class 1-A24, Class 1-AX and Class A-R Certificates, referred to
collectively.
CLASS 1-A DEFICIENCY AMOUNT: As defined in Section 6.01(I)(b)(iii) hereof.
CLASS 1-A1 CERTIFICATE: Any one of the Class 1-A1 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at a per annum rate equal to the lesser of (i) LIBOR plus
0.60% and (ii) 6.00% on the Outstanding Certificate Principal Balance of the
Class 1-A1 Certificates minus (i) any Compensating Interest Shortfall allocated
to the Class 1-A1 Certificates on such Distribution Date pursuant to Section
6.05(b), (ii) any Realized Loss Interest Shortfall resulting from an Excess Loss
allocated to the Class 1-A1 Certificates on such Distribution Date pursuant to
Section 6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A1 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A1 MAXIMUM YIELD MAINTENANCE AGREEMENT AMOUNT: The amount
described in Section 5.29(e).
CLASS 1-A1 SCHEDULED NOTIONAL AMOUNT: With respect to any Distribution
Date set forth in Exhibit U hereto, the amount set forth with respect to such
Distribution Date in Exhibit U under the heading "Notional."
5
CLASS 1-A1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A1 Interest Accrual Amount over the
amount actually distributed to the Class 1-A1 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(A).
CLASS 1-A1 YIELD MAINTENANCE AGREEMENT: The Yield Maintenance Agreement
set forth on Exhibit U hereto.
CLASS 1-A2 CERTIFICATE: Any one of the Class 1-A2 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class 1-A2 Notional Amount
minus (i) any Compensating Interest Shortfall allocated to the Class 1-A2
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 1-A2 Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class 1-A2 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A2 NOTIONAL AMOUNT: With respect to any Distribution Date, the
Outstanding Certificate Principal Balance of the Class 1-A1 Certificates for
such Distribution Date.
CLASS 1-A2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A2 Interest Accrual Amount over the
amount actually distributed to the Class 1-A2 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(B).
CLASS 1-A3 ACCRETION TERMINATION DATE: The earlier to occur of the (i) the
Distribution Date following the Distribution Date on which the aggregate
Outstanding Certificate Principal Balance of the Class 1-A1 Certificates has
been reduced to zero and (ii) the Distribution Date following the Credit Support
Depletion Date.
CLASS 1-A3 CERTIFICATE: Any one of the Class 1-A3 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class 1-A3 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class 1-A3 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class 1-A3 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 1-A3 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 1-A3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A3 Interest Accrual Amount over the
amount actually distributed to the Class 1-A3 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(C).
CLASS 1-A4 ACCRETION TERMINATION DATE: The earlier to occur of the (i) the
Distribution Date following the Distribution Date on which the aggregate
Outstanding Certificate
6
Principal Balances of the Class 1-A1 and Class 1-A3 Certificates have been
reduced to zero and (ii) the Distribution Date following the Credit Support
Depletion Date.
CLASS 1-A4 CERTIFICATE: Any one of the Class 1-A4 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class 1-A4 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class 1-A4 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class 1-A4 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 1-A4 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 1-A4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A4 Interest Accrual Amount over the
amount actually distributed to the Class 1-A4 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(D).
CLASS 1-A5 AND CLASS 1-A6 LOCKOUT PERCENTAGE: With respect to any
Distribution Date, will equal the Outstanding Certificate Principal Balance
immediately preceding such Distribution Date of the Class 1-A5 and Class 1-A6
Certificates divided by the aggregate Outstanding Certificate Principal Balance
of the Non-PO Class 1-A Certificates (excluding the Class A-R Certificate), but
in no case will the Class 1-A5 and Class 1-A6 Lockout Percentage exceed 100%.
CLASS 1-A5 AND CLASS 1-A6 LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With
respect to any Distribution Date, will equal the product of (1) the Class 1-A5
and Class 1-A6 Lockout Percentage, (2) the aggregate amount of principal to be
distributed to the Non-PO Class 1-A Certificates (after taking into account
distributions made to the Class A-R Certificate) on such Distribution Date
pursuant to Section 6.01 hereof and (3) the Lockout Shift Percentage.
CLASS 1-A5 CERTIFICATE: Any one of the Class 1-A5 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class 1-A5 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class 1-A5 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class 1-A5 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 1-A5 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 1-A5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A5 Interest Accrual Amount over the
amount actually distributed to the Class 1-A5 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(E).
CLASS 1-A6 CERTIFICATE: Any one of the Class 1-A6 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to
7
Section 4.06, the Authenticating Agent), senior in right of payment to the Class
M and Class B Certificates, substantially in the form of the Class A Certificate
set forth in Exhibit C hereto.
CLASS 1-A6 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class 1-A6 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class 1-A6 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class 1-A6 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 1-A6 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 1-A6 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A6 Interest Accrual Amount over the
amount actually distributed to the Class 1-A6 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(F).
CLASS 1-A7 AND CLASS 1-A8 LOCKOUT PERCENTAGE: With respect to any
Distribution Date, will equal the Outstanding Certificate Principal Balance
immediately preceding such Distribution Date of the Class 1-A7 and Class 1-A8
Certificates divided by the aggregate Outstanding Certificate Principal Balance
of the Class 1-A7, Class 1-A8, Class 1-A10, Class 1-A12, Class 1-A13, Class
1-A14 and Class 1-A15 Certificates, but in no case will the Class 1-A7 and Class
1-A8 Lockout Percentage exceed 100%.
CLASS 1-A7 AND CLASS 1-A8 LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With
respect to any Distribution Date, will equal the product of (1) the Class 1-A7
and Class 1-A8 Lockout Percentage, (2) the aggregate amount of principal to be
distributed to the Class 1-A7, Class 1-A8, Class 1-A10, Class 1-A12, Class
1-A13, Class 1-A14 and Class 1-A15 Certificates on such Distribution Date
pursuant to Section 6.01 hereof and (3) the Lockout Shift Percentage.
CLASS 1-A7 CERTIFICATE: Any one of the Class 1-A7 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A7 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class 1-A7 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class 1-A7 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class 1-A7 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 1-A7 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 1-A7 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A7 Interest Accrual Amount over the
amount actually distributed to the Class 1-A7 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(G).
CLASS 1-A8 CERTIFICATE: Any one of the Class 1-A8 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A8 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at a per annum rate equal to 5.75% on the Outstanding
Certificate Principal Balance of
8
the Class 1-A8 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class 1-A8 Certificates on such Distribution Date pursuant to
Section 6.05(b), (ii) any Realized Loss Interest Shortfall resulting from an
Excess Loss allocated to the Class 1-A8 Certificates on such Distribution Date
pursuant to Section 6.05(c), and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class 1-A8 Certificates on such Distribution Date
pursuant to Section 6.05(d).
CLASS 1-A8 MAXIMUM YIELD MAINTENANCE AGREEMENT AMOUNT: The amount
described in Section 5.29(e).
CLASS 1-A8 SCHEDULED NOTIONAL AMOUNT: With respect to any Distribution
Date set forth in Exhibit U-1 hereto, the amount set forth with respect to such
Distribution Date in Exhibit U-1 under the heading "Notional."
CLASS 1-A8 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A8 Interest Accrual Amount over the
amount actually distributed to the Class 1-A8 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(H).
CLASS 1-A8 YIELD MAINTENANCE AGREEMENT: The Yield Maintenance Agreement
set forth on Exhibit U-1 hereto.
CLASS 1-A9 CERTIFICATE: Any one of the Class 1-A9 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A9 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class 1-A9 Notional Amount
minus (i) any Compensating Interest Shortfall allocated to the Class 1-A9
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 1-A9 Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class 1-A9 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A9 NOTIONAL AMOUNT: With respect to any Distribution Date, the the
product of (a) the Outstanding Certificate Principal Balance of the Class 1-A8
Certificates for such Distribution Date and (b) a fraction the numerator of
which is 0.25% and the denominator of which is 6.00%.
CLASS 1-A9 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A9 Interest Accrual Amount over the
amount actually distributed to the Class 1-A9 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(I).
CLASS 1-A10 CERTIFICATE: Any one of the Class 1-A10 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A10 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A10 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A10 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A10
Certificates on such Distribution Date pursuant to
9
Section 6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A10 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A10 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A10 Interest Accrual Amount over the
amount actually distributed to the Class 1-A10 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(J).
CLASS 1-A11 CERTIFICATE: Any one of the Class 1-A11 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A11 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class 1-A11 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class
1-A11 Certificates on such Distribution Date pursuant to Section 6.05(b), (ii)
any Realized Loss Interest Shortfall resulting from an Excess Loss allocated to
the Class 1-A11 Certificates on such Distribution Date pursuant to Section
6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A11 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A11 NOTIONAL AMOUNT: With respect to any Distribution Date, the
the product of (a) the Outstanding Certificate Principal Balance of the Class
1-A10 Certificates for such Distribution Date and (b) a fraction the numerator
of which is 0.25% and the denominator of which is 6.00%.
CLASS 1-A11 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A11 Interest Accrual Amount over the
amount actually distributed to the Class 1-A11 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(K).
CLASS 1-A12 CERTIFICATE: Any one of the Class 1-A12 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A12 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A12 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A12 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A12
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A12 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A12 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A12 Interest Accrual Amount over the
amount actually distributed to the Class 1-A12 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(L).
CLASS 1-A13 CERTIFICATE: Any one of the Class 1-A13 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A13 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-
10
A13 Certificates minus (i) any Compensating Interest Shortfall allocated to
the Class 1-A13 Certificates on such Distribution Date pursuant to Section
6.05(b), (ii) any Realized Loss Interest Shortfall resulting from an Excess Loss
allocated to the Class 1-A13 Certificates on such Distribution Date pursuant to
Section 6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A13 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A13 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A13 Interest Accrual Amount over the
amount actually distributed to the Class 1-A13 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(M).
CLASS 1-A14 CERTIFICATE: Any one of the Class 1-A14 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A14 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A14 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A14 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A14
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A14 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A14 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A14 Interest Accrual Amount over the
amount actually distributed to the Class 1-A14 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(N).
CLASS 1-A15 CERTIFICATE: Any one of the Class 1-A15 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A15 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A15 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A15 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A15
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A15 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A15 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A15 Interest Accrual Amount over the
amount actually distributed to the Class 1-A15 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(O).
CLASS 1-A16 CERTIFICATE: Any one of the Class 1-A16 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A16 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A16 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A16 Certificates
11
on such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A16
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A16 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A16 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A16 Interest Accrual Amount over the
amount actually distributed to the Class 1-A16 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(P).
CLASS 1-A17 CERTIFICATE: Any one of the Class 1-A17 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A17 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class 1-A17 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class
1-A17 Certificates on such Distribution Date pursuant to Section 6.05(b), (ii)
any Realized Loss Interest Shortfall resulting from an Excess Loss allocated to
the Class 1-A17 Certificates on such Distribution Date pursuant to Section
6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A17 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A17 NOTIONAL AMOUNT: With respect to any Distribution Date, the
the sum of (i) product of (a) the Outstanding Certificate Principal Balance of
the Class 1-A16 Certificates for such Distribution Date and (b) a fraction the
numerator of which is 0.125% and the denominator of which is 6.00% and (ii) the
product of (a) the Outstanding Certificate Principal Balance of the Class 1-A21
Certificates and (b) a fraction the numerator of which is 0.50% and the
denominator of which is 6.00%.
CLASS 1-A17 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A17 Interest Accrual Amount over the
amount actually distributed to the Class 1-A17 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(Q).
CLASS 1-A18 CERTIFICATE: Any one of the Class 1-A18 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A18 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A18 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A18 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A18
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A18 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A18 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A18 Interest Accrual Amount over the
amount actually distributed to the Class 1-A18 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(R).
CLASS 1-A19 CERTIFICATE: Any one of the Class 1-A19 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to
12
Section 4.06, the Authenticating Agent), senior in right of payment to the Class
M and Class B Certificates, substantially in the form of the Class A Certificate
set forth in Exhibit C hereto.
CLASS 1-A19 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A19 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A19 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A19
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A19 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A19 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A19 Interest Accrual Amount over the
amount actually distributed to the Class 1-A19 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(S).
CLASS 1-A20 CERTIFICATE: Any one of the Class 1-A20 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A20 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A20 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A20 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A20
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A20 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A20 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A20 Interest Accrual Amount over the
amount actually distributed to the Class 1-A20 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(T).
CLASS 1-A21 CERTIFICATE: Any one of the Class 1-A21 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A21 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A21 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A21 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A21
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A21 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A21 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A21 Interest Accrual Amount over the
amount actually distributed to the Class 1-A21 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(U).
CLASS 1-A22 CERTIFICATE: Any one of the Class 1-A22 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A22 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A22 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A22 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A22
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A22 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A22 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A22 Interest Accrual Amount over the
amount actually distributed to the Class 1-A22 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(V).
CLASS 1-A23 CERTIFICATE: Any one of the Class 1-A23 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to
13
Section 4.06, the Authenticating Agent), senior in right of payment to the Class
M and Class B Certificates, substantially in the form of the Class A Certificate
set forth in Exhibit C hereto.
CLASS 1-A23 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A23 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A23 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A23
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A23 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A23 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A23 Interest Accrual Amount over the
amount actually distributed to the Class 1-A23 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(W).
CLASS 1-A24 CERTIFICATE: Any one of the Class 1-A24 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 1-A24 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A24 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A24 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A24
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A24 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A24 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-A24 Interest Accrual Amount over the
amount actually distributed to the Class 1-A24 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(X).
CLASS 1-AX CERTIFICATE: Any one of the Class 1-AX Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to
14
Section 4.06, the Authenticating Agent), senior in right of payment to the Class
M and Class B Certificates, substantially in the form of the Class A Certificate
set forth in Exhibit C hereto.
CLASS 1-AX INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class 1-AX Notional Amount
minus (i) any Compensating Interest Shortfall allocated to the Class 1-AX
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 1-AX Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class 1-AX Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-AX NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of the aggregate Scheduled Principal Balance of the
Non-Discount Mortgage Loans in Mortgage Group One and a fraction the numerator
of which is the Group One Stripped Interest Rate and the denominator of which is
6.00%.
CLASS 1-AX SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 1-AX Interest Accrual Amount over the
amount actually distributed to the Class 1-AX Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(Y).
CLASS 2-A CERTIFICATES: The Class 2-A1 and Class 2-AX Certificates,
referred to collectively.
CLASS 2-A DEFICIENCY AMOUNT: As defined in Section 6.01(I)(b)(iv) hereof.
CLASS 2-A1 CERTIFICATE: Any one of the Class 2-A1 Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 2-A1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class 2-A1 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class 2-A1 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class 2-A1 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 2-A1 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 2-A1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 2-A1 Interest Accrual Amount over the
amount actually distributed to the Class 2-A1 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(Z).
CLASS 2-AX CERTIFICATE: Any one of the Class 2-AX Certificates, executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
senior in right of payment to the Class M and Class B Certificates,
substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.
CLASS 2-AX INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class 2-AX Notional Amount
minus (i) any Compensating Interest Shortfall allocated to the Class 2-AX
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 2-AX Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall
15
resulting from the Relief Act allocated to the Class 2-AX Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 2-AX NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of (a) the aggregate Scheduled Principal Balance of
the Non-Discount Mortgage Loans in Mortgage Group Two and (b) a fraction the
numerator of which is the Group Two Stripped Interest Rate and the denominator
of which is 5.50%.
CLASS 2-AX SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class 2-AX Interest Accrual Amount over the
amount actually distributed to the Class 2-AX Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(AA).
CLASS A CERTIFICATES: The Class 1-A1, Class 1-A2, Class 1-A3, Class 1-A4,
Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8, Class 1-A9, Class 1-A10, Class
1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A16, Class
1-A17, Class 1-A18, Class 1-A19, Class 1-A20, Class 1-A21, Class 1-A22, Class
1-A23, Class 1-A24, Class 1-AX, Class A-P, Class A-R, Class 2-A1, and Class 2-AX
Certificates, referred to collectively.
CLASS A PERCENTAGE: As of any Distribution Date, the fraction, expressed
as a percentage (which shall never exceed 100%), the numerator of which is the
Class A Principal Balance and the denominator of which is the outstanding
Principal Balance of the Mortgage Loans as of the immediately preceding Due
Date.
CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class A
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed (or deemed distributed) to the Class A Certificateholders on
such preceding Distribution Date allocable to principal (including the principal
portion of Advances of the Servicer made pursuant to Section 6.03 and Realized
Losses allocated to the Class A Certificates pursuant to Section 6.04); provided
that the Class A Principal Balance on the first Distribution Date shall be the
Original Class A Principal Balance.
CLASS A-M CERTIFICATE: Any one of the Class A-M Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A Certificates, substantially in
the form of the Class M Certificate set forth in Exhibit D hereto.
CLASS A-M INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one (1) month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class A-M Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class A-M Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class A-M Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class A-M Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS A-M PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class
A-M Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class A-M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class A-M Certificates pursuant to Section 6.04); provided that
the Class A-M Principal Balance on the first Distribution Date shall be the
Original Class A-M Principal Balance, and provided further that if the aggregate
Outstanding Certificate Principal Balance of the Class B and Class M-1
Certificates has been reduced to zero, as of any Distribution Date, the Class
A-M Principal Balance will equal the excess of the
16
Mortgage Pool Principal Balance (together with the portion of any Monthly
Payment due but not paid with respect to which an Advance has not been made)
over the Class A Principal Balance.
CLASS A-M SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-M Interest Accrual Amount over the
amount actually distributed to the Class A-M Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(c)(1)(A) and 6.01(I)(c)(1)(B).
CLASS A-P AMOUNT: With respect to any Distribution Date, the applicable PO
Percentage of (i) all principal received on or in respect of each Discount
Mortgage Loan (exclusive of any amounts in respect of any Monthly Payment)
during the related Principal Prepayment Period and (ii) all principal received
as part of a Monthly Payment on or in respect of a Discount Mortgage Loan during
the related Due Period.
CLASS A-P CERTIFICATE: Any one of the Class A-P Certificates, executed by
the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-P COMPONENT ONE: The portion of the Class A-P Certificates so
designated in Section 4.01(d).
CLASS A-P COMPONENT TWO: The portion of the Class A-P Certificates so
designated in Section 4.01(d).
CLASS A-P SHORTFALL AMOUNT: With respect to any Distribution Date prior to
and including the Credit Support Depletion Date, to the extent of amounts
available to pay the Subordinated Optimal Principal Amount (without regard to
clause (b)(2) of the definition of such term), an amount equal to the sum of (i)
the applicable PO Percentage of the principal portion of any Realized Loss
(other than an Excess Loss) with respect to a Discount Mortgage Loan and (ii)
the sum of amounts, if any, by which the amounts specified in clause (i) with
respect to each prior Distribution Date exceeded the amount actually distributed
in respect thereof on such prior Distribution Date and not subsequently
distributed to the Class A-P Certificateholders.
CLASS A-R CERTIFICATE: The Class A-R Certificates, executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has
been appointed pursuant to Section 4.06, the Authenticating Agent),
substantially in the form of the Class A-R Certificate set forth in Exhibit F
hereto.
CLASS A-R INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class A-R Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class A-R Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class A-R Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class A-R Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS A-R SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-R Interest Accrual Amount over the
amount actually distributed to the Class A-R Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(BB).
CLASS B CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates, referred to collectively.
17
CLASS B PERCENTAGE: As of any Distribution Date, the difference between
100% and the sum of (i) the Class A Percentage and (ii) the Class M Percentage
for such Distribution Date.
CLASS B PRINCIPAL BALANCE: As of any Distribution Date, the excess of the
Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of (i) the Class A Principal Balance and (ii) the Class M
Principal Balance.
CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A and Class M Certificates,
substantially in the form of the Class B Certificate set forth in Exhibit E
hereto.
CLASS B-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class B-1 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS B-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-1 Interest Accrual Amount over the
amount actually distributed to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(1) (A) and (B).
CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M and Class B-1
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class B-2 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS B-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-2 Interest Accrual Amount over the
amount actually distributed to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(2) (A) and (B).
CLASS B-3 CERTIFICATE: Any one of the Class B-3 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class B-1 and Class
B-2 Certificates, substantially in the form of the Class B Certificate set forth
in Exhibit E hereto.
CLASS B-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class B-3 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an
18
Excess Loss allocated to the Class B-3 Certificates on such Distribution Date
pursuant to Section 6.05(c) and (iii) any interest shortfall resulting from the
Relief Act allocated to the Class B-3 Certificates on such Distribution Date
pursuant to Section 6.05(d).
CLASS B-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-3 Interest Accrual Amount over the
amount actually distributed to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(3) (A) and (B).
CLASS B-4 CERTIFICATE: Any one of the Class B-4 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class B-1, Class B-2
and Class B-3 Certificates, substantially in the form of the Class B Certificate
set forth in Exhibit E hereto.
CLASS B-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class B-4 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class B-4 Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class B-4 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS B-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-4 Interest Accrual Amount over the
amount actually distributed to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(4) (A) and (B).
CLASS B-5 CERTIFICATE: Any one of the Class B-5 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit E hereto.
CLASS B-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class B-5 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS B-5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-5 Interest Accrual Amount over the
amount actually distributed to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(5) (A) and (B).
CLASS B-6 CERTIFICATE: Any one of the Class B-6 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class B-1, Class B-2,
Class B-3, Class B-4 and Class B-5 Certificates, substantially in the form of
the Class B Certificate set forth in Exhibit E hereto.
CLASS B-6 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class B-6
19
Certificates minus (i) any Compensating Interest Shortfall allocated to the
Class B-6 Certificates on such Distribution Date pursuant to Section 6.05(b),
(ii) any Realized Loss Interest Shortfall resulting from an Excess Loss
allocated to the Class B-6 Certificates on such Distribution Date pursuant to
Section 6.05(c) and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class B-6 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS B-6 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-6 Interest Accrual Amount over the
amount actually distributed to the Class B-6 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(6) (A) and (B).
CLASS LT-R INTEREST: The sole residual interest in the Lower-Tier REMIC.
CLASS M CERTIFICATES: The Class A-M and Class M-1 Certificates, referred
to collectively.
CLASS M PERCENTAGE: As of any Distribution Date, the percentage obtained
by dividing (i) the sum of the Class A-M Principal Balance and the Class M-1
Principal Balance by (ii) the Mortgage Pool Principal Balance; provided,
however, that on any Distribution Date on which the Class B Percentage equals
0%, the Class M Percentage shall equal 100% minus the Class A Percentage.
CLASS M PRINCIPAL BALANCE: As of any Distribution Date, the sum of the
Class A-M Principal Balance and the Class M-1 Principal Balance.
CLASS M-1 CERTIFICATE: Any one of the Class M-1 Certificates executed by
the Depositor and authenticated by the Trustee (or, if an Authenticating Agent
has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A Certificates and the Class A-M
Certificates, substantially in the form of the Class M Certificate set forth in
Exhibit D hereto.
CLASS M-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one (1) month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class M-1 Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class M-1 Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class M-1 Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class M-1 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS M-1 PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class
M-1 Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class M-1 Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class M-1 Certificates pursuant to Section 6.04); provided that
the Class M-1 Principal Balance on the first Distribution Date shall be the
Original Class M-1 Principal Balance, and provided further that if the aggregate
Outstanding Certificate Principal Balance of the Class B Certificates has been
reduced to zero, as of any Distribution Date, the Class M-1 Principal Balance
will equal the excess of the Mortgage Pool Principal Balance (together with the
portion of any Monthly Payment due but not paid with respect to which an Advance
has not been made) over the sum of the Class A Principal Balance and the Class
A-M Principal Balance.
CLASS M-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class M-1 Interest Accrual Amount over the
amount actually distributed to the Class M-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(c)(2)(A) and Section
6.01(I)(c)(2)(B).
20
CLASS MT-R INTEREST: The sole residual interest in the Middle-Tier REMIC.
CLOSING DATE: April 25, 2007.
CODE: The Internal Revenue Code of 1986, as amended from time to time, and
any successor statutes thereto, and applicable U.S. Department of Treasury
temporary or final regulations promulgated thereunder.
COLLECTION ACCOUNT: The account created and maintained pursuant to Section
5.08.
COMMISSION: The United States Securities and Exchange Commission.
COMPENSATING INTEREST: The meaning specified in Section 6.05(a).
COMPENSATING INTEREST SHORTFALL: The meaning specified in Section 6.05(b).
CO-OP LEASE: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
CO-OP LOAN: A Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and a collateral
assignment of the related Co-op Lease.
COUNTERPARTY: JPMorgan Chase Bank, National Association, in its capacity
as cap counterparty under the Yield Maintenance Agreements, and its successors
in interest.
CREDIT SUPPORT: With respect to each Class of Subordinated Certificates
(other than the Class B-6 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate Outstanding Certificate
Principal Balance of all Classes of Certificates (other than the Class A-P
Certficates). With respect to each Distribution Date, Credit Support for each
such Class will equal in each case the percentage, rounded to two decimal
places, obtained by dividing the aggregate Outstanding Certificate Principal
Balances immediately prior to such Distribution Date of all Classes of
Subordinated Certificates having higher numerical class designations than such
Class (for this purpose, the Class M Certificates shall be deemed to have a
lower numerical class designation than each Class of Class B Certificates and
the Class A-M Certificates shall be deemed to have a lower numerical class
designation than the Class M-1 Certificates) by the aggregate Outstanding
Certificate Principal Balance of all Classes of Certificates (other than the
Class A-P Certificates) immediately prior to such Distribution Date.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date on which the
aggregate Outstanding Certificate Principal Balance of the Subordinated
Certificates has been or will be reduced to zero.
CUSTODIAN: JPMorgan Chase Bank, N.A., and its permitted successors in
interest.
CUT-OFF DATE: April 1, 2007.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, other than such a
reduction resulting from a Deficient Valuation.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property (or stock allocated to a dwelling unit, in the case
of a Co-op Loan) by a court of
21
competent jurisdiction in an amount less than the then outstanding Principal
Balance of the Mortgage Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: The Certificates referred to in Section 4.01(c).
DEPOSITOR: Chase Mortgage Finance Corporation, a Delaware corporation, or
its successor in interest or any successor under this Agreement appointed as
herein provided.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede &
Co.
DEPOSITORY AGREEMENT: The agreement referred to in Section 4.01(b).
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: The sixteenth day of the month in which the related
Distribution Date occurs (or, if such sixteenth day is not a Business Day, the
preceding Business Day).
DISCOUNT MORTGAGE LOAN: Any Mortgage Loan having a Net Mortgage Rate less
than the applicable Remittance Rate.
DISQUALIFIED ORGANIZATION: An organization referred to in Section
860E(e)(5) of the Code.
DISTRIBUTION DATE: The 25th day of any month, or if such 25th day is not a
Business Day, the first Business Day immediately following, beginning with May
25, 2007.
DUE DATE: The first day of each month, being the day of the month on which
each Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the month preceding the month in which such Distribution Date
occurs through the first day of the month in which such Distribution Date
occurs.
ELIGIBLE ACCOUNT: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a national bank or banking corporation
which (a) has a rating of at least Baa3 or P-3 by Moody's and (b) is either
Chase or is the corporate trust department of a national bank or banking
corporation which has a rating of at least A-1 by S&P and F1 by Fitch Ratings,
or (iii) an account or accounts the deposits in which are fully insured by the
FDIC, or (iv) an account or accounts in a depository institution in which such
accounts are insured by the FDIC (to the limit established by the FDIC), the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Eligible Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, provided, however,
that such uninsured deposits do not result in the reduction of the ratings
assigned to the Certificates by the Rating Agencies as evidenced by a letter
from each Rating Agency or (v) otherwise acceptable to each Rating Agency
without reduction or withdrawal of the rating of any Class of Certificates, as
evidenced by a letter from each Rating Agency.
22
ELIGIBLE INVESTMENTS: One or more of the following:
(i) obligations of, or guaranteed as to principal and interest by, the
United States or obligations of any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
provided that any such obligation held as a "cash flow investment" within the
meaning of section 860G(a)(6) of the Code shall mature before the next
Distribution Date;
(ii) repurchase agreements on obligations specified in clause (i) maturing
not more than two months from the date of acquisition thereof, provided that the
long-term unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency with its highest rating
and the short-term debt obligations of the party agreeing to repurchase are
rated with one of the two highest ratings by Moody's, A-1+ by S&P and, if rated
by Fitch, F1+ by Fitch;
(iii) federal funds, certificates of deposit, time deposits and bankers'
acceptances (other than bankers' acceptances issued by Chase or any of its
Affiliates) (which shall each have an original maturity of not more than 60 days
and, in the case of bankers' acceptances, shall in no event have an original
maturity of more than 365 days) of any United States depository institution or
trust company incorporated under the laws of the United States or any state,
provided that the long-term unsecured debt obligations of such depository
institution or trust company at the date of acquisition thereof have been rated
by each Rating Agency with its highest rating and the short-term obligations of
such depository institution or trust company are rated A-1+ by S&P, P-1 by
Moody's and, if rated by Fitch, F1+ by Fitch;
(iv) commercial paper (other than commercial paper issued by Chase or any
of its Affiliates) (having original maturities of not more than 365 days) of any
corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by each Rating Agency in
its highest short-term unsecured commercial paper rating category; provided that
such commercial paper shall have a remaining maturity of not more than 45 days;
(v) units of taxable money market funds (including those for which the
Trustee or the Servicer or any Affiliate thereof acts as sponsor, administrator
or the like and receives compensation with respect to such investment) which may
be 12b-1 funds, as contemplated under the rules promulgated by the Commission
under the Investment Company Act of 1940, as amended, and which funds have been
rated by each Rating Agency in its highest rating category or which have been
designated in writing by each Rating Agency as Eligible Investments with respect
to this definition; or
(vi) other obligations or securities (other than investments or
obligations of Chase or any of its Affiliates) acceptable to each Rating Agency
rating the Certificates as an Eligible Investment hereunder and will not result
in a reduction or withdrawal in the then current rating of any Class of
Certificates, as evidenced by a letter to such effect from each Rating Agency;
Provided that no such instrument shall be an Eligible Investment if such
instrument evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal payments with respect to such instrument provide a yield
to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations; and provided further that no such instrument shall be
purchased above par; and provided further that each Eligible Investment must be
a "permitted investment" within the meaning of Section 860G(a)(5) of the Code.
ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Labor temporary or final regulations promulgated thereunder.
23
ERISA QUALIFYING UNDERWRITING: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 2002-19, 67 Fed. Reg. 14797 (March 28, 2002),
as amended, or any substantially similar administrative exemption granted by the
U.S. Department of Labor to Chase, except, in relevant part, for the requirement
that the certificates have received a rating at the time of acquisition that is
in one of the three (or four, in the case of a "designated transaction") highest
generic rating categories by at least one of the Rating Agencies.
ERISA RESTRICTED CERTIFICATE: Any Class B-4, Class B-5 or Class B-6
Certificate and any other Certificate, as long as the acquisition and holding of
such Certificate is not covered by and exempt under Prohibited Transaction
Exemption 2002-19, 67 Fed. Reg. 14797 (March 28, 2002), as amended, or any
substantially similar administrative exemption granted by the U.S. Department of
Labor to Chase.
ESCROW ACCOUNT: The account or accounts created and maintained pursuant to
Section 5.10.
ESCROW PAYMENTS: The amounts constituting applicable ground rents, taxes,
assessments, water rates, Standard Hazard Policy premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to a
Mortgage Loan.
EVENT OF DEFAULT: Any of the events specified in Section 9.01.
EXCEPTION REPORT: The report of the Custodian or Trustee, as applicable,
referred to in Section 2.02.
EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
EXCESS FRAUD LOSS: Any Fraud Loss, or portion thereof, which exceeds the
then applicable Fraud Loss Amount.
EXCESS LOSSES: Excess Bankruptcy Losses, Excess Fraud Losses and Excess
Special Hazard Losses, referred to collectively.
EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss, or portion thereof,
that exceeds the then applicable Special Hazard Amount.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGEABLE CERTIFICATES: The Certificates designated as Exchangeable
Certificates in Section 4.01 issued or issuable pursuant to the Trust Agreement
in exchange for the applicable Exchangeable Initial Certificates in accordance
with the Trust Agreement.
EXCHANGEABLE INITIAL CERTIFICATES: The Class 1-A14, Class 1-A15, Class
1-A17 and Class 1-A21 Certificates.
FDIC: The Federal Deposit Insurance Corporation or any successor
organization.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
organization.
FIDELITY BOND: The fidelity bond and errors and omissions insurance to be
maintained by the Servicer pursuant to Section 5.19.
24
FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date in May 2037.
FITCH RATINGS: Fitch, Inc. or its successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
organization.
FNMA GUIDES: The FNMA Sellers' Guide and the FNMA Servicers' Guide, and
all amendments or additions thereto.
FRAUD LOSS: Any Realized Loss or portion thereof sustained by reason of a
default arising from fraud, dishonesty or misrepresentation in connection with
the related Mortgage Loan, including by reason of the denial of coverage under
any related Primary Insurance Policy.
FRAUD LOSS AMOUNT: As of any date of determination after the Cut-off Date,
an amount (initially, $32,255,457.02) equal to (X) prior to the third
anniversary of the Cut-off Date, (a) 1.00% of the aggregate principal balance of
all of the Mortgage Loans as of the most recent anniversary of the Cut-off Date
minus (b) the aggregate amounts allocated to the Certificates with respect to
Fraud Losses on the Mortgage Loans since the most recent anniversary of the
Cut-off Date up to such date of determination, (Y) from the third to (but
excluding) the fifth anniversary of the Cut-off Date, (a) 0.50% of the aggregate
principal balance of all of the Mortgage Loans as of the most recent anniversary
of the Cut-off Date minus (b) the aggregate amounts allocated to the
Certificates with respect to Fraud Losses on the Mortgage Loans since the most
recent anniversary of the Cut-off Date up to such date of determination and (Z)
on and after the fifth anniversary of the Cut-off Date, zero.
GROUP ONE CLASS A-P AMOUNT: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group One (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group One during the related Due Period.
GROUP ONE MORTGAGE LOANS: The Mortgage Loans in Mortgage Group One.
GROUP ONE MORTGAGE POOL PRINCIPAL BALANCE: As of any date of
determination, the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in Mortgage Group One on such date of determination less the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made.
GROUP ONE NON-PO ALLOCATED AMOUNT: At the time of any determination, the
amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group One on such date of determination by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.
GROUP ONE REMITTANCE RATE: 6.00% per annum.
GROUP ONE STRIPPED INTEREST RATE: The excess of the weighted average Net
Mortgage Rate of the Group One Mortgage Loans that are Non-Discount Mortgage
Loans over the Group One Remittance Rate.
GROUP ONE SUBORDINATED AMOUNT: For any Distribution Date, the excess of
the Group One Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date if there is no preceding
Distribution Date) over the aggregate Outstanding Certificate
25
Principal Balance of the Class 1-A Certificates (prior to giving effect to
distributions to be made on such Distribution Date and allocation of losses to
be made on such Distribution Date).
GROUP TWO CLASS A-P AMOUNT: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group Two (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group Two during the related Due Period.
GROUP TWO MORTGAGE LOANS: The Mortgage Loans in Mortgage Group Two.
GROUP TWO MORTGAGE POOL PRINCIPAL BALANCE: As of any date of
determination, the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in Mortgage Group Two on such date of determination less the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made.
GROUP TWO NON-PO ALLOCATED AMOUNT: At the time of any determination, the
amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group Two on such date of determination by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.
GROUP TWO REMITTANCE RATE: 5.50% per annum.
GROUP TWO STRIPPED INTEREST RATE: The excess of the weighted average Net
Mortgage Rate of the Group Two Mortgage Loans that are Non-Discount Mortgage
Loans over the Group Two Remittance Rate.
GROUP TWO SUBORDINATED AMOUNT: For any Distribution Date, the excess of
the Group Two Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date, if there is no preceding
Distribution Date) over the aggregate Outstanding Certificate Principal Balance
of the Class 2-A Certificates (prior to giving effect to distributions to be
made on such Distribution Date and allocation of losses to be made on such
Distribution Date).
INDIRECT PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant, either directly or indirectly.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any insurance
policy covering a Mortgage Loan, net of costs of collecting such proceeds and
net of amounts released to the Mortgagor or applied to the restoration of the
Mortgaged Property (or in the underlying Mortgaged Property, in the case of a
Co-op Loan).
INSURED EXPENSES: Expenses covered by any insurance policy.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date and any
Class of Certificates (other than the Class 1-A1, Class 1-A2 and Class A-P
Certificates), the calendar month immediately preceding the month in which the
related Distribution Date occurs, in each case calculated on the basis of a
360-day year of twelve 30-day months. With respect to any Distribution Date and
the Class 1-A1 and Class 1-A2 Certificates, the period from and including the
25th day of the month immediately preceding the month in which such Distribution
Date occurs (or from the Closing Date in the case of the first Distribution
Date), to but excluding, the 25th day of the month in which such Distribution
Date occurs, in each case calculated on the basis of a 360-day year of twelve
30-day months.
26
LATE COLLECTIONS: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, Subsequent
Recoveries or with respect to a disposition of a Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) which has been
acquired by foreclosure or deed in lieu of foreclosure or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date and the Certificate Rate on
the Class 1-A1, Class 1-A2 and Class 1-A8 Certificates, LIBOR as determined in
accordance with Section 6.07.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the city of London, England are required
or authorized by law to be closed.
LIBOR CERTIFICATES: The Class 1-A1 and Class 1-A8 Certificates.
LIQUIDATED MORTGAGE LOAN: Any Mortgage Loan (a) as to which the Servicer
has determined that all amounts which it expects to recover from or on account
of such Mortgage Loan or property acquired in respect thereof have been
recovered, (b) as to which a Cash Liquidation has taken place or (c) with
respect to which the Mortgaged Property (or stock allocated to a dwelling unit,
in the case of a Co-op Loan) has been acquired by foreclosure or deed in lieu of
foreclosure and a disposition (the term disposition shall include, for purposes
of a repurchase pursuant to Section 11.01, any repurchase of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
pursuant to such Section) of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) has occurred.
LIQUIDATION EXPENSES: Expenses which are incurred by the Servicer or any
Sub-Servicer in connection with the liquidation of any defaulted Mortgage Loan
or property acquired in respect thereof including, without limitation, legal
fees and expenses, any unreimbursed amount expended by the Servicer pursuant to
Sections 5.16 and 5.21 respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration or preservation.
LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds) received by the
Servicer in connection with the liquidation of any Mortgage Loan or Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
acquired in respect thereof, whether through the sale or assignment of such
Mortgage Loan (other than pursuant to Section 5.21), trustee's sale, foreclosure
sale or otherwise, or the sale of the Mortgaged Property (or stock allocated to
a dwelling unit, in the case of a Co-op Loan) if the Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) is acquired in
satisfaction of the Mortgage Loan other than amounts required to be paid to the
Mortgagor pursuant to law or the terms of the applicable Mortgage Note.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the principal amount of the related Mortgage Loan at the
time of origination (or, (i) for purposes of Section 5.15, at the time of
determination and (ii) for purposes of a Mortgage Loan with respect to which a
conversion from adjustable rate to fixed rate has occurred, at the time of
initial origination) and the denominator of which is the Appraised Value of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination or, in the case of a Mortgage Loan financing
the acquisition of the Mortgaged Property (or applicable dwelling unit, in the
case of a Co-op Loan), the sales price of the Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan), if such sales price is less than
such appraised value; provided however, certain Mortgage Loans financing the
acquisition of a Mortgaged Property in New York will be based solely on the
appraised value.
27
LOCKOUT SHIFT PERCENTAGE: With respect to any Distribution Date, the
percentage indiated below:
DISTRIBUTION DATE OCCURRING IN LOCKOUT SHIFT PERCENTAGE
------------------------------ ------------------------
May 2007 through April 2012........... 0%
May 2012 through April 2013........... 30%
May 2013 through April 2014........... 40%
May 2014 through April 2015........... 60%
May 2015 through April 2016........... 80%
May 2016 and thereafter............... 100%
LONDON BUSINESS DAY: Any day on which banks are open for business in
London and on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
LOWER-TIER REMIC: The Lower-Tier REMIC as described in Section 2.04.
LOWER-TIER REMIC INTEREST: Any one of the Classes of Lower-Tier REMIC
Interests described in Section 2.04.
LOWER-TIER REMIC REGULAR INTEREST: Any one of the Lower-Tier REMIC
Interests other than the Class LT-R Interest.
LOWER-TIER REMIC SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated Principal Balances of each of the Lower-Tier REMIC Regular
Interests ending with the designation "A" that is equal to the ratio among, with
respect to each such Lower-Tier REMIC Regular Interest, the excess of (x) the
aggregate Non-PO Percentage of the Principal Balance of each of the Mortgage
Loans in the related Mortgage Group over (y) the aggregate class principal
amounts of the Certificate Group related to such Mortgage Group.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage, or
an Assignment of Mortgage, has been or will be recorded in the name of MERS or
otherwise assigned to MERS, as agent for the holder from time to time of the
Mortgage Note.
MIDDLE-TIER REMIC: The Middle-Tier REMIC as described in Section 2.04.
MIDDLE-TIER REMIC INTEREST: Any one of the Classes of Middle-Tier REMIC
Interests described in Section 2.04.
MIDDLE-TIER REMIC REGULAR INTEREST: Any one of the Middle-Tier REMIC
Interests other than the Class MT-R Interest.
MODIFIED MORTGAGE LOAN: Any Mortgage Loan which the Servicer has modified
pursuant to Section 5.01.
MONTHLY PAYMENT: The minimum required monthly payment of principal and
interest due on a Mortgage Loan as specified in the Mortgage Note for any Due
Date (before any adjustment to such scheduled amount by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver
28
or grace period). Monthly Payments shall be deemed due on an Outstanding
Mortgage Loan until such time as it becomes a Liquidated Mortgage Loan.
MOODY'S: Xxxxx'x Investors Service, Inc. or its successor in interest.
MORTGAGE: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument creating a first lien or a first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note. With respect to a Co-op Loan, the security agreement creating a
security interest in the stock allocated to a dwelling unit in a residential
cooperative housing corporation and pledged to secure such Co-op Loan and the
related Co-op Lease.
MORTGAGE FILE: As to each Mortgage Loan, the items referred to in Exhibit
B annexed hereto.
MORTGAGE GROUP: Pertaining to Mortgage Group One or Mortgage Group Two, as
the case may be.
MORTGAGE GROUP ONE: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit A-1 as
comprising Mortgage Group One.
MORTGAGE GROUP ONE SUBORDINATED PERCENTAGE: As of any Distribution Date,
the difference between 100% and the Non-PO Class 1-A Percentage.
MORTGAGE GROUP ONE SUBORDINATED PREPAYMENT PERCENTAGE: As of any
Distribution Date, the difference between 100% and the Non-PO Class 1-A
Prepayment Percentage.
MORTGAGE GROUP TWO: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached herero as Exhibit A-2 as
comprising Mortgage Group Two.
MORTGAGE GROUP TWO SUBORDINATED PERCENTAGE: As of any Distribution Date,
the difference between 100% and the Non-PO Class 2-A Percentage.
MORTGAGE GROUP TWO SUBORDINATED PREPAYMENT PERCENTAGE: As of any
Distribution Date, the difference between 100% and the Non-PO Class 2-A
Prepayment Percentage.
MORTGAGE LOAN: An individual mortgage loan and all rights with respect
thereto, evidenced by a Mortgage and a Mortgage Note, sold and assigned by the
Depositor to the Trustee and which is subject to this Agreement and included in
the Trust Fund. The Mortgage Loans originally sold and subject to this Agreement
are identified on the Mortgage Loan Schedule.
MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans attached hereto as
Exhibit A as it may be amended in accordance with Section 3.03, setting forth
the following information as to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) the city, state and zip code of the Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan); (iii) an
indication of whether the Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op Loan)
is owner-occupied; (iv) the property type of the Mortgaged Property (or the
related residential dwelling unit in the Underlying Mortgaged Property, in the
case of a Co-op Loan); (v) the original number of months to stated maturity;
(vi) the number of months remaining to stated maturity from the Cut-off Date;
(vii) the original Loan-to-Value Ratio; (viii) the original principal balance of
the Mortgage Loan; (ix) the unpaid principal balance of the Mortgage Loan as of
the close of business on the Cut-off Date; (x) the Mortgage Rate; and (xi) the
amount of the current Monthly Payment.
29
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
MORTGAGE POOL: The pool of Mortgage Loans held in the Trust Fund.
MORTGAGE POOL PRINCIPAL BALANCE: As of any date of determination, the
aggregate of the Principal Balances of each Outstanding Mortgage Loan on such
date of determination less the principal portion of any Monthly Payment due but
not paid with respect to which an Advance has not been made, initially
$1,075,181,901.
MORTGAGED PROPERTY: The property securing a Mortgage Note.
MORTGAGE RATE: With respect to each Mortgage Loan, the per annum rate of
interest borne by the Mortgage Loan, as specified in the Mortgage Note. The
Mortgage Rate for any Mortgage Loan shall be zero with respect to the period
prior to the period during which interest accrues with respect to such Mortgage
Loan's first Monthly Payment.
MORTGAGOR: The obligor on a Mortgage Note.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of Liquidation Expenses.
NET MORTGAGE RATE: With respect to each Mortgage Loan, a per annum rate of
interest for the applicable period equal to the Mortgage Rate less (i) the
Servicing Fee Rate and (ii) in the case of a substitute Mortgage Loan, any
excess of the Mortgage Rate on the substitute Mortgage Loan over the Mortgage
Rate on the removed Mortgage Loan.
NON-DISCOUNT MORTGAGE LOANS: Any Mortgage Loan having a Net Mortgage Rate
in excess of the applicable Remittance Rate.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage Loan.
NON-PO CLASS 1-A OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class 1-A Principal Balance and
(b) the sum of:
(i) the Non-PO Class 1-A Percentage of the applicable Non-PO
Percentage of the principal portion of all Monthly Payments, whether or
not received, which were due during the related Due Period on Group One
Mortgage Loans which were outstanding during such Due Period;
(ii) the Non-PO Class 1-A Prepayment Percentage of the applicable
Non-PO Percentage of all Principal Prepayments made on any Group One
Mortgage Loan during the related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv)
below, the Non-PO Class 1-A Percentage of the applicable Non-PO Percentage
of the principal portion of all Insurance Proceeds, condemnation awards
and any other cash proceeds from a source other than the applicable
Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 5.08(iv) and (v), which were received during
the related Principal Prepayment Period with respect to a Group One
Mortgage Loan, net of related unreimbursed Servicing Advances and net of
any portion thereof which, as to any such Mortgage Loan, constitutes Late
Collections that have been the subject of an Advance on any prior
Distribution Date;
30
(iv) with respect to each Group One Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment Period,
the lesser of (A) the Non-PO Class 1-A Percentage of the applicable Non-PO
Percentage of an amount equal to the Principal Balance of such Liquidated
Mortgage Loan as of the Due Date immediately preceding the date on which
it became a Liquidated Mortgage Loan and (B) the Non-PO Class 1-A
Prepayment Percentage of the applicable Non-PO Percentage of the Net
Liquidation Proceeds with respect to such liquidated Mortgage Loan (net of
any unreimbursed Advances);
(v) with respect to each Group One Mortgage Loan repurchased during
the related Principal Prepayment Period pursuant to Section 2.02, 3.01,
5.21 or 11.01, an amount equal to the Non-PO Class 1-A Prepayment
Percentage of the applicable Non-PO Percentage of the principal portion of
the Purchase Price (net of amounts with respect to which a distribution of
principal has previously been made to the Non-PO Class 1-A
Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess of
the Non-PO Class 1-A Principal Balance (calculated after giving effect to
reductions thereof on such Distribution Date with respect to the amounts
described in (i) - (v) above) over the Group One Non-PO Allocated Amount,
as of the preceding Distribution Date.
NON-PO CLASS 2-A OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class 2-A Principal Balance and
(b) the sum of:
(i) the Non-PO Class 2-A Percentage of the applicable Non-PO
Percentage of the principal portion of all Monthly Payments, whether or
not received, which were due during the related Due Period on Group Two
Mortgage Loans which were outstanding during such Due Period;
(ii) the Non-PO Class 2-A Prepayment Percentage of the applicable
Non-PO Percentage of all Principal Prepayments made on any Group Two
Mortgage Loan during the related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv)
below, the Non-PO Class 2-A Percentage of the applicable Non-PO Percentage
of the principal portion of all Insurance Proceeds, condemnation awards
and any other cash proceeds from a source other than the applicable
Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 5.08(iv) and (v), which were received during
the related Principal Prepayment Period with respect to a Group Two
Mortgage Loan, net of related unreimbursed Servicing Advances and net of
any portion thereof which, as to any such Mortgage Loan, constitutes Late
Collections that have been the subject of an Advance on any prior
Distribution Date;
(iv) with respect to each Group Two Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment Period,
the lesser of (A) the Non-PO Class 2-A Percentage of the applicable Non-PO
Percentage of an amount equal to the Principal Balance of such Liquidated
Mortgage Loan as of the Due Date immediately preceding the date on which
it became a Liquidated Mortgage Loan and (B) the Non-PO Class 2-A
Prepayment Percentage of the applicable Non-PO Percentage of the Net
Liquidation Proceeds with respect to such liquidated Mortgage Loan (net of
any unreimbursed Advances);
(v) with respect to each Group Two Mortgage Loan repurchased during
the related Principal Prepayment Period pursuant to Section 2.02, 3.01,
5.21 or 11.01, an amount equal to the Non-PO Class 2-A Prepayment
Percentage of the applicable Non-PO Percentage of the applicable Non-PO
Percentage of the principal portion of the Purchase Price (net of amounts
with respect to
31
which a distribution of principal has previously been made to the Non-PO
Class 2-A Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess of
the Non-PO Class 2-A Principal Balance (calculated after giving effect to
reductions thereof on such Distribution Date with respect to the amounts
described in (i) - (v) above) over the Group Two Non-PO Allocated Amount,
as of the preceding Distribution Date.
NON-PO CLASS 1-A PERCENTAGE : As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class 1-A Principal Balance and the denominator of which is
the Group One Non-PO Allocated Amount as of the immediately preceding Due Date.
NON-PO CLASS 2-A PERCENTAGE : As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class 2-A Principal Balance and the denominator of which is
the Group Two Non-PO Allocated Amount of the immediately preceding Due Date.
NON-PO CLASS 1-A PREPAYMENT PERCENTAGE: As of any Distribution Date up to
and including the Distribution Date in April 2012, 100%; as of any Distribution
Date in the first year thereafter, the Non-PO Class 1-A Percentage plus 70% of
the Mortgage Group One Subordinated Percentage for such Distribution Date; as of
any Distribution Date in the second year thereafter, the Non-PO Class 1-A
Percentage plus 60% of the Mortgage Group One Subordinated Percentage for such
Distribution Date; as of any Distribution Date in the third year thereafter, the
Non-PO Class 1-A Percentage plus 40% of the Mortgage Group One Subordinated
Percentage for such Distribution Date; as of any Distribution Date in the fourth
year thereafter, the Non-PO Class 1-A Percentage plus 20% of the Mortgage Group
One Subordinated Percentage for such Distribution Date; and as of any
Distribution Date after the fourth year thereafter, the Non-PO Class 1-A
Percentage; provided that, if the Non-PO Class 1-A Percentage as of any such
Distribution Date is greater than the Non-PO Class 1-A Percentage on the first
Distribution Date, the Non-PO Class 1-A Prepayment Percentage shall be 100%; and
provided further, however, that whenever the Non-PO Class 1-A Percentage equals
0%, the Non-PO Class 1-A Prepayment Percentage shall equal 0%; and provided
further that no reduction of the Non-PO Class 1-A Prepayment Percentage below
the level in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding Principal Balance of Mortgage
Loans with respect to both Mortgage Groups, each taken individually, delinquent
60 days or more (including for this purpose any Mortgage Loans in foreclosure
and Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage Group One
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
Mortgage Group One as of such date and (ii) cumulative Realized Losses with
respect to both Mortgage Groups, each taken individually, do not exceed (a) 30%
of the related Subordinated Percentage of the Mortgage Pool Principal Balance
with respect to the related Mortgage Group as of the date of issuance of the
Certificates (the related "Original Subordinated Principal Balance") if such
Distribution Date occurs between and including May 2012 and April 2013, (b) 35%
of the related Original Subordinated Principal Balance if such Distribution Date
occurs between and including May 2013 and April 2014, (c) 40% of the related
Original Subordinated Principal Balance if such Distribution Date occurs between
and including May 2014 and April 2015, (d) 45% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including May 2015 and April 2016, and (e) 50% of the related Original
Subordinated Principal Balance if such Distribution Date occurs during or after
May 2016.
32
NON-PO CLASS 2-A PREPAYMENT PERCENTAGE: As of any Distribution Date up to
and including the Distribution Date in April 2012, 100%; as of any Distribution
Date in the first year thereafter, the Non-PO Class 2-A Percentage plus 70% of
the Mortgage Group Two Subordinated Percentage for such Distribution Date; as of
any Distribution Date in the second year thereafter, the applicable Non-PO Class
2-A Percentage plus 60% of the Mortgage Group Two Subordinated Percentage for
such Distribution Date; as of any Distribution Date in the third year
thereafter, the Non-PO Class 2-A Percentage plus 40% of the Mortgage Group Two
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the fourth year thereafter, the applicable Non-PO Class 2-A Percentage plus
20% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; and as of any Distribution Date after the fourth year thereafter, the
Non-PO Class 2-A Percentage; provided that, if the Non-PO Class 2-A Percentage
on the first Distribution Date is greater than the Non-PO Class 2-A Percentage,
the Non-PO Class 2-A Prepayment Percentage shall be 100%; and provided further,
however, that whenever the Non-PO Class 2-A Percentage equals 0%, the Non-PO
Class 2-A Prepayment Percentage shall equal 0%; and provided further that no
reduction of the Non-PO Class 2-A Prepayment Percentage below the level in
effect for the most recent period shall occur with respect to any Distribution
Date unless, as of the last day of the month preceding such Distribution Date,
(i) the aggregate outstanding Principal Balance of Mortgage Loans with respect
to both Mortgage Groups, each taken individually, delinquent 60 days or more
(including for this purpose any Mortgage Loans in foreclosure and Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust Fund) does not exceed 50% of the Mortgage Group Two Subordinated
Percentage of the Mortgage Pool Principal Balance with respect to Mortgage Group
Two as of such date and (ii) cumulative Realized Losses with respect to both
Mortgage Groups, each taken individually, do not exceed (a) 30% of the related
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
the related Mortgage Group as of the date of issuance of the Certificates (the
related "Original Subordinated Principal Balance") if such Distribution Date
occurs between and including May 2012 and April 2013, (b) 35% of the related
Original Subordinated Principal Balance if such Distribution Date occurs between
and including May 2013 and April 2014, (c) 40% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including May 2014 and April 2015, (d) 45% of the related Original Subordinated
Principal Balance if such Distribution Date occurs between and including May
2015 and April 2016, and (e) 50% of the related Original Subordinated Principal
Balance if such Distribution Date occurs during or after May 2016.
NON-PO CLASS 1-A PRINCIPAL BALANCE: As of any Distribution Date, (a) the
Non-PO Class 1-A Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class 1-A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Class 1-A Certificates
pursuant to Section 6.04); provided that the Non-PO Class 1-A Principal Balance
on the first Distribution Date shall be the Original Non-PO Class 1-A Principal
Balance.
NON-PO CLASS 2-A PRINCIPAL BALANCE: As of any Distribution Date, (a) the
Non-PO Class 2-A Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class 2-A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Class 2-A Certificates
pursuant to Section 6.04); provided that the Non-PO Class 2-A Principal Balance
on the first Distribution Date shall be the Original Non-PO Class 2-A Principal
Balance.
NON-PO CLASS 1-A PRINCIPAL PAYMENT RULES:
33
(I) With respect to any Distribution Date up to and including the Credit
Support Depletion Date, distributions to the Class 1-A Certificateholders
pursuant to Section 6.01(b)(ii)(A) shall be made in the following amounts and
priority:
First, to the Class A-R Certificates, until the Outstanding Certificate
Principal Balance of such Class has been reduced to zero;
Second, to the Class 1-A5 and Class 1-A6 Certificates, pro rata, based
upon their Outstanding Certificate Principal Balances, up to the Class 1-A5 and
Class 1-A6 Lockout Principal Distribution Amount;
Third, concurrently:
(A) 44.6752728427%, as follows:
(a) first, to the Class 1-A7 and Class 1-A8 Certificates, pro rata,
based upon their Outstanding Certificate Principal Balances, up to the Class
1-A7 and Class 1-A8 Lockout Principal Distribution Amount;
(b) second, concurrently:
(0) 00.0000000000%, sequentially, as follows:
(i) first, to the Class 1-A10, until the Outstanding Certificate Principal
Balance of such Class has been reduced to zero;
(ii) second, to the Class 1-A14 and Class 1-A20 Certificates, pro rata,
based upon the Outstanding Certificate Principal Balance of the Class 1-A14
Certificates and, with respect to the Class 1-A20 Certificates, the amount that
is equal to the product of the Outstanding Certificate Principal Balance of the
Class 1-A20 Certificates multiplied by a fraction the numerator of which is
16,453,428 and the denominator of which is 46,014,619 (such amount, the "Class
1-A14 and Class 1-A20 Exchangeable Amount"), until the Outstanding Certificate
Principal Balance of the Class 1-A14 Certificates and the Class 1-A14 and Class
1-A20 Exchangeable Amount has been reduced to zero;
(iii) third, to the Class 1-A15 and Class 1-A20 Certificates, pro rata,
based upon the Outstanding Certificate Principal Balance of the Class 1-A15
Certificates and, with respect to the Class 1-A20 Certificates, the amount that
is equal to the product of the Outstanding Certificate Principal Balance of the
Class 1-A20 Certificates multiplied by a fraction the numerator of which is
29,561,191 and the denominator of which is 46,014,619 (such amount, the "Class
1-A15 and Class 1-A20 Exchangeable Amount"), until the Outstanding Certificate
Principal Balance of the Class 1-A15 Certificates and the Class 1-A15 and Class
1-A20 Exchangeable Amount has been reduced to zero;
(0) 00.0000000000%, sequentially, as follows:
(i) first, to the Class 1-A12, until the Outstanding Certificate Principal
Balance of such Class has been reduced to zero;
(ii) second, to the Class 1-A14 and Class 1-A20 Certificates, pro rata,
based upon the Outstanding Certificate Principal Balance of the Class 1-A14
Certificates and, with respect to the Class 1-A20 Certificates, the Class 1-A14
and Class 1-A20 Exchangeable Amount, until the Outstanding
34
Certificate Principal Balance of the Class 1-A14 Certificates and the Class
1-A14 and Class 1-A20 Exchangeable Amount has been reduced to zero;
(iii) third, to the Class 1-A15 and Class 1-A20 Certificates, pro rata,
based upon the Outstanding Certificate Principal Balance of the Class 1-A15
Certificates and, with respect to the Class 1-A20 Certificates, the Class 1-A15
and Class 1-A20 Exchangeable Amount, until the Outstanding Certificate Principal
Balance of the Class 1-A15 Certificates and the Class 1-A15 and Class 1-A20
Exchangeable Amount has been reduced to zero;
(0) 00.0000000000%, sequentially, as follows:
(i) first, to the Class 1-A13, until the Outstanding Certificate Principal
Balance of such Class has been reduced to zero;
(ii) second, to the Class 1-A15 and Class 1-A20 Certificates, pro rata,
based upon the Outstanding Certificate Principal Balance of the Class 1-A15
Certificates and, with respect to the Class 1-A20 Certificates, the Class 1-A15
and Class 1-A20 Exchangeable Amount, until the Outstanding Certificate Principal
Balance of the Class 1-A15 Certificates and the Class 1-A15 and Class 1-A20
Exchangeable Amount has been reduced to zero;
(c) third, to the Class 1-A7 and Class 1-A8 Certificates, pro rata,
based upon their Outstanding Certificate Principal Balances, until the principal
balance of each such class has been reduced to zero.
(B) 55.3247271573%, as follows:
(a) first, to the Class 1-A16, Class 1-A18, Class 1-A19, Class
1-A21, Class 1-A22, Class 1-A23 and Class 1-A24 Certificates, up to the amount
necessary to reduce the aggregate principal balance of such classes to their
Planned Principal Balance, as follows:
(1) first, to the Class 1-A16, Class 1-A18, Class 1-A21, Class
1-A22, Class 1-A23 and Class 1-A24 Certificates, pro rata, based upon their
Outstanding Certificate Principal Balances, until the principal balance of each
such class has been reduced to zero;
(2) second, to the Class 1-A19 Certificates, until the
principal balance of such class has been reduced to zero;
(b) second, sequentially, to the Class 1-A1 and Class 1-A3
Certificates, in that order, up to the amount necessary to reduce the aggregate
principal balance of such classes to their Targeted Principal Balance;
(c) third, to the Class 1-A4 Certificates, until the principal
balance of such class has been reduced to zero;
(d) fourth, sequentially, to the Class 1-A1 and Class 1-A3
Certificates, in that order, until the principal balance of each such class has
been reduced to zero;
(e) fifth, to the Class 1-A16, Class 1-A18, Class 1-A21, Class
1-A22, Class 1-A23 and Class 1-A24 Certificates, pro rata, based upon their
Outstanding Certificate Principal Balances, until the principal balance of each
such class has been reduced to zero;
35
(f) sixth, to the Class 1-A19 Certificates, until the principal
balance of such class has been reduced to zero;
Fourth, to the Class 1-A5 and Class 1-A6 Certificates, pro rata, based
upon their Outstanding Certificate Principal Balances, until the principal
balance of each such class has been reduced to zero.
(II) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(I)(b)(ii)(A) shall be
made pro rata among the outstanding Classes of Class 1-A Certificates in
relation to the respective Outstanding Certificate Principal Balances of such
outstanding Classes, and not in accordance with the priority of payments among
such Classes set forth in clause (I) above.
NON-PO CLASS 2-A PRINCIPAL PAYMENT RULES: On each Distribution Date, the
Non-PO Class 2-A Optimal Principal Amount will be distributed to the Class 2-A1
Certificates, until the Outstanding Certificate Principal Balance of such Class
has been reduced to zero.
NON PO PERCENTAGE: With respect to each Mortgage Loan, the fraction,
expressed as a percentage (but not greater than 100%), the numerator of which
equals the applicable Net Mortgage Rate and the denominator of which equals the
applicable Remittance Rate.
NON-PO PRINCIPAL BALANCE: In the case of a Non-Discount Mortgage Loan, the
Scheduled Principal Balance of such Mortgage Loan and, in the case of a Discount
Mortgage Loan, the product of (i) the Scheduled Principal Balance of such
Mortgage Loan and (ii) the Non-PO Percentage for such Mortgage Loan.
NONRECOVERABLE ADVANCE: Any Advance previously made or proposed to be made
in respect of a Mortgage Loan by the Servicer pursuant to Section 6.03 which, in
the good faith judgment of the Servicer, will not or, in the case of a proposed
Advance, would not, ultimately be recoverable by the Servicer from Late
Collections or otherwise. The determination by the Servicer that it has made, or
would be making, a Nonrecoverable Advance shall be evidenced by a certificate of
a Servicing Officer of the Servicer delivered to the Trustee, any co-trustee and
the Depositor and detailing the reasons for such determination.
OFFICERS' CERTIFICATE: A certificate signed by two of the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President, the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Depositor or the
Servicer, and delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer and who is reasonably acceptable to the Trustee.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates, the amount specified for such Class or Component in Section
4.01(d).
ORIGINAL CLASS A PRINCIPAL BALANCE: $ 1,026,798,714.
ORIGINAL NON-PO CLASS 1-A PRINCIPAL BALANCE: $ 950,615,205.
ORIGINAL NON-PO CLASS 2-A PRINCIPAL BALANCE: $ 71,744,204.
ORIGINAL CLASS M PRINCIPAL BALANCE: $ 18,278,000.
ORIGINAL CLASS B PRINCIPAL BALANCE: $ 30,105,186.
36
ORIGINAL CREDIT SUPPORT: With respect to any Class of Subordinated
Certificates (other than the Class B-6 Certificates), the level of Credit
Support indicated below:
Class A-M: 3.70%
Class M-1: 2.80%
Class B-1: 1.40%
Class B-2: 0.85%
Class B-3: 0.50%
Class B-4: 0.30%
Class B-5: 0.20%
OUTSTANDING CERTIFICATE GROUP: With respect to any Distribution Date, any
Certificate Group which has not become a Retired Certificate Group on any prior
Distribution Date.
ORIGINAL SUBORDINATED PRINCIPAL BALANCE: With respect to any Mortgage
Group, the related Subordinated Amount, as of the date of issuance of the
Certificates.
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates of Certificates or Component (other than the Class 1-A2, Class
1-A9, Class 1-A11, Class 1-A17, Class 1-AX and Class 2-AX Certificates) and any
Distribution Date, the Original Certificate Principal Balance of such Class or
Component minus the sum of (i) any distributions of principal made on such Class
or Component prior to such Distribution Date and (ii) any Realized Losses
allocated to such Class prior to such Distribution Date; plus, in the case of
the Class 1-A3 Certificates, on each Distribution Date prior to the Class 1-A3
Accretion Termination Date, the related amounts calculated for such Distribution
Date pursuant to Section 6.01(I)(b)(i)(CC), and in the case of the Class 1-A4
Certificates, on each Distribution Date prior to the Class 1-A4 Accretion
Termination Date, the related amounts calculated for such Distribution Date
pursuant to Section 6.01(I)(b)(i)(DD); provided, however, that on any
Distribution Date on which a Subsequent Recovery is distributed, the Outstanding
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Realized Loss has been applied will be increased, in order of
seniority, by an amount equal to the lesser of (i) the amount the Class of
Certificates has been reduced by any Realized Losses which have not been
previously offset by any Subsequent Recovery pursuant to this proviso and (ii)
the total amount of any Subsequent Recovery distributed on such date to
Certificateholders (as reduced (x) by increases in the Outstanding Certificate
Principal Balance of more senior Classes of Certificates on such Distribution
Date and (y) to reflect a proportionate amount of what would (but for this
clause (y)) have been the increases in the Outstanding Certificate Principal
Balance of Classes of Certificates of equal seniority on such Distribution
Date); provided, further, however, that (I) with respect to the Class of Class B
Certificates then outstanding having the highest numerical class designation,
the Outstanding Certificate Principal Balance of such Class shall equal the
excess of the Mortgage Pool Principal Balance (excluding the PO Allocated
Amount) (together with the principal portion of any Monthly Payment due but not
paid with respect to which an Advance has not been made) over the sum of the
Outstanding Certificate Principal Balances of all Classes of Certificates (other
than the Class A-P Certificates and the Class of Class B Certificates then
outstanding having the highest numerical class designation); and (II) during
such time as the Outstanding Certificate Principal Balance of the Class B-1
Certificates equals zero, with respect to the Class of Class M Certificates then
outstanding having the highest numerical class designation (for the purposes of
this paragraph, the Class M-1 Certificates shall be deemed to have a higher
numerical class designation than the Class A-M Certificates), the Outstanding
Certificate Principal Balance of such Class shall equal the excess of the
Mortgage Pool Principal Balance (excluding the PO Allocated Amount) (together
with the
37
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made) over the sum of the Outstanding Certificate
Principal Balances of all Classes of Certificates (other than the Class A-P
Certificates and the Class of Class M Certificates then outstanding having the
highest numerical class designation); provided, however, that the Outstanding
Certificate Principal Balances of the Exchangeable Initial Certificates and the
Exchangeable Certificates shall vary based upon which exchanges, if any, have
taken place pursuant to the terms of Section 3.02 of the Trust Agreement.
OUTSTANDING MORTGAGE LOAN: As to any Distribution Date, a Mortgage Loan
which was not paid in full during the related or any previous Principal
Prepayment Period, which did not become a Liquidated Mortgage Loan during the
related or any previous Principal Prepayment Period and which was not
repurchased under Section 2.02, 3.01, 5.01, 5.21 or 11.01 during the related or
any previous Principal Prepayment Period.
OVERCOLLATERALIZED GROUP: As defined in Section 6.01(I)(b)(ix)(B).
PASS-THRU ENTITY: A "Pass-Thru Entity" as defined in Section 860E(e)(6) of
the Code.
PAYING AGENT: The Person appointed by the Trustee as Paying Agent pursuant
to Section 4.05.
PERCENTAGE INTEREST: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made hereunder, such
percentage interest being equal, with respect to any Class, to the percentage
obtained by dividing the Outstanding Certificate Principal Balance (or the Class
1-A2 Notional Amount, Class 1-A9 Notional Amount, Class 1-A11 Notional Amount,
Class 1-A17 Notional Amount, Class 1-AX Notional Amount and Class 2-AX Notional
Amount in the case of the Class 1-A2, Class 1-A9, Class 1-A11, Class 1-A17,
Class 1-AX and Class 2-AX Certificates, respectively) of such Certificate by the
aggregate of the Outstanding Certificate Principal Balances (or the Class 1-A2
Notional Amount, Class 1-A9 Notional Amount, Class 1-A11 Notional Amount, Class
1-A17 Notional Amount, Class 1-AX Notional Amount and Class 2-AX Notional Amount
in the case of the Class 1-A2, Class 1-A9, Class 1-A11, Class 1-A17, Class 1-AX
and Class 2-AX Certificates, respectively) of all the Certificates of such Class
and with respect to all Certificates, the percentage obtained by dividing the
Outstanding Certificate Principal Balance of such Certificate by the aggregate
of the Outstanding Certificate Principal Balances of all the Certificates.
PERMITTED ACTIVITIES: The primary activities of the Trust created pursuant
to this Agreement which shall be: (i) holding Mortgage Loans transferred from
the Depositor and other assets of the Trust Fund, including any credit
enhancement and passive derivative financial instruments that pertain to
beneficial interests issued or sold to parties other than the Depositor, its
Affiliates, or its agents; (ii) issuing certificates and other interests in the
assets of the Trust Fund; (iii) receiving collections on the Mortgage Loans and
making payments on such certificates and interests in accordance with the terms
of this Agreement; and (iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which activities cannot be
contrary to the status of the Trust Fund as a qualified special purpose entity
under existing accounting literature.
PERSON: Any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
PLANNED PRINCIPAL BALANCE: With respect to the Class 1-A16, Class 1-A18,
Class 1-A19, Class 1-A21, Class 1-A22, Class 1-A23 and Class 1-A24 Certificates
and any Determination Date, the amount specified for such Distribution Date on
Exhibit V hereto.
38
PO ALLOCATED AMOUNT: At the time of any determination, the amount derived
by (i) multiplying the outstanding Principal Balance of each Mortgage Loan on
such date of determination by the PO Percentage with respect to such Mortgage
Loan and (ii) summing the results.
PO PERCENTAGE: The PO Percentage with respect to each Mortgage Loan as
identified on the Mortgage Loan Schedule, such percentage being equal to the
fraction, expressed as a percentage (but not less than 0%), the numerator of
which equals the excess of the applicable Remittance Rate over the applicable
Net Mortgage Rate and the denominator of which equals the applicable Remittance
Rate.
PLAN: As defined in Section 4.02(d)(i).
PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 5.15 hereof.
PRINCIPAL BALANCE: At the time of any determination, the principal balance
of a Mortgage Loan remaining to be paid at the close of business on the Cut-off
Date (after deduction of all principal payments due on or before the Cut-off
Date whether or not paid) (or, in the case of a substitute Mortgage Loan
included in the Trust Fund pursuant to Section 3.03, the close of business as of
the date of substitution) reduced by all amounts previously distributed to
Certificateholders that are allocable to payments of principal on such Mortgage
Loan (including the principal portion of Advances of the Servicer made pursuant
to Section 6.03).
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan (other than Late Collections) which is received other than as part
of a monthly payment; provided, however, that the term Principal Prepayment does
not include Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries,
condemnation awards or other cash proceeds from a source other than the
applicable Mortgagor.
PRINCIPAL PREPAYMENT PERIOD: With respect to any Distribution Date, the
period beginning on the first day of the month preceding the month in which such
Distribution Date occurs and ending on the last day of such month.
PTCE: As defined in Section 4.02(d)(i).
PURCHASE PRICE: With respect to any Mortgage Loan required to be purchased
on any date pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an amount equal
to the sum of (a) 100% of the Principal Balance thereof, (b) unpaid accrued
interest at the Mortgage Rate thereon from the Due Date on which interest was
last paid by the Mortgagor or Advanced by the Servicer to the Due Date next
following the date of repurchase, (c) the aggregate of any unreimbursed Advances
and any unreimbursed Servicing Advances and (d) any unreimbursed costs,
penalties and/or damages incurred by the Trust Fund and/or the Trustee in
connection with any violation relating to such Mortgage Loan of any predatory or
abusive lending law.
QUALIFIED INSURER: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by FNMA and
FHLMC and whose claims-paying ability is rated in the two highest rating
categories by S&P, Xxxxx'x and Fitch with respect to primary mortgage insurance
and in the two highest rating categories for general policyholder rating and
financial performance index rating by A.M. Best Company or its successor in
interest with respect to hazard and flood insurance.
39
RATE ADJUSTMENT DATE: The second LIBOR Business Day prior to the first day
of each Interest Accrual Period after the initial Interest Accrual Period.
RATE CAP CEILING: With respect to the Class 1-A1 or Class 1-A8 Yield
Maintenance Agreement and the applicable Distribution Date, the rate specified
in Exhibit U or Exhibit U-1, respectively, under the heading "Ceiling" for that
Distribution Date.
RATING AGENCY: Any nationally recognized statistical rating organization,
or its successor, that rated one or more Classes of Certificates at the request
of the Depositor at the time of the initial issuance of the Certificates. 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, designated by the Depositor, notice of which designation
shall be given to the Trustee and the Servicer. References herein to the two
highest long-term debt rating categories of a Rating Agency shall mean AA or
better in the case of S&P and Fitch Ratings and Aa or better in the case of
Xxxxx'x.
REALIZED LOSS: With respect to (i) a Liquidated Mortgage Loan, the amount,
if any, by which the unpaid Principal Balance and accrued interest thereon at a
rate equal to the Net Mortgage Rate exceeds the amount actually recovered by the
Servicer with respect thereto (net of reimbursement of Advances and Servicing
Advances) at the time such Mortgage Loan became a Liquidated Mortgage Loan or
(ii) with respect to a Mortgage Loan which is not a Liquidated Mortgage Loan,
any amount of principal that the Mortgagor is no longer legally required to pay
(except for the extinguishment of debt that results from the exercise of
remedies due to default by the Mortgagor).
REALIZED LOSS INTEREST SHORTFALL: The meaning specified in Section
6.05(c).
RECORD DATE: With respect to each Class of Certificates (other than the
Class 1-A1 and Class 1-A2 Certificates), the close of business of the last
Business Day of the month preceding the month of the related Distribution Date.
With respect to the Class 1-A1 and Class 1-A2 Certificates, the close of
business on the business day immediately preceding the related Distribution
Date.
REFERENCE BANKS: Four xxxxxx xxxxx in the London interbank market selected
by the Counterparty.
REGULATION AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 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.
RELEVANT MORTGAGE LOAN: The meaning specified in Section 5.01.
RELIEF ACT: The Servicemembers Civil Relief Act or the California Military
and Veterans Code, as amended, or any other similar state or local law.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in Section 860D of the Code. References herein to "a REMIC" or "the
REMICs" shall mean one or all, as the context requires, of the REMICs created
hereunder.
REMIC POOL: Each of the Lower-Tier REMIC, the Middle-Tier REMIC and the
Upper-Tier REMIC.
40
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs which appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury temporary, proposed or final regulations and rulings promulgated
thereunder, as the foregoing are in effect (or with respect to proposed
regulations, are proposed to be in effect) from time to time.
REMIC REPORTING AGENT: As defined in Section 7.02(b).
REMITTANCE RATE: The Group One Remittance Rate or the Group Two Remittance
Rate, as applicable.
REPURCHASE PROCEEDS: All proceeds of any Mortgage Loan or property
acquired in respect thereof repurchased pursuant to Section 2.02, 3.01, 5.01,
5.21 or 11.01.
RESERVE FUND: As defined in Section 5.29.
RESIDUAL INTEREST: The interest represented by (i) amounts, if any,
remaining in the Collection Account following termination of the Trust Fund
after payments to the Class A Certificateholders (other than the Class A-R
Certificateholders), the Class M Certificateholders and the Class B
Certificateholders and (ii) amounts paid in respect of principal and accrued
interest on the Class A-R Certificates, other than, in the case of both (i) and
(ii), amounts attributable to the Class LT-R Interest or the Class MT-R
Interest.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any senior
vice president, any vice president, any assistant vice president, any senior
trust officer, any trust officer or any other officer of the Trustee in its
Agency & Trust Office customarily performing functions similar to those
performed by any of the above designated officers.
RETIRED CERTIFICATE GROUP: With respect to any Distribution Date, any
Certificate Group with respect to which the aggregate Outstanding Certificate
Principal Balance is reduced to zero on or before such Distribution Date.
REUTERS PAGE LIBOR01: The display currently so designated on Reuters Xtra
3000 Service or such other page as may replace such display on that service for
the purpose of displaying London interbank offered rates of major banks.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
SALE AGREEMENT: The Mortgage Loan Sale Agreement dated as of April 1, 2007
between the Depositor and CHF.
XXXXXXXX-XXXXX CERTIFICATION: The meaning specified in Section 5.24(f).
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan as of any
Distribution Date, the unpaid principal balance of such Mortgage Loan as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such schedule by reason of bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) as of the Due Date in the month
preceding the month of such Distribution Date, or as the Cut-off Date, with
respect to the first (1st) Distribution Date, after giving effect to any
previously applied prepayments, the payment of principal due on such first day
of the month and any reduction of the principal balance of such Mortgage Loan by
a bankruptcy court, irrespective of any delinquency in payment by the related
Mortgagor.
41
SECTION 302 REQUIREMENTS: Any rules or regulations promulgated pursuant to
the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: CHF.
SERVICER: Chase or any successor under this Agreement.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations and which are "unanticipated expenses" (within the meaning
of Treasury regulations section 1.860G-1(b)(3)(ii)) including, but not limited
to, the cost of (i) the preservation, restoration and protection of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
acquired in satisfaction of the Mortgage, (iv) taxes and assessments on the
Mortgaged Properties subject to the Mortgage Loans and (v) compliance with the
obligations under Section 5.21.
SERVICING CRITERIA: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
SERVICING FEE: The amount of the monthly fee paid for the servicing of the
Mortgage Loans, equal to, as of any Distribution Date, with respect to each
Mortgage Loan, one-twelfth of the Servicing Fee Rate of the Principal Balance
thereof as of the Determination Date in the preceding month, subject to
adjustment as provided in Section 6.05. The Servicing Fee shall be payable only
at the time of and with respect to those Mortgage Loans for which payment is in
fact made of the entire amount of the Monthly Payments that shall have come due
and only at the time such Monthly Payment shall be made. The right to receive
the Servicing Fee is limited to, and the Servicing Fee is payable solely from,
the interest portion of such Monthly Payments (or the interest portion of any
Principal Prepayment in full) collected by the Servicer, or as otherwise
provided under Section 5.09 or 5.23.
SERVICING FEE RATE: 0.2560% per annum.
SERVICING OFFICER: Any officer of the Servicer or any Sub-Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name appears on a written certificate listing servicing
officers furnished to the Trustee by the Servicer on or prior to the Closing
Date, and signed on behalf of the Servicer or any Sub-Servicer by its President,
any Vice President or its Treasurer, as such certificate may from time to time
be amended.
SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
SIMILAR LAW: The meaning specified in Section 4.02(d).
SINGLE CERTIFICATE: A Certificate of any Class that evidences the smallest
permissible original denomination for such Class of Certificates as specified in
Section 4.01(d).
SPECIAL HAZARD AMOUNT: Initially, $10,751,819.01. As of the first
anniversary of the Cut-off Date, the Special Hazard Amount shall be reduced, but
not increased, to the lesser of (i) the initial
42
Special Hazard Amount less the sum of all amounts allocated to the Subordinated
Certificates in respect of Special Hazard Losses on the Mortgage Loans during
such year or (ii) the Adjustment Amount for such anniversary. As of each
subsequent anniversary of the Cut-off Date, the Special Hazard Amount shall be
reduced, but not increased, to the lesser of (i) the Special Hazard Amount on
the immediately preceding anniversary of the Cut-off Date less the sum of all
amounts allocated to the Subordinated Certificates in respect of Special Hazard
Losses on the Mortgage Loans during such year and (ii) the Adjustment Amount for
such anniversary. The "Adjustment Amount" with respect to each anniversary of
the Cut-off Date will be equal to 1.00% multiplied by the aggregate outstanding
Principal Balance of the Mortgage Loans.
SPECIAL HAZARD LOSS: With respect to any Mortgage Loan, any Realized Loss
or portion thereof resulting from direct physical loss or damage to the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), which is not insured against under the Standard Hazard Policy required to
be maintained hereunder.
STANDARD HAZARD POLICY: Each standard hazard insurance policy or
replacement therefor referred to in Section 5.16.
STARTUP DAY: The meaning specified in Section 2.04(a).
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 as determined by and under the direction or
authority of the Servicer or a Sub-Servicer.
SUBORDINATED CERTIFICATES: The Class M and Class B Certificates, referred
to collectively.
SUBORDINATED OPTIMAL PRINCIPAL AMOUNT: With respect to any Distribution
Date, the lesser of (a) the aggregate Outstanding Certificate Principal Balance
of the Subordinated Certificates (before giving effect to any distributions of
principal on such Distribution Date) and (b) (1) the sum of: (i) the applicable
Subordinated Percentage of the applicable Non-PO Percentage of the principal
portion of all Monthly Payments, whether or not received, which were due during
the related Due Period on Mortgage Loans which were outstanding during such Due
Period; (ii) the applicable Subordinated Prepayment Percentage of the applicable
Non-PO Percentage of all Principal Prepayments made on any Mortgage Loan during
the related Principal Prepayment Period; (iii) with respect to each Mortgage
Loan not described in (iv) below, the applicable Subordinated Percentage of the
applicable Non-PO Percentage of the principal portion of all Insurance Proceeds,
condemnation awards and any other cash proceeds from a source other than the
applicable Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 5.08(iv) and (v), which were received during the
related Principal Prepayment Period, net of related unreimbursed Servicing
Advances and net of any portion thereof which, as to any such Mortgage Loan,
constitutes Late Collections that have been the subject of an Advance on any
prior Distribution Date; (iv) with respect to each Mortgage Loan which has
become a Liquidated Mortgage Loan during the related Principal Prepayment
Period, an amount equal to the portion (if any) of the Net Liquidation Proceeds
with respect to such Mortgage Loan (net of any unreimbursed Advances) that was
not included in the Group One Class A-P Amount, the Group Two Class A-P Amount,
the Non-PO Class 1-A Optimal Principal Amount or Non-PO Class 2-A Optimal
Principal Amount with respect to such Distribution Date; and (v) with respect to
each Mortgage Loan repurchased or purchased during the related Principal
Prepayment Period pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an amount
equal to the applicable Subordinated Prepayment Percentage of applicable Non-PO
Percentage of the principal portion of the Purchase Price (net of amounts with
respect to which a distribution of principal has
43
previously been made to the Subordinated Certificateholders) minus (2) the Class
A-P Shortfall Amount with respect to such Distribution Date.
SUBORDINATED PERCENTAGE: The Mortgage Group One Subordinated Percentage or
the Mortgage Group Two Subordinated Percentage, as the case may be.
SUBORDINATED PREPAYMENT PERCENTAGE: The Mortgage Group One Subordinated
Prepayment Percentage or the Mortgage Group Two Subordinated Prepayment
Percentage, as the case may be.
SUB-SERVICER: Any Person that services Mortgage Loans on behalf of the
Servicer or any Sub-Servicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement that are identified in Item 1122(d) of Regulation AB. Any
Sub-Servicer shall meet the qualifications set forth in Section 5.02.
SUB-SERVICING AGREEMENT: Any agreement between the Servicer and any
Sub-Servicer, relating to servicing or administration of certain Mortgage Loans
as provided in Section 5.02, in such form as has been approved by the Servicer
and the Depositor.
SUBSEQUENT RECOVERY: The amount, if any, recovered by the Servicer with
respect to a Liquidated Mortgage Loan with respect to which a Realized Loss has
been incurred after liquidation and disposition of such Mortgage Loan.
SUBSTITUTE EXCESS INTEREST: As defined in Section 3.03.
TARGETED PRINCIPAL BALANCE: With respect to the Class 1-A1 and Class 1-A3
Certificates and any Determination Date, the amount specified for such Class for
such Distribution Date on Exhibit W hereto.
TRUST: The Trust created pursuant to this Agreement.
TRUST AGREEMENT: The Trust Agreement dated as of April 1, 2007, entered
into by and among the Depositor, the Trustee, the servicer and the Paying Agent
for the issuance of the Exchangeable Certificates and the Exchangeable Initial
Certificates.
TRUST FUND: The corpus of the Trust consisting of (i) the Mortgage Loans,
(ii) such assets as shall from time to time be identified as deposited in the
Collection Account and the Certificate Account, (iii) the Trust's rights under
the Yield Maintenance Agreements, (iv) property which secured a Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure, (v)
Standard Hazard Policies and any other insurance policies, and the proceeds
thereof and (vi) any proceeds of any of the foregoing.
TRUSTEE: The Bank of New York Trust Company, N.A., a national banking
association and its successors and any corporation resulting from or surviving
any consolidation or merger to which it or its successors may be a party, and
any successor trustee at the time serving as successor trustee hereunder,
appointed as herein provided.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to any Lower-Tier REMIC
Regular Interest as of any Distribution Date, the initial principal amount of
such regular interest, reduced by (i) all amounts distributed on previous
Distribution Dates on such regular interest with respect to principal and (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such regular interest, and increased with respect to
Subsequent Recoveries as provided in Section 2.04.
44
UNCERTIFICATED REMIC INTERESTS: The rights created under this Pooling and
Servicing Agreement with respect to the Class 1-A14, Class 1-A15, Class 1-A17
and Class 1-A21 Certificates (without giving effect to any issuance of
Exchangeable Certificates pursuant to the terms of the Trust Agreement), which
rights are deposited in the trust created pursuant to the Trust Agreement.
UNDERCOLLATERALIZED POOL: As defined in Section 6.01(I)(b)(ix)(B).
UPPER-TIER REMIC: The Upper-Tier REMIC as described in Section 2.04.
UPPER-TIER REMIC REGULAR INTERESTS: (i) Each of the Classes of
Certificates (other than the Class A-R Certificate, Class 1-A1 and Class 1-A8
Certificates, the Exchangeable Initial Certificates and the Exchangeable
Certificates), (ii) the Uncertificated REMIC Interests and (iii) the rights
under the Class 1-A1 and Class 1-A8 Certificates other than the rights with
respect to Basis Risk Shortfall Carryover Amounts.
U.S. PERSON: A "United States Person" as defined in Section 7701(a)(30) of
the Code.
YIELD MAINTENANCE AGREEMENTS: The Class 1-A1 Yield Maintenance Agreement
and the Class 1-A8 Yield Maintenance Agreement, as described in Section 5.29 and
set forth in Exhibit U and Exhibit U-1 hereto, respectively.
YIELD MAINTENANCE AGREEMENT REMITTANCE DATE: The day that is two New York
business days prior to each Distribution Date, provided that if such day is not
a New York business day, such Yield Maintenance Agreement Remittance Date shall
be the next preceding New York business day.
[END OF ARTICLE I]
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
Section 2.01 Conveyance of Mortgage Loans. The Depositor, concurrently
with the execution and delivery hereof, does hereby sell, transfer, assign, set
over and convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all interest
and principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date (other than Monthly Payments due on the Mortgage Loans on or before
the Cut-off Date).
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with, the Custodian on behalf of the Trustee the following documents
or instruments with respect to each Mortgage Loan so assigned:
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) Original Mortgage Note bearing all intervening endorsements, endorsed
"Pay to the order of ______, without recourse" and signed in the name of the
last endorsee by an authorized officer.
(B) The original Mortgage (including all riders thereto) with evidence of
recording thereon, or a copy thereof certified by the public recording office in
which such Mortgage has been recorded or, if the original Mortgage has not been
returned from the applicable public recording office, a true certified copy of
the original that was sent for recording, certified by the Seller.
45
(C) The original policy of title insurance, or in the event such original
title policy is unavailable a copy of the related policy (provided that use of a
copy is acceptable to the related title insurance or escrow company), including
riders and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company.
(D) Certified true copy of power of attorney sent for recording.
(ii) With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan:
(A) The original Assignment of Mortgage to "The Bank of New York Trust
Company, N.A., as trustee (Chase Mortgage Finance Corporation)," which
assignment shall be in form and substance acceptable for recording, or a copy
certified by the Seller as a true and correct copy of the original Assignment of
Mortgage which has been sent for recordation. Subject to the foregoing, such
assignments may, if permitted by law, be by blanket assignments for Mortgage
Loans covering Mortgaged Properties situated within the same county. If the
Assignment of Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
(B) The original policy of title insurance, or in the event such original
title policy is unavailable a copy of the related policy (provided that use of a
copy is acceptable to the related title insurance or escrow company), including
riders and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company.
(C) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage together
with a certificate of the Seller certifying that the original Assignment of
Mortgage has been delivered for recording in the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located.
(D) Originals, or copies thereof certified by the public recording office
in which such documents have been recorded, of each assumption, extension,
modification, written assurance or substitution agreements, if applicable, or if
the original of such document has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller, of such
original document together with certificate of Seller certifying the original of
such document has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.
(E) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and compelte
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been deliverd for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located, a copy of any applicable power of attorney.
(iii) With respect to each Co-op Loan:
(A) (I) 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 by an authorized officer.
(B) The original loan security agreement entered into by the Mortgagor
with respect to such Co-Op Loan.
46
(C) Original Form UCC-1 and any continuation statements with evidence of
filing thereon entered into by the Mortgagor with respect to such
Co-Op Loan or if the original of such document has not been returned
from the applicable public recording office, a true certified copy
of the document sent for recording.
(D) Form UCC-3 (or copy thereof) by the applicable Mortgage Loan Seller
or its agent assigning the security interest covered by such Form
UCC-1 to "The Bank of New York as trustee" or to blank, together
with all Forms UCC-3 (or copies thereof) showing a complete chain of
assignment from the originator of the related Co-op Loan to the
Seller, with evidence of recording thereon.
(E) Stock certificate representing the stock allocated to the related
dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator
of such Co-op Loan with a stock power in blank attached.
(F) Original proprietary lease.
(G) Original assignment of proprietary lease, to the Trustee or to
blank, and all intervening assignments thereof.
(H) Original recognition agreement of the interests of the mortgagee
with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
(I) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (D)
above with respect to such Co-op Loan.
(J) Certified true copy of power of attorney sent for recording.
If in connection with any Mortgage Loan which is not a Co-op Loan the
Depositor cannot deliver the Mortgage, Assignments of Mortgage, or assumption,
consolidation or modification agreement, as the case may be, with evidence of
recording thereon concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage, or assumption, consolidation or modification
agreement, as the case may be, has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage, Assignments of Mortgage, or assumption, consolidation or
modification agreement, as the case may be, has been delivered to the
appropriate public recording office for recordation. Thereafter, the Depositor
shall deliver or cause to be delivered to the Trustee such Mortgage, Assignments
of Mortgage, or assumption, consolidation or modification agreement, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office.
With respect to any Non-MERS Mortgage Loans which are not Co-op Loans, and
as to which the related Mortgaged Property is located in Florida, the Servicer
shall cause to be recorded in the appropriate public recording office for real
property records each Assignment of Mortgage referred to in this Section 2.01 as
soon as practicable. With respect to any Non-MERS Mortgage Loans which are not
Co-op Loans as to which the related Mortgaged Property is located outside of
Florida, the Servicer shall not be obligated to cause to be recorded the
Assignment of Mortgage referred to in this Section 2.01. With respect to Co-op
Loans as to which the related dwelling unit is located in Florida, the Servicer
shall cause to be filed in the appropriate filing office the Form UCC-3 referred
to in this Section 2.01 as soon as practicable. With respect to any Co-op Loans
as to which the related dwelling unit is located outside
47
Florida, the Servicer shall not be obligated to cause to be filed the Form UCC-3
referred to in this Section 2.01. While each such Assignment of Mortgage or Form
UCC-3 is being recorded or filed, as applicable, the Servicer shall deliver to
the Trustee a photocopy of such document. If any such Assignment of Mortgage or
Form UCC-3 is returned unrecorded or unfiled to the Servicer because of any
defect therein, the Servicer shall cause such defect to be cured and such
document to be recorded or filed in accordance with this paragraph. The
Depositor shall deliver or cause to be delivered each such original recorded or
filed Assignment of Mortgage and intermediate assignment or Form UCC-3 to the
Trustee within 270 days of the Closing Date or shall deliver to the Trustee on
or before such date an Officer's Certificate stating that such document has been
delivered to the appropriate public recording or filing office for recording or
filing, but has not been returned solely because of a delay caused by such
recording or filing office. In any event, the Depositor shall use all reasonable
efforts to cause each such document with evidence of recording or filing thereon
to be delivered to the Trustee within 300 days of the Closing Date.
With respect to each MERS Mortgage Loan, the Trustee, at the expense of
the Depositor and at the direction and with the cooperation of the Servicer,
shall cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the trustee relating to such Mortgage Loan on the records
of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
The ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the Trustee. Neither the Depositor nor the
Servicer shall take any action inconsistent with such ownership and shall not
claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer or any
Sub-Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's or such Sub-Servicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer or such Sub-Servicer is in a
custodial capacity only. The Depositor agrees to take no action inconsistent
with the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans. Each Mortgage File and the mortgage
documents relating to the Mortgage Loans contain proprietary business
information of the Servicer and its customers. The Trustee and the Depositor
agree that they will not use such information for business purposes without the
express written consent of the Servicer and that all such information shall be
kept strictly confidential.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from any Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of such Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of such
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement
48
terminates prior to the satisfaction of the claims of any Person in any
Certificates, the security interest created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
In addition to the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey, assign and set over to the Trustee all
of its right, title and interest in that portion of the Trust Fund described in
items (ii), (iii), (iv) and (v) of the definition thereof and further assigns to
the Trustee for the benefit of the Certificateholders those representations and
warranties of the Seller contained in the Sale Agreement and described in
Section 3.01 hereof and the benefit of the repurchase obligations of the Seller
described in Sections 2.02 and 3.01 hereof and the obligations of the Seller
contained in the Sale Agreement to take, at the request of the Depositor or the
Trustee, all action on its part which is reasonably necessary to ensure the
enforceability of a Mortgage Loan.
The parties hereto agree and understand that it is not intended that any
mortgage loan be included in the Trust that is any of (i) a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act effective November 27,
2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004, (iii) a "High-Cost Home Mortgage Loan"
as defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the Indiana High
Cost Home Loan Law effective January 1, 2005.
Section 2.02 Acceptance by Trustee. Except as set forth in the Exception
Report delivered contemporaneously herewith (the "Exception Report"), the
Trustee acknowledges receipt by the Custodian on the Trustee's behalf of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that the
Custodian holds and will hold on the Trustee's behalf such documents and any
other documents constituting a part of the Mortgage Files delivered to it in
trust for the use and benefit of all present and future Certificateholders. The
Depositor will cause the Seller to repurchase any Mortgage Loans to which an
exception was taken in the Exception Report unless such exception is cured to
the satisfaction of the Trustee within 45 Business Days of the Closing Date. The
Trustee may accept delivery of such Mortgage Files by the Custodian on its
behalf. The Custodian will deliver a copy of the Exception Report to the
Depositor and the Trustee
The Custodian, on the Trustee's behalf, agrees, for the benefit of
Certificateholders, to review each Mortgage File delivered to it within 270 days
after the Closing Date to ascertain that all documents required by Section 2.01
have been executed and received, and that such documents relate to the Mortgage
Loans identified in Exhibit A that have been conveyed to it. If the Custodian on
the Trustee's behalf finds any document or documents constituting a part of a
Mortgage File to be missing or defective (that is, mutilated, damaged, defaced
or unexecuted) in any material respect, the Custodian on the Trustee's behalf
shall promptly (and in any event within no more than five Business Days) after
such finding so notify the Servicer, the Seller, the Trustee and the Depositor.
In addition, the Custodian on the Trustee's behalf shall also notify the
Servicer, the Seller, the Trustee and the Depositor, if (a) in examining the
Mortgage Files, the documentation shows on its face (i) any adverse claim, lien
or encumbrance, (ii) that any Mortgage Note was overdue or had been dishonored,
(iii) any evidence on the face of any Mortgage Note or Mortgage of any security
interest or other right or interest therein, or (iv) any defense against or
claim to the Mortgage Note by any party or (b) the original Mortgage with
evidence of recording thereon with respect to a Mortgage Loan is not received
within 270 days of the Closing Date; provided, however, that if the Depositor
cannot deliver the original Mortgage with evidence of recording thereon because
of a delay caused by the public recording office where such Mortgage has been
delivered for recordation, the Depositor shall deliver or cause to be delivered
to the Custodian and the Trustee written notice stating that such Mortgage has
been delivered to the appropriate public
49
recording officer for recordation and thereafter the Depositor shall deliver or
cause to be delivered such Mortgage with evidence of recording thereon upon
receipt thereof from the public recording office. The Depositor shall request
that the Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 3.03, within 60
days from the date the Seller was notified of such omission or defect and, if
the Seller does not correct or cure such omission or defect within such period,
that the Seller purchase such Mortgage Loan from the Trustee within 90 days from
the date the Depositor notified the Seller and the Trustee of such omission,
defect or other irregularity at the Purchase Price of such Mortgage Loan. The
Purchase Price for any Mortgage Loan purchased pursuant to this Section 2.02
shall be paid to the Servicer and deposited by the Servicer in the Collection
Account promptly upon receipt, and, upon receipt by the Trustee of written
notification of such deposit signed by a Servicing Officer, the Trustee shall
promptly release to the Seller the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment, without
recourse, as shall be necessary to vest in the Seller or its designee, as the
case may be, any Mortgage Loan released pursuant hereto, and the Trustee shall
have no further responsibility with regard to such Mortgage Loan. It is
understood and agreed that the obligation of the Seller to purchase, cure or
substitute any Mortgage Loan as to which a material defect in or omission of a
constituent document exists shall constitute the sole remedy respecting such
defect or omission available to the Trustee on behalf of Certificateholders. The
Trustee shall be under no duty or obligation to inspect, review and examine such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable or appropriate to the represented purpose, or that they
have actually been recorded, or that they are other than what they purport to be
on their face. The Trustee shall keep confidential the name of each Mortgagor
and shall not solicit any such Mortgagor for the purpose of refinancing the
related Mortgage Loan.
Within 280 days of the Closing Date, the Trustee based solely on
information provided to it by the Custodian shall deliver to the Depositor and
the Servicer the Trustee's Certification, substantially in the form of Exhibit G
attached hereto, setting forth the status of the Mortgage Files as of such date.
Section 2.03 Trust Fund; Authentication of Certificates. The Trustee
acknowledges and accepts the assignment to it of the Trust Fund created pursuant
to this Agreement in trust for the use and benefit of all present and future
Certificateholders. The Trustee acknowledges the assignment to it for the
benefit of the Trust Fund of the Mortgage Loans and has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates and Uncertificated REMIC Interests duly
authenticated by the Trustee or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent in authorized denominations
evidencing ownership of the entire Trust Fund.
Section 2.04 REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Paying Agent to make
appropriate elections to treat the Trust Fund as comprising three REMICs (the
Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC). This
Agreement shall be construed so as to carry out the intention of the parties
that each REMIC created hereunder be treated as a REMIC at all times prior to
the date on which the Trust Fund is terminated. The Closing Date is hereby
designated as the "startup day" of each REMIC created hereunder within the
meaning of Section 860G(a)(9) of the Code. The Lower-Tier REMIC shall hold as
assets all property of the Trust Fund other than (i) the Lower-Tier REMIC
Interests and the Middle-Tier REMIC Interests and (ii) the Yield Maintenance
Agreements and the Reserve Fund. Each of the Lower-Tier REMIC Regular Interests
is hereby designated a "regular interest" (within the meaning of
50
Section 860G(a)(1) of the Code) in the Lower-Tier REMIC. The Middle-Tier REMIC
shall hold as assets the several classes of uncertificated Lower-Tier REMIC
Regular Interests. Each of the Middle-Tier REMIC Regular Interests is hereby
designated a "regular interest" (within the meaning of Section 860G(a)(1) of the
Code) in the Middle-Tier REMIC. The Upper-Tier REMIC shall hold as assets the
several classes of uncertificated Middle-Tier REMIC Regular Interests. Each of
the Upper-Tier REMIC Regular Interests is hereby designated as a "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in the
Upper-Tier REMIC. The Class LT-R Interest is hereby designated as the sole
residual interest (within the meaning of Section 860G(a)(2) of the Code) in the
Lower-Tier REMIC. The Class MT-R Interest is hereby designated as the sole
residual interest (within the meaning of Section 860G(a)(2) of the Code) in the
Middle-Tier REMIC. The Residual Interest is hereby designated as the sole
residual interest (within the meaning of Section 860G(a)(2) of the Code) in the
Upper-Tier REMIC. The Class A-R Certificate evidences ownership of the Class
LT-R Interest, the Class MT-R Interest and the Residual Interest. All interests
described in this Section 2.04(a) shall be designated as such on the Startup
Day.
51
LOWER-TIER REMIC
The following table specifies the class designation, initial principal
amount, pass-through rate and related Mortgage Group for each class of
Lower-Tier REMIC Interest.
Related Mortgage
Lower-Tier REMIC Interest Initial Principal Amount Pass-Through Rate Group
------------------------ ----------------------- ------------------- ------------------
LT-R (1) (1) N/A
LTA-P (2) 0.00% N/A
LT1-AX (3) 6.00% N/A
LT2-AX (4) 5.50% N/A
LT1-A (5) 6.00% Mortgage Group One
LT1-B (6) 6.00% Mortgage Group One
LT2-A (7) 5.50% Mortgage Group Two
LT2-B (6) 5.50% Mortgage Group Two
-------------
(1) The Class LT-R Interest shall represent the sole class of residual
interest in the Lower-Tier REMIC. The Class LT-R Interest will not have a
principal amount or an interest rate. The Class LT-R Interest shall be
represented by the Class A-R Certificate.
(2) The initial principal amount of the Class LTA-P Interest shall equal the
Original Certificate Principal Balance of the Class A-P Certificates.
(3) The Class LT1A-X Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest
on its notional amount. The notional amount of the Class LT1A-X Interest
shall equal the Class 1-AX Notional Amount.
(4) The Class LT2A-X Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest
on its notional amount. The notional amount of the Class LT2A-X Interest
shall equal the Class 2-AX Notional Amount.
(5) The initial principal amount of the Class LT1-A Interest shall equal 1% of
the Group One Subordinated Amount as of the first Distribution Date.
(6) The initial principal amount of each Lower-Tier REMIC Interest ending with
the designation "B" shall equal the excess of (i) the initial Group One
Non-PO Allocated Amount (in the case of the Class LT1-B Interest) or the
initial Group Two Non-PO Allocated Amount (in the case of the Class LT2-B
Interest) over (ii) the initial principal amount of the Lower-Tier REMIC
Interest ending with the designation "A" that is related to the same
Mortgage Group.
(7) The initial principal amount of the Class LT2-A Interest shall equal 1% of
the Group Two Subordinated Amount as of the first Distribution Date.
Interest shall be payable to, and shortfalls and losses are allocable to,
the Class LT1-AX Interest as such amounts are payable or allocable to the Class
1-AX Certificates. Interest shall be payable to, and shortfalls and losses are
allocable to, the Class LT2-AX Interest as such amounts are payable or allocable
to the Class 2-AX Certificates.
Principal shall be payable to, and shortfalls, losses, prepayments and
increases in principal amount related to Subsequent Recoveries are allocable to,
the Class LTA-P Interest as such amounts are payable or allocable to the Class
A-P Certificates.
After the foregoing allocations and distributions are made to the Class
LT1-AX Interest, Class
52
LT2-AX Interest and the Class LTA-P Interest, distributions shall be deemed to
be made and Realized Losses shall be deemed to be allocated to the other
Lower-Tier REMIC Regular Interests first, so as to keep the Uncertificated
Principal Balance of each Lower-Tier REMIC Regular Interest ending with the
designation "A" equal to 1% of the excess of (x) the Group One Non-PO Allocated
Amount (in the case of the Class LT1-A Interest) or the Group Two Non-PO
Allocated Amount (in the case of the Class LT2-A Interest) over (y) the
aggregate class principal amounts of the Class 1-A Certificates (in the case of
the Class LT1-A Interest) or the Class 2-A Certificates (in the case of the
Class LT2-A Interest) (except that if 1% of any such excess is greater than the
principal amount of the corresponding Lower-Tier REMIC Regular Interest ending
with the designation "A", the least amount of principal and Realized Losses
shall be distributed and allocated to such Lower-Tier REMIC Regular Interests
such that the Lower-Tier REMIC Subordinated Balance Ratio is maintained); and
second, any remaining principal and Realized Losses to the Lower-Tier REMIC
Regular Interests ending with the designation "B" in such a manner that the
remaining principal balance of each such Lower-Tier REMIC Regular Interest
equals the excess of (x) the Group One Non-PO Allocated Amount (in the case of
the Class LT1-B Interest) or the Group Two Non-PO Allocated Amount (in the case
of the Class LT2-B Interest) over (y) the Uncertificated Principal Balance of
the Lower-Tier REMIC Regular Interest ending with the designation "A" which is
related to the same Mortgage Group. All computations with respect to the
Lower-Tier REMIC Interests shall be taken out to eight decimal places.
If on any Distribution Date there is an increase in the principal amount
of any Class of Certificates (other than the Class A-P Certificates) related to
Subsequent Recoveries, then, prior to distributions of principal and allocations
of losses on such Distribution Date with respect to the Lower-Tier REMIC, there
shall be a corresponding increase in the Uncertificated Principal Balance of the
Lower-Tier REMIC Regular Interests, with such increase allocated among the
Lower-Tier REMIC Regular Interests first, to each Lower-Tier REMIC Regular
Interest ending with the designation "A", so that the Uncertificated Principal
Balance of each such Lower-Tier REMIC Regular Interest continues to equal the
same percentage of the excess of (x) the Group One Non-PO Allocated Amount (in
the case of the Class LT1-A Interest) or the Group Two Non-PO Allocated Amount
(in the case of the Class LT2-A Interest) over (y) the aggregate class principal
amounts of the Class 1-A Certificates (in the case of the Class LT1-A Interest)
or the Class 2-A Certificates (in the case of the Class LT2-A Interest) and so
that the Lower-Tier REMIC Subordinated Balance Ratio is maintained; and second,
any remaining increase allocated to the Lower-Tier REMIC Regular Interests
ending with the designation "B" in such a manner that the principal balance of
each such Lower-Tier REMIC Regular Interest equals the excess of (x) the Group
One Non-PO Allocated Amount (in the case of the Class LT1-B Interest) or the
Group Two Non-PO Allocated Amount (in the case of the Class LT2-B Interest) over
(y) the Uncertificated Principal Balance of the Lower-Tier REMIC Regular
Interest ending with the designation "A" which is related to the same Mortgage
Group.
MIDDLE TIER REMIC
The following table specifies the class designation, interest rate,
initial principal amount and Classes of corresponding certificates for each
class of Middle-Tier REMIC Interest:
53
Pass-
Middle-Tier Through
REMIC Interest Initial Balance Rate Corresponding Certificates
---------------- --------------- ------- ----------------------------
MT-R (1) (1) N/A
MT1-A1 (2) 6.00% Class 1-A1, Class 1-A2
MT1-A3 (2) 6.00% Class 1-A3
MT1-A4 (2) 6.00% Class 1-A4
MT1-A5 (2) 6.00% Class 1-A5
MT1-A6 (2) 6.00% Class 1-A6
MT1-A7 (2) 6.00% Class 1-A7
MT1-A8 (2) 6.00% Class 1-A8, Class 1-A9
MT1-A10 (2) 6.00% Class 1-A10, Class 1-A11
MT1-A12 (2) 6.00% Class 1-A12
MT1-A13 (2) 6.00% Class 1-A13
MT1-A14 (2) 6.00% Class 1-A14
MT1-A15 (2) 6.00% Class 1-A15
MT1-A16 (2) 6.00% Class 1-A16, Class 1-A17 (6)
MT1-A19 (2) 6.00% Class 1-A19
MT1-A21 (2) 6.00% Class 1-A21, Class 1-A17 (7)
MT1-AX (3) 6.00% Class 1-AX
MTA-P (2) 0.00% Class A-P
MTA-R (2) 6.00% Class A-R
MT2-A1 (2) 5.50% Class 2-A1
MT2-AX (4) 5.50% Class 2-AX
MTA-M (2) (5) Class A-M
MTM-1 (2) (5) Class M-1
MTB-1 (2) (5) Class B-1
MTB-2 (2) (5) Class B-2
MTB-3 (2) (5) Class B-3
MTB-4 (2) (5) Class B-4
MTB-5 (2) (5) Class B-5
MTB-6 (2) (5) Class B-6
---------
(1) The Class MT-R Interest shall represent the sole class of residual
interest in the Middle-Tier REMIC. The Class MT-R Interest will not have a
principal amount or an interest rate. The Class MT-R Interest shall be
represented by the Class A-R Certificate.
(2) The initial principal amount of each of these interests shall be equal to
the Original Certificate Principal Balance the Class of corresponding
Certificates (disregarding the notional amount of any class of
"interest-only" certificates).
(3) The Class MT1-AX Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest
on its notional amount. The notional amount of the Class MT1-AX Interest
shall equal the Class 1-AX Notional Amount.
54
(4) The Class MT2-AX Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest
on its notional amount. The notional amount of the Class MT2-AX Interest
shall equal the Class 2-AX Notional Amount.
(5) For any Distribution Date, the interest rate for the Class MTA-M Interest,
Class MTM-1 Interest, Class MTB-1 Interest, Class MTB-2 Interest, Class
MTB-3 Interest, Class MTB-4 Interest, Class MTB-5 Interest and Class MTB-6
Interest shall be a per annum rate equal to the weighted average of the
interest rates on the Class LT1-A Interest and the Class LT2-A Interest
weighted on the basis of their principal amounts immediately prior to such
Distribution Date.
(6) The Corresponding Certificates for the Class MT1-A16 Interest shall be the
Class 1-A16 Certificates and the portion of the Class 1-A17 Certificates
corresponding to clause (i) of the definition of "Class 1-A17 Notional
Amount".
(7) The Corresponding Certificates for the Class MT1-A21 Interest shall be the
Class 1-A21 Certificates and the portion of the Class 1-A17 Certificates
corresponding to clause (ii) of the definition of "Class 1-A17 Notional
Amount."
Principal and interest (disregarding payments in respect of Basis Risk Shortfall
Carryover Amounts) shall be payable to, and shortfalls, losses, prepayments and
increases in principal amount are allocable to, the Middle-Tier REMIC Regular
Interests as such amounts are payable and allocable to the corresponding
certificates under this Agreement (computed as if no Exchangeable Certificates
existed and by excluding Section 6.01(I)(a)(v) hereof).
55
(b) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" of each "regular interest" in
each REMIC created hereunder is the Distribution Date immediately following the
latest scheduled maturity of any Mortgage Loan.
(c) The "tax matters person" with respect to each REMIC created hereunder
for purposes of the REMIC Provisions shall be the beneficial owner of the Class
A-R Certificate having the largest Percentage Interest of such Class; provided,
however, that such largest beneficial owner and, to the extent relevant, each
other Holder of a Class A-R Certificate, by its acceptance thereof, irrevocably
appoints the Servicer as its agent and attorney-in-fact to act as "tax matters
person" with respect to each REMIC created hereunder for purposes of the REMIC
provisions.
(d) It is intended that each REMIC created hereunder shall constitute, and
that the affairs of the Trust Fund shall be conducted so as to qualify each
REMIC created hereunder as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Servicer covenants and agrees that it shall act as agent (and the
Servicer is hereby appointed to act as agent) on behalf of the Trust Fund, each
REMIC created hereunder and the Holder of the Class A-R Certificate and that in
such capacity it shall:
(i) prepare and file, or cause to be prepared and filed, in a timely
manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066) for each REMIC created hereunder and prepare and file or cause
to be prepared and filed 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 REMIC created hereunder, using the
calendar year as the taxable year and the accrual method of accounting,
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 shall furnish or cause to be furnished to Certificateholders the
schedules, statements or information at such times and in such manner as
may be required thereby;
(ii) within thirty days of the Closing Date, shall furnish or cause
to be furnished 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 (and the Servicer shall act
as the representative of the Trust Fund for this purpose), together with
such additional information as may be required by such Form, and shall
update such information at the time or times in the manner required by the
Code;
(iii) make or cause to be made an election, on behalf of each REMIC
created hereunder, to be treated as a REMIC, and make the appropriate
designations, if applicable, in accordance with this Section 2.04 on the
federal tax return of each REMIC hereunder for its first taxable year
(and, if necessary, under applicable state law);
(iv) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns or reports, or
furnish or cause to be furnished by telephone, mail, publication or other
appropriate method such information, as and when required to be provided
to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount;
(v) provide information necessary for the computation of tax imposed
on the transfer of the Class A-R Certificate to a Disqualified
Organization, or an agent (including a broker,
56
nominee or other middleman) of a Disqualified Organization, or a
pass-through entity in which a Disqualified Organization 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);
(vi) ensure that federal, state or local income tax or information
returns shall 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
(vii) maintain such records relating to each REMIC created hereunder
as may be required by the Code and as may be necessary to prepare the
foregoing returns, schedules, statements or information.
(e) Pursuant to Section 6.02(b), the Servicer, with the consent of the
Trustee, hereby appoints the Global Corporate Trust MBS Group of The Bank of New
York Trust Company, N.A. to perform the duties enumerated in (d) above.
(f) It is intended that the rights of each of the Class 1-A1 and Class
1-A8 Certificates to receive payments in respect of Basis Risk Shortfall
Carryover Amounts shall be treated as a right in interest rate cap contracts and
such shall be accounted for as property held separate and apart from each of the
regular interests in the Upper-Tier REMIC held by the Holders of the Class 1-A1
and Class 1-A8 Certificates, respectively. This provision is intended to satisfy
the requirements of Treasury Regulations Section 1.860G-2(i) for the treatment
of property rights coupled with REMIC interests to be separately respected and
shall be interpreted consistently with such regulation.
Section 2.05 Permitted Activities of Trust. The Trust is created for the
object and purpose of engaging in the Permitted Activities.
Section 2.06 Qualifying Special Purpose Entity. For purposes of SFAS 140,
the parties hereto intend that the Trust shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.05 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
[END OF ARTICLE II]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND
THE SERVICER; REPURCHASE OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of the Depositor with respect
to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that on or before the Closing Date it has
entered into the Sale Agreement with the Seller, that the Seller has made the
following representations and warranties with respect to each Mortgage Loan in
the Sale Agreement as of the Closing Date, which representations and warranties
run to and are for the benefit of the Depositor and the Trustee for the benefit
of the Certificateholders, and as to which the Depositor has assigned to the
Trustee for the benefit of the Certificateholders, pursuant to Section 2.01
hereof, the right to cause the Seller to repurchase a Mortgage Loan as to which
there has occurred an uncured breach of representations and warranties in
accordance with the provisions of the Sale Agreement.
57
(a) The information set forth in the Mortgage Loan Schedule is complete,
true and correct in all material respects;
(b) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Co-op Loan, the related Mortgage is a valid, enforceable and
subsisting first security interest on the related cooperative shares securing
the related Mortgage Note, subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments representing the
Mortgagor's pro rata share of the related residential cooperative housing
corporation's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the related security
agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Trustee's security interest in such cooperative shares;
(c) All payments due prior to the Cut-off Date for such Mortgage Loan have
been made as of the Closing Date, the Mortgage Loan is not delinquent in payment
more than 30 days and has not been dishonored; to the best of the Seller's
knowledge, there are no material defaults under the terms of the Mortgage Loan;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage (or, with respect to a Co-op Loan, the related
Mortgagor), directly or indirectly, for the payment of any amount required by
the Mortgage Loan; there has been no more than one delinquency in excess of 30
days during the preceding twelve-month period;
(d) To the best of the Seller's knowledge, 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 escrow funds have been established in an amount sufficient to pay for every
such escrowed item which remains unpaid and which has been assessed but is not
yet due and payable;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments. No Mortgagor has been released, in whole or in part, from the terms
thereof except in connection with an assumption agreement and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule;
(f)The Mortgage Note and the Mortgage are 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 Mortgage, or the exercise of any right thereunder, render the Mortgage
Note or Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto, and the Mortgagor was not a debtor in any state
or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(g) With respect to a Mortgage Loan which is not a Co-op Loan, all
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by an insurer acceptable under the FNMA Guides against loss by fire,
hazards of extended coverage and such other hazards as are provided for in the
FNMA Guides or by FHLMC. All such standard hazard policies are in full force and
58
effect and on the date of origination contained a standard mortgagee clause
naming the Seller and its successors in interest and assigns as loss payee and
such clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the Mortgaged
Property is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration which policy conforms
to FNMA and FHLMC requirements. The Mortgage obligates the Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local laws and all
applicable predatory and abusive lending laws, including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects;
(i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, 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;
(j) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property, including, all buildings on the Mortgaged Property. The
Mortgage and the Mortgage Note do not contain any evidence of any security
interest or other interest or right thereto. Such lien is free and clear of all
adverse claims, liens and encumbrances having priority over the first lien of
the Mortgage subject only to (1) the lien of non-delinquent current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording which are acceptable to mortgage
lending institutions generally and either (A) which are 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 as
set forth in such appraisal, and (3) 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 and first priority security interest on the property
described therein, and the Depositor has the full right to sell and assign the
same to the Trustee for the benefit of the Certificateholders;
(k) The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors and the Depositor has taken all action necessary to transfer such
rights of enforceability to the Trustee for the benefit of the
Certificateholders. All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been
duly and property executed by such parties. 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 improvements and as to disbursements of any escrow funds therefor have
been complied with;
(l) The Seller is the sole owner and holder of the Mortgage Loan and the
indebtedness evidenced by the Mortgage Note, except for the Assignments of
Mortgage which have been sent for
59
recording, and upon recordation the Seller will be the owner of record of the
Mortgage and the indebtedness evidenced by the Mortgage Note, and upon the sale
of the Mortgage Loan to the Trust for the benefit of the Certificateholders, the
Seller will retain the Mortgage File or any part thereof with respect thereto
not delivered to the Trust for the benefit of the Certificateholders or its
designee in trust only for the purpose of servicing and supervising the
servicing of the Mortgage Loan. Immediately prior to the transfer and assignment
to the Trust for the benefit of the Certificateholders, the Mortgage Loan,
including the Mortgage Note and the Mortgage, were not subject to an assignment
or pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell the Mortgage Loan to the
Trustee for the benefit of the Certificateholders free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest and has
the full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign the Mortgage Loan pursuant
to this Agreement and following the sale of the Mortgage Loan, the Trustee for
the benefit of the Certificateholders will own such Mortgage Loan free and clear
of any encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest;
(m) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage Loan is covered by an ALTA lender's title insurance policy or other
generally acceptable form of policy or insurance acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (j) (1), (2) and (3) above) the Seller,
its successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. Such lender's title insurance
policy insures ingress and egress by or upon the Mortgaged Property or any
interest therein. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. The Seller, its successors and assigns, are the sole insureds of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in full 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;
(n) There is no default, breach, violation or event of acceleration
existent, under the Mortgage or the related 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 permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(o) 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 (or the
related residential dwelling unit in the Underlying Mortgage Property, in the
case of a Co-op Loan) which are or may be liens prior to or equal to the lien of
the related Mortgage;
(p) With respect to a Mortgage Loan which is not a Co-op Loan, all
improvements subject to the Mortgage which were considered in determining the
Appraised Value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (m) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances; the Mortgaged Property is lawfully occupied under
applicable law;
(q) The Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of the Seller's underwriting standards in
effect at the time of origination of such Mortgage
60
Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on forms
generally acceptable to FNMA or FHLMC. Monthly Payments under the Mortgage Note
are due and payable on the first day of each month. The Mortgage contains the
usual and enforceable provisions of the originator at the time of origination
for the acceleration of the payment of the unpaid principal amount of the
Mortgage Loan if the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder;
(r) The Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op Loan), is not subject to any material damage by waste, fire,
earthquake, windstorm, flood or other casualty. To the best of the Seller's
knowledge, at origination of the Mortgage Loan there was, and there currently
is, no proceeding pending for the total or partial condemnation of the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan);
(s) The related 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, (l) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the 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;
(t) If the Mortgage constitutes a deed of trust, a trustee, authorized and
duly qualified if required under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;
(u) The Mortgage File contains an appraisal or a recertification document
(in the case of a Mortgage Loan originated under CHF's Streamlined Refinance
Program) of the related Mortgaged Property (or the related residential dwelling
unit in the Underlying Mortgaged Property, in the case of a Co-op Loan), signed
prior to the final approval of the mortgage loan application by an appraiser
approved by the Seller who had no interest, direct or indirect, in the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), or in
any loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan. The appraisal is in a form
acceptable to FNMA or FHLMC;
(v) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (A) in substantial compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property (or Underlying Mortgaged Property, in the case of
a Co-op Loan), is located, and (B) (1) organized under the laws of such state,
or (2) qualified to do business in such state, or (3) federal savings and loan
associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;
(w) The related 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 interest of any applicable agreement or
chattel mortgage referred to above and such collateral does not serve as
security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
61
(y) The Mortgage Loan does not contain "graduated payment" features;
(z) The Mortgagor is not in bankruptcy and, to the best of the Seller's
knowledge, the Mortgagor is not insolvent;
(aa) The Mortgage Loans are fixed rate mortgage loans. Each Mortgage Loan
has an original term to maturity of not more than thirty (30) years with
interest payable in arrears on the first day of each month. No Mortgage Loan
contains terms or provisions which would result in negative amortization;
(bb) Each Mortgage Note, each Mortgage, each Assignment of Mortgage and
any other documents required pursuant to this Agreement to be delivered to the
Trustee on behalf of the Certificateholders or its designee, or its assignee for
each Mortgage Loan, have been, on or before the Closing Date, delivered to the
Trustee on behalf of the Certificateholders or its designee, or its assignee;
(cc) 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
to any Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient to
pay for every escrowed item that remains unpaid and has been assessed but is not
yet due and payable. No escrow deposits or other charges or payments due under
the Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(dd) [Reserved];
(ee) In the event that at origination the Mortgage Loan has a
Loan-to-Value Ratio greater than 80%, the excess of the principal balance of the
Mortgage Loan over 75% of the Appraised Value of the Mortgaged Property, with
respect to a refinanced Mortgage Loan, or the lesser of the Appraised Value or
the purchase price of the Mortgaged Property (or Underlying Mortgaged Property,
in the case of a Co-op Loan), with respect to a purchase money Mortgage Loan, is
and will be insured as to payment defaults by a Primary Insurance Policy issued
by a Qualified Insurer, except where the primary mortgage insurance was (i)
impermissible at origination at applicable law, in which case such Mortgage Loan
was originated in accordance with applicable law, (ii) cancelled at the request
of the Mortgagor pursuant to the cancellation requirements of FNMA, FHLMC, state
law or, as applicable the Home Owner and Equity Protection Act of 1994, as
amended, or (iii) automatically terminated in accordance with the termination
requirements of FNMA, FHLMC, state law or, as applicable the Home Owner and
Equity Protection Act of 1994, as amended. All provisions of such Primary
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Insurance Policy and to pay all premiums and charges in
connection therewith. The Mortgage Rate for the Mortgage Loan as set forth on
the Mortgage Loan Schedule is net of any such insurance premium;
(ff) The Assignment of Mortgage is in recordable form and is acceptable
for recording (or, in the case of a Co-op Loan, is in a form acceptable for
filing) under the laws of the jurisdiction in which the Mortgaged Property (or
underlying Mortgaged Property, in the case of a Co-op Loan) is located;
(gg) As to Mortgage Loans that are not secured by an interest in a
leasehold estate, the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan), is 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
62
condominium unit in a condominium project, or a dwelling unit in a residential
cooperative housing corporation or an individual unit in an attached planned
unit development or a detached planned unit development, provided, however, that
no residence or dwelling is a single parcel of real property with a mobile home
thereon. As of the date of origination, no portion of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), was used for
commercial purposes, and since the date of origination, to the best of the
Seller's knowledge, no portion of the Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan), is used for commercial
purposes;
(hh) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), as of the date
of origination of the related Mortgage Loan, such condominium or planned unit
development project met the Seller's eligibility requirements, as set forth in
the Seller's underwriting guidelines as of such date; in the case of each Co-op
Loan, the related residential cooperative housing corporation complied in all
material respects with the Seller's requirements as set forth in the Seller's
underwriting guidelines as of such date;
(ii) To the best of the Seller's knowledge, there is no pending action or
proceeding directly involving the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan), in which compliance with any
environmental law, rule or regulation is an issue;
(jj) As of the Cut-off Date, the Seller has not granted any interest rate
relief to the Mortgagor under the Relief Act;
(kk) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), or facilitating the trade-in or exchange of a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan);
(ll) No action has been taken or failed to be taken by Depositor, on or
prior to the Closing Date, which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any Primary Insurance Policy
(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 Depositor, or
for any other reason under such coverage;
(mm) 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, as amended, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company or similar institution
which is supervised and examined by a federal or state authority;
(nn) Principal payments on the Mortgage Loan commenced no more than sixty
(60) days after funds were disbursed in connection with the Mortgage Loan. The
Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest, 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;
(oo) As of the Closing Date, the Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code (without regard to Treasury
Regulations Section 1.860G-2(f) or any similar rule that provides that a
defective obligation is a qualified mortgage for a temporary period);
63
(pp) With respect to a Mortgage Loan that is a Co-op Loan, the stock that
is pledged as security for the Mortgage Loan is held by a Person as a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code);
(qq) As of the Closing Date, the Mortgage Loan is not the subject of
pending or final foreclosure proceedings and the Seller would not, based on the
delinquency status of the Mortgage Loan, institute foreclosure proceedings with
respect to the Mortgage Loan prior to the next scheduled payment for the
Mortgage Loan;
(rr) As of the Closing Date, the Mortgage Loan does not provide for
interest other than at either (i) a single fixed rate in effect throughout the
term of the Mortgage Loan or (ii) a "variable rate" (within the meaning of
Treasury Regulation Section 1.860G-1(a)(3)) in effect throughout the term of the
Mortgage Loan;
(ss) No Mortgage Loan is a "covered loan" within the meaning of the
Georgia Fair Lending Act of 2002, as amended;
(tt) None of the Mortgage Loans are (a) covered by the Home Ownership and
Equity Protection Act of 1994 or (b) classified as a "high cost" loan or
similarly classified using different terminology under any federal, state or
local law imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points and/or fees
such as predatory lending laws; None of the Mortgage Loans are "high cost" loans
as defined by the applicable federal, state or local predatory and abusive
lending laws nor is any Mortgage Loan a "High Cost Loan" or "Covered Loan," as
applicable (as such terms are defined in the current Standard & Poor's LEVELS(R)
Glossary which is now version 5.6 revised, appendix E) and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed by the
Georgia Fair Lending Act of 2002, as amended; and
(uu) As to each Mortgage Loan that is secured by an interest in a
leasehold estate, (i) the use of a leasehold estate for residential properties
is an accepted practice in the area where the related Mortgaged Property is
located, (ii) residential property consisting of leasehold estates is marketable
in the area where the related Mortgaged Property is located, (iii) the related
lease has been recorded in the applicable land records, (iv) the lease is valid
and in good standing and is not subject to any prior lien by which the lease
could be terminated or subject to any charge or penalty, and (v) the remaining
term of the lease does not terminate less than five years after the maturity
date of such Mortgage Loan.
Upon discovery by any of the Depositor, the Servicer or the Trustee of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the value of a Mortgage Loan or the interest of the
Certificateholders (or which materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan 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 parties
and to the Seller, which notice shall specify the date of discovery. Pursuant to
the Sale Agreement, the Seller shall within 90 days from the earlier of (i) the
date of receipt of notice of such breach or (ii) the date the Seller otherwise
discovers such breach, cure such breach, substitute a Mortgage Loan pursuant to
the provisions of Section 3.03 or, if the breach relates to a particular
Mortgage Loan, purchase such Mortgage Loan from the Trustee at the Purchase
Price. The Purchase Price for the purchased Mortgage Loan shall be paid to the
Servicer and shall be deposited by the Servicer in the Collection Account
promptly upon receipt, and, upon receipt by the Trustee of written notification
of such deposit signed by a Servicing Officer, the Trustee shall promptly
release to the Seller the related Mortgage File, and the Trustee shall execute
and deliver such instruments of transfer or assignment as may be provided to it
by the Servicer, without recourse, as shall be necessary to vest in the Seller
or its
64
designee, as the case may be, any Mortgage Loan released pursuant hereto, and
the Trustee shall have no further responsibility with regard to such Mortgage
Loan. It is understood and agreed that the obligation of the Seller to cure,
substitute or purchase any Mortgage Loan as to which such a breach has occurred
shall constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholder.
Section 3.02 Representations and Warranties of the Servicer. The Servicer
represents and warrants to, and covenants with, the Trustee for the benefit of
the Certificateholders that as of the Closing Date:
(a) The Servicer is a limited liability company duly chartered and validly
existing in good standing under the laws of the State of Delaware, and the
Servicer is duly qualified or registered as a foreign corporation in good
standing in each jurisdiction in which the ownership or lease or its properties
or the conduct of its business requires such qualification;
(b) The execution and delivery of this Agreement by the Servicer and its
performance and compliance with the terms of this Agreement will not violate the
Servicer's certificate of formation or by-laws or 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 Servicer is a party or which may be applicable to the
Servicer or any of its assets;
(c) This Agreement, assuming due authorization, execution and delivery by
the Trustee and the Depositor, constitutes a valid, legal and binding obligation
of the Servicer, enforceable against it in accordance with the terms hereof
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(d) The Servicer 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, which default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Servicer or its properties or might have consequences that would affect its
performance hereunder; and
(e) No litigation is pending or, to the best of the Servicer's knowledge,
threatened against the Servicer which would prohibit its entering into this
Agreement or performing its obligations under this Agreement. It is understood
and agreed that the representations and warranties set forth in this Section
3.02 shall survive the issuance and delivery of the Certificates and shall be
continuing as long as any Certificate shall be outstanding or this Agreement has
been terminated.
Section 3.03 Option to Substitute. If the Seller is required to repurchase
any Mortgage Loan pursuant to Section 2.02 or 3.01, the Seller may, at its
option, within two years from the Closing Date, remove such defective Mortgage
Loan from the terms of this Agreement and substitute another mortgage loan for
such defective Mortgage Loan, in lieu of repurchasing such defective Mortgage
Loan. Any substitute Mortgage Loan shall (a) have a Principal Balance at the
time of substitution not in excess of the Principal Balance of the removed
Mortgage Loan (the amount of any difference, plus one month's interest thereon
at the Mortgage Rate borne by the removed Mortgage Loan, being paid by the
Seller and deemed to be a Principal Prepayment to be deposited by the Servicer
in the Collection Account), (b) have a Mortgage Rate not less than, and not more
than one percentage point greater than, the Mortgage Rate of the removed
Mortgage Loan (provided, however, that if the Mortgage Rate on the substitute
Mortgage Loan exceeds the Mortgage Rate on the removed Mortgage Loan, the amount
of that excess interest (the
65
"Substitute Excess Interest") shall be payable to the Class A-R Certificate),
(c) have a remaining term to stated maturity not later than, and not more than
one year less than, the remaining term to stated maturity of the removed
Mortgage Loan, (d) be, in the reasonable determination of the Servicer, of the
same type, quality and character (including location of the Mortgaged Property
(or underlying Mortgaged Property, in the case of a Co-op Loan)) as the removed
Mortgage Loan as if the breach had not occurred, (e) have a Loan-to-Value Ratio
at origination no greater than that of the removed Mortgage Loan and (f) be, in
the reasonable determination of the Seller, in material compliance with the
representations and warranties contained in the Sale Agreement and described in
Section 3.01, as of the date of substitution.
The Seller shall amend the Mortgage Loan Schedule to reflect the
withdrawal of the removed Mortgage Loan from this Agreement and the substitution
of such substitute Mortgage Loan therefor and shall send a copy of such amended
Mortgage Loan Schedule to the Servicer and the Trustee. The Sale Agreement
provides that upon such amendment the Seller shall be deemed to have made as to
such substitute Mortgage Loan the representations and warranties set forth in
Section 3.01 as of the date of such substitution, which shall be continuing as
long as any Certificate shall be outstanding or this Agreement has not been
terminated, and the remedies for breach of any such representation or warranty
shall be as set forth in Section 3.01. Upon such amendment, the Custodian on
behalf of the Trustee shall review the Mortgage File delivered to it relating to
the substitute Mortgage Loan, within the time and in the manner and with the
remedies specified in Section 2.02, except that for purposes of this Section
3.03 (other than the two-year period specified in the first sentence of this
Section), such time shall be measured from the date of the applicable
substitution. In the event of such a substitution, accrued interest on the
substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund, and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The principal payment on a
substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller, and the principal payment on the Mortgage Loan
for which the substitution is made due on such date shall be the property of the
Trust Fund.
[END OF ARTICLE III]
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates.
(a) The Class A, Class M and Class B Certificates shall be substantially
in the forms thereof included within Exhibits C, D, E and F and shall, on
original issue, be executed by the Depositor and authenticated by the Trustee
(or, if an Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent) upon receipt by the Trustee of the documents specified in
Section 2.01, delivered to or upon the order of the Depositor.
(b) The Depository and the Trustee have entered into a Depository
Agreement dated as of April 25, 2007 (the "Depository Agreement"). Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of the Book-Entry Certificates may not be transferred as
provided in Section 4.02 except to a successor to the Depository; (ii) 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;
(iii) the Depository may collect its usual and customary fees, charges and
expenses
66
from its Depository Participants; (iv) the Paying Agent and the Trustee shall
deal with the Depository, Depository Participants and Indirect Participants as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of such 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 (v) the Paying Agent and the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to Indirect Participants and persons shown on the books of such Indirect
Participants as direct or indirect Certificate Owners. The Depository Agreement
provides that the Depository shall maintain book-entry records with respect to
the Certificate Owners and with respect to ownership and transfers of such
Certificates.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(c) If (i)(A) the Depository advises the Depositor, the Paying Agent or
the Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository and (B) the Trustee, the
Paying Agent or the Depositor are unable after exercise of their reasonable best
efforts to locate a qualified successor or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, of the Book-Entry Certificates by the Depository for registration and
receipt by the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, of an adequate supply of certificates from the
Depositor, the Trustee or if the Paying Agent is appointed under Section 4.05,
the Paying Agent shall issue the Definitive Certificates based on information
received from the Depository. Neither the Depositor, the Servicer, the Paying
Agent nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.
(d) The Certificates (other than the Class A-R Certificate) shall be
issuable in the minimum original dollar denominations (and integral multiples of
$1.00 in excess of such amount) and aggregate original dollar denominations per
Class (or in the case of the Class 1-A2, Class 1-A9, Class 1-A11, Class 1-A17,
Class 1-AX and 2-AX Certificates, in the minimum denominations based upon the
Class 1-A2 Notional Amount, Class 1-A9 Notional Amount, Class 1-A11 Notional
Amount, Class 1-A17 Notional Amount, Class 1-AX Notional Amount and the Class
2-AX Notional Amount, respectively) as set forth in the following table (except
that, if necessary, in order to aggregate the Original Certificate Principal
Balance of a Class, one Certificate of such Class will be issued in a different
denomination). A single Class A-R Certificate will be issued in definitive form
in a $100 denomination.
(e) The Uncertificated REMIC Interests shall be issued in uncertificated
form and transferred to the Trustee to be held in trust pursuant to the terms of
the Trust Agreement. The Bank of New York Trust Company, N.A., as Trustee and
Paying Agent, is hereby directed and authorized to enter into the Trust
Agreement. In entering into the Trust Agreement and performing its obligations
thereunder, each of the Trustee and the Paying Agent shall be entitled to the
same rights, protections and indemnities afforded to them under this Agreement
in their capacity as Trustee and Paying Agent, respectively.
67
Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
-------------- ------------ ------------------------------ -----------
Class 1-A1 $ 100,000.00 185,000,000 16163H AA9
Class 1-A2 $ 100,000.00 (1) 16163H AB7
Class 1-A3 $ 25,000.00 25,000 16163H AC5
Class 1-A4 $ 100,000.00 2,277,486 16163H AD3
Class 1-A5 $ 100,000.00 78,700,000 16163H AE1
Class 1-A6 $ 100,000.00 21,300,000 16163H AF8
Class 1-A7 $ 100,000.00 41,000,000 16163H AG6
Class 1-A8 $ 100,000.00 3,000,000 16163H AH4
Class 1-A9 $ 100,000.00 (1) 16163H AJ0
Class 1-A10 $ 100,000.00 50,000,000 16163H AK7
Class 1-A11 $ 100,000.00 (1) 16163H AL5
Class 1-A12 $ 100,000.00 65,000,000 16163H AM3
Class 1-A13 $ 100,000.00 175,000,000 16163H AN1
Class 1-A14 (4) $ 1,000.00 16,453,428 16163H AP6
Class 1-A15 (4) $ 1,000.00 29,561,191 16163H AQ4
Class 1-A16 $ 100,000.00 75,000,000 16163H AR2
Class 1-A17 (4) $ 100,000.00 (1) 16163H AS0
Class 1-A18 (5) $ 100,000.00 (5) 16163H AT8
Class 1-A19 $ 100,000.00 29,726,000 16163H AU5
Class 1-A20 (5) $ 1,000.00 (5) 16163H AV3
Class 1-A21 (4) $ 100,000.00 178,572,000 16163H AW1
Class 1-A22 (5) $ 100,000.00 (5) 16163H AX9
Class 1-A23 (5) $ 100,000.00 (5) 16163H AY7
Class 1-A24 (5) $ 100,000.00 (5) 16163H AZ4
Class 1-AX $ 100,000.00 (1) 16163H BB6
Class 2-A1 $ 100,000.00 71,744,204 16163H BC4
Class 2-AX $ 100,000.00 (1) 16163H BD2
Class A-P $ 100,000.00 4,439,305(3) 16163H BE0
Class A-R $ 100.00 100 (2) 16163H BF7
Class A-M $ 100,000.00 8,601,400 16163H BG5
Class M-1 $ 100,000.00 9,676,600 16163H BH3
Class B-1 $ 100,000.00 15,052,600 16163H BJ9
Class B-2 $ 100,000.00 5,913,500 16163H BK6
Class B-3 $ 100,000.00 3,763,100 16163H BL4
Class B-4 $ 100,000.00 2,150,400 16163H BM2
Class B-5 $ 100,000.00 1,075,200 16163H BN0
Class B-6 $ 100,000.00 2,150,386 16163H BP5
-------------
(1) The Class 1-A2, Class 1-A9, Class 1-A11, Class 1-A17, Class 1-AX and Class
2-AX Certificates are interest-only certificates, have no principal
balance, are not entitled to payments of principal
68
and will bear interest on their notional amounts. The initial notional
amounts of the Class 1-A2, Class 1-A9, Class 1-A11, Class 1-A17, Class
1-AX and Class 2-AX Certificates will be $185,000,000, $125,000,
$2,083,333, $16,443,500, $34,248,973 and $3,774,503, respectively.
(2) The Class A-R Certificate represents the residual interest in each of the
REMIC Pools.
(3) The Class A-P Certificates consist of two components. The original
principal amount of Class A-P Component One is $4,389,470.00 and the
original principal amount of Class A-P Component Two is $49,835.00.
(4) Each of these Classes of Certificates is an Exchangeable Initial
Certificate which will not be issued under this Agreement and instead will
be issued pursuant to the Trust Agreement.
(5) Each of these Certificates is an Exchangeable Certificate which will not
be issued under this Agreement and instead will be issued pursuant to the
Trust Agreement. The Original Certificate Principal Balance or notional
amount, as applicable, of each such Class of Certificates will be zero.
The Certificates shall be signed by manual or facsimile signature on
behalf of the Depositor by an officer of the Depositor. Certificates bearing the
manual or facsimile signatures of individuals who were at the time of signature
officers of the Depositor shall bind the Depositor, notwithstanding that such
individuals or any of them have ceased to be an officer prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a manual authentication by an officer of the Trustee (or if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent) and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
Section 4.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall cause to be kept a certificate register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) Upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee, or if a Paying Agent has been appointed
hereunder pursuant to Section 4.05, the Paying Agent maintained for such
purpose, the Depositor shall execute and the Trustee or if an Authenticating
Agent is appointed under Section 4.06, the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication by the Authenticating Agent.
(c) No transfer of a Class B-3, Class B-4 or Class B-5 Certificate shall
be made unless such transfer is made pursuant to an effective registration
statement or otherwise in accordance with the requirements under the Securities
Act. If such a transfer is to be made in reliance upon an exemption from said
Act, (i) the Depositor may require (except with respect to the initial transfer
of a Class B-3, Class B-4 or Class B-5 Certificate from X.X. Xxxxxx Securities
Inc. and except if the transferee executes a certificate substantially in the
form of Exhibit H hereto) a written opinion of independent counsel acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from said Act and laws or is being
made pursuant to said Act and laws, which opinion of counsel shall not be an
expense of the Trust Fund, the Trustee, the Depositor or the Servicer, and (ii)
the
69
Depositor shall require the transferee to execute a certification substantially
in the form of Exhibit H or Exhibit I.
(d) (i) No transfer of an ERISA Restricted Certificate or a Class A-R
Certificate shall be made unless the prospective transferee provides the
Depositor and the Trustee with (I) a representation as set forth in Exhibit K
for Class A-R Certificates or in Exhibit M for ERISA Restricted Certificates to
the effect that such transferee is not an employee benefit plan subject to Title
I of ERISA, a plan subject to Section 4975 of the Code or a plan or arrangement
subject to any provisions under any federal, state, local, non-U.S. or other
laws or regulations that are substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") (collectively, a "Plan"), and is not
directly or indirectly acquiring the Certificate for, on behalf of or with any
assets of any such Plan, or (II) solely in the case of an ERISA Restricted
Certificate, (A) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, a representation as set forth in Exhibit M that such transferee is
an insurance company that is acquiring the ERISA-Restricted Certificate with
assets contained in an "insurance company general account," as defined in
Section V(E) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under Sections
I and III of PTCE 95-60, or (B) solely in the case of a Definitive Certificate,
an Opinion of Counsel reasonably satisfactory to the Depositor and the Trustee
to the effect that the acquisition and holding of such Certificate will not
constitute or result in a nonexempt prohibited transaction under ERISA or the
Code, or a violation of Similar Law, and will not subject the Depositor, the
Servicer or the Trustee to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer or the Trustee.
(ii) Except in the case of a Definitive Certificate, the
representations set forth in paragraph (i) of this Subsection 4.02(d), other
than subparagraph (i)(II)(B), shall be deemed to have been made to the Depositor
and the Trustee by the transferee's acceptance of an ERISA Restricted
Certificate or a Class A-R Certificate (or the acceptance by a Certificate Owner
of the beneficial interest in any Class of ERISA Restricted Certificates or a
Class A-R Certificate). Notwithstanding any other provision herein to the
contrary, any purported transfer of an ERISA Restricted Certificate or a Class
A-R Certificate to or on behalf of a Plan without the delivery to the Depositor
of a representation or an Opinion of Counsel reasonably satisfactory to the
Depositor and the Trustee as described above shall be void and of no effect.
None of the Depositor, the Servicer or the Trustee shall be under any liability
to any Person for any registration or transfer of any ERISA Restricted
Certificate or Class A-R Certificate that is in fact not permitted by this
Section 4.02(d) nor shall the Paying Agent be under any liability 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 in accordance with the foregoing
requirements. The Depositor, Servicer, Paying Agent and/or Trustee shall be
entitled, but not obligated, to recover from any Holder of any ERISA Restricted
Certificate or Class A-R Certificate that was in fact a Plan and that held such
Certificate in violation of this Section 4.02(d) all payments made on such ERISA
Restricted Certificate or Class A-R Certificate at and after the time it
commenced such holding. Any such payments so recovered shall be paid and
delivered to the last preceding Holder of such Certificate that is not a Plan.
(e) At the option of a Certificateholder, a Certificate may be exchanged
for another Certificate or Certificates of authorized denominations of a like
Class, upon surrender of the Certificate to be exchanged at any office or agency
of the Trustee, or if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, maintained for such purpose. Whenever the Certificate is so
surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver, the Certificate which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Authenticating Agent) be
70
duly endorsed by, or be accompanied by a written instrument of transfer in the
form satisfactory to the Authenticating Agent duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to the Holder for any transfer or
exchange of a Certificate, but the Servicer may require payment by the
Certificateholders of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of such
Certificate.
(g) All Certificates surrendered for transfer or exchange shall be
destroyed by the Trustee or if a Paying Agent has been appointed under Section
4.05, the Paying Agent, in accordance with the Trustee's or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent's, standard procedures.
(h) [Reserved].
(i) A Disqualified Organization is prohibited from acquiring beneficial
ownership of a Class A-R Certificate. Notwithstanding anything to the contrary
contained herein, (i) unless and until the Servicer and the Trustee shall have
received an Opinion of Counsel, satisfactory to it in form and substance, to the
effect that the absence of the conditions contained in this Section 4.02(i)
would not result in the imposition of federal tax upon any REMIC created
hereunder or cause any REMIC created hereunder to fail to qualify as a REMIC, no
transfer, sale or other disposition of the Class A-R Certificate (including for
purposes of this section any beneficial interest therein) may be made without
the express written consent of the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee, which consent is to be granted by the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
only upon compliance with the requirements of this Section and (ii) no transfer,
sale or other disposition of the Class A-R Certificate (or any beneficial
interest therein) may be made to a Person who is not a U.S. Person unless such
Person furnishes the transferor, the Certificate Registrar and the Trustee, with
a duly completed and effective Form W-8ECI (or any successor thereto) or an
Opinion of Counsel to the effect that such transfer is in accordance with the
requirements of the Code and that the transfer will not be disregarded for
federal income tax purposes. As a condition to granting its consent to a
transfer of a Class A-R Certificate, the Certificate Registrar or, if no
Certificate Registrar is appointed, the Trustee, shall require the proposed
transferee of such Certificate (including, in the case of the initial issuance
of the Class A-R Certificate, the initial Holder thereof) to execute a letter
and affidavit substantially in the form attached hereto as Exhibit K and shall
require the proposed transferor (other than in the case of the transfer to the
initial Holder) of such Certificate to execute a letter substantially in the
form attached hereto as Exhibit K-1. In the absence of a contrary instruction
from the transferor of such Certificate, declaration (11) in the affidavit in
Exhibit K may be left blank. If the transferor requests by written notice to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
prior to the date of the proposed transfer that one of the two other forms of
declaration (11) of such affidavit be used, then the Certificate Registrar or,
if no Certificate Registrar is appointed, the Trustee, shall require that such
form of declaration (11) be included in such affidavit.
As a condition to the granting of the consent referred to in this Section
4.02(i), prior to the transfer, sale, pledge, hypothecation or other disposition
of the Class A-R Certificate or any interest therein, the Certificate Registrar
or, if no Certificate Registrar is appointed, the Trustee shall require that (1)
the proposed transferee deliver to the Trustee or Certificate Registrar, as
applicable, its taxpayer identification number and state, under penalties of
perjury that such number is the social security or employer identification
number, as the case may be, of the transferee or provide an affidavit under
penalties of perjury stating that as of the date of such transfer such
transferee is not and has no intention of becoming a Disqualified Organization;
(2) the proposed transferee deliver to the Trustee or Certificate Registrar, as
applicable, an affidavit stating (i) that such transferee is not acquiring such
Class A-R
71
Certificate as an agent, broker, nominee, or middleman for a Disqualified
Organization, (ii) if the Class A-R Certificate is a "non-economic residual
interest" within the meaning of Treas. Reg. Section 1.860E-1(c)(2), (X) that no
purpose of the acquisition of the Class A-R Certificate is to avoid or impede
the assessment or collection of tax, (Y) that such transferee has historically
paid its debts as they came due and will continue to pay its debts as they come
due, and (Z) that such transferee represents that it understands that, as the
holder of the non-economic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and that the
transferee intends to pay taxes associated with holding the residual interest,
and (iii) unless the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee consents to the transfer of the Class A-R Certificate to
a Person who is not a U.S. Person and who has furnished either a duly completed
and effective Form W-8ECI (or any successor thereto) or an Opinion of Counsel to
the effect that the transfer will not be disregarded for federal income tax
purposes, that it is a U.S. Person; (3) if so requested by the transferor in
written notice provided to the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee, prior to the date of the proposed transfer,
the proposed transferee deliver to the Trustee or Certificate Registrar, as
applicable, an affidavit that includes a declaration made in the form of
declaration (11) in the affidavit set forth in Exhibit K requested by the
transferor; and (4) the transferor deliver to the Certificate Registrar or, if
no Certificate Registrar is appointed, the Trustee a written certification that
as of the date of such transfer it has no knowledge and no reason to know that
the affirmations described in clauses (1), (2) and (3) were false. The
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
shall not grant the consent referred to in this Section 4.02(i) if it has actual
knowledge that any statement made in the affidavit issued pursuant to the
preceding sentence is not true. Notwithstanding any purported transfer, sale or
other disposition of the Class A-R Certificate to a Disqualified Organization or
in violation of the provisions of this Section 4.02(i), such transfer, sale or
other disposition shall be deemed to be of no legal force or effect whatsoever
and such Disqualified Organization shall not be deemed to be a Class A-R
Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Class A-R Certificate. If any purported
transfer shall be in violation of the provisions of this Section 4.02(i) then
the prior Holder of the Class A-R Certificate shall, upon discovery that the
transfer of such Class A-R Certificate was not in fact permitted by this Section
4.02(i), be restored to all rights and obligations as a Holder thereof
retroactive to the date of the purported transfer of such Class A-R Certificate.
The Trustee, the Servicer and the Certificate Registrar shall be under no
liability to any Person for any registration or transfer of a Class A-R
Certificate that is not permitted by this Section 4.02(i) or for making payments
due on such Class A-R Certificate to the purported Holder thereof or taking any
other action with respect to such purported Holder under the provisions of this
Agreement so long as the transfer was not registered under the written
certification of the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee as described in this Section 4.02(i). The prior Holder
shall be entitled to recover from any purported Holder of a Class A-R
Certificate that was in fact not a permitted purported transferee under this
Section 4.02(i) at the time it became a purported Holder all payments made to
such purported Holder on such Class A-R Certificate; provided that the Servicer
shall not be responsible for such recovery. Each Class A-R Certificateholder, by
the acceptance of the Class A-R Certificate, shall be deemed for all purposes to
have consented to the provisions of this Section 4.02(i) and to any amendment to
this Agreement deemed necessary by counsel of the Trustee or the Servicer to
ensure that the Class A-R Certificate is not transferred to a Disqualified
Organization and that any transfer of such Class A-R Certificate will not cause
the imposition of a tax upon any REMIC created hereunder or cause any REMIC
created hereunder to fail to qualify as a REMIC. The restrictions on transfer of
the Class A-R Certificate will cease to apply and be void upon receipt by the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
of an Opinion of Counsel to the effect that such restrictions on transfer are no
longer necessary to avoid the risk of material federal taxation to any REMIC
created hereunder or prevent any REMIC created hereunder from qualifying as a
REMIC.
72
(j) The Servicer shall make available upon written request to each Holder
and each proposed transferee of a Class B-4, Class B-5 or Class B-6 Certificate
such information as may be required to permit the proposed transfer to be
effected pursuant to Rule 144A under the Securities Act.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, or the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, such security or indemnity
as may be required by it to save it harmless, then, in the absence of notice to
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, that such Certificate has been acquired by a bona fide purchaser,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Class. Upon the issuance of any new Certificate under this Section,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, may require of the Certificateholder 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 connected therewith. Any replacement
Certificate of any Class issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest in
the distributions to which the Certificateholders of such Class are entitled, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time, and such mutilated, destroyed, lost or
stolen Certificate shall be of no force or effect under this Agreement, to the
extent permitted by law.
Section 4.04 Persons Deemed Owners. Prior to due presentation of a
Certificate of any Class for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered on the Record Date as the owner of such
Certificate and the Percentage Interest in the distributions to which the
Certificateholders of such Class are entitled on the relevant date as the Holder
of such Certificate and the Percentage Interest represented by such Certificate
for the purpose of receiving remittances pursuant to Section 6.01 and for all
other purposes whatsoever, and neither the Depositor, the Servicer, the Paying
Agent nor the Trustee shall be affected by notice to the contrary.
Section 4.05 Appointment of Paying Agent and Certificate Registrar;
Certificate Account. The Trustee shall appoint a Paying Agent and a Certificate
Registrar (the "Certificate Registrar") hereunder, provided such Paying Agent
and such Certificate Registrar shall not be the Depositor, any Seller, or an
Affiliate of the Depositor or any Seller. No later than two Business Days prior
to each Distribution Date, the Servicer shall deposit or cause to be deposited
with the Paying Agent from funds on deposit in the Collection Account a sum up
to the Available Distribution Amount, such sum to be held in trust for the
benefit of Certificateholders in a segregated account (the "Certificate
Account") which shall be an Eligible Account in the name of "The Bank of New
York Trust Company, N.A., as Trustee, in trust for and for the benefit of the
Certificateholders of Multi-Class Mortgage Pass-Through Certificates, Chase
Mortgage Finance Corporation, Series 2007-S3 - Certificate Account". The Paying
Agent shall establish such Certificate Account with a commercial bank, a savings
bank or a savings and loan association. The Paying Agent may invest moneys in
the Certificate Account in Eligible Investments, which shall mature not later
than a date sufficient to make payment on the Distribution Date next following
the date of such investment and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Paying Agent as additional compensation and shall be subject to
its withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments (to the extent not offset by income from other
such investments) shall be deposited in the Certificate Account by the Paying
Agent out of its own funds
73
immediately as realized. The Servicer shall cause the Paying Agent to perform
each of the obligations of the Paying Agent set forth herein and shall be liable
to the Trustee and the Certificateholders for failure of the Paying Agent to
perform such obligations. So long as the Paying Agent is a party other than the
Trustee, the Trustee shall have no liability in connection with the performance
or failure of performance of the Paying Agent. The Trustee designates The Bank
of New York Trust Company, N.A. as the initial Paying Agent and initial
Certificate Registrar. Only the Trustee may remove the Paying Agent and
Certificate Registrar and may do so at will, provided that the Trustee gives 20
days' prior written notice of such removal to the Paying Agent and Certificate
Registrar and the Rating Agencies.
The Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders.
Section 4.06 Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents (each, an
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. So long as the Authenticating Agent is a party
other than the Trustee, the Trustee shall have no liability in connection with
the performance or failure of performance of the Authenticating Agent. The
Trustee hereby appoints the Paying Agent as the initial Authenticating Agent.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 4.06, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 4.06. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Each of the Authenticating Agent,
Certificate Registrar and Paying Agent shall be afforded the same rights,
protections and indemnities as the Trustee as set forth under Article VIII
hereunder.
[END OF ARTICLE IV]
74
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 Servicer to Service Mortgage Loans. The Servicer shall
service and administer the Mortgage Loans and shall have full power and
authority, acting alone or through Sub-Servicers as provided in Section 5.02, to
do any and all things which it may deem necessary or desirable in connection
with such servicing and administration, all in accordance with Accepted
Servicing Practices. Without limiting the generality of the foregoing, the
Servicer in its own name or in the name of a Sub-Servicer shall, pursuant to a
power of attorney granted hereby by the Trustee for such purposes, when the
Servicer or the Sub-Servicer, as the case may be, believes it appropriate in its
best judgment, to execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, 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 with respect to
the related Mortgaged Properties; provided, however, that subject to the
provisions of this paragraph, the Servicer may allow a modification with respect
to a Mortgage Loan if the Servicer would take such action in the ordinary course
of its business if it were the owner of the Mortgage Loan. The Servicer will
indemnify the Trustee for any misuse of such power of attorney provided
hereunder. The Servicer may agree to a modification of any Mortgage Loan (the
"Relevant Mortgage Loan") upon the request of the related Mortgagor, provided
that (i) the modification is in lieu of a refinancing and the Mortgage Rate on
the Relevant Mortgage Loan, as modified, is approximately a prevailing market
rate of newly-originated mortgage loans having similar terms, (ii) the aggregate
of the adjusted bases of all Modified Mortgage Loans (including the Relevant
Mortgage Loans) plus the aggregate adjusted bases of any assets that are not
qualified mortgages or permitted investments under Section 860G(a) of the Code
that are assets of the Trust Fund established hereunder at all times on any day
is less than one percent of the aggregate of the adjusted bases of all assets of
the Trust Fund (including such Modified Mortgage Loans) on such day, and (iii)
the Servicer purchases the Relevant Mortgage Loan from the Trust Fund as
described below. Effective immediately after such modification, and, in any
event, on the same Business Day on which the modification occurs, all right,
title and interest of the Trustee in and to the Modified Mortgage Loan shall
automatically be deemed transferred and assigned to the Servicer and all
benefits and burdens of ownership thereof, including without limitation the
right to accrued interest thereon from and including the date of modification
and the risk of default thereon, shall pass to the Servicer. To confirm such
transfer and assignment, the Servicer, as servicer hereunder, as soon as
practicable shall execute an instrument of assignment of the Modified Mortgage
Loan without recourse in customary form to the Servicer in its individual
capacity. The Servicer shall deposit the Purchase Price for any Modified
Mortgage Loan in the Collection Account pursuant to Section 5.08. Upon receipt
by the Trustee of written notification of any such deposit signed by a Servicing
Officer, the Trustee shall release to the Servicer the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary more fully to vest in the Servicer
any Modified Mortgage Loan previously transferred and assigned pursuant thereto.
Notwithstanding anything herein to the contrary, the Servicer shall not make or
permit any modification of a Mortgage Loan that would cause any REMIC Pool to
fail to qualify as a REMIC for federal income tax purposes or that would result
in the imposition of any material tax under Section 860F(a) or Section 860G(d)
of the Code.
The Servicer shall furnish to the Trustee for execution and redelivery to
the Servicer or, at the request of the Servicer, a Sub-Servicer, such documents
necessary or appropriate to enable the Servicer to service and administer the
Mortgage Loans and the Trustee shall not be responsible for the Servicer's
application thereof. The Servicer agrees to remain eligible as either a FNMA or
FHLMC seller/servicer, or both, for so long as it is Servicer.
75
All Servicing Advances made by the Servicer in effecting the timely
payment of taxes, insurance and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loan so permit, and such
Servicing Advances shall be recoverable by the Servicer to the extent permitted
by Sections 5.09 and 5.23.
Section 5.02 Sub-Servicing Agreements Between Servicer and Sub-Servicers;
Enforcement of Sub-Servicer's Obligations.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of all or part of the
Mortgage Loans. References in this Agreement to actions taken or to be taken by
the Servicer in servicing the Mortgage Loans serviced by it include actions
taken or to be taken by a Sub-Servicer on behalf of the Servicer. Each
Sub-Servicing Agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Servicer and the Sub-Servicer have
agreed. The Servicer hereby agrees to notify the Trustee in writing promptly
upon the appointment of any Sub-Servicer. For purposes of this Agreement, the
receipt by the Sub-Servicer of any amount with respect to a Mortgage Loan (other
than amounts representing servicing compensation or reimbursement for an
advance) shall be treated as the receipt by the Servicer of such amount. The
Sub-Servicer shall deposit all such funds in an Eligible Account.
(b) As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements as appropriate, and the pursuit of other
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense but shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement only 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.
(c) The Servicer shall not permit a Sub-Servicer to perform any servicing
responsibilities hereunder with respect to the Mortgage Loans unless that
Sub-Servicer first agrees in writing with the Servicer to deliver an Assessment
of Compliance and an Accountant's Attestation in such manner and at such times
that permits the Servicer to comply with Section 5.25 of this Agreement.
Section 5.03 Successor Sub-Servicers. The Servicer shall be entitled to
terminate any Sub-Servicing Agreement that may exist in accordance with the
terms and conditions of such Sub-Servicing Agreement and without any limitation
by virtue of this Agreement.
Section 5.04 Liability of the Servicer. Notwithstanding any Sub-Servicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a Sub-Servicer or reference to actions
taken through a Sub-Servicer or otherwise, the Servicer shall remain obligated
and liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Mortgage Loans.
The Servicer shall be entitled to enter into any agreement with a Sub-Servicer
for indemnification of the Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
76
Section 5.05 No Contractual Relationship Between Sub-Servicer and Trustee
or Certificateholders. Any Sub-Servicing Agreement that may be entered into and
any other transactions or services relating to the Mortgage Loans involving a
Sub-Servicer in its capacity as such and not as an originator shall be deemed to
be between the Sub-Servicer and the Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer.
Section 5.06 Termination of Sub-Servicing Agreement. If the Servicer shall
for any reason no longer be the Servicer hereunder (including by reason of any
Event of Default), the Servicer shall thereupon terminate each Sub-Servicing
Agreement that may have been entered into, and the Trustee, its designee or the
successor servicer and the Trustee shall not be deemed to have assumed any of
the Servicer's interest therein or to have replaced the Servicer as a party to
any such Sub-Servicing Agreement.
Section 5.07 Collection of Mortgage Loan Payments. Continuously from the
date hereof until the principal and interest on all Mortgage Loans are paid in
full, the Servicer will proceed diligently to collect all payments due under
each of the Mortgage Loans when the same shall become due and payable; provided,
however, that the Servicer may elect, to the extent consistent with Accepted
Servicing Practices, to waive any late payment charge and shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows with respect to conventional mortgage loans held in its
own portfolio. Any such arrangements shall not diminish or otherwise affect the
Servicer's obligation to make Advances pursuant to Section 6.03.
Section 5.08 Establishment of Collection Account; Deposit in Collection
Account. With respect to all of the Mortgage Loans, the Servicer shall segregate
and hold all funds collected and received pursuant to a Mortgage Loan separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Collection Accounts for the benefit of the
Certificateholders (collectively, the "Collection Account") which are Eligible
Accounts, in the form of a trust account, in the name of "The Bank of New York
Trust Company, N.A., as Trustee, in trust for and for the benefit of the
Certificateholders of Multi-Class Mortgage Pass-Through Certificates, Chase Home
Finance LLC as subservicer for JPMorgan Chase Bank, N.A. as Servicer, Chase
Mortgage Finance Corporation, Series 2007-S3 - Collection Account." Such
Collection Account shall be established with a commercial bank, a savings bank
or a savings and loan association. The Servicer may invest, or cause the
institution maintaining the Collection Account to invest, moneys in the
Collection Account in Eligible Investments, which shall mature not later than
two Business Days preceding the Distribution Date next following the date of
such investment and shall not be sold or disposed of prior to its maturity. All
income and gain realized from any such investment shall be for the benefit of
the Servicer as additional compensation and shall be subject to its withdrawal
or order from time to time. The amount of any losses incurred in respect of any
such investments (to the extent not offset by income from other such
investments) shall be deposited in the Collection Account by the Servicer out of
its own funds immediately as realized; provided, however, that if the Trustee
becomes the Servicer, the Trustee shall not be required to deposit the amount of
any loss incurred prior to it becoming the Servicer.
The Servicer shall deposit or cause to be deposited in the Collection
Account on a daily basis (and not later than the second Business Day following
receipt), and retain therein:
(i) All payments which were received after the Cut-off Date on
account of principal of the Mortgage Loans (other than the principal
portion of Monthly Payments due on or before the Cut-off Date), and all
Principal Prepayments collected on or after the Cut-off Date;
77
(ii) All payments which were received after the Cut-off Date on
account of interest on the Mortgage Loans (net of the Servicing Fee)(other
than the interest portion of Monthly Payments due on or before the Cut-off
Date);
(iii) Any Subsequent Recovery or Net Liquidation Proceeds;
(iv) All Insurance Proceeds received by the Servicer under any
title, hazard or other insurance policy, including amounts required to be
deposited pursuant to Sections 5.16 and 5.20, other than proceeds to be
held in the Escrow Account or applied to the restoration or repair of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan) or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures or otherwise applied or held as required by
applicable law;
(v) All awards or settlements in respect of condemnation proceedings
affecting any Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), which are not released to the Mortgagor in
accordance with the Servicer's normal servicing procedures;
(vi) All Repurchase Proceeds;
(vii) All Advances made by the Servicer pursuant to Section 6.03;
(viii) All amounts representing revenues under the insurance
provided pursuant to Section 5.19 to the extent of any losses borne by any
Certificateholder;
(ix) All revenues from any Mortgaged Property (or Underlying
Mortgaged Property in the case of a Co-op Loan) acquired by the Servicer
by foreclosure or deed in lieu of foreclosure net of any Servicing
Advances with respect to such Mortgaged Property (or Underlying Mortgaged
Property in the case of a Co-op Loan); and
(x) Any other amounts required to be deposited therein pursuant to
this Agreement.
The Servicer shall maintain accounting records on a Mortgage Loan by
Mortgage Loan basis with respect to the Collection Account. The Servicer shall
give notice to the Trustee, any Paying Agent, the Depositor and each Rating
Agency of any change in the location of the Collection Account, prior to the use
thereof. Notwithstanding anything to the contrary herein, no Monthly Payment or
any portion thereof shall be permitted to remain in the Collection Account for
more than 12 months. Any Monthly Payment or any portion thereof that has
remained in the Collection Account for 12 months shall be deemed a Principal
Prepayment and distributed to Certificateholders pursuant to the provisions of
this Agreement on the Distribution Date immediately following the end of such 12
month period.
Section 5.09 Permitted Withdrawals from the Collection Account. The
Servicer may, from time to time, withdraw funds from the Collection Account for
the following purposes:
(a) to reimburse itself for Advances made pursuant to Section 6.03
(including amounts to reimburse the related Sub-Servicer for advances made
pursuant to the applicable Sub-Servicing Agreement), the Servicer's and the
related Sub-Servicer's right to receive reimbursement pursuant to this subclause
(i) being limited to amounts received on particular Mortgage Loans which
represent Late Collections (net of the Servicing Fees) with respect to those
particular Mortgage Loans;
(b) to pay itself the Servicing Fee;
78
(c) to reimburse itself for unreimbursed Servicing Advances, or to pay the
related Sub-Servicer any unreimbursed Servicing Advances, the Servicer's right
to receive reimbursement or make payments to the Sub-Servicer pursuant to this
subclause (c) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Insurance Proceeds, Subsequent Recoveries and condemnation
awards;
(d) to reimburse itself (or the related Sub-Servicer) or the Depositor for
expenses incurred by and recoverable by or reimbursable to it pursuant to
Section 5.01 or 5.16;
(e) to reimburse itself (or the related Sub-Servicer) for any
Nonrecoverable Advances;
(f) to pay to itself (or the related Sub-Servicer) income earned on the
investment of funds deposited in the Collection Account;
(g) to make deposits into the Certificate Account in the amounts and in
the manner provided for herein;
(h) to make payments to itself or others pursuant to any provision of this
Agreement, and to clear and terminate the Collection Account upon the
termination of this Agreement; and
(i) to withdraw amounts deposited in error.
Section 5.10 Establishment of Escrow Account; Deposits in Escrow Account.
With respect to those Mortgage Loans on which the Servicer or any Sub-Servicer
collects Escrow Payments, if any, the Servicer shall, and shall cause any
Sub-Servicer to, segregate and hold all funds collected and received pursuant to
each such Mortgage Loan which constitute Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of trust accounts. Such Escrow Accounts shall
be established with a commercial bank, a mutual savings bank or a savings and
loan association the deposits of which are insured by the FDIC in a manner which
shall provide maximum available insurance thereunder, and which may be drawn on
by the Servicer. The Servicer shall, if requested by the Trustee, give notice to
the Trustee of the location of any Escrow Account. Nothing in this paragraph
shall be deemed to require the Servicer to collect Escrow Payments in the
absence of a provision in the related Mortgage requiring such collection.
The Servicer shall deposit, or cause to be deposited, in any Escrow
Account or Accounts on a daily basis, and retain therein, (i) all Escrow
Payments collected on account of any Mortgage Loans serviced by the Servicer,
for the purpose of effecting timely payment of any such items as required under
the terms of this Agreement and (ii) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair of
any Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan). The Servicer shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
are set forth in Section 5.11. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the related Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the related Mortgagor notwithstanding that the
Escrow Account is non-interest-bearing or that interest paid thereon is
insufficient for such purposes.
Section 5.11 Permitted Withdrawals from Escrow Account. Withdrawals from
any Escrow Account or Accounts may be made by a Servicer only (i) to effect
timely payments of ground rents, taxes, assessments, water rates, Standard
Hazard Policy premiums, or other items constituting Escrow Payments for the
related Mortgage, (ii) to reimburse the Servicer for any Servicing Advance made
by the Servicer,
79
with respect to a related Mortgage Loan but only from amounts received on the
related Mortgage Loan which represent late payments or collections of Escrow
Payments thereunder, (iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage Loan or
under applicable law, (iv) for application to restoration or repair of the
property subject to the related Mortgage, (v) to pay to the Servicer, or to the
Mortgagor to the extent required by law, any interest paid on the funds
deposited in the Escrow Account, (vi) to clear and terminate the Escrow Account
on the termination of this Agreement or (vii) to withdraw amounts deposited in
error.
Section 5.12 Payment of Taxes, Insurance and Other Charges. With respect
to each Mortgage Loan, the Servicer shall maintain, or cause to be maintained,
accurate records reflecting any delinquencies or nonpayments with regard to
taxes, assessments and Standard Hazard Policy premiums. The Servicer assumes
full responsibility for ensuring the payment of all such bills and shall effect
payments of all such bills irrespective of each 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.
Section 5.13 Transfer of Accounts. The Servicer may transfer the
Collection Account or Escrow Account to an Eligible Account maintained with a
different depository institution from time to time and shall notify the Trustee
and the Paying Agent of any such transfer.
Section 5.14 [Reserved].
Section 5.15 Maintenance of the Primary Insurance Policies. The Servicer
shall not take, or permit any related Sub-Servicer to take, any action which
would result in non-coverage under any applicable Primary Insurance Policy of
any loss which, but for the actions of the Servicer or Sub-Servicer, would have
been covered thereunder. Except as otherwise required by applicable law, to the
extent coverage is available and until the Loan-to-Value Ratio of the related
Mortgage Loan is reduced to 80%, the Servicer shall keep or cause to be kept in
full force and effect each such Primary Insurance Policy in an amount equal to
the amount by which the unpaid principal balance of the related Mortgage Loan
exceeds 75% of the value (as described in the definition of Loan-to-Value Ratio)
of the related Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op Loan). The Servicer shall not cancel or refuse to renew any such
Primary Insurance Policy or consent to any related Sub-Servicer canceling or
refusing to renew any such Primary Insurance Policy applicable to a Mortgage
Loan subserviced by it, that is in effect at the date of the initial issuance of
the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non-renewed policy is
maintained with an insurer whose claims-paying ability is rated at least as high
as the original insurer or is acceptable to each Rating Agency as confirmed in
writing by each such Rating Agency, unless otherwise required by law.
Section 5.16 Maintenance of Standard Hazard Policies.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
(other than a Co-op Loan) a Standard Hazard Policy with extended coverage as is
prudent in the area where the Mortgaged Property is located in an amount which
is equal to the greater of (i) the lesser of (A) 100% of the maximum insurable
value of the improvements securing such Mortgage Loan or (B) the principal
balance owing on such Mortgage Loan, or (ii) such amount required to prevent the
Mortgagor or mortgagee from becoming a co-insurer. If the Mortgaged Property is
in an area identified at the time of origination in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding Principal Balance of the Mortgage Loan, (ii) the full
insurable value or (iii) the maximum
80
amount of insurance which is available under the Flood Disaster Protection Act
of 1973, as amended. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, of any Mortgage Loan, fire and
hazard insurance with extended coverage in an amount which is not less than the
lesser of (i) the outstanding Principal Balance of the Mortgage Loan or (ii) the
maximum insurable value of the improvements which are a part of such property,
liability insurance, and, to the extent available, flood insurance in an amount
as provided above. Any amounts collected by the 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 property acquired in liquidation of the
Mortgage Loan, or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures) shall be deposited, subject to applicable law, in
the Collection Account. It is understood and agreed that no earthquake or other
additional insurance need be required by the Servicer of any Mortgagor or
maintained on property acquired in respect of a Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such Standard Hazard
Policies and other policies shall be endorsed with standard mortgagee clauses
with loss payable to the Servicer or its designee. Any such Standard Hazard
Policies or other policies may be in the form of blanket policies; provided,
however, that in the event of any claim arising in connection with a hazard loss
the Servicer shall be obligated, in the case of blanket insurance policies, to
deposit in the Collection Account any amount not payable under such blanket
policy because of a deductible clause in such policy and not otherwise payable
under an individual policy. The Servicer shall not interfere with the
Mortgagor's freedom of choice in selecting either his insurance carrier or
agent; provided, however, that the Servicer shall not accept any such insurance
policies from insurance companies unless such companies are acceptable insurers
in the discretion of the Servicer.
(b) Any cost incurred by the Servicer in maintaining any of the foregoing
insurance shall not, for the purpose of calculating monthly distributions to
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs (other
than the costs of maintaining a blanket hazard insurance policy not attributable
to a specific Mortgaged Property) shall be recoverable by the Servicer from the
Mortgagor or out of Insurance Proceeds, Subsequent Recoveries or Liquidation
Proceeds or to the extent permitted by Section 5.09.
Section 5.17 [Reserved].
Section 5.18 [Reserved].
Section 5.19 Fidelity Bond and Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting on behalf of the
Servicer in any capacity with regard to the Mortgage Loans to handle funds,
money, documents and papers relating to the Mortgage Loans. Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons and shall be maintained at a level
acceptable to FNMA. No provision of this Section 5.19 requiring such fidelity
bond and errors and omissions insurance shall diminish or relieve the Servicer
from its duties and obligations as set forth in this Agreement. Upon request of
the Trustee, the Servicer shall cause to be delivered to the Trustee a
certification evidencing coverage under such fidelity bond and insurance policy.
Promptly upon receipt of any notice from the surety or the insurer that such
fidelity bond or insurance policy has been terminated or modified in a
materially adverse manner, the Servicer shall notify the Trustee and each Rating
Agency of any such termination or modification.
Section 5.20 Collections under Insurance Policies; Enforcement of
Due-On-Sale Clauses; Assumption Agreements.
81
(a) In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to present, on behalf of itself, the Trustee
and the Certificateholders, claims to the insurer under any Standard Hazard
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any insurance policies. Pursuant to Section
5.08, the Servicer shall deposit Insurance Proceeds in the Collection Account.
(b) When any Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) is conveyed by the Mortgagor, the Servicer shall
enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent permitted by such Mortgage Note or Mortgage, applicable law and
governmental regulations. Subject to the foregoing, the Servicer is authorized
to take or enter into an assumption or substitution agreement from or with the
Person to whom such property has been or is about to be conveyed. In connection
with such assumption or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
and as it applies to mortgage loans owned solely by it.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) or any assumption of a Mortgage Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from
preventing, for any reason whatsoever.
(c) Subject to the Servicer's duty to enforce any due-on-sale clause to
the effect set forth in Section 5.20(b), in any case in which a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
to be conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage, the Servicer shall so notify the Trustee by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee 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. In connection
with any such assumption, modification agreement or substitution agreement, the
interest rate of the related Mortgage Note shall not be changed, the principal
amount of the Mortgage Note shall not be increased or decreased and the maturity
of the Mortgage Note shall not be extended, nor shall it be shortened by more
than one year. Any fee collected by the Servicer for entering into an assumption
or substitution of liability agreement with respect to such Mortgage Loan shall
be retained by the Servicer as additional servicing compensation.
Section 5.21 Income and Realization from Defaulted Mortgage Loans. The
Servicer, on behalf of the Trustee, shall foreclose upon or otherwise comparably
convert the ownership of Mortgaged Properties (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) 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 5.07, shall
manage, conserve, protect and operate such Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) for the purposes of
their prompt disposition and sale, and shall dispose of such Mortgaged
Properties (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
on such terms and conditions as it deems in the best interests of the
Certificateholders. The Servicer shall sell such property prior to the close of
the third calendar year beginning after the year in which such foreclosure or
conversion occurs or such longer period as would not prevent such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
from constituting "foreclosure property" within the meaning of Section
860G(a)(8) of the Code. The Servicer will ensure that no Mortgaged Property
shall be held, rented or otherwise used in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
(ii) subject any REMIC Pool to the imposition of any federal income taxes on the
income earned on such Mortgaged Property,
82
including any taxes imposed by reason of Section 860F or 860G(c) of the Code. In
connection with such activities, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable, as shall be normal and usual
in its general mortgage servicing activities, including its management of
foreclosed properties for a temporary period as contemplated herein. The
foregoing is subject to the provisions of Section 5.28 of this Agreement and to
the proviso that the Servicer shall not be required to expend its own funds in
connection with any management, foreclosure or towards the restoration of any
property unless it shall determine that such management, restoration or
foreclosure will increase any Subsequent Recoveries or Liquidation Proceeds of
the Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses (respecting which it shall have priority for purposes of withdrawals
from the Collection Account pursuant to Section 5.09). The Servicer shall be
permitted to earn income with respect to any Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan), provided such income
does not constitute "net income from foreclosure property" within the meaning of
Section 860G(c) of the Code. The income earned from the management of such
Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a
Co-op Loan), net of reimbursement to the Servicer for expenses (including any
taxes) incurred in connection with such management, shall be applied to the
payment of principal of and interest on the related defaulted Mortgage Loans
(with interest accruing and principal amortizing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Collection Account. To
the extent the income received is in excess of the amount attributable to
amortizing principal and accrued interest at the Net Mortgage Rate on the
related Mortgage Loan, such excess shall be deposited in the Collection Account.
The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, as amended,
the Resources Conservation and Recovery Act of 1976, as amended, or other
federal, state or local environmental legislation, on a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) in determining
whether to foreclose upon or otherwise comparably convert the ownership of such
property. To the extent that the Servicer has actual knowledge of any such
substance or waste, it shall consult with the Trustee regarding the appropriate
course of action. The Servicer shall not institute foreclosure actions with
respect to a property containing substance or waste as described above if it
reasonably believes that such action would not be consistent with its servicing
standards, and in no event shall the Servicer manage, operate or take any other
action with respect thereto which the Servicer in good faith believes will
result in "clean-up" or other liability under applicable law. The net income
from the rental or sale of a REO Property shall be deposited in the Collection
Account within two (2) Business Days after receipt thereof by the Servicer.
The Servicer may enter into a special servicing agreement with an
unaffiliated holder of 100% Percentage Interest of the Class of Class B
Certificates then outstanding having the highest numerical class designation or
a holder of a class of securities representing interests in such Class B
Certificate and/or other subordinate mortgage pass-through certificates, such
agreement to be (i) substantially in the form of Exhibit J hereto or (ii)
subject to each Rating Agency's acknowledgment that the ratings of the
Certificates in effect immediately prior to the entering into of such agreement
would not be qualified, downgraded or withdrawn and the Certificates would not
be placed on credit review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions whereby such holder
may instruct the Servicer to commence or delay foreclosure proceedings with
respect to delinquent Mortgage Loans and will contain provisions for the deposit
of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Servicer acted in accordance with its normal procedures.
Section 5.22 Trustee to Cooperate; Release of Mortgage Files.
83
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Servicer of a notification that payment in full will be
made in a manner customary for such purposes, the Servicer shall immediately
notify the Custodian with a copy to the Trustee by a certification (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 5.08 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. Upon receipt of such certification and request, within five
Business Days the Custodian on behalf of the Trustee shall release the related
Mortgage File to the Servicer and the Trustee will execute and deliver to the
Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such other instruments releasing the lien of the
Mortgage as have been provided by the Servicer to the Trustee, together with the
Mortgage Note with written evidence of cancellation thereon, and the Trustee
shall have no further responsibility with respect to said Mortgage File. Upon
any such payment in full, or the receipt of such notification, the Servicer is
authorized to procure from the Trustee under the deed of trust which secured the
Mortgage Note, if any, a deed of full reconveyance covering the property
encumbered by such deed of trust, which assignment of deed of trust, except as
otherwise provided by any applicable law, shall be recorded by the Servicer in
the appropriate land records in the jurisdiction in which the assignment of deed
of trust is recorded, or, as the case may be, to procure from the Trustee an
instrument of satisfaction or, if the Mortgagor so requests, an assignment
without recourse, which deed of reconveyance, instrument of satisfaction or
assignment shall be delivered by the Servicer to the Person or Persons entitled
thereto. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Collection Account or to the
Trustee.
(b) From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, the Servicer shall deliver to the Custodian a certificate
of a Servicing Officer requesting that possession of the Mortgage File be
released to the Servicer and certifying as to the reason for such release and
that such release will not invalidate any insurance coverage provided in respect
of the Mortgage Loan under any of the insurance policies required by this
Agreement. With such certificate, the Servicer shall require that the Custodian
on behalf of the Trustee release the Mortgage File, and, within five Business
Days, the Custodian shall deliver the Mortgage File or any document therein to
the Servicer. The Servicer shall cause each Mortgage File so released to be
returned to the Custodian on behalf of the Trustee when the need therefor by the
Servicer no longer exists, unless (i) the Mortgage Loan has been liquidated and
the Net Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or (ii) the Mortgage File 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 (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) either judicially or non-judicially, and the Servicer
has delivered to the Custodian on behalf of the Trustee a certificate of a
Servicing Officer in the form of Exhibit L hereto certifying as to the name and
address of the Person to which such Mortgage File was delivered and the purpose
or purposes of such delivery.
(c) Upon written request of the Servicer, the Trustee shall execute and
deliver to the Servicer any court pleadings, requests for trustee's sale or
other documents prepared by and delivered by the Servicer to the Trustee
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) 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. Together with such documents or pleadings, the
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate any
insurance coverage under the
84
insurance policies required under this Agreement or 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. The Trustee may rely on such
certificate without further inquiry.
(d) The Servicer may provide an electronic transmission for release of
documents under this Section 5.22 in a form agreed to in advance of initial
transmission by both the Servicer and the Custodian, which form shall contain
information readable without intervention by Custodian's data processing
operations computer hardware and software staff, and arranged in a record layout
to be specified by Custodian (a "Paperless Release Request"). The Servicer
agrees to maintain and control access to electronic signature information and
assumes liability for any unauthorized use thereof, except for any unauthorized
use thereof by the Custodian and, provided that, the Servicer shall have no
liability arising from the form of transmission if the Servicer complies with
the Custodian's standards set forth in the next paragraph of this Section
5.22(d). The Servicer also agrees to maintain accurate records of electronic
transactions related to the custodial files. The Servicer hereby authorizes the
Custodian to automatically append the electronic signature of an authorized
representative to the applicable request for release of documents and agrees and
acknowledges that by appending such authorized representative's electronic
signature, the Custodian shall be entitled to rely thereon. For purposes of this
Agreement the term "electronic signature" means an electronic identifier
intended by the person using it to have the same force and effect as the use of
a manual signature.
The Servicer agrees in advance to comply with all Custodian data
encryption, security and record layout standards in connection with any
Paperless Release Request as may be amended from time to time upon notice from
Custodian to the Servicer. The Custodian reserves the right to restrict or
suspend the Servicer's access to the Custodian's computer systems for
maintenance or repairs or for any other reason in the Custodian's sole
discretion, provided however that the Custodian shall promptly provide the
Servicer with notice of such restriction or suspension. Notwithstanding the
foregoing, the Servicer is authorized to transmit and the Custodian is
authorized to accept signed facsimile copies of the requests for document
release described in this Section 5.22.
Section 5.23 Servicing and Other Compensation. The Servicer, as
compensation for its activities hereunder, shall be entitled to receive, on or
prior to each Distribution Date, the amounts provided for as the Servicing Fee
and as reimbursement for Nonrecoverable Advances, Servicing Advances and
reimbursement for Advances, all as specified by Section 5.09. The amount of
compensation or reimbursement provided for shall be accounted for on a Mortgage
Loan-by-Mortgage Loan basis.
Additional servicing compensation in the form of assumption fees,
prepayment fees and late payment charges shall be retained by the Servicer, to
the extent permitted by applicable law. The Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including the fees, expenses and indemnities of the Trustee and any
Sub-Servicer) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 5.09 and 5.21.
Section 5.24 1934 Act Reports.
(a) As set forth on Schedule X hereto, for so long as the Trust is subject
to the Exchange Act reporting requirements, no later than the end of business on
the 2nd Business Day after the occurrence of an event requiring disclosure on
Form 8-K (a "reportable event") (i) the Depositor, the Seller, the Trustee and
the Paying Agent shall notify the Servicer of any item reportable on a Form 8-K
of which each such party has knowledge (unless such item is specific to the
Servicer, in which case the Servicer will be deemed to have notice) and (ii)
shall deliver to the Servicer at least two Business Days prior to the filing
deadline for such Form 8-K, all information, data, and
85
exhibits (unless such information, data, and exhibits are specific to the
Servicer) required to be provided or filed with such Form 8-K. After preparing
the Form 8-K on behalf of the Depositor, the Servicer shall execute and promptly
file such Form 8-K.
(b) For so long as the Trust is subject to the Exchange Act, within 15
days after each Distribution Date, the Servicer shall, on behalf of the Trust
and in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System (XXXXX), a Form 10-D with (1) a
copy of the report to the Certificateholders for such Distribution Date as an
exhibit thereto and (2) any other information known to the Servicer or provided
to the Servicer to be included at its discretion in Form 10-D ("Additional Form
10-D Disclosure") as set forth in the next paragraph.
(c) For so long as the Trust is subject to the Exchange Act, as set forth
in Schedule Y hereto, within 5 calendar days after the related Distribution Date
(i) the parties hereto, as applicable, will be required to provide to the
Servicer, to the extent known to such party, any Additional Form 10-D Disclosure
(including any breaches of pool asset representations and warranties or
transaction covenants of which the party has written notice and which has not
been included on the monthly distribution report for the period), if applicable,
and (ii) the Servicer, to the extent it deems necessary, shall incorporate such
Additional Form 10-D Disclosure into the Form 10-D and shall file such Form 10-D
by the 8th calendar day after the Distribution Date.
(d) For so long as the Trust is subject to the Exchange Act, prior to the
90th calendar day after the end of the fiscal year for the trust, the Servicer
shall, on behalf of the Trust and in accordance with industry standards, prepare
and file with the Commission via XXXXX a Form 10 -K with respect to the Trust
Fund. Such Form 10-K shall include the following items: (i) an annual compliance
statement for the Servicer and each Subservicer, as described in Section 5.25 of
the Agreement, (ii)(A) the annual reports on assessment of compliance with
servicing criteria for the Paying Agent, each Servicer, Subservicer and
Subcontractor (unless the Servicer has determined that such compliance statement
is not required by Regulation AB), as described in Section 5.25 of the
Agreement, and (B) if any Reporting Servicer's report on assessment of
compliance with servicing criteria described in Section 5.25 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any report on assessment of compliance with servicing
criteria described in Section 5.25 of the Agreement 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 Paying Agent, the Servicer and each
Subservicer, as described in Section 5.26 of the Agreement, and (B) if any
registered public accounting firm attestation report described in the Section
5.26 of the Agreement identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a Xxxxxxxx-Xxxxx Certification in the form
attached hereto as Exhibit S, executed by the senior officer in charge of
securitizations of the Servicer. Any disclosure or information in addition to
(i) through (iv) above that is required to be included on Form 10-K ("Additional
Form 10-K Disclosure") shall be determined and prepared by and at the direction
of the Depositor pursuant to the following paragraph.
(e) As set forth in Schedule Z hereto, no later than March 12 of each year
that the Trust is subject to the Exchange Act reporting requirements, commencing
in 2008, (i) the parties identified on Schedule Z shall be required to provide
to the Depositor and the Servicer, to the extent known, any Additional Form 10-K
Disclosure, if applicable, and (ii) the Servicer, to the extent it deems
necessary, shall incorporate such Additional Form 10-K Disclosure into the Form
10-K and shall file such Form 10-K by the 85th calendar day after the end of the
fiscal year for the Trust.
86
(f) Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") which shall be in the form attached hereto as Exhibit S. The
Depositor will cause its senior officer in charge of securitization to execute
the Xxxxxxxx-Xxxxx Certification required pursuant to Rule 13a-14 under the
Securities Exchange Act of 1934, as amended, by March 15 of each year in which
the Trust is subject to the reporting requirements of the Exchange Act. In
connection therewith, the Paying Agent shall sign a certification (in the form
attached hereto as Exhibit O) for the benefit of the Servicer and its officers,
directors and affiliates regarding certain aspects of the Form 10-K
Certification.
(g) Following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Servicer shall, on behalf
of the Trust and in accordance with industry standards, file with the Commission
via XXXXX a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable.
(h) The Servicer shall have no responsibility to file any items with the
Commission other than those specified in this section and the Servicer shall
execute any and all form 8-Ks and 10-Ds required hereunder. The Depositor shall
execute each form 10-K.
(i) If the Commission issues additional interpretative guidance or
promulgates additional rules or regulations with respect to Regulation AB or
otherwise, or if other changes in applicable law occur, that would require the
reporting arrangements, or the allocation of responsibilities with respect
thereto, described in this Section 5.24, to be conducted differently than as
described, the Depositor, the Servicer, the Paying Agent and the Trustee shall
comply with reasonable requests made by CHF, the Servicer or the Depositor to
amend the provisions of this Section 5.24 in order to comply with such amended
reporting requirements and to deliver additional or different information as CHF
or the Depositor may determine in good faith is necessary to comply with the
provisions of Regulation AB, provided that such information is available to such
party without unreasonable effort or expense or is reimbursed by the requesting
party and within such timeframe as may be reasonably requested. Any such
supplementation or modification shall be made without the consent of the
Certificateholders, and may result in a change in the reports filed by the
Servicer on behalf of the Trust under the Exchange Act.
(j) The Depositor, the Servicer, the Trustee and the Paying Agent agree to
use their good faith efforts to cooperate in complying with the requirements of
this Sections 5.24.
Section 5.25 Annual Statement as to Compliance. Not later than (a) March
15 of each calendar year (other than the calendar year during which the Closing
Date occurs) or (b) with respect to any calendar year during which an annual
report on Form 10-K is not required to be filed pursuant to Section 5.24 on
behalf of the Trust, by April 15 of each calendar year (or if such day is not a
Business Day, the immediately succeeding Business Day), the Servicer shall
deliver to the Depositor, an Officers' Certificate in the form attached hereto
as Exhibit T stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of the
performance of the Servicer under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement in all material respects throughout such year or a portion thereof,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status thereof. With respect to any Subservicer that meets the criteria of Item
1108(a)(2)(i) through (iii) of Regulation AB in the sole determination of the
Servicer, the Servicer shall request from such Subservicer, the Officer's
Certificate set forth in this Section 5.25 as and when required with respect to
such Subservicer.
Section 5.26 Assessment of Compliance and Independent Public Accountants'
Attestation; Financial Statements.
87
(a) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 5.24 on behalf of the Trust, by April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall deliver to the Trustee
and the Depositor an officer's assessment of its compliance with the Servicing
Criteria during the preceding calendar year as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB (the "Assessment of
Compliance"), which addresses the items set forth in Exhibit R hereto.
(b) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 5.24 on behalf of the Trust, April 15 of each calendar
year (or if such day is not a Business Day, the immediately succeeding Business
Day), the Servicer, at its own expense, shall cause a nationally or regionally
recognized firm of independent registered public accountants (who may also
render other services to any Servicer, the Sellers or any affiliate thereof)
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee, the Paying Agent and the Depositor that
attests to and reports on the assessment of compliance provided by such Servicer
pursuant to Section 5.26(a) (the "Accountant's Attestation"). Such Accountant's
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) The Servicer shall request that any Subservicer and each Subcontractor
(to the extent determined by the Servicer to be required under Regulation AB)
not later than March 15 of each calendar year (other than the calendar year
during which the Closing Date occurs) with respect to any calendar year during
which the Trust's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, provide an Assessment of Compliance, which addresses the items set
forth in Exhibit R hereto. The Servicer shall request that any Subservicer
(other than the calendar year during which the Closing Date occurs) with respect
to any calendar year during which the Trust's annual report on Form 10-K is not
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately succeeding Business
Day) provide an Assessment of Compliance, which addresses the items set forth in
Exhibit R hereto.
(d) Not later than March 15 of each calendar year (other than the calendar
year during which the Closing Date occurs) with respect to any calendar year
during which the Trust's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, the Servicer shall request that each Subservicer and each
Subcontractor (to the extent determined by the Servicer to be required by
Regulation AB) provide an Accountant's Attestation by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance
pursuant to Section 5.26(c) above. Other than the calendar year during which the
Closing Date occurs, with respect to any calendar year during which the Trust's
annual report on Form 10-K is not required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, not later than
April 15 of each calendar year (or, in each case, if such day is not a Business
Day, the immediately succeeding Business Day), the Servicer shall request that
each Subservicer provide an Accountant's Attestation by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance
pursuant to Section 5.26(c) above.
(e) Not later than, with respect to any calendar year during which the
Trust's annual report on Form 10K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, March 15 (or, in
each case, if such day is not a Business Day, the immediately preceding Business
Day), the Paying Agent shall deliver to the Depositor and the Servicer an
Assessment of
88
Compliance with regard to the Servicing Criteria applicable to the Paying Agent
during the preceding calendar year, which addresses the items set forth in
Exhibit R hereto.
(f) Not later than, with respect to any calendar year during which the
Trust's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission, March 15 (or,
in each case, if such day is not a Business Day, the immediately preceding
Business Day), the Paying Agent shall deliver to the Depositor and the Servicer
an Accountant's Attestation by a registered public accounting firm that attests
to, and reports on, the Assessment of Compliance pursuant to Section 5.26(e)
above.
(g) Not later than, with respect to any calendar year during which the
Trust's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission, 15 calendar
days before the date on which the Trust's annual report on Form 10-K is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or, in each case, if such day is not a Business Day, the
immediately preceding Business Day), the Servicer shall request that each
custodian, including the Custodian, deliver to the Servicer an Assessment of
Compliance with regard to the Servicing Criteria applicable to such custodian
during the preceding calendar year, which addresses the items set forth in
Exhibit R hereto; provided, however, that where the Custodian and the Servicer
are both Chase, the provisions of this Section 5.26(g) may be satisfied by the
delivery of a single report containing the Assessment of Compliance of Chase.
(h) Not later than March 12 (or, in each case, if such day is not a
Business Day, the immediately succeeding Business Day), of any calendar year
(other than the calendar year during which the Closing Date occurs) during which
the Trust's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, the
Servicer shall request that each Custodian deliver to the Servicer an
Accountant's Attestation by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance pursuant to Section 5.26(g) above;
provided, however, that where the Custodian and the Servicer are both Chase, the
provisions of this Section 5.26(h) may be satisfied by the delivery of a single
report containing the Accountant's Attestation of Chase.
(i) Each of the parties hereto acknowledges and agrees that the purpose of
this Section 5.26 is to facilitate compliance by the Seller, the Servicer and
the Depositor with the provisions of Regulation AB, as such may be amended or
clarified from time to time. Therefore, each of the parties agrees that the
parties' obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed securities
markets, advice of counsel, or otherwise in respect of the requirements of
Regulation AB and the parties shall comply with reasonable requests made by the
Seller, the Servicer or the Depositor for delivery of additional or different
information as CHF or the Depositor may determine in good faith is necessary to
comply with the provisions of Regulation AB, provided that such information is
available to such party without unreasonable effort or expense or is reimbursed
by the requesting party and within such timeframe as may be reasonably
requested. Any such supplementation or modification shall be made without the
consent of the Certificateholders, and may result in a change in the reports
filed by the Servicer on behalf of the Trust under the Exchange Act.
Section 5.27 Access to Certain Documentation; Rights of the Depositor in
Respect of the Servicer. The Servicer shall provide access to the Trustee and
Certificateholders which are savings and loan associations, banks or insurance
companies or examiners of any federal or state banking or insurance regulatory
authority to the documentation regarding the Mortgage Loans if so required by
applicable regulations of any regulatory authority, such access to be afforded
subject to reimbursement for expenses without charge but only upon reasonable
request and during normal business hours at the offices of the
89
Servicer designated by it. The Depositor may, but is not obligated to, enforce
the obligations of the Servicer under this Agreement. The Depositor shall not
assume any responsibility or liability for any action or failure to take action
by the Servicer and is not obligated to supervise the performance of the
Servicer under this Agreement or otherwise.
Section 5.28 REMIC-Related Covenants. For as long as the Trust Fund shall
exist, the Servicer, the Paying Agent and the Trustee shall act in accordance
herewith to assure continuing treatment of each REMIC created hereunder as a
REMIC. In particular:
(a) The Servicer shall not create, or permit the creation of, any
"interests" in any REMIC created hereunder within the meaning of Section 860G(a)
of the Code other than the "regular interests" in each such REMIC designated as
such in Section 2.04(a) and the "residual interest" in each such REMIC
designated as such in Section 2.04(a);
(b) As of all times as may be required by the Code, the Servicer will
ensure that substantially all of the assets of each REMIC created hereunder will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code. The
Paying Agent will maintain records that are sufficient to indicate the
compliance of each REMIC created hereunder with applicable requirements of the
Code (and applicable Proposed, Temporary or final Treasury Regulations) relating
to the assets held by such REMIC. Further, the Servicer shall not permit and the
Trustee shall not accept the transfer or substitution of any Mortgage Loan other
than pursuant to Section 3.03, 5.01 or 5.21 of this Agreement, and the Servicer
shall, in any case, not permit substitution unless the Servicer and the Trustee
have received an Opinion of Counsel, which will not be an expense of any REMIC
created hereunder, that such transfer or substitution would not adversely affect
the REMIC status of any REMIC created hereunder or would not otherwise be
prohibited by this Agreement;
(c) The Servicer shall ensure that no REMIC created hereunder receives a
fee or other compensation for services and that no REMIC created hereunder
receives any income from assets other than "qualified mortgages" within the
meaning of Section 860G(a)(3) of the Code or "permitted investments" within the
meaning of Section 860G(a)(5) of the Code, and shall take whatever action it
deems necessary to avoid any material tax imposed by the Code on any REMIC
created hereunder;
(d) None of the Depositor, the Servicer, the Paying Agent or the Trustee
shall sell or permit the sale of all or any portion of the Mortgage Loans or of
any Eligible Investment unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received an Opinion
of Counsel, which will not be an expense of any REMIC created hereunder or the
Trustee, to the effect that such sale (i) is pursuant to a "qualified
liquidation" as defined in Section 860F(a)(4) of the Code and as described in
Section 11.01 hereof, or (ii) would not be treated as a "prohibited transaction"
within the meaning of Section 860F(a)(2) of the Code that results in the
realization of a material amount of gain or loss for federal income tax
purposes;
(e) The Trustee shall not accept any contribution to any REMIC created
hereunder after the Startup Day without an Opinion of Counsel (which shall not
be an expense of the Trustee) that such contribution is included within the
exceptions provided in Section 860G(d)(2) of the Code and, therefore, will not
be subject to the tax imposed by Section 860G(d)(1) of the Code; and
(f) Notwithstanding anything to the contrary in this Agreement, the
Servicer and the Trustee, at the direction of the Servicer, shall take any other
action or refuse to take any action otherwise required (including adjusting the
Purchase Price for any Mortgage Loan) where the Servicer deems such action or
inaction reasonably necessary to ensure the REMIC status of each REMIC created
hereunder under the
90
Code and applicable regulations or to avoid the imposition of any material tax
liability on any REMIC created hereunder that will affect amounts distributable
to the Certificateholders.
(g) In the event that any applicable federal, state or local tax,
including interest, penalties or assessments, additional amounts or additions to
tax, is imposed on any REMIC created hereunder, such tax shall be treated in the
same manner as a Realized Loss and shall be charged against amounts otherwise
distributable to the Holders of the Certificates, except as provided in the last
sentence of this Section 5.28 (g). The Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall withdraw from the
Collection Account sufficient funds to pay or provide for the payment of, and to
actually pay, such tax as is estimated to be legally owed by (but such
authorization shall not prevent the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent from contesting, at the expense
of the Trust Fund (other than as a consequence of a breach of its obligations
under this Agreement), any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent is hereby authorized to and shall segregate, into a
separate non-interest bearing account, the net income from any "prohibited
transaction" under Code Section 860F(a), the amount of any taxable contribution
to any REMIC created hereunder after the Startup Day that is subject to tax
under Code Section 860G(d), and 35% of any estimated "net income from
foreclosure property" under Section 860G(c) and use such income or amount, to
the extent necessary, to pay such tax. To the extent that any such tax is paid
to the Internal Revenue Service or applicable state or local tax authorities,
the Trustee or a Paying Agent has been appointed under Section 4.05, the Paying
Agent shall retain an equal amount from future amounts otherwise distributable
to the Holder of the Class A-R Certificate and shall distribute such retained
amounts to the Holders of the other Classes of Certificates, to the extent they
remain outstanding, until they are fully reimbursed for any amount of such taxes
previously charged to the then Holder of the Class A-R Certificate. Neither the
Trustee nor the Servicer shall be responsible for any taxes imposed on any REMIC
created hereunder except to the extent such taxes arise as a consequence of a
breach of their respective obligations under this Agreement. The Trustee shall
not be liable hereunder for any taxes imposed on any REMIC hereunder as the
result of any direction taken hereunder from the Servicer or any action of the
Servicer or Paying Agent hereunder.
Section 5.29 Reserve Fund; Yield Maintenance Agreements.
(a) On the Closing Date, the Paying Agent shall establish an account (the
"Reserve Fund"), which shall be an Eligible Account. The Reserve Fund shall be
entitled "Reserve Fund, The Bank of New York Trust Company, N.A., as Trustee for
the benefit of the Holders of the Chase Mortage Finance Trust 2007-S3 LIBOR
Certificates." On each Distribution Date, the Paying Agent is hereby directed
to, and shall therefore, deposit into the Reserve Fund all amounts received
under the Yield Maintenance Agreements. For federal and state income tax
purposes, the LIBOR Certificateholders will be deemed to be the owners of the
related portion of the Reserve Fund and all amounts deposited into the Reserve
Fund and shall be taxable on any income earned thereon. The Reserve Fund shall
not be an asset of any REMIC. Amounts held in the Reserve Fund shall remain
uninvested. The Reserve Fund will be part of the Trust Fund but not part of any
REMIC and any payments to the LIBOR Certificates of Basis Risk Shortfall
Carryover Amounts with respect to the LIBOR Certificates will not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860G(a)(1).
(b) The Depositor hereby directs the Paying Agent, to execute and deliver
on behalf of the Trust the Yield Maintenance Agreements and authorizes the
Paying Agent to perform its obligations thereunder on behalf of the Trust in
accordance with the terms of the Yield Maintenance Agreements. The Yield
Maintenance Agreements will provide for the payment of Basis Risk Shortfall
Carryover Amounts for one Class of LIBOR Certificates to the extent provided in
this Section 5.29(b). On or before the Closing Date, the Paying Agent shall
enter into the Yield Maintenance Agreements on behalf of the
91
Trust, with the Counterparty. The Yield Maintenance Agreements shall be part of
the Trust Fund but not part of any REMIC.
On each Distribution Date, the Paying Agent shall distribute amounts
received under the Class 1-A1 Yield Maintenance Agreement on deposit in the
Reserve Fund to the Class 1-A1 Certificates, up to the Basis Risk Shortfall
Carryover Amount for the Class 1-A1 Certificates.
On each Distribution Date, the Paying Agent shall distribute amounts
received under the Class 1-A8 Yield Maintenance Agreement on deposit in the
Reserve Fund to the Class 1-A8 Certificates, up to the Basis Risk Shortfall
Carryover Amount for the Class 1-A8 Certificates.
(c) [Reserved.]
(d) The Seller, the Depositor and the Certificateholders by acceptance of
their Certificates acknowledge and agree that the Paying Agent shall execute,
deliver and perform its obligations under the Yield Maintenance Agreements and
shall do so solely in its capacity as Paying Agent of the Trust Fund and not in
its individual capacity. The Paying Agent is hereby directed to represent and
warrant to the Counterparty under the Yield Maintenance Agreements that the
beneficial owner for United States federal income tax purposes of payments made
under the Yield Maintenance Agreements is a "U.S. person" (as that term is used
in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations (the
"Regulations")) for United States federal income tax purposes. Every provision
of this Agreement relating to the conduct of, affecting the liability of or
affording protection to the Paying Agent shall apply to the Paying Agent's
execution of the Yield Maintenance Agreements and the performance of its duties
and satisfaction of its obligations thereunder.
(e) On the 20th calendar day of each month, the Paying Agent shall
calculate the Class 1-A1 Maximum Yield Maintenance Agreement Amount and the
Class 1-A8 Maximum Yield Maintenance Agreement Amount and notify the
Counterparty of such amounts. On each Distribution Date, the "Class 1-A1 Maximum
Yield Maintenance Agreement Amount" shall be an amount equal to the lesser of:
(i) the product of:
(A) the excess, if any, of LIBOR (as calculated under the
Class 1-A1 Yield Maintenance Agreement subject to the Rate Cap
Ceiling) over the related Cap Strike Rate for that Distribution
Date;
(B) the related Class 1-A1 Scheduled Notional Amount for that
Distribution Date; and
(C) a fraction, the numerator of which is 30 and the
denominator of which is 360;
and
(ii) the related Basis Risk Shortfall Carryover Amount related to
the Class 1-A1 Certificates.
On each Distribution Date, the "Class 1-A8 Maximum Yield Maintenance
Agreement Amount" shall be an amount equal to the lesser of:
(i) the product of:
92
(A) the excess, if any, of LIBOR (as calculated under the
Class 1-A8 Yield Maintenance Agreement subject to the Rate Cap
Ceiling) over the related Cap Strike Rate for that Distribution
Date;
(B) the related Class 1-A8 Scheduled Notional Amount for that
Distribution Date; and
(C) a fraction, the numerator of which is 30 and the
denominator of which is 360;
and
(ii) the related Basis Risk Shortfall Carryover Amount related to
the Class 1-A8 Certificates.
(f) If on any Distribution Date the Paying Agent has received any
excess amounts from the Yield Maintenance Agreements, such excess amounts
shall be returned to the Counterparty via the wiring instructions set
forth in the applicable Yield Maintenance Agreement.
[END OF ARTICLE V]
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01 Distributions.
(I) Prior to the Credit Support Depletion Date, the Available Distribution
Amount shall be applied as follows:
(a) On each Distribution Date, the Paying Agent shall apply an amount
equal to the Available Distribution Amount in the following order of priority:
(i) Concurrently (A) solely from the Available Distribution Amount
with respect to Mortgage Group One, to the Class 1-A Certificateholders
(other than the Class A-P Certificates), all amounts distributable
pursuant to (I)(b)(i)(A) through (Y) and (BB) below, and (B) solely from
the Available Distribution Amount with respect to Mortgage Group Two, to
the Class 2-A Certificateholders (other than the Class A-P Certificates),
all amounts distributable pursuant to (I)(b)(i)(Z) through (AA) below;
(ii) the balance, if any, of the Available Distribution Amount shall
be distributed first, (A) concurrently, solely from the Available
Distribution Amount with respect to Mortgage Group One (or from amounts
described under (I)(b)(iii) below) to the Class 1-A and Class A-R
Certificateholders in the amounts distributable pursuant to (I)(b)(ii)(A)
below, up to the Non-PO Class 1-A Optimal Principal Amount and (I)(b)(iii)
below, up to the amounts payable thereunder,
93
and to Class A-P Component One, the Group One Class A-P Amount pursuant to
(I)(b)(ii)(A) below and (B) concurrently, solely from the Available
Distribution Amount with respect to Mortgage Group Two (or from amounts
described under (I)(b)(iv) below) to the Class 2-A Certificateholders in
the amounts distributable pursuant to (I)(b)(ii)(B) below, up to the
Non-PO Class 2-A Optimal Principal Amount and (I)(b)(iv) below, up to the
amounts payable thereunder, and to the Class A-P Component Two
Certificates, the Group Two Class A-P Amount pursuant to (I)(b)(ii)(B)
below, and second, to the Class A-P Component One, the portion of the
Class A-P Shortfall Amount relating to the Group One Mortgage Loans and to
the Class A-P Component Two, the portion of the Class A-P Shortfall Amount
relating to the Group Two Mortgage Loans, in accordance with paragraph
(I)(b)(v) below;
(iii) subject to subsection (b) below, to the Class M
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i) and
(ii) above, in accordance with, and up to the amount calculated pursuant
to, Section 6.01(I)(c) below;
(iv) subject to subsection (b) below, to the Class B
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
through (iii) above, in accordance with, and up to the amounts calculated
pursuant to, Section 6.01(I)(d) below; and
(v) to the Class A-R Certificateholders the balance, if any, of the
Available Distribution Amount remaining after the distributions provided
for in paragraphs (i) through (iv) above.
(b) Amounts payable to the Class A Certificateholders on any Distribution
Date shall be distributed as follows:
(i) to the extent the amount available for distribution pursuant to
paragraph (a)(i) above is sufficient:
(A) to the Class 1-A1 Certificateholders, (1) the Class 1-A1
Interest Accrual Amount plus (2) the Class 1-A1 Shortfall from the
preceding Distribution Date;
(B) to the Class 1-A2 Certificateholders, (1) the Class 1-A2
Interest Accrual Amount plus (2) the Class 1-A2 Shortfall from the
preceding Distribution Date;
(C) subject to (CC) below, to the Class 1-A3
Certificateholders, (1) the Class 1-A3 Interest Accrual Amount plus
(2) the Class 1-A3 Shortfall from the preceding Distribution Date;
(D) subject to (DD) below, to the Class 1-A4
Certificateholders, (1) the Class 1-A4 Interest Accrual Amount plus
(2) the Class 1-A4 Shortfall from the preceding Distribution Date;
(E) to the Class 1-A5 Certificateholders, (1) the Class 1-A5
Interest Accrual Amount plus (2) the Class 1-A5 Shortfall from the
preceding Distribution Date;
(F) to the Class 1-A6 Certificateholders, (1) the Class 1-A6
Interest Accrual Amount plus (2) the Class 1-A6 Shortfall from the
preceding Distribution Date;
(G) to the Class 1-A7 Certificateholders, (1) the Class 1-A7
Interest Accrual Amount plus (2) the Class 1-A7 Shortfall from the
preceding Distribution Date;
(H) to the Class 1-A8 Certificateholders, (1) the Class 1-A8
Interest Accrual Amount plus (2) the Class 1-A8 Shortfall from the
preceding Distribution Date;
94
(I) to the Class 1-A9 Certificateholders, (1) the Class 1-A9
Interest Accrual Amount plus (2) the Class 1-A9 Shortfall from the
preceding Distribution Date;
(J) to the Class 1-A10 Certificateholders, (1) the Class 1-A10
Interest Accrual Amount plus (2) the Class 1-A10 Shortfall from the
preceding Distribution Date;
(K) to the Class 1-A11 Certificateholders, (1) the Class 1-A11
Interest Accrual Amount plus (2) the Class 1-A11 Shortfall from the
preceding Distribution Date;
(L) to the Class 1-A12 Certificateholders, (1) the Class 1-A12
Interest Accrual Amount plus (2) the Class 1-A12 Shortfall from the
preceding Distribution Date;
(M) to the Class 1-A13 Certificateholders, (1) the Class 1-A13
Interest Accrual Amount plus (2) the Class 1-A13 Shortfall from the
preceding Distribution Date;
(N) to the Class 1-A14 Certificateholders, (1) the Class 1-A14
Interest Accrual Amount plus (2) the Class 1-A14 Shortfall from the
preceding Distribution Date;
(O) to the Class 1-A15 Certificateholders, (1) the Class 1-A15
Interest Accrual Amount plus (2) the Class 1-A15 Shortfall from the
preceding Distribution Date;
(P) to the Class 1-A16 Certificateholders, (1) the Class 1-A16
Interest Accrual Amount plus (2) the Class 1-A16 Shortfall from the
preceding Distribution Date;
(Q) to the Class 1-A17 Certificateholders, (1) the Class 1-A17
Interest Accrual Amount plus (2) the Class 1-A17 Shortfall from the
preceding Distribution Date;
(R) to the Class 1-A18 Certificateholders, (1) the Class 1-A18
Interest Accrual Amount plus (2) the Class 1-A18 Shortfall from the
preceding Distribution Date;
(S) to the Class 1-A19 Certificateholders, (1) the Class 1-A19
Interest Accrual Amount plus (2) the Class 1-A19 Shortfall from the
preceding Distribution Date;
(T) to the Class 1-A20 Certificateholders, (1) the Class 1-A20
Interest Accrual Amount plus (2) the Class 1-A20 Shortfall from the
preceding Distribution Date;
(U) to the Class 1-A21 Certificateholders, (1) the Class 1-A21
Interest Accrual Amount plus (2) the Class 1-A21 Shortfall from the
preceding Distribution Date;
(V) to the Class 1-A22 Certificateholders, (1) the Class 1-A22
Interest Accrual Amount plus (2) the Class 1-A22 Shortfall from the
preceding Distribution Date;
(W) to the Class 1-A23 Certificateholders, (1) the Class 1-A23
Interest Accrual Amount plus (2) the Class 1-A23 Shortfall from the
preceding Distribution Date;
(X) to the Class 1-A24 Certificateholders, (1) the Class 1-A24
Interest Accrual Amount plus (2) the Class 1-A24 Shortfall from the
preceding Distribution Date;
(Y) to the Class 1-AX Certificateholders, (1) the Class 1-AX
Interest Accrual Amount plus (2) the Class 1-AX Shortfall from the
preceding Distribution Date;
95
(Z) to the Class 2-A1 Certificateholders, (1) the Class 2-A1
Interest Accrual Amount plus (2) the Class 2-A1 Shortfall from the
preceding Distribution Date;
(AA) to the Class 2-AX Certificateholders, (1) the Class 2-AX
Interest Accrual Amount plus (2) the Class 2-AX Shortfall from the
preceding Distribution Date;
(BB) to the Class A-R Certificateholders, (1) the Class A-R
Interest Accrual Amount plus (2) the Class A-R Shortfall from the
preceding Distribution Date;
(CC) on each Distribution Date prior to the Class 1-A3
Accretion Termination Date, the Class 1-A3 Interest Accrual Amount
will be distributed as principal as follows:
first, to the Class 1-A1 Certificates, until the Outstanding Certificate
Principal Balance of such Class has been reduced to zero; and
second, to the Class 1-A3 Certificates; and
(DD) on each Distribution Date prior to the Class 1-A4
Accretion Termination Date, the Class 1-A4 Interest Accrual Amount
will be distributed as principal as follows:
first, sequentially, to the Class 1-A1 and Class 1-A3 Certificates, in
that order, up to the amount necessary to reduce the aggregate Outstanding
Certificate Principal Balance of such Classes to their Targeted Principal
Balances; and
second, to the Class 1-A4 Certificates.
(ii) concurrently, (A) to the Class 1-A Certificateholders, solely
from the Available Distribution Amount with respect to Mortgage Group One
up to the Non-PO Class 1-A Optimal Principal Amount, allocated among the
Class 1-A Certificates in accordance with the Non-PO Class 1-A Principal
Payment Rules and to the Class A-P Component One, the Group One Class A-P
Amount and (B) to the Class 2-A Certificateholders, solely from the
Available Distribution Amount with respect to Mortgage Group Two up to the
Non-PO Class 2-A Optimal Principal Amount, allocated among the Class 2-A
Certificates in accordance with the Non-PO Class 2-A Principal Payment
Rules and to Class A-P Component Two, the Group Two Class A-P Amount;
(iii) to the extent that the Available Distribution Amount with
respect to Mortgage Group One is insufficient to make distributions
pursuant to paragraphs (I)(b)(i)(A) through (Y) and (BB) or the portion of
the Available Distribution Amount with respect to Mortgage Group One
remaining after giving effect to the distributions in (I)(b)(i) above is
insufficient to distribute in full to the Class 1-A Certificateholders
amounts described in (I)(b)(ii)(A) above (such shortfall, the "Class 1-A
Deficiency Amount") and the Available Distribution Amount with respect to
Mortgage Group Two remaining after giving effect to the distributions in
(I)(b)(i) above exceeds the amount required to distribute in full to the
Class 2-A Certificateholders the amounts described in (I)(b)(ii)(B) above,
such excess shall be distributed in reduction of the Class 1-A Deficiency
Amount in application first to amounts payable pursuant to Section
(I)(b)(i) and second to amounts payable pursuant to Section (I)(b)(ii);
(iv) to the extent that the Available Distribution Amount with
respect to Mortgage Group Two is insufficient to make distributions
pursuant to paragraphs (I)(b)(i)(Z) through (AA) or the portion of the
Available Distribution Amount with respect to Mortgage Group Two remaining
after giving effect to the distributions in (I)(b)(i) above is
insufficient to distribute in
96
full to the Class 2-A Certificateholders amounts described in
(I)(b)(ii)(B) above (such shortfall, the "Class 2-A Deficiency Amount")
and the Available Distribution Amount with respect to Mortgage Group One
remaining after giving effect to the distributions in (I)(b)(i) above
exceeds the amount required to distribute in full to the Class 1-A
Certificateholders the amounts described in (I)(b)(ii)(A) above, such
excess shall be distributed in reduction of the Class 2-A Deficiency
Amount in application first to amounts payable pursuant to Section
(I)(b)(i) and second to amounts payable pursuant to Section (I)(b)(ii);
(v) to the Class A-P Component One the portion of the Class A-P
Shortfall Amount relating to the Group One Mortgage Loans and to the Class
A-P Component Two the portion of the Class A-P Shortfall Amount relating
to the Group Two Mortgage Loans; provided, however, that any amount
distributed pursuant to this Section 6.01(I)(b)(v) shall not cause a
further reduction in the principal balance of the Class A-P Component One
or Class A-P Component Two, as applicable;
(vi) If the Available Distribution Amount with respect to Mortgage
Group One is insufficient to make the distributions set forth in
paragraphs (I)(b)(i)(A) through (Y) and (BB) above, the Paying Agent shall
distribute the Available Distribution Amount with respect to Mortgage
Group One to the Class 1-A Certificateholders pro rata in accordance with
the amounts otherwise distributable to them pursuant to paragraphs
(I)(b)(i)(A) through (Y) and (BB) above. If the Available Distribution
Amount with respect to Mortgage Group Two is insufficient to make the
distributions set forth in paragraphs (I)(b)(i) (Z) through (AA) above,
the Paying Agent shall distribute the Available Distribution Amount with
respect to Mortgage Group Two to the Class 2-A Certificateholders pro rata
in accordance with the amounts otherwise distributable to them pursuant to
paragraphs (I)(b)(i)(Z) through (AA) above; and
(vii) In addition to the foregoing distributions, the Class 1-A
Certificates and Class 2-A Certificates will receive additional principal
distributions on any Distribution Date prior to the Credit Support
Depletion Date under the circumstances specified in (A) and (B) below:
(A) On any Distribution Date on or after the date on which the
aggregate Outstanding Certificate Principal Balance of the Class 1-A
Certificates or the aggregate Outstanding Certificate Principal
Balance of the Class 2-A Certificates has been reduced to zero, all
principal (other than the applicable PO Percentage of any principal
received on or in respect of each Discount Mortgage Loan and limited
to amounts in excess of that needed to reduce the aggregate
Outstanding Certificate Principal Balance of the Class 1-A
Certificates or the Outstanding Certificate Principal Balance of the
Class 2-A Certificates, as applicable, to zero) on the Mortgage
Loans in the Mortgage Group relating to such Class A Certificates
that are no longer outstanding will be distributed as principal to
the remaining Class A Certificates (other than the Class A-P
Certificates) in accordance with Section 6.01(I)(b)(ii)(A) or
6.01(I)(b)(ii)(B), as applicable, in reduction of the Outstanding
Certificate Principal Balances thereof, provided that on such
Distribution Date either (a) the Aggregate Subordinated Percentage
for such Distribution Date is less than 200% of the initial
Aggregate Subordinate Percentage, or (b) the average outstanding
Principal Balance of the Mortgage Loans in either Mortgage Group
delinquent 60 days or more over the prior six months, as a
percentage of the corresponding Group One or Group Two Subordinated
Amount, is greater than or equal to 50%. For purposes of the
foregoing, the "Aggregate Subordinated Percentage" for any
Distribution Date is equal to the aggregate Outstanding Certificate
Principal Balance of the Subordinated Certificates immediately prior
to such Distribution Date divided by the
97
aggregate Scheduled Principal Balance of all of the Mortgage Loans
immediately prior to such Distribution Date.
(B) If on any Distribution Date on which the aggregate
Outstanding Certificate Principal Balance of the Class 1-A
Certificates or the Class 2-A Certificates would be greater than the
the Group One Non-PO Allocated Amount or the Group Two Non-PO
Allocated Amount, as the case may be (the "Undercollateralized
Group"), after giving effect to distributions to be made on such
Distribution Date, the portion of the Available Distribution Amount
in respect of principal on the Mortgage Loans in the other Mortgage
Group (the "Overcollateralized Group") otherwise allocable to the
Subordinated Certificates will be distributed to the Classes of
Class A Certificates (other than the Class A-P Certificates)
relating to the Undercollateralized Group (in accordance with the
priorities set forth in Section 6.01(I)(b)(ii)), in reduction of the
principal balances thereof, until the aggregate principal balance of
the Certificates (other than the Class A-P Certificates) included in
the Undercollateralized Group is equal to the Group One Non-PO
Allocated Amount or the Group Two Non-PO Allocated Amount, as the
case may be. Moreover, the Available Distribution Amount with
respect to the Overcollateralized Group will be further reduced
(after distributions of interest to the Class A Certificates
included in the Overcollateralized Group) in an amount equal to one
month's interest on the amount by which the Undercollateralized
Group is undercollateralized at 6.00% per annum (if Mortgage Group
One is the Undercollateralized Group) or 5.50% per annum (if
Mortgage Group Two is the Undercollateralized Group), plus any
shortfall of such amounts from prior Distribution Dates; provided,
however, that in no event shall the Available Distribution Amount
with respect to the Overcollateralized Group on any Distribution
Date be reduced by more than the sum of (i) the overcollateralized
amount with respect to the Overcollateralized Group and (ii)
interest thereon at the applicable Remittance Rate. Such amounts
will be distributed to the applicable Classes of Certificates in the
priority of interest payable on such Distribution Date.
(c) Amounts payable on any Distribution Date to the Class M
Certificateholders pursuant to Section 6.01(I)(a)(iii) shall be distributed in
the following priority:
(1) Amounts payable on any Distribution Date to the Class A-M
Certificateholders shall be distributed up to an amount equal to (A) the Class
A-M Interest Accrual Amount plus (B) the Class A-M Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(I)(e)) to the Class A-M Certificates
plus (D) any Carry-over Subordinated Principal Amounts with respect to the Class
A-M Certificates; and
(2) Amounts payable on any Distribution Date to the Class M-1
Certificateholders shall be distributed up to an amount equal to (A) the Class
M-1 Interest Accrual Amount plus (B) the Class M-1 Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(I)(e)) to the Class M-1 Certificates
plus (D) any Carry-over Subordinated Principal Amounts with respect to the Class
M-1 Certificates plus (E) any portion of the Subordinated Optimal Principal
Amount allocated to the Class A-M Certificates in excess of the Outstanding
Certificate Principal Balance of such Class.
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(I)(a)(iv) shall be distributed in
the following priority:
98
(1) first, to the Class B-1 Certificateholders, up to an amount
equal to (A) the Class B-1 Interest Accrual Amount plus (B) the Class B-1
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-1
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-1 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class M-1 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(2) second, to the Class B-2 Certificateholders, up to an amount
equal to (A) the Class B-2 Interest Accrual Amount plus (B) the Class B-2
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-2
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-2 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-1 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(3) third, to the Class B-3 Certificateholders, up to an amount
equal to (A) the Class B-3 Interest Accrual Amount plus (B) the Class B-3
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-3
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-3 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-2 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(4) fourth, to the Class B-4 Certificateholders, up to an amount
equal to (A) the Class B-4 Interest Accrual Amount plus (B) the Class B-4
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-4
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-4 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-3 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(5) fifth, to the Class B-5 Certificateholders, up to an amount
equal to (A) the Class B-5 Interest Accrual Amount plus (B) the Class B-5
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-5
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-5 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-4 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class; and
(6) sixth, to the Class B-6 Certificateholders, up to an amount
equal to (A) the Class B-6 Interest Accrual Amount plus (B) the Class B-6
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-6
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-6 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-5 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class.
(e) On each Distribution Date, the Subordinated Optimal Principal Amount
shall be allocated among the Classes of Subordinated Certificates entitled,
pursuant to the next succeeding sentence, to an allocation of principal on such
Distribution Date, pro rata based upon the Outstanding Certificate Principal
Balances of all such Classes so entitled. With respect to the Subordinated
Certificates, on each
99
Distribution Date, principal shall be distributable to (1) any Class of
Subordinated Certificates which has current Credit Support (before giving effect
to any distribution of principal and any Realized Losses allocable on such
Distribution Date) greater than or equal to the Original Credit Support for such
Class; (2) the Class having the lowest numerical class designation of any
outstanding Class of Subordinated Certificates which does not meet the criteria
in (1) above; and (3) the Class B-6 Certificates if all other outstanding
Classes of Subordinated Certificates meet the criteria in (1) above or if no
other Class of Subordinated Certificates is outstanding; provided, however, that
no Class of Subordinated Certificates shall receive any distributions of
principal if any Class of Subordinated Certificates having a lower numerical
class designation than such Class fails to meet the criteria in (1) above. For
purposes of this Agreement, the Class M Certificates shall be deemed to have a
lower numerical class designation than each Class of Class B Certificates and
the Class A-M Certificates shall be deemed to have a lower numerical class
designation than the Class M-1 Certificates.
(II) On or after the Credit Support Depletion Date, the Available Distribution
Amount shall be applied, first, in respect of interest in accordance with
Section 6.01(I)(b)(i) and, second, in respect of principal to each Class of the
Class A Certificates, pro rata, based upon their respective outstanding
balances.
(III) Based upon the information received from the Servicer, as provided in
Section 6.02, the Paying Agent shall make all calculations necessary to make the
distributions described in this Section 6.01. All distributions made to
Certificateholders of any Class on each Distribution Date will be made to the
Certificateholders of the respective Class of record on the next preceding
Record Date, except that the final distribution with respect to each Class shall
be made as provided in the forms of Certificates. All distributions made to
Certificateholders shall be based on the Percentage Interest of the Class
represented by their respective Certificates, and shall be made either by
transfer in immediately available funds to the account of such Holder at a bank
or other financial or depository institution having appropriate facilities
therefor, if such Holder has so notified the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, in writing at least 10
Business Days prior to the first Distribution Date for which distribution by
wire transfer is to be made and such Holder's Certificates of such Class in the
aggregate evidence an original denomination of not less than $5,000,000 or such
Holder holds a 100% Percentage Interest of such Class or, if not, by check
mailed to the address of the Person entitled thereto as it appears on the
Certificate Register, except that the final distribution in retirement of the
Certificates will be made only upon presentation and surrender of the
Certificates at the office specified in the final Distribution Notice. If on any
Determination Date, the Servicer determines that there are no Mortgage Loans
outstanding and no other funds or assets in the Trust Fund other than the funds
in the Certificate Account, the Trustee or if a Paying Agent has been appointed
under Section 4.05, the Paying Agent shall promptly send the final distribution
notice to each Certificateholder specifying the manner in which the final
distribution will be made.
Section 6.02 Statements to the Certificateholders.
(a) Not later than the earlier of (i) three Business Days after the
Determination Date and (ii) the second Business Day prior to each Distribution
Date, the Servicer shall send to the Paying Agent and the Trustee (in such
format as may be mutually agreed) the relevant information for purposes of this
Section 6.02. Not later than each Distribution Date, the Paying Agent shall make
available on its website located at xxx.xxxxxxxx.xxx/xxx or upon request shall
send to any Certificateholder, the Depositor, the Trustee, the Servicer, any
co-trustee, and each Rating Agency a statement setting forth the following
information, after giving effect to the distributions to be made by the Paying
Agent pursuant to Section 6.01 on or as of such Distribution Date:
100
(i) with respect to each Class of Certificates the amount of such
distribution to Holders of such Class allocable to principal;
(ii) with respect to each Class of Certificates the amount of such
distribution to Holders of such Class allocable to interest;
(iii) the aggregate amount of any Principal Prepayments, Repurchase
Proceeds or other unscheduled recoveries included in the distributions to
Certificateholders, in each case both in the aggregate and by Pool;
(iv) the aggregate amount of any Advances by the Servicer pursuant
to Section 6.03, both in the aggregate and by Pool;
(v) the number of Outstanding Mortgage Loans and the Mortgage Pool
Principal Balance as of the close of business as of the end of the related
Principal Prepayment Period;
(vi) the related amount of the Servicing Fees (as adjusted pursuant
to Section 6.05) retained or withdrawn from the Collection Account by the
Servicer;
(vii) the number and aggregate principal amounts of Mortgage Loans
(A) delinquent (calculated using the Mortgage Bankers Association (MBA)
method) (1) one Monthly Payment, (2) two Monthly Payments and (3) three or
more Monthly Payments, (B) in foreclosure and (C) in bankruptcy, in each
case, as of the end of the close of business on the first day of the
calendar month of such Distribution Date;
(viii) the number and the principal balance of Mortgage Loans with
respect to any real estate acquired through foreclosure or grant of a deed
in lieu of foreclosure;
(ix) the aggregate amount of all Advances recovered during the
related Due Period;
(x) with respect to the following Distribution Date, the Class A
Percentage, the Class M Percentage, the Class B Percentage, the Class A
Principal Balance, the Class M Principal Balance, the Class B Principal
Balance, the Non-PO Class A Percentage, the Non-PO Class A Prepayment
Percentage, the Non-PO Class 1-A Percentage, the Non-PO Class 2-A
Percentage, the Non-PO Class 1-A Prepayment Percentage, the Non-PO Class
2-A Prepayment Percentage, the Non-PO Class 1-A Principal Balance, the
Non-PO Class 2-A Principal Balance and the level of Credit Support, if
any, with respect to each Class of Subordinated Certificates;
(xi) the aggregate amount of Realized Losses during the related Due
Period and the aggregate amount of Realized Losses since the Cut-off Date;
(xii) the allocation to each Class of Certificate of any Realized
Losses during the related Due Period;
(xiii) the Outstanding Certificate Principal Balance of each Class
of Certificates immediately prior to and after giving effect to the
distributions to each Class on such Distribution Date;
(xiv) with respect to each Class of Certificates, any amounts of
Compensating Interest Shortfalls and reductions relating to the Relief Act
on such Distribution Date;
101
(xv) the number of Mortgage Loans with respect to which a reduction
in the Mortgage Rate has occurred pursuant to the Relief Act, as well as
the amount of interest not required to be paid with respect to any such
Mortgage Loans during the related Due Period as a result of such
reductions; both in the aggregate and for each Class of Certificates;
(xvi) updated pool composition information such as weighted average
coupon, weighted average life, weighted average remaining term, pool
factors and prepayment amounts;
(xvii) if applicable, any material changes to methodology regarding
calculations of delinquencies and charge-offs;
(xviii) any material modifications, extensions or waivers to pool
asset terms, fees, penalties or payments during the distribution period or
that have cumulatively become material over time;
(xix) material breaches of pool asset representations or warranties
or transaction covenants;
(xx) information on ratio, coverage or other test used for
determining any early amortization, liquidation or other performance
trigger and whether the trigger was met;
(xxi) as of each Distribution Date, the amount, if any, received
pursuant to each Yield Maintenance Agreement and the amount thereof to be
paid to each Class of Certificates;
(xxii) as of each Distribution Date, the amount in the Reserve Fund;
(xxiii) if applicable, information regarding any new issuance of
asset-backed securities backed by the same asset pool, any pool asset
changes (other than in connection with a pool asset converting into cash
in accordance with its terms), such as additions or removals in connection
with a prefunding period and pool asset substitutions and repurchases (and
purchase rates, if applicable), and cash flows available for future
purchases, such as the balances of any prefunding or revolving accounts,
if applicable; and
(xxiv) any material changes in the solicitation, credit-granting,
underwriting, origination, acquisition or pool selection criteria or
procedures, as applicable, used to originate, acquire or select the new
pool assets.
The Paying Agent's responsibility for sending the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from the Servicer which shall be provided as required in
this Section 6.02(a).
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder which is a
savings and loan association, bank or insurance company certain reports and
access during business hours to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of regulatory authorities with respect to investment in
the Certificates; provided, that the Servicer shall be entitled to be reimbursed
by each such Certificateholder for the Servicer's actual expenses incurred in
providing such reports and access.
(b) The Servicer shall cause to be prepared, and the Servicer or the
Trustee, as required by applicable law, shall file, any and all tax returns,
information statements or other filings required to be delivered to
Certificateholders and any governmental taxing authority pursuant to any
applicable law with
102
respect to the Trust Fund and the transactions contemplated hereby (the Servicer
or the Trustee may, at its option but with the consent of the other, which
consent shall not be unreasonably withheld, appoint an organization which
regularly engages in the preparation and filing of such documents on a
continuous basis for profit and which represents itself to be expert in such
matters) and the Servicer shall maintain a record of the information necessary
for the application of Section 860E(e) of the Code and shall make such
information available as required by Section 860D(a)(6) of the Code; provided,
however, that the Servicer shall notify the Trustee of the Trustee's obligation
to make any such filings and that any fees of the organization appointed as
provided above shall be paid by the Servicer; and provided further that if an
organization is employed, as described above, to prepare and file any such
filings, neither the Trustee nor the Servicer shall be liable for any errors by
such organization.
Section 6.03 Advances by the Servicer. If, on any Determination Date, the
Servicer determines that any Monthly Payments due on the immediately preceding
Due Date have not been received, the Servicer shall, unless it determines in its
sole discretion that such amounts will not be recoverable from Late Collections,
Liquidation Proceeds or otherwise, make an Advance on or before two Business
Days prior to the related Distribution Date in an amount equal to the amount of
such delinquent Monthly Payments, after adjustment of any delinquent interest
payment for the Servicing Fee. For purposes of this Section 6.03, the delinquent
Monthly Payments referred to in the preceding sentence shall be deemed to
include an amount equal to the Monthly Payments that would have been due on
Mortgage Loans which have been foreclosed or otherwise terminated and in
connection with which the Servicer acquired and continues to own the Mortgaged
Properties on behalf of the Certificateholders. If the Servicer makes an
Advance, it shall on or prior to two Business Days prior to such Distribution
Date either (i) deposit in the Collection Account an amount equal to such
Advance, (ii) cause to be made an appropriate entry in the records of the
Collection Account that funds in such account being held for future distribution
or withdrawal have been, as permitted by this Section 6.03, used by the Servicer
to make such Advance or (iii) make Advances in the form of any combination of
clauses (i) and (ii) aggregating the amount of such Advance. Any funds being
held in the Collection Account for future distribution to Certificateholders and
so used pursuant to clause (ii) or (iii) above shall be replaced by the Servicer
from its own funds by deposit into the Collection Account on or before any
subsequent Distribution Date to the extent that funds in the Collection Account
on such Distribution Date shall be less than the amount of payments required to
be made to Certificateholders on such Distribution Date. Any such Advance shall
be included with the distribution to the Certificateholders on the related
Distribution Date. If the Servicer determines not to make a Nonrecoverable
Advance, it shall on the related Determination Date furnish to the Trustee, any
co-trustee, the Paying Agent and each Rating Agency notice of such
determination. The Servicer shall be entitled to be reimbursed from the
Collection Account for all Advances and Nonrecoverable Advances as provided in
Section 5.09.
Section 6.04 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall determine (i) the
total amount of Realized Losses, if any, incurred during the related Principal
Prepayment Period; (ii) whether and to what extent such Realized Losses
constitute Excess Losses; and (iii) the respective portions of such Realized
Losses allocable to interest and to principal.
(b) The principal portion of any Realized Losses, other than Excess
Losses, shall be allocated as follows: first, to the Class B-6 Certificates
until the Outstanding Certificate Principal Balance of the Class B-6
Certificates has been reduced to zero; second, to the Class B-5 Certificates
until the Outstanding Certificate Principal Balance of the Class B-5
Certificates has been reduced to zero; third, to Class B-4 Certificates until
the Outstanding Certificate Principal Balance of the Class B-4 Certificates has
been reduced to zero; fourth, to the Class B-3 Certificates until the
Outstanding Certificate Principal Balance of the Class B-3 Certificates has been
reduced to zero; fifth, to the Class B-2 Certificates until the
103
Outstanding Certificate Principal Balance of the Class B-2 Certificates has been
reduced to zero; sixth, to the Class B-1 Certificates until the Outstanding
Certificate Principal Balance of the Class B-1 Certificates has been reduced to
zero; seventh, to the Class M-1 Certificates until the Outstanding Certificate
Principal Balance of the Class M-1 Certificates has been reduced to zero;
eighth, to the Class A-M Certificates until the Outstanding Certificate
Principal Balance of the Class A-M Certificates has been reduced to zero; and
ninth, (X) if the Realized Loss has occurred with respect to a Group One
Mortgage Loan, first to the Class 1-A Certificates on a pro rata basis until the
Outstanding Certificate Principal Balance of the Class 1-A Certificates has been
reduced to zero, and second to the Class 2-A Certificates on a pro rata basis
until the Outstanding Certificate Principal Balance of the Class 2-A
Certificates has been reduced to zero or (Y) if the Realized Loss has occurred
with respect to a Group Two Mortgage Loan, first to the Class 2-A Certificates
on a pro rata basis until the Outstanding Certificate Principal Balance of the
Class 2-A Certificates has been reduced to zero, and second to the Class 1-A
Certificates on a pro rata basis until the Outstanding Certificate Principal
Balance of the Class 1-A Certificates has been reduced to zero; provided,
however, that if a Realized Loss occurs with respect to a Discount Mortgage Loan
(a) the amount of such Realized Loss equal to the product of (i) the amount of
such Realized Loss and (ii) the PO Percentage with respect to such Discount
Mortgage Loan will be allocated to Class A-P Component One (if the Realized Loss
occurred with respect to a Group One Mortgage Loan), or to Class A-P Component
Two (if the Realized Loss occurred with respect to the Group Two Mortgage Loan)
and (b) the remainder of such Realized Loss will be allocated as described
above; provided, however, that so long as the Outstanding Certificate Principal
Balance of the Class 1-A6 Certificates is greater than zero, (A) any Realized
Losses (other than Excess Losses) that would otherwise be allocated to the Class
1-A1 Certificates will instead be allocated to the Class 1-A6 Certificates, but
only in an amount up to the product of (x) the Outstanding Certificate Principal
Balance of the Class 1-A6 Certificates (after reduction of such Outstanding
Certificate Principal Balance after giving effect to the pro rata application of
Realized Losses directly to the Class 1-A6 Certificates) and (y) 33.10%, (B) any
Realized Losses (other than Excess Losses) that would otherwise be allocated to
the Class 1-A12 Certificates will instead be allocated to the Class 1-A6
Certificates, but only in an amount up to the product of (x) the Outstanding
Certificate Principal Balance of the Class 1-A6 Certificates (after reduction of
such Outstanding Certificate Principal Balance after giving effect to the pro
rata application of Realized Losses directly to the Class 1-A6 Certificates) and
(y) 31.80%, (C) any Realized Losses (other than Excess Losses) that would
otherwise be allocated to the Class 1-A14 Certificates will instead be allocated
to the Class 1-A6 Certificates, but only in an amount up to the product of (x)
the Outstanding Certificate Principal Balance of the Class 1-A6 Certificates
(after reduction of such Outstanding Certificate Principal Balance after giving
effect to the pro rata application of Realized Losses directly to the Class 1-A6
Certificates) and (y) 3.83%, (D) any Realized Losses (other than Excess Losses)
that would otherwise be allocated to the Class 1-A15 Certificates will instead
be allocated to the Class 1-A6 Certificates, but only in an amount up to the
product of (x) the Outstanding Certificate Principal Balance of the Class 1-A6
Certificates (after reduction of such Outstanding Certificate Principal Balance
after giving effect to the pro rata application of Realized Losses directly to
the Class 1-A6 Certificates) and (y) 6.88%, (E) any Realized Losses (other than
Excess Losses) that would otherwise be allocated to the Class 1-A16 Certificates
will instead be allocated to the Class 1-A6 Certificates, but only in an amount
up to the product of (x) the Outstanding Certificate Principal Balance of the
Class 1-A6 Certificates (after reduction of such Outstanding Certificate
Principal Balance after giving effect to the pro rata application of Realized
Losses directly to the Class 1-A6 Certificates) and (y) 17.46%, and (F) any
Realized Losses (other than Excess Losses) that would otherwise be allocated to
the Class 1-A19 Certificates will instead be allocated to the Class 1-A6
Certificates, but only in an amount up to the product of (x) the Outstanding
Certificate Principal Balance of the Class 1-A6 Certificates (after reduction of
such Outstanding Certificate Principal Balance after giving effect to the pro
rata application of Realized Losses directly to the Class 1-A6 Certificates) and
(y) 6.92%. The principal portion of any Excess Losses shall be allocated without
priority among (i) all Classes of Subordinated Certificates and (ii) the Class A
Certificates, pro rata based upon their respective Outstanding Certificate
Principal Balances (or, in the case of the Class 1-A3 and Class 1-A4
Certificates,
104
the lesser of their Original Certificate Principal Balance or their Outstanding
Certificate Principal Balance); provided , however, that the Class A
Certificates related to the Mortgage Group in which the Excess Loss occurs will
be allocated the portion of such Excess Losses that would otherwise be allocated
to the Class A Certificates not related to such Mortgage Group; and provided,
further, however, that the applicable PO Percentage of any Excess Losses on the
Discount Mortgage Loans shall be allocated to Class A-P Component One (if the
Excess Loss occurred with respect to a Group One Mortgage Loan), or to Class A-P
Component Two (if the Excess Loss occurred with respect to a Group Two Mortgage
Loan). For purposes of the foregoing sentence, each Class of Subordinated
Certificates will be deemed to have an Outstanding Certificate Principal Balance
(and to accrue interest thereon) equal to the actual Outstanding Certificate
Principal Balance thereof times a fraction, the numerator of which is the Group
One Subordinated Amount (for a loss on a Group One Mortgage Loan) or the Group
Two Subordinated Amount (for a loss on a Group Two Mortgage Loan), and the
denominator of which is the aggregate of the Group One Subordinated Amount and
the Group Two Subordinated Amount.
(c) As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their Outstanding Certificate Principal Balances
(or, in the case of the Class 1-A3 and Class 1-A4 Certificates, in each case,
the lesser of (i) the Original Certificate Principal Balance of such Class of
Certificates and (ii) the Outstanding Certificate Principal Balance of such
Class of Certificates) prior to giving effect to distributions to be made on
such Distribution Date. All Realized Losses and all other losses allocated to a
Class of Certificates hereunder will be allocated among the Certificates of such
Class in proportion to the Percentage Interests evidenced thereby.
(d) In the event that a recovery is made with respect to any Realized
Loss, the amount of such recovery shall be treated as a Principal Prepayment and
deposited into the Collection Account and distributed on the applicable
Distribution Date.
Section 6.05 Compensating Interest; Allocation of Certain Interest
Shortfalls.
(a) Upon a Principal Prepayment of a Mortgage Loan, the Servicer shall
deposit into the Collection Account from its own funds, as a reduction of its
servicing compensation hereunder, an amount, if any, by which the amount of the
interest that would otherwise accrue with respect to such Mortgage Loan from the
date of prepayment to the Due Date in the related Due Period at the Net Mortgage
Rate exceeds the amount of the interest (adjusted to the Net Mortgage Rate)
collected from the Mortgagor with respect to such period (such amount,
"Compensating Interest"); provided, however, that with respect to any
Distribution Date, the Servicer's obligation to deposit any such amount is
limited to an amount equal to the product of (i) one-twelfth of 0.125% and (ii)
the aggregate Scheduled Principal Balance of the Mortgage Loans with respect to
such Distribution Date.
(b) On any Distribution Date, the excess, if any, of (X) Compensating
Interest with respect to such Distribution Date over (Y) the amount deposited in
the Collection Account pursuant to (a) above for such Distribution Date shall
equal the "Compensating Interest Shortfall" with respect to such Distribution
Date. On any Distribution Date, the Compensating Interest Shortfall shall be
allocated pro rata among the outstanding Classes of Class A, Class M and Class B
Certificates based on the amount of interest (disregarding any Basis Risk
Shortfall Carryover Amount) to which each such Class would otherwise be paid on
such Distribution Date had there been no such Compensating Interest Shortfall.
(c) On any Distribution Date, the interest portion of any Realized Losses
("Realized Loss Interest Shortfall") (other than the interest portion of Excess
Losses) shall be allocated to the Class of Subordinated Certificates then
outstanding having the highest numerical class designation (for this
105
purpose, the Class M Certificates shall be deemed to have a lower numerical
class designation than each Class of Class B Certificates) or, if no Class of
Subordinated Certificates is then outstanding, to the Class A Certificates
(other than the Class A-P Certificates) pro rata among the outstanding Classes
of Class A Certificates (other than the Class A-P Certificates) based on the
amount of interest (disregarding any Basis Risk Shortfall Carryover Amount) to
which each such Class would otherwise be entitled (or in the case of the Class
1-A3 and Class 1-A4 Certificates, added to the principal balance of such Class
prior to the Class 1-A3 Accretion Termination Date or Class 1-A4 Accretion
Termination Date, respectively, as applicable) on such Distribution Date had
there been no such Realized Loss Interest Shortfall. On any Distribution Date,
the interest portion of any Excess Losses shall be allocated pro rata among the
outstanding Classes of Certificates based upon the amount of interest
(disregarding any Basis Risk Shortfall Carryover Amount) to which each such
Class would otherwise be entitled (or in the case of the Class 1-A3 and Class
1-A4 Certificates, added to the principal balance of such Class prior to the
Class 1-A3 Accretion Termination Date or Class 1-A4 Accretion Termination Date,
respectively, as applicable) on such Distribution Date had there been no such
Excess Losses allocable to interest; provided, however, that so long as the
Outstanding Certificate Principal Balance of the Class 1-A6 Certificates is
greater than zero, (A) the interest portion of any Excess Losses that would
otherwise be allocated to the Class 1-A1 Certificates in accordance with this
Section 6.05(c) will instead be allocated to the Class 1-A6 Certificates, but
only in an amount up to the product of (x) the Outstanding Certificate Principal
Balance of the Class 1-A6 Certificates (after reduction of such Outstanding
Certificate Principal Balance after giving effect to the pro rata application of
Realized Losses directly to the Class 1-A6 Certificates) and (y) 33.10%, (B) the
interest portion of any Excess Losses that would otherwise be allocated to the
Class 1-A12 Certificates in accordance with this Section 6.05(c) will instead be
allocated to the Class 1-A6 Certificates, but only in an amount up to the
product of (x) the Outstanding Certificate Principal Balance of the Class 1-A6
Certificates (after reduction of such Outstanding Certificate Principal Balance
after giving effect to the pro rata application of Realized Losses directly to
the Class 1-A6 Certificates) and (y) 31.80%, (C) the interest portion of any
Excess Losses that would otherwise be allocated to the Class 1-A14 Certificates
in accordance with this Section 6.05(c) will instead be allocated to the Class
1-A6 Certificates, but only in an amount up to the product of (x) the
Outstanding Certificate Principal Balance of the Class 1-A6 Certificates (after
reduction of such Outstanding Certificate Principal Balance after giving effect
to the pro rata application of Realized Losses directly to the Class 1-A6
Certificates) and (y) 3.83%, (D) the interest portion of any Excess Losses that
would otherwise be allocated to the Class 1-A15 Certificates in accordance with
this Section 6.05(c) will instead be allocated to the Class 1-A6 Certificates,
but only in an amount up to the product of (x) the Outstanding Certificate
Principal Balance of the Class 1-A6 Certificates (after reduction of such
Outstanding Certificate Principal Balance after giving effect to the pro rata
application of Realized Losses directly to the Class 1-A6 Certificates) and (y)
6.88%, (E) the interest portion of any Excess Losses that would otherwise be
allocated to the Class 1-A16 Certificates in accordance with this Section
6.05(c) will instead be allocated to the Class 1-A6 Certificates, but only in an
amount up to the product of (x) the Outstanding Certificate Principal Balance of
the Class 1-A6 Certificates (after reduction of such Outstanding Certificate
Principal Balance after giving effect to the pro rata application of Realized
Losses directly to the Class 1-A6 Certificates) and (y) 17.46%, and (F) the
interest portion of any Excess Losses that would otherwise be allocated to the
Class 1-A19 Certificates in accordance with this Section 6.05(c) will instead be
allocated to the Class 1-A6 Certificates, but only in an amount up to the
product of (x) the Outstanding Certificate Principal Balance of the Class 1-A6
Certificates (after reduction of such Outstanding Certificate Principal Balance
after giving effect to the pro rata application of Realized Losses directly to
the Class 1-A6 Certificates) and (y) 6.92%.
(d) Any interest shortfall resulting from the Relief Act shall be
allocated pro rata among the outstanding Classes of Certificates based upon the
amount of interest (disregarding any Basis Risk Shortfall Carryover Amount) to
which each such Class would otherwise be paid on such Distribution Date.
106
Section 6.06 Subordination. The rights of the Class B Certificateholders
to receive distributions in respect of the Class B Certificates on any
Distribution Date shall be subordinated to the rights of the Class A and Class M
Certificateholders to receive distributions in respect of the Class A and Class
M Certificates. The rights of the Class M-1 Certificateholders to receive
distributions inrespect of the Class M-1 Certificates on any Distribution Date
shall be subordinated to the rights of the Class A and Class A-M
Certificateholders to receive distributions in respect of the Class A and Class
A-M Certificates, respectively. The rights of the Class A-M Certificateholders
to receive distributions in respect of the Class A-M Certificates on any
Distribution Date shall be subordinated to the rights of the Class A
Certificateholders to receive distributions in respect of the Class A
Certificates. The rights of the Class B-1 Certificateholders to receive
distributions in respect of the Class B-1 Certificates on any Distribution Date
shall be subordinate to the rights of the Class A and Class M Certificateholders
to receive distributions in respect of such Class A and Class M Certificates.
Each Class of Class B Certificates (other than the Class B-1 Certificates) is
subordinated to the Class A Certificates, the Class M Certificates and each
Class of Class B Certificates having a lower numerical class designation than
such Class of Class B Certificates. The rights of the Servicer, as servicer, to
receive funds from the Collection Account, pursuant to Section 5.09, on account
of the Servicing Fee (except as provided in Section 6.05) in respect of each
Mortgage Loan, assumption fees, late payment charges and other mortgagor
charges, reimbursement of Advances and expenses or otherwise, shall not be
subordinated to the rights of the Class A, Class M or Class B
Certificateholders. Amounts held by the Servicer or the Paying Agent for future
distribution to the Class M or Class B Certificateholders, including, without
limitation, in the Collection Account, shall not be distributed in respect of
the Class M or Class B Certificates except in accordance with the terms of this
Agreement. The Class B Certificateholders are deemed to have granted a security
interest in such amounts to the Class A and Class M Certificateholders to secure
the rights of the Class A and Class M Certificateholders to receive
distributions in priority over the Class B Certificateholders. The Class M
Certificateholders are deemed to have granted a security interest in such
amounts to the Class A Certificateholders to secure the rights of the Class A
Certificateholders to receive distributions in priority over the Class A
Certificateholders.
Section 6.07 Determination of LIBOR. The meaning of LIBOR applicable to
the calculation of the Certificate Rates on the Class 1-A1, Class 1-A2 and Class
1-A8 Certificates for any Interest Accrual Period (other than the initial
Interest Accrual Period) will be determined by the Servicer or its designee on
each Rate Adjustment Date as follows:
For any Interest Accrual Period other than the first Interest Accrual
Period, "LIBOR" means, with respect to a Yield Maintenance Agreement Remittance
Date, the rate determined by the Counterparty to be (i) the per annum rate for
deposits in U.S. dollars for a period of one month which appears on the Reuters
Page LIBOR01 as of 11:00 a.m., London time, on the day that is two London
Business Days prior to the first day of the Interest Accrual Period relating to
such Yield Maintenance Agreement Remittance Date (rounded upwards, if necessary,
to the nearest 1/100,000 of 1%); (ii) if such rate does not appear on the
Reuters Page XXXXX00, XXXXX shall be the arithmetic mean (rounded as aforesaid)
of the offered quotations obtained by the Counterparty from the Reference Banks
for deposits in U.S. dollars to leading banks in the London interbank market as
of approximately 11:00 a.m., London time, on the day that is two London Business
Days prior to the first day of the Interest Accrual Period relating to such
Yield Maintenance Agreement Remittance Date; or (iii) if fewer than two
Reference Banks provide the Counterparty with such quotations, LIBOR shall be
the rate per annum which the Counterparty determines to be the arithmetic mean
(rounded as aforesaid) of the offered quotations which leading banks in New York
City selected by the Counterparty are quoting in the New York interbank market
on the first day of the Interest Accrual Period relating to such Yield
Maintenance Agreement Remittance Date for deposits in U.S. dollars to the
Reference Banks or, if fewer than two such quotations are available, to leading
European and Canadian banks.
107
The establishment of LIBOR by the Counterparty on any Rate Adjustment Date
and the Servicer's subsequent calculation of the Certificate Rates applicable to
the Class 1-A1 and Class 1-A2 Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final and binding.
[END OF ARTICLE VI]
ARTICLE VII
REPORTS TO BE PREPARED BY THE SERVICER
Section 7.01 Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to the Trustee or, if a Paying Agent has been
appointed pursuant to Section 4.05, the Paying Agent, during the term of this
Agreement, such periodic, special, or other reports or information, whether or
not provided for herein, as shall be necessary, reasonable, or appropriate in
respect to the Trustee or, if a Paying Agent has been appointed pursuant to
Section 4.05, the Paying Agent, or otherwise in respect to the purposes of this
Agreement, all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Trustee or,
if a Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent
may reasonably require.
Section 7.02 Federal Information Returns and Reports to
Certificateholders.
(a) For federal income tax purposes, the taxable year of each REMIC Pool
shall be a calendar year and the Servicer shall maintain or cause the
maintenance of the books of each REMIC Pool on the accrual method of accounting.
(b) The Servicer or anyone acting on its behalf pursuant to Section
2.04(g) shall prepare and file or cause to be filed with the Internal Revenue
Service federal tax or information returns with respect to the Trust Fund, each
REMIC Pool and the Certificates containing such information and at the times and
in the manner as may be required by the Code or applicable Treasury regulations,
and shall furnish to each Certificateholder at any time during the calendar year
for which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby. Without limitation on any
other requirement of this Section 7.02, the Servicer shall make available the
information necessary for the application of Section 860E(e) of the Code within
60 days of such request. With respect to the Class A-R Certificate, the Servicer
shall provide such information or cause such information to be provided to (i)
the Internal Revenue Service, (ii) the transferor of a Class A-R Certificate to
a Disqualified Organization and (iii) a Pass-Thru Entity that holds a Class A-R
Certificate with one or more record holders that are Disqualified Organizations.
The Servicer also shall provide or cause to be provided promptly the above
described computation and information relating to the tax on transfers to
Disqualified Organizations or holdings by Pass-Thru Entities within sixty (60)
days after becoming aware of the transfer to a Disqualified Organization or
Pass-Thru Entity with one or more Disqualified Organization owners, as the case
may be. In addition, except as may be provided in Treasury Regulations, any
Person holding an interest in a Pass-Thru Entity as a nominee for another will,
with respect to such interest, be treated as a Pass-Thru Entity. In connection
with the foregoing, the Servicer shall provide the name, address and telephone
number of the person who can be contacted to obtain information required to be
reported to the holders of regular interests in any REMIC created hereunder (the
"REMIC Reporting Agent") as required by IRS Form 8811. The Trustee hereby
designates the Servicer to serve as the REMIC Reporting Agent. The Servicer
shall indicate the elections to treat each of the REMIC Pools as a REMIC (which
elections shall apply to the taxable period ending December 31, 2007 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The
108
Trustee shall sign all tax and information returns filed pursuant to this
Section 7.02 and any other returns as may be required by the Code, and in doing
so shall rely entirely upon, and shall have no liability for information
provided by, or calculations provided by, the Servicer. The Servicer is hereby
designated as the agent of the Holder of the Class A-R Certificate who shall be
the "tax matters person" (within the meaning of Treas. Reg. Section 1.860F-4(d))
for each REMIC Pool. Any Holder of a Class A-R Certificate will by acceptance
thereof so appoint the Servicer as agent and attorney-in-fact for the purpose of
acting as tax matters person. In the event that the Code or applicable Treasury
regulations prohibit the Trustee from signing tax or information returns or
other statements, or the Servicer from acting as tax matters person (as an agent
or otherwise), the Trustee or the Servicer, as the case may be, shall take
whatever action that in its sole good faith judgment is necessary for the proper
filing of such information returns or for the provision of a tax matters person,
including designation of the Holder of a Class A-R Certificate to sign such
returns or act as tax matters person. Each Holder of a Class A-R Certificate
shall be bound by this Section 7.02 by virtue of its acceptance of a Class A-R
Certificate.
[END OF ARTICLE VII]
ARTICLE VIII
THE DEPOSITOR AND THE SERVICER
Section 8.01 Indemnification; Third Party Claims. The Servicer agrees to
indemnify the Depositor and the Trustee and hold the Depositor and the Trustee,
their officers, directors, employees and agents harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Depositor or the
Trustee, or their officers, directors, employees or agents may sustain in any
way related to failure of the Servicer to perform its duties and service the
Mortgage Loans in compliance with the terms of this Agreement; provided that no
such indemnification shall be required with respect to acts of a prior Servicer.
The Servicer shall immediately notify the Depositor and the Trustee if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Depositor and the Trustee) 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, the Depositor or the Trustee, their officers, directors,
employees or agents in respect of such claim. This right to indemnification
shall survive the termination of this Agreement.
Section 8.02 Merger or Consolidation of the Depositor or the Servicer. The
Depositor and the Servicer will each keep in full effect its existence, rights
and franchises as a corporation, and will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement. The Servicer will not sell all
or substantially all of its assets without the prior written consent of the
Depositor and the Trustee which shall not be unreasonably withheld or delayed.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or to whom the Depositor or the Servicer has sold substantially
all of its assets, or any corporation resulting from any merger, conversion or
consolidation to which the Depositor or the Servicer shall be a party, or any
Person succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the 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 surviving Person to the Servicer shall satisfy the requirements of
Section 8.05 with respect to the qualifications of a successor to the Servicer.
109
Notwithstanding anything else in this Section 8.02 and Section 8.04 to the
contrary, the Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is approved in advance in writing by
the Trustee and the Depositor, is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement, in form and
substance reasonably satisfactory to the Depositor and the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Agreement; provided further that each Rating Agency's rating
of any of the Classes of Certificates that have been rated in effect immediately
prior to such assignment and delegation will not be qualified or reduced or
withdrawn as a result of such assignment and delegation. In the case of any such
assignment and delegation, the Servicer shall be released from its obligations
as Servicer under this Agreement, except that the Servicer shall remain liable
for all liabilities and obligations incurred by it as Servicer hereunder prior
to the satisfaction of the conditions to such assignment and delegation set
forth in the next preceding sentence.
Section 8.03 Limitation on Liability of the Depositor, the Servicer, the
Trustee and Others. Neither the Depositor, the Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Servicer shall
be under any liability to the Trustee or the Certificateholders for any action
taken, or for refraining from the taking of any action, in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor or the Servicer against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with this Agreement, or any liability which would otherwise
be imposed by reason of any breach of the terms and conditions of this
Agreement. The Depositor, the Servicer, the Trustee, and any director, officer,
employee or agent of the Depositor, the Servicer or the Trustee 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. Neither the Depositor, the
Servicer nor the Trustee shall be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its respective duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may cause it to incur any expenses or liability; provided, however, that
the Depositor, the Servicer or the Trustee may in its discretion (and, in the
case of the Depositor or the Servicer, with the consent of the Trustee, which
consent shall not be unreasonably withheld) undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the Collection Account and the Depositor, the Servicer
or the Trustee shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 5.09; provided that no such right of
reimbursement shall exist with respect to the Servicer when such claim relates
to the failure of the Servicer to service the Mortgage Loans in strict
compliance with the terms of this Agreement or to a breach of a representation
or warranty made by the Servicer hereunder.
Section 8.04 Depositor and Servicer Not to Resign. Except as described in
Section 8.02, neither the Depositor nor the Servicer shall assign this Agreement
or resign from the obligations and duties hereby imposed on it except by mutual
consent of the Depositor, the Servicer and all of the Certificateholders unless
the determination is made that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Depositor or the
Servicer. Any such determination permitting the resignation of the Depositor or
the Servicer shall be evidenced by an opinion of independent counsel to such
effect delivered to the Trustee which opinion of counsel shall be in form and
substance acceptable to the Trustee. Upon any such assignment or resignation,
the Depositor or the Servicer, as appropriate, shall send notice to all
Certificateholders of the effect of such assignment or resignation upon the then
current rating of the Class of Certificates by each Rating Agency whose rating
on such Class is then in effect. No such resignation shall become effective
until a successor shall have assumed the Depositor's or the Servicer's
responsibilities and obligations hereunder in the manner
110
provided in Section 8.05. Any purported assignment or resignation which does not
comply with the requirements of this Section shall be of no effect.
Section 8.05 Successor to the Servicer. In connection with the termination
of the Servicer's responsibilities and duties under this Agreement pursuant to
Section 8.04 or 9.01, the Trustee shall succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations as Servicer (but not
in any other capacity) under this Agreement (except that the Trustee shall not
be obligated to make Advances if prohibited by applicable law nor to effectuate
repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 and
except that the Trustee makes no representations and warranties pursuant to
Sections 3.01 and 3.02). Prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement, the Trustee may
appoint a successor having a net worth of not less than $15,000,000 and which is
a FNMA or FHLMC approved seller/servicer in good standing and which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement, except as aforesaid, if the
Trustee receives a letter from each Rating Agency that such appointment would
not result in a reduction or withdrawal of the current rating of any Class of
Certificates that is rated by a Rating Agency. Any co-trustee appointed pursuant
to Section 10.10 for purposes of this Section 8.05 shall have an obligation to
make Advances pursuant to Section 6.03 during such time as the Trustee is the
Servicer, which obligation shall be joint and several with that of the Trustee
as Servicer. If the Trustee has become the successor to the Servicer in
accordance with this Section or Section 9.03, then notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution having a net worth of not
less than $15,000,000 and which is a FNMA or FHLMC approved seller/servicer in
good standing as the successor to the Servicer hereunder in the assumption of
all of the responsibilities, duties or liabilities of the Servicer hereunder. In
connection with any 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 or such court shall determine;
provided, however, that no such compensation shall be in excess of that
permitted under this Agreement without the consent of all of the
Certificateholders. If the Trustee is acting as Servicer, the Trustee shall be
entitled to all compensation of the Servicer hereunder, and all such
compensation due to the Trustee as Servicer shall be in addition to all
compensation it is entitled to as Trustee under this Agreement. If the
Servicer's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to Section 8.02, 8.04 or 9.01, the Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof 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 or financial condition of its successor or the Trust Fund.
The resignation or removal of the Servicer pursuant to Section 8.02, 8.04 or
9.01 shall not become effective until a successor shall be appointed pursuant to
this Section and shall in no event relieve the Servicer of liability for breach
of the representations and warranties made pursuant to Section 3.02.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
and the Certificates. Any termination or resignation of the Servicer or this
Agreement pursuant to Section 8.02, 8.04, 9.01 or 11.01 shall not affect any
claims that the Trustee may have against the Servicer for events or actions
taken or not taken by the Servicer arising prior to any such termination or
resignation.
The Servicer shall timely deliver to the successor the funds that were, or
were required to be, in the Collection Account and the Escrow Account, if any,
and all Mortgage Files and related documents, statements and recordkeeping held
by it hereunder and the Servicer shall account for all funds and shall
112
execute and deliver such instruments and do such other things as may reasonably
be required to more fully and definitely vest and confirm in the successor all
such rights, powers, duties, responsibilities, obligations and liabilities of
the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify, in writing, the Trustee, the Certificateholders and each Rating Agency
of such appointment.
Section 8.06 Maintenance of Ratings. The Servicer shall cooperate with the
Depositor and take any action that may be reasonably necessary to maintain the
current rating or ratings on the Certificates.
[END OF ARTICLE VIII]
ARTICLE IX
DEFAULT
Section 9.01 Events of Default. If one or more of the following Events of
Default shall occur and be continuing, that is to say:
(a) any failure by the Servicer to remit any payment required to be made
or distributed under the terms of this Agreement which continues unremedied for
a period of three (3) Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, the Paying Agent or the Depositor or to the Servicer,
the Trustee, the Paying Agent and the Depositor by the Holders of Certificates
of any Class evidencing, as to such Class, Percentage Interests aggregating not
less than 25%; or
(b) a breach by the Servicer in a material respect of any representation
or warranty set forth in Section 3.02, or failure on the part of the Servicer
duly to observe or perform in any material respect any other of the covenants or
agreements on the part of the Servicer set forth in this Agreement, which
continues unremedied for a period of 60 days after the date on which written
notice of such breach or failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee or the Depositor or to the Servicer,
the Trustee and the Depositor by the Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than
25%; or
(c) the Servicer shall notify the Trustee and any Paying Agent appointed
pursuant to Section 4.05 in writing that it is unable to make an Advance
required to be made in accordance with Section 6.03; or;
(d) 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, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(e) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of the Servicer's property; or
112
(f) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, upon receiving notice or knowledge of such event, the
Trustee shall notify the Certificateholders and each Rating Agency of such Event
of Default. The Trustee may, upon receipt of such notice or knowledge, and at
the written direction of the Holders of Certificates evidencing Percentage
Interests aggregating more than 50%, shall, by notice in writing to the
Servicer, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 8.05. Upon written request from the Trustee, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in such
successor's possession all Mortgage Files, and 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, at the Servicer's sole
expense. The Servicer agrees to cooperate with the Trustee and any co-trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited or
should have been credited by the Servicer to the Collection Account or Escrow
Account or thereafter received with respect to the Mortgage Loans. The Trustee
will have no obligation to take any action or institute, conduct or defend any
litigation under this Agreement at the request, order or direction of any of the
Holders of Certificates unless such Certificateholders have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which the Trustee may incur. The Paying Agent shall provide
information regarding the Certificateholders available to the Paying Agent in
order to allow the Trustee to comply with the provisions above.
Section 9.02 Waiver of Defaults. The Trustee may waive any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except that a default in the making of any required distribution on any of the
Certificates may only be waived by the Holders of a majority of the Percentage
Interests of the affected Certificateholders. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
Section 9.03 Trustee to Act; Appointment of Successor. On and after the
time the Servicer receives a notice of termination pursuant to Section 9.01, the
Trustee or a successor servicer appointed by it shall be the successor in all
respects to the Servicer to the extent provided in Section 8.05.
Section 9.04 Notification to Certificateholders and the Rating Agencies.
(a) Upon any such termination pursuant to Section 9.01, the Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency.
(b) Within sixty (60) days of a Responsible Officer of the Trustee having
received written notice of the occurrence of any Event of Default, the Trustee
shall transmit by mail to all Holders of Certificates notice of each such Event
of Default hereunder known to the Trustee, unless such Event of Default shall
have been cured or waived.
113
(c) The Paying Agent shall provide information regarding the
Certificateholders available to the Paying Agent in order to allow the Trustee
to comply with the provisions above.
[END OF ARTICLE IX]
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01 Duties of Trustee. The Trustee, prior to the occurrence of
an Event of Default and after the curing of all Events of Default which may have
occurred, undertakes to, and is empowered to, perform such duties and only such
duties as are specifically set forth in this Agreement. Any permissive right of
the Trustee as enumerated in this Agreement shall not be construed as a duty;
provided that in case an Event of Default has occurred (which has not been
cured), 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 man would exercise or use under the circumstances in the conduct of such
man's own affairs.
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; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Certificateholders of any Class holding Certificates
which evidence, as to such Class, Percentage Interests aggregating not
less than 25% as 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.
(iv) The Trustee shall execute the Letter of Representations, a form
of which is attached hereto as Exhibit P, on behalf of the Depositor.
Section 10.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument,
114
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;
(b) The Trustee may consult with counsel, and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the trusts
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 Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(d) Neither the Trustee nor any of its directors, officers, employees or
agents shall be personally liable for any action taken, suffered or omitted by
it in good faith and believed by it or any of them to be authorized or within
the discretion or rights or powers conferred upon the Trustee by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after the
curing of all Events of Default which may have occurred, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than 25%
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholder requesting
the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
subcontractors or attorneys; and
(g) Nothing in this Agreement shall be construed to require the Trustee
(except as might otherwise be required in its capacity as successor Servicer) to
expend its own funds.
Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans. The
recitals contained herein shall be taken as the statements of the Depositor or
the Servicer, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates, of any
Mortgage Loan or related document or the Trust Estate. The Trustee shall not be
accountable for the use or application by the Depositor or the Servicer of any
of the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Depositor or the Servicer or the Certificate Account by the Paying Agent. The
Trustee shall have no responsibility for the timeliness or the amount of
payments made by the Paying Agent to the Certificateholders.
115
Section 10.04 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 it would have if it were not Trustee.
Section 10.05 Fees and Expenses. The Paying Agent, from moneys received
from the Servicer, covenants and agrees to pay to the Trustee and its agents a
monthly fee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) equal to the product of (a) the
aggregate Principal Balance of the Mortgage Loans as of the Determination Date
in the preceding month and (b) one-twelfth of 0.000010, and the Servicer will
pay or reimburse the Trustee, or its agents upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or its
agents in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ, and the expenses incurred by the
Trustee in connection with the appointment of an office or agency pursuant to
Section 10.11) and the Servicer shall indemnify and hold harmless the Trustee
its officers, directors, employees and agents from and against any and all
claims, liabilities, losses or expenses (including but not limited to reasonable
attorneys fees) incurred in connection with the administration of this Trust and
the performance of its duties hereunder provided that the Servicer shall not be
required to reimburse any such expense or indemnify against any such loss or
liability incurred by the Trustee through the Trustee's own negligence or bad
faith. Notwithstanding anything to the contrary in this Agreement, this Section
shall survive the termination of this Agreement.
Section 10.06 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be an entity having its principal office in a state and city
acceptable to the Depositor and organized and doing business under the laws of
such 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 and subject to supervision or examination by federal or state
authority. The Trustee shall not be an Affiliate of either Seller or the
Depositor. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation 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 the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 10.07.
Section 10.07 Resignation and Removal of the Trustee. The Trustee, and any
co-trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Servicer and each
Rating Agency. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or co-trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee; provided that such appointment
does not result in a reduction or withdrawal of the rating of any of the Classes
of Certificates that have been rated. If no successor trustee shall have been so
appointed and have accepted appointment within thirty (30) days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time, the Trustee shall cease to be eligible in accordance with
the provisions of Section 10.06 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor may remove
the Trustee and appoint a successor trustee by written instrument, in duplicate,
one
116
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate more than 50% of
Percentage Interest 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
instruments shall be delivered to the Depositor, one complete set to the Trustee
so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee or any resignation of any
co-trustee and appointment of a successor trustee or co-trustee pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 10.08, or upon
acceptance of appointment by a co-trustee, as applicable, unless with respect to
a co-trustee, the Trustee receives written notice from each Rating Agency that
the failure to appoint a successor co-trustee would not result in a withdrawal
or reduction of the rating of any of the Classes of Certificates that have been
rated, in which case the resignation of any co-trustee shall be effective upon
receipt of such written notice. Any co-trustee may not be removed unless the
Depositor and the Trustee each receive written notice from each Rating Agency
that such removal would not result in a withdrawal or reduction of the rating of
any of the Classes of Certificates that have been rated, in which case the
removal of any co-trustee shall be effective upon receipt of such written
notice.
Section 10.08 Successor Trustee. Any successor trustee appointed as
provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective, and such successor trustee 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 predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Depositor, the Servicer and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for 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
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 10.06. Prior to the appointment of any successor
trustee becoming effective, the Depositor shall have received from each Rating
Agency written confirmation that such appointment would not result in a
reduction of the rating of the Class A or Class M Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register, to the Servicer, any Sub-Servicer and to each Rating
Agency. If the Depositor fails to mail such notice within ten (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 10.09 Merger or Consolidation of Trustee. Any entity into which
the Trustee may be merged or converted or with which it may be consolidated or
any entity resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any entity succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible
117
under the provisions of Section 10.06, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 10.10 Appointment of Co-Trustee or Separate Trustee. 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 the same may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, of any part of the Trust Fund, and to vest in such Person or Persons,
in such capacity, such title to the Trust Fund, or any part thereof, and,
subject to the other provisions of this Section 10.10, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, or in 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 10.06, hereunder, and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 10.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly and severally, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
Every instrument appointing any separate trustee or co-trustee shall refer
to this Agreement and the conditions of this Article X. 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.
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.
Section 10.11 Appointment of Office or Agency. The Trustee may appoint an
office or agency in The City of New York where Certificates may be surrendered
for registration of transfer or exchange. The Trustee will maintain an office at
the address stated in Section 12.07 hereof where notices and demands to or upon
the Trustee in respect of the Certificates may be served.
Section 10.12 Indemnification.
(a) The Paying Agent shall indemnify and hold harmless the Trustee, the
Depositor, the Servicer and their respective officers, directors, agents and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a failure of the Paying Agent to deliver when
required any Assessment of Compliance required of it pursuant to Section 5.26 or
any material misstatement or
118
omission contained in any Assessment of Compliance provided on its behalf
pursuant to Section 5.26. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the indemnified parties, then the
Paying Agent agrees that it shall contribute to the amount paid or payable by
the indemnified parties as a result of the losses, claims, damages or
liabilities of the indemnified parties in such proportion as is appropriate to
reflect the relative fault of the Paying Agent on the one hand and of the
indemnified parties on the other.
(b) The Servicer shall indemnify and hold harmless the Trustee, the Paying
Agent and the Depositor and their respective officers, directors, agents and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach by the Servicer or any of its officers,
directors, agents or Affiliates of its obligations under Sections 5.24, 5.25,
and 5.26, any material misstatement or omission in any documents prepared
thereunder (to the extent the Servicer is responsible for providing information
or calculating amounts included in such information), the failure of the
Servicer to deliver when required any Assessment of Compliance or Accountant's
Attestation required of it pursuant to Section 5.26 or Annual Statement of
Compliance required pursuant to Section 5.25, as applicable, or any material
misstatement or omission contained in any Assessment of Compliance, Accountant's
Attestation or Annual Statement of Compliance provided on its behalf pursuant to
Section 5.25 or 5.26, as applicable, or the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
indemnified parties, then the Servicer agrees that it shall contribute to the
amount paid or payable by the indemnified parties as a result of the losses,
claims, damages or liabilities of the indemnified parties in such proportion as
is appropriate to reflect the relative fault of the Servicer on the one hand and
of the indemnified parties on the other.
[END OF ARTICLE X]
ARTICLE XI
TERMINATION
Section 11.01 Termination. The respective obligations and responsibilities
of the Depositor, the Servicer (except the duty to pay the Trustee's fees and
expenses and indemnification hereunder) and the Trustee shall terminate upon (i)
the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee with a copy to the Paying
Agent appointed pursuant to Section 4.05 of its intention to so deposit on or
before 20th day of such Principal Prepayment Period) an amount equal to the
Purchase Price for each Outstanding Mortgage Loan, less any unreimbursed
Advances made with respect to any Mortgage Loan (which amount shall offset
completely any unreimbursed Advances for which the Servicer is otherwise
entitled to reimbursement), and, with respect to all property acquired in
respect of any Mortgage Loan remaining in the Trust Fund, an amount equal to the
fair market value of such property, as determined by an appraisal to be
conducted by an appraiser selected by the Trustee, less unreimbursed Advances
made with respect to any Mortgage Loan with respect to which property has been
acquired; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last
119
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 the foregoing, a termination may be effected by the making of
such optional repurchases only if the termination of the Trust Fund satisfies
the requirement for a "qualified liquidation" of the Trust Fund within the
meaning of Section 860F(a)(4) of the Code and the purchases of the Outstanding
Mortgage Loans pursuant to this Section 11.01 will not constitute "prohibited
transactions" within the meaning of Section 860F(a)(2) of the Code.
Notice of any termination, specifying the Distribution Date upon which all
Certificateholders may surrender their Certificates to the Trustee or, if a
Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent for
payment and cancellation, shall be given promptly by the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, (upon direction
by the Depositor ten (10) days prior to the date such notice is to be mailed) by
signed letter to Certificateholders and each Rating Agency mailed no later than
the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, therein designated and (ii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, therein specified. The Servicer shall indicate the date
of adoption of the plan of qualified liquidation in a statement attached to the
final federal income tax return of each REMIC Pool. After giving such notice,
the Trustee or if a Paying Agent has been appointed under Section 4.05, the
Paying Agent shall not register the transfer or exchange of any Certificates. If
such notice is given in connection with the Servicer's election to purchase the
Outstanding Mortgage Loans, the Servicer shall deposit in the Collection Account
after adoption of the plan during the applicable Principal Prepayment Period an
amount equal to the purchase price as determined as provided in clause (ii) of
the preceding paragraph and on the Distribution Date on which such termination
is to occur, Certificateholders will be entitled to the amount of such purchase
price but not amounts in excess thereof, all as provided herein. Upon
presentation and surrender of the Certificates, the Trustee, or if a Paying
Agent has been appointed under Section 4.05, the Paying Agent shall notify the
Servicer and the Servicer shall cause to be distributed to Certificateholders an
amount equal to (a) the amount otherwise distributable on such Distribution
Date, if not in connection with a purchase; or (b) if the Servicer elected to so
purchase, the purchase price determined as provided in clause (ii) of the
preceding paragraph. Following such final deposit the Trustee shall promptly
release to the Servicer the Mortgage Files for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer and shall have no further responsibility
with regard to said Mortgage Files.
If all of the Certificateholders shall not surrender their Certificates
for cancellation within three (3) months after the time specified in the
above-mentioned written notice, at the close of the 90 day period beginning
after the written notice is given, each remaining Certificateholder will be
credited with an amount that would have been otherwise distributed to such
Certificateholder, and the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, 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 three (3)
months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent, shall appoint an agent to take
appropriate and reasonable 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 in the Trust Fund hereunder.
[END OF ARTICLE XI]
120
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 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.
Section 12.02 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust Fund, nor
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 expressly
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 Person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and the Holders of Certificates
of any Class evidencing in the aggregate not less than 25% of the Percentage
Interests of such Class shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request) 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 sixty (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
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, 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 Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 12.03 Amendment. This Agreement may be amended from time to time
by the Depositor, the Servicer and the Trustee, without the consent of any of
the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, to
ensure continuing treatment of each REMIC created hereunder as a REMIC to avoid
or minimize the risk of imposition of any tax on any REMIC created hereunder
pursuant to the Code, or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, provided that such actions
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any
121
Certificateholder of a Class having an Outstanding Certificate Principal Balance
of greater than zero or cause any REMIC created hereunder to fail to qualify as
a REMIC.
This Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
all Classes of Certificates having an Outstanding Certificate Principal Balance
greater than zero and 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 of such Class; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01, without the consent of the Holders
of all Certificates of such Class then outstanding.
Notwithstanding anything to the contrary in this Agreement, this Agreement
may be amended from time to time by the Depositor, the Servicer and the Trustee
with the consent of Certificateholders evidencing not less than 66-2/3% of the
interests held by parties other than the Depositor, its Affiliates or its
agents, for the purposes of significantly changing the Permitted Activities of
the Trust.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section 12.03 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. In connection with any amendment
pursuant to this Section 12.03 the Trustee, Paying Agent and Depositor shall be
entitled to receive an Opinion of Counsel to the effect that such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution of such amendment in accordance with this Section 12.03 have been
met.
Section 12.04 Counterparts. 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 12.05 Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 12.06 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 12.07 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by first class or registered mail, postage prepaid, to
(i) in the case of the Depositor, Chase Mortgage Finance Corporation, 000 Xxxx
Xxxxxxxxx, 0xx Xxxxx Xxxxx, Xxxxxxxxx Lake, New Jersey 07675, Attention:
Structured Finance, (ii) in the case of the Servicer, JPMorgan Chase Bank, N.A.,
0000 Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxx 00000, (iii) in the case of the Custodian,
JPMorgan Chase Bank, N.A., 0000 Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxx, 00000, (iv) in
the case of the Trustee, The Bank of New York Trust Company, N.A., 000 Xxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxx 00000, (v) in the case of the Paying Agent, The Bank
of New York
122
Trust Company, N.A., 000 Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000, (vi) in the
case of Moody's, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (vii) in the case of Fitch Ratings, Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (viii) in the case of S&P, Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ix) in the case of any of the foregoing
persons, such other addresses as may hereafter be furnished by any such persons
to the other parties to this Agreement.
Section 12.08 Further Assurances. The Sellers and the Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements and the preparation for execution by the
Trustee of any continuation statements relating to the Co-op Loans for filing
under the provisions of the Uniform Commercial Code as in effect in the
jurisdiction in which the Underlying Mortgaged Property related to the affected
Co-op Loan is located. The Trustee agrees that it shall promptly execute and
redeliver to the Seller or the Servicer for filing any such continuation
statement so prepared by such Seller relating to the Co-op Loans.
[END OF ARTICLE XII]
123
IN WITNESS WHEREOF, the Depositor, the Servicer, the Paying Agent and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
CHASE MORTGAGE FINANCE
CORPORATION,
as Depositor
By:___________________________________________
Name:
Title:
JPMORGAN CHASE BANK, N.A.,
as Servicer
By:___________________________________________
Name:
Title:
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Trustee and Paying Agent
By:___________________________________________
Name:
Title:
JPMORGAN CHASE BANK, N.A.,
as Custodian
By:___________________________________________
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
EXHIBIT B
CONTENTS OF MORTGAGE FILE
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) (I) Original Mortgage Note bearing all intervening endorsements,
endorsed, "Pay to the order of ___________, without recourse" and signed in the
name of the last endorsee by an authorized officer.
(B) The original Mortgage (including all riders thereto) with evidence of
recording thereon, or a copy thereof certified by the public recording office in
which such Mortgage has been recorded or, if the original Mortgage has not been
returned from the applicable public recording office, a true certified copy of
the original that was sent for recording, certified by the Seller.
(C) With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan,
the original Assignment of Mortgage to "The Bank of New York Trust Company,
N.A., as trustee (Chase Mortgage Finance Corporation)," which assignment shall
be in form and substance acceptable for recording, or a copy certified by the
Seller as a true and correct copy of the original Assignment of Mortgage which
has been sent for recordation. Subject to the foregoing, such assignments may,
if permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment of
Mortgage is in blanket form, a copy of the Assignment of Mortgage shall be
included in the related individual Mortgage File.
(D) The original policy of title insurance, or in the event such original
title policy is unavailable a copy of the related policy (provided that use of a
copy is acceptable to the related title insurance or escrow company), including
riders and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company.
(E) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage together
with a certificate of the Seller certifying that the original Assignment of
Mortgage has been delivered for recording in the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located.
(F) Originals, or copies thereof certified by the public recording office
in which such documents have been recorded, of each assumption, extension,
modification, written assurance or substitution agreements, if applicable, or if
the original of such document has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller, of such
original document together with certificate of such Seller certifying the
original of such document has been delivered for recording in the appropriate
recording office of the jurisdiction in which the Mortgaged Property is located.
(G) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of
B-1
attorney or other instrument that authorized and empowered such Person to sign
bearing evidence that such instrument has been recorded, if so required in the
appropriate jurisdiction where the Mortgaged Property is located (or, in lieu
thereof, a duplicate or conformed copy of such instrument, together with a
certificate of receipt from the recording office, certifying that such copy
represents a true and complete copy of the original and that such original has
been or is currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located),
or if the original power of attorney or other such instrument has been delivered
for recording in the appropriate public recording office of the jurisdiction in
which the Mortgaged Property is located, a certified true copy of any applicable
power of attorney.
(ii) With respect to each Co-op Loan:
(A)(I) The original Mortgage Note endorsed "Pay to the order of
___________, without recourse" and signed in the name of the last endorsee
by an authorized officer.
(B) The original loan security agreement entered into by the
Mortgagor with respect to such Co-op Loan.
(C) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect to
such Co-op Loan or if the original of such document has not been returned
from the applicable public recording office, a true certified copy of the
document sent for recording.
(D) Form UCC-3 (or copy thereof) by the applicable Mortgage Loan
Seller or its agent assigning the security interest covered by such Form
UCC-1 to "The Bank of New York as trustee" or to blank, together with all
Forms UCC-3 (or copies thereof) showing a complete chain of assignment
from the originator of the related Co-op Loan to the Seller, with evidence
of recording thereon.
(E) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of such
Co-op Loan with a stock power in blank attached.
(F) Original proprietary lease.
(G) Original assignment of proprietary lease, to the Trustee or to
blank, and all intervening assignments thereof.
(H) Original recognition agreement of the interests of the mortgagee
with respect to the Co-op Loan by the residential cooperative housing
corporation, the stock of which was pledged by the related Mortgagor to
the originator of such Co-op Loan.
(I) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F) above
with respect to such Co-op Loan.
(J) Certified true copy of power of attorney sent for recording.
B-2
EXHIBIT C
FORM OF CLASS A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE PAYING 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 FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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").
THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES
NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION
(the "depositor"), JPMORGAN CHASE BANK, N.A. (THE "SERVICER") OR THE TRUSTEE
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY the depositor, THE SERVICER, THE TRUSTEE OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OR
NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL BALANCE OR NOTIONAL AMOUNT, AS APPLICABLE, BY INQUIRY OF THE
PAYING AGENT.
THIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING
AGREEMENT (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 AND THE
PAYING AGENT.
TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE
MEANINGS ASSIGNED IN THE AGREEMENT.
C-
CLASS [ ]-A[ ] CERTIFICATE
Number: 07-S3-1-A[ ]-1 Original Denomination:
$
Cut-off Date: April 1, 2007 Final Scheduled
Distribution Date: May 25, 2037
Initial Distribution Date: Aggregate Original Principal
May 25, 2007 Balance or Notional Amount
of all Class A-[ ] Certificates:
$
Certificate Rate: CUSIP:
Registered Owner:
CHASE MORTGAGE FINANCE TRUST SERIES 2007-S3
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
This certifies that the Registered Owner identified above is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of Mortgage
Loans formed and sold by Chase Mortgage Finance Corporation (the "Depositor"),
and certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the "Servicer") and are secured
by liens on the Mortgaged Properties. The Trust Fund was created pursuant to a
Pooling and Servicing Agreement (the "Agreement"), dated as of the Cut-off Date
among the Depositor, the Servicer, the Custodian and The Bank of New York Trust
Company, N.A., as Paying Agent and Trustee.
This Certificate is one of a duly authorized issue of Certificates, as
designated above, and 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 Agreement
such Holder is bound. Anyone acquiring this Certificate may ascertain its
current Principal Balance or Notional Amount, as applicable, by inquiry of the
Paying Agent.
Pursuant to the terms of the Agreement, the Paying Agent will distribute
from funds in the Certificate Account the amount specified in the Agreement 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
Initial Distribution Date.
Distributions on this Certificate will be made in the manner specified in
the Agreement. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Paying Agent of the pendency of
such distribution, and only upon presentation and
C-2
surrender of this Certificate at the office of the Paying Agent specified in
such notice of final distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the Paying
Agent will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such
purpose, the Paying Agent will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund for payment hereunder and that neither the Trustee
nor the Paying Agent is liable to the Holders 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.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Paying Agent 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 the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee in the manner specified in the Agreement.
The Agreement provides that the Trust Fund will elect to be treated as one
or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC").
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate in the manner
specified in the Agreement; provided, however, that in no event shall the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-3
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: April 25, 2007 CHASE MORTGAGE FINANCE
CORPORATION
By:__________________________________
Authorized Officer
C-4
Dated: April 25, 2007 CERTIFICATE OF AUTHENTICATION
This is one of the
Certificates
referred to in the
within-mentioned
Agreement.
THE BANK OF NEW YORK TRUST COMPANY,
N.A.
as Authenticating Agent
By:__________________________________
Authorized Signatory
C-5
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________________________Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty)
____________________________________________
NOTICE: The signature to this assignment
must correspond with the name as
it appears upon the face of the within
Certificate in every particular,
without alteration or enlargement or any
change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
C-6
EXHIBIT D
FORM OF CLASS M CERTIFICATE
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE PAYING 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 FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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").
THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES
NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION
(the "depositor"), JPMORGAN CHASE BANK, N.A. (THE "SERVICER") OR THE TRUSTEE
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY the depositor, THE SERVICER, THE TRUSTEE OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OR
NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL BALANCE OR NOTIONAL AMOUNT, AS APPLICABLE, BY INQUIRY OF THE
PAYING AGENT.
THIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING
AGREEMENT (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 AND THE
PAYING AGENT.
TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE
MEANINGS ASSIGNED IN THE AGREEMENT.
CLASS M-[ ] CERTIFICATE
Number: 07-S3-1-M-[ ]-1 Original Denomination:
$
Cut-off Date: April 1, 2007 Final Scheduled
Distribution Date: May 25, 2037
Initial Distribution Date: Aggregate Original Principal
May 26, 2007 Balance or Notional Amount
of all Class M-[ ] Certificates:
$
Certificate Rate: CUSIP:
Registered Owner:
D-2
CHASE MORTGAGE FINANCE TRUST SERIES 2007-S3
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
This certifies that the Registered Owner identified above is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of Mortgage
Loans formed and sold by Chase Mortgage Finance Corporation (the "Depositor"),
and certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the "Servicer") and are secured
by liens on the Mortgaged Properties. The Trust Fund was created pursuant to a
Pooling and Servicing Agreement (the "Agreement"), dated as of the Cut-off Date
among the Depositor, the Servicer, the Custodian and The Bank of New York Trust
Company, N.A., as Paying Agent and Trustee.
This Certificate is one of a duly authorized issue of Certificates, as
designated above, and 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 Agreement
such Holder is bound. Anyone acquiring this Certificate may ascertain its
current Principal Balance or Notional Amount, as applicable, by inquiry of the
Paying Agent.
Pursuant to the terms of the Agreement, the Paying Agent will distribute
from funds in the Certificate Account the amount specified in the Agreement 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
Initial Distribution Date.
Distributions on this Certificate will be made in the manner specified in
the Agreement. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Paying Agent of the pendency of
such distribution, and only upon presentation and surrender of this Certificate
at the office of the Paying Agent specified in such notice of final
distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the Paying
Agent will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such
purpose, the Paying Agent will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund for payment hereunder and that neither the Trustee
nor the Paying Agent is liable to the Holders 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.
D-3
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Paying Agent 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 the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee in the manner specified in the Agreement.
The Agreement provides that the Trust Fund will elect to be treated as one
or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC").
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate in the manner
specified in the Agreement; provided, however, that in no event shall the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.
Dated: April 25, 2007 CHASE MORTGAGE FINANCE
CORPORATION
By:________________________________
Authorized Officer
D-5
Dated: April 25, 2007 CERTIFICATE OF AUTHENTICATION
This is one of the
Certificates
referred to in the
within-mentioned
Agreement.
THE BANK OF NEW YORK TRUST COMPANY,
N.A.
as Authenticating Agent
By:________________________________
Authorized Signatory
D-6
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:
(Signature guaranty) _______________________________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
D-7
EXHIBIT E
FORM OF CLASS B CERTIFICATE
THIS CLASS B CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES, AS DESCRIBED IN THE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE PAYING 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 FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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").
THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES
NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION
(the "depositor"), JPMORGAN CHASE BANK, N.A. (THE "SERVICER") OR THE TRUSTEE
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY the depositor, THE SERVICER, THE TRUSTEE OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OR
NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL BALANCE OR NOTIONAL AMOUNT, AS APPLICABLE, BY INQUIRY OF THE
PAYING AGENT.
[THIS LEGEND WILL APPEAR ON THE CLASS B-4, Class B-5 and Class B-6 Certificates
Only.] THIS CLASS B CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
F-1
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
[THIS LEGEND WILL APPEAR ON THE CLASS B-4, Class B-5 and Class B-6 Certificates
Only.] NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR AND
THE TRUSTEE SHALL HAVE RECEIVED (A) A REPRESENTATION LETTER FROM THE TRANSFEREE
OF THIS CERTIFICATE 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"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A PLAN SUBJECT TO ANY
PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF
ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER TO THE EFFECT THAT SUCH
TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS
OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF
PTCE 95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE, AND UPON WHICH THE
DEPOSITOR AND THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE
ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL
NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR
THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE
DEPOSITOR OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY
SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE SERVICER.
tHIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING
AGREEMENT (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 AND THE
PAYING AGENT.
TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE
MEANINGS ASSIGNED IN THE AGREEMENT.
CLASS B-[ ] CERTIFICATE
E-2
Number: 07-S3-1-B-[ ]-1 Original Denomination:
$
Cut-off Date: April 1, 2007 Final Scheduled
Distribution Date: May 25, 2037
Initial Distribution Date: Aggregate Original Principal
May 25, 2007 Balance or Notional Amount
of all Class B-[ ] Certificates:
$
Certificate Rate: CUSIP:
Registered Owner:
E-3
CHASE MORTGAGE FINANCE TRUST SERIES 2007-S3
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
This certifies that the Registered Owner identified above is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of Mortgage
Loans formed and sold by Chase Mortgage Finance Corporation (the "Depositor"),
and certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the "Servicer") and are secured
by liens on the Mortgaged Properties. The Trust Fund was created pursuant to a
Pooling and Servicing Agreement (the "Agreement"), dated as of the Cut-off Date
among the Depositor, the Servicer, the Custodian and The Bank of New York Trust
Company, N.A., as Paying Agent and Trustee.
This Certificate is one of a duly authorized issue of Certificates, as
designated above, and 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 Agreement
such Holder is bound. Anyone acquiring this Certificate may ascertain its
current Principal Balance or Notional Amount, as applicable, by inquiry of the
Paying Agent.
Pursuant to the terms of the Agreement, the Paying Agent will distribute
from funds in the Certificate Account the amount specified in the Agreement 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
Initial Distribution Date.
Distributions on this Certificate will be made in the manner specified in
the Agreement. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Paying Agent of the pendency of
such distribution, and only upon presentation and surrender of this Certificate
at the office of the Paying Agent specified in such notice of final
distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the Paying
Agent will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such
purpose, the Paying Agent will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund for payment hereunder and that neither the Trustee
nor the Paying Agent is liable to the Holders 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.
E-4
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Paying Agent 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 the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee in the manner specified in the Agreement.
The Agreement provides that the Trust Fund will elect to be treated as one
or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC").
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate in the manner
specified in the Agreement; provided, however, that in no event shall the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
E-5
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: April 25, 2007 CHASE MORTGAGE FINANCE
CORPORATION
By:_________________________________
Authorized Officer
E-6
Dated: April 25, 2007 CERTIFICATE OF AUTHENTICATION
This is one of the
Certificates
referred to in the
within-mentioned
Agreement.
THE BANK OF NEW YORK TRUST COMPANY,
N.A.
as Authenticating Agent
By:_________________________________
Authorized Signatory
E-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________Attorney to transfer the within Certificate on
the books kept for the registration thereof, with full power of substitution in
the premises.
Dated:
(Signature guaranty) ______________________________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
E-8
EXHIBIT F
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "RESIDUAL
INTEREST" IN MULTIPLE "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").
THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES
NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION
(the "depositor"), JPMORGAN CHASE BANK, N.A. (THE "SERVICER") OR THE TRUSTEE
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC RESIDUAL INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY the depositor, THE SERVICER, THE TRUSTEE OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR AND THE
TRUSTEE SHALL HAVE RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE 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"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT
TO ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH
PLAN.
TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED UNDER THE PROVISIONS OF THE
AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE PAYING AGENT.
F-1
CLASS A-R CERTIFICATE
Number: 07-S3-1-A-R-1 Original Denomination:
$100.00
Cut-off Date: April 1, 2007 Final Scheduled
Distribution Date: May 25, 2037
Initial Distribution Date: Aggregate Original Principal
May 25, 2007 Balance of Class A-R
Certificate: $100.00
Certificate Rate: CUSIP:
Registered Owner:
CHASE MORTGAGE FINANCE TRUST SERIES 2007-S3
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
This certifies that the Registered Owner identified above is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of Mortgage
Loans formed and sold by Chase Mortgage Finance Corporation (the "Depositor"),
and certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the "Servicer") and are secured
by liens on the Mortgaged Properties. The Trust Fund was created pursuant to a
Pooling and Servicing Agreement (the "Agreement"), dated as of the Cut-off Date
among the Depositor, the Servicer, the Custodian and The Bank of New York Trust
Company, N.A., as Paying Agent and Trustee.
This Certificate is one of a duly authorized issue of Certificates, as
designated above, and 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 Agreement
such Holder is bound. Anyone acquiring this Certificate may ascertain its
current Principal Balance or Notional Amount, as applicable, by inquiry of the
Paying Agent.
Pursuant to the terms of the Agreement, the Paying Agent will distribute
from funds in the Certificate Account the amount specified in the Agreement 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
Initial Distribution Date.
Distributions on this Certificate will be made in the manner specified in
the Agreement. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Paying Agent of the pendency of
such distribution, and only upon presentation and
F-2
surrender of this Certificate at the office of the Paying Agent specified in
such notice of final distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the Paying
Agent will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such
purpose, the Paying Agent will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund for payment hereunder and that neither the Trustee
nor the Paying Agent is liable to the Holders 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.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Paying Agent 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 the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee in the manner specified in the Agreement.
The Agreement provides that the Trust Fund will elect to be treated as one
or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC").
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate in the manner
specified in the Agreement; provided, however, that in no event shall the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
F-3
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.
Dated: April 25, 2007 CHASE MORTGAGE FINANCE CORPORATION
By: ______________________________
Authorized Officer
F-4
Dated: April 25, 2007 CERTIFICATE OF AUTHENTICATION
This is one of the
Certificates referred to
in the within-mentioned
Agreement.
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Authenticating Agent
By:_________________________________
Authorized Signatory
F-5
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________Attorney to transfer the within Certificate on
the books kept for the registration thereof, with full power of substitution in
the premises.
Dated:
(Signature guaranty) ___________________________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
F-6
EXHIBIT G
FORM OF TRUSTEE CERTIFICATION
[DATE]
The Bank of New York Trust Company, N.A., as trustee (the "Trustee") under
the Pooling and Servicing Agreement dated as of April 1, 2007 (the "Agreement")
among Chase Mortgage Finance Corporation (the "Company"), the Trustee, the
Paying Agent and JPMorgan Chase Bank, N.A., regarding Chase Mortgage Finance
Trust, Series 2007-S3, hereby certifies that, except as noted in the Exception
Report:
1. The Trustee or the Custodian on behalf of the Trustee took the Mortgage
Notes and other property in the Trust Fund in good faith for value and without
notice or knowledge (i) of any adverse claims, liens or encumbrances, (ii) that
any Mortgage Note was overdue or had been dishonored or subject to any security
interest or other right or interest therein, or (iii) of any defense against or
claim to the Mortgage Notes or other property in the Trust Fund on the part of
any entity;
2. The Trustee or the Custodian on behalf of the Trustee received actual
possession of the Mortgage Notes; and
3. The Trustee or the Custodian on behalf of the Trustee took possession
of the Mortgage Notes in the ordinary course of its business.
Capitalized words used herein shall have the respective meanings assigned
to them in the Agreement.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
G-1
IN WITNESS WHEREOF, the undersigned executed this Trustee's Certificate as
of the 25th day of April, 2007.
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
By: ___________________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York Trust Company, N.A., as trustee
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Services/CMFT 2007-S3
Re: Chase Mortgage Finance Trust Series 2007-S3, Multi-Class
Mortgage Pass-Through Certificates, Series 2007-S3, [CLASS B-]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ________________
_________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Chase Mortgage Finance Trust Series 2007-S3,
Multi-Class Mortgage Pass-Through Certificates, Series 2007-S3, [CLASS B- ] (the
"Certificates"), issued pursuant to a pooling and servicing agreement, dated as
of April 1, 2007 (the "Pooling and Servicing Agreement"), among Chase Mortgage
Finance Corporation (the "Depositor"), JPMorgan Chase Bank, N.A. ("Chase"), as
servicer and custodian, The Bank of New York Trust Company, N.A., as paying
agent and The Bank of New York Trust Company, N.A., as trustee (the "Trustee").
[THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
H-1
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CLASS B CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN
TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER
APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS AN
ERISA RESTRICTED CERTIFICATE.] NO TRANSFER OF THIS CERTIFICATE SHALL BE
MADE UNLESS THE DEPOSITOR SHALL HAVE RECEIVED (A) A REPRESENTATION LETTER
FROM THE TRANSFEREE OF THIS CERTIFICATE 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"), A PLAN
SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), OR A PLAN SUBJECT TO ANY PROVISIONS UNDER ANY FEDERAL,
STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF
THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING,
A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS AN INSURANCE
COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING
OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE
95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE DEPOSITOR, AND UPON WHICH THE DEPOSITOR SHALL
BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND HOLDING OF
THIS CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR
OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH
ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
H-2
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR
OR THE SERVICER.
3. The Purchaser is acquiring the Transferred Certificates for its own
account [for investment only]*/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it authorize any
Person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any Person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
6. If the Purchaser is acquiring ERISA Restricted Certificates, the
Purchaser is not a Plan and is not acquiring the ERISA Restricted Certificates
for, on behalf of or with any assets of any such Plan, except as may be
permitted in accordance with Section 4.02(d) of the Pooling and Servicing
Agreement.
7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit I to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
9. The Purchaser has received such information as Purchaser deems
necessary in order to make its investment decision.
Very truly yours,
[PURCHASER]
___________________________
*/ Not required of a broker/dealer purchaser.
H-3
By:_______________________________
Name: ____________________________
Title: ___________________________
H-4
EXHIBIT I
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York Trust Company, N.A., as trustee
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Services/CMFT 2007-S3
Re: Chase Mortgage Finance Trust Series 2007-S3, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-S3, [CLASS B- ]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Chase Mortgage Finance Trust Series
2007-S3, Multi-Class Mortgage Pass-Through Certificates, Series 2007-S3, [CLASS
B-] (the "Certificates"), issued pursuant to a pooling and servicing agreement,
dated as of April 1, 2007 (the "Pooling and Servicing Agreement"), among Chase
Mortgage Finance Corporation (the "Depositor"), JPMorgan Chase Bank, N.A.
("Chase"), as servicer (the "Servicer") and custodian, The Bank of New York
Trust Company, N.A., as paying agent and The Bank of New York Trust Company,
N.A., as trustee (the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE
TRANSFERRED CERTIFICATE IN THE NAME OF ____________________, AS NOMINEE FOR
__________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
I-1
In connection with our acquisition of the above Transferred 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 Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely with respect to an
ERISA Restricted Certificate, we (A) are not an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions under any
federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), and is not directly or indirectly acquiring the
Certificate for, on behalf of or with any assets of any such Plan, (B) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account" as defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(C) solely in the case of a Definitive Certificate, will deliver herewith an
Opinion of Counsel satisfactory to the Depositor and the Trustee, and upon which
the Depositor and the Trustee shall be entitled to rely, to the effect that the
acquisition and holding of this Certificate by the prospective transferee will
not constitute or result in a nonexempt prohibited transaction under ERISA or
the Code or a violation of Similar Law and will not subject the Trustee, the
Depositor or the Servicer to any obligation in addition to those undertaken by
such entities in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Servicer,(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, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred 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 by us, based upon
certifications of such purchaser or information we have in our possession, 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. We
have received such information as we deem necessary in order to make our
investment decision.
I-2
We agree to indemnify the Trustee, the Servicer and the Depositor against
any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By: ____________________________
Name: __________________________
Title: _________________________
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX 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 the 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 $____________*/ 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 Federal, 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 such institution 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, as amended.
----------
* 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.
I-4
____ 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 the 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, as amended.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
____ 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, as amended.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (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 as
I-5
provided above, the Buyer agrees that it will furnish to such parties updated
annual financial statements promptly after they become available.
By: ________________________________
Name: ______________________________
Title: _____________________________
Date: ______________________________
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX 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 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
I-7
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.
By: ________________________________
Name: ______________________________
Title: _____________________________
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date: ______________________________
I-8
EXHIBIT J
FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the "Agreement") is
made and entered into as of [DATE], between JPMorgan Chase Bank, N.A., (the
"Company") and _____________________ (the "Purchaser").
PRELIMINARY STATEMENT
__________________ (the "Owner") is the holder of the entire interest in
Chase Mortgage Finance Trust Series 2007-S3, Multi-Class Mortgage Pass-Through
Certificates, Series 2007-S3, Class B-6 (the "Class B-6 Certificates"). The
Class B-6 Certificates were issued pursuant to a Pooling and Servicing Agreement
dated as of April 1, 2007 (the "Pooling and Servicing Agreement") among Chase
Mortgage Finance Corporation, (the "Company"), JPMorgan Chase Bank, N.A., as
servicer (the "Servicer"), JPMorgan Chase Bank, N.A., as custodian, (the
"Custodian"), The Bank of New York Trust Company, N.A., as paying agent (the
"Paying Agent") and The Bank of New York Trust Company, N.A., as trustee (the
"Trustee").
The Owner intends to resell all of the Class B-6 Certificates directly to
the Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed that the
Company, as Servicer, will engage in certain special servicing procedures
relating to foreclosures for benefit of the Purchaser, and that the Purchaser
will deposit funds in a collateral fund to cover any losses attributable to such
procedures as well as all advances and costs in connection therewith, as set
forth herein.
In consideration of the mutual agreements herein contained, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree to the following:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the State of New York are required or
authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant to Section
3.01 hereof.
Collateral Fund Permitted Investments: Either: (i) obligations of, or
obligations fully guaranteed as to principal and interest by, the United States,
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States, (ii) a money market fund
rated in the highest rating category by a nationally recognized rating agency
selected by the Company, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by GNMA, FNMA or FHLMC, (v) commercial paper (including
both non-interest bearing discount obligations and interest bearing
J-1
obligations payable on demand or on a specified date), the issuer of which may
be an affiliate of the Company, having at the time of such investment a rating
of at least Prime-1 by Xxxxx'x Investors Service, Inc. ("Moody's") or at least
F-1 by Fitch Ratings and (vi) demand and time deposits in, certificates of
deposit of, any depository institution or trust company (which may be an
affiliate of the Company) incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal and/or state banking authorities, so long as at the time of such
investment either (x) the long-term debt obligations of such depository
institution or trust company have a rating of at least Aa by Moody's or at least
AA by Fitch Ratings or (y) the certificate of deposit or other unsecured
short-term debt obligations of such depository institution or trust company have
a rating of at least F-1 by Fitch Ratings or Prime-1 by Moody's and, for each of
the preceding clauses (i), (iv), (v) and (vi), the maturity thereof shall be not
later than the earlier to occur of (A) 30 days from the date of the related
investment and (B) the next succeeding Distribution Date.
Commencement of Foreclosure: The first official action required under
local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a mortgage,
any filing or service of process necessary to commence an action to foreclose,
or (ii) in the case of a deed of trust, the posting, publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of
default, notice of intent to foreclose or sell or any other action prerequisite
to the actions specified in (i) or (ii) above and upon the consent of the
Purchaser which will be deemed given unless expressly withheld within two
Business Days of notification, (y) the acceptance of a deed-in-lieu of
foreclosure (whether in connection with a sale of the related property or
otherwise) or (z) initiation and completion of a short pay-off.
Current Appraisal: With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), obtained by the Purchaser at its expense from an appraiser (which shall
not be an affiliate of the Purchaser) acceptable to the Company as nearly
contemporaneously as practicable to the time of the Purchaser's election,
prepared based on the Company's customary requirements for such appraisals.
Election to Delay Foreclosure: Any election by the Purchaser to delay the
Commencement of Foreclosure, made in accordance with Section 2.02(b).
Election to Foreclose: Any election by the Purchaser to proceed with the
Commencement of Foreclosure, made in accordance with Section 2.03(a).
Required Collateral Fund Balance: As of any date of determination, an
amount equal to the aggregate of all amounts previously required to be deposited
in the Collateral Fund pursuant to Section 2.02(d) (after adjustment for all
withdrawals and deposits pursuant to Section 2.02(e)) and Section 2.03(b) (after
adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.03 to be reduced by all withdrawals therefrom pursuant to Section
2.02(g) and Section 2.03(d).
Section 1.02. Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement shall have
the meanings assigned in the Pooling and Servicing Agreement.
J-2
ARTICLE II
SPECIAL SERVICING PROCEDURES
Section 2.01 Reports and Notices.
1. In connection with the performance of its duties under the Pooling and
Servicing Agreement relating to the realization upon defaulted Mortgage Loans,
the Company, as Servicer, shall provide to the Purchaser the following notices
and reports:
(a) Within five Business Days after each Distribution Date (or
included in or with the monthly statement to
Certificateholders pursuant to the Pooling and Servicing
Agreement), the Company shall provide to the Purchaser a
report indicating for the Trust the number of Mortgage Loans
that are (A) thirty days, (B) sixty days, (C) ninety days or
more delinquent or (D) in foreclosure, and indicating for each
such Mortgage Loan the outstanding principal balance.
(b) Prior to the Commencement of Foreclosure in connection with
any Mortgage Loan, the Company shall provide the Purchaser
with a notice (sent by telecopier) of such proposed and
imminent foreclosure, stating the loan number and the
aggregate amount owing under the Mortgage Loan.
2. If requested by the Purchaser, the Company shall make its servicing
personnel available (during their normal business hours) to respond to
reasonable inquiries by the Purchaser in connection with any Mortgage Loan
identified in a report under subsection (a)(i)(B), (a)(i)(C), (a)(i)(D) or
(a)(ii) which has been given to the Purchaser; provided, that (1) the Company
shall only be required to provide information that is readily accessible to its
servicing personnel and is non-confidential and (2) the Company shall not be
required to provide any written information under this subsection.
3. In addition to the foregoing, the Company shall provide to the
Purchaser such information as the Purchaser may reasonably request concerning
each Mortgage Loan that is at least sixty days delinquent and each Mortgage Loan
which has become real estate owned, through the final liquidation thereof;
provided that the Company shall only be required to provide information that is
readily accessible to its servicing personnel and is non-confidential.
(a) With respect to all Mortgage Loans which are serviced at any
time by the Company through a Subservicer, the Company shall
be entitled to rely for all purposes hereunder, including for
purposes of fulfilling its reporting obligations under this
Section 2.01 on the accuracy and completeness of any
information provided to it by the applicable Subservicer.
Section 2.02 Purchaser's Election to Delay Foreclosure Proceedings.
1. The Purchaser directs the Company that in the event that the Company
does not receive written notice of the Purchaser's election pursuant to
subsection (b) below within 24 hours (exclusive of any intervening non-Business
Days) of transmission of the notice provided by the Company under Section
2.01(a)(ii), subject to extension as set forth in Section 2.02(b), the Company
shall proceed with the Commencement of Foreclosure in respect of such Mortgage
Loan in accordance with its normal foreclosure policies without further notice
to the Purchaser. Any foreclosure that has been initiated may be discontinued
(i) without notice to the Purchaser, if the Mortgage Loan has been brought
current or if a refinancing or prepayment occurs with respect to the Mortgage
Loan (including by means of a short payoff approved by the Company) (ii) with
notice to the Purchaser if the Company has reached the terms of a forbearance
agreement with the borrower. In such latter case the Company may complete such
J-3
forbearance agreement unless instructed otherwise by the Purchaser within one
Business Day of notification.
2. In connection with any Mortgage Loan with respect to which a notice
under Section 2.01(a)(ii) has been given to the Purchaser, the Purchaser may
elect, for reasonable cause as determined by the Purchaser, to instruct the
Company to delay the Commencement of Foreclosure until such term as the
Purchaser determines that the Company may proceed with the Commencement of
Foreclosure. Such election must be evidenced by written notice received within
24 hours (exclusive of any intervening non-Business Days) of transmission of the
notice provided by the Company under Section 2.01(a)(ii). Such 24 hour period
shall be extended for no longer than an additional four Business Days after the
receipt of the information if the Purchaser requests additional information
related to such foreclosure; provided, however that the Purchaser will have at
least one Business Day to respond to any requested additional information. Any
such additional information shall (i) not be confidential in nature and (ii) be
obtainable by the Company from existing reports, certificates or statements or
otherwise be readily accessible to its servicing personnel. The Purchaser agrees
that it has no right to deal with the Mortgagor. If the Company's normal
foreclosure policy includes acceptance of a deed-in-lieu of foreclosure or short
payoff, the Purchaser will be notified and given one Business Day to respond.
3. With respect to any Mortgage Loan as to which the Purchaser has made an
Election to Delay Foreclosure, the Purchaser shall obtain a Current Appraisal as
soon as practicable, and shall provide the Company with a copy of such Current
Appraisal.
4. Within two Business Days of making any Election to Delay Foreclosure,
the Purchaser shall remit by wire transfer to the Company, for deposit in the
Collateral Fund, an amount, as calculated by the Company, equal to the sum of
(i) 125% of the greater of the outstanding Principal Balance of the Mortgage
Loan and the value shown in the Current Appraisal referred to in subsection (c)
above (or, if such Current Appraisal has not yet been obtained, the Company's
estimate thereof, in which case the required deposit under this subsection shall
be adjusted upon obtaining of such Current Appraisal), and (ii) three months'
interest on the Mortgage Loan at the applicable Mortgage Rate. If any Election
to Delay Foreclosure extends for a period in excess of three months (such excess
period being referred to herein as the "Excess Period"), the Purchaser shall
remit by wire transfer in advance to the Company for deposit in the Collateral
Fund the amount, as calculated by the Company, equal to interest on the Mortgage
Loan at the applicable Mortgage Rate for the Excess Period. The terms of this
Agreement shall no longer apply to the servicing of any Mortgage Loan upon the
failure of the Purchaser to deposit the above amounts relating to the Mortgage
Loan within two Business Days of the Election to Delay Foreclosure.
5. With respect to any Mortgage Loan as to which the Purchaser has made an
Election to Delay Foreclosure, the Company may withdraw from the Collateral Fund
from time to time amounts necessary to reimburse the Company for all Advances
and Liquidation Expenses thereafter made by the Company as Servicer in
accordance with the Pooling and Servicing Agreement. To the extent that the
amount of any such Liquidation Expense is determined by the Company based on
estimated costs, and the actual costs are subsequently determined to be higher,
the Company may withdraw the additional amount from the Collateral Fund. In the
event that the Mortgage Loan is brought current by the Mortgagor and the
foreclosure action is discontinued, the amounts so withdrawn from the Collateral
Fund shall be redeposited therein as and to the extent that reimbursement
therefor from amounts paid by the Mortgagor is not prohibited pursuant to the
Pooling and Servicing Agreement. Except as provided in the preceding sentence,
amounts withdrawn from the Collateral Fund to cover Advances and Liquidation
Expenses shall not be redeposited therein or otherwise reimbursed to the
Purchaser. If and when any such Mortgage Loan is brought current by the
Mortgagor, all amounts remaining in the Collateral Fund in respect of such
J-4
Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to
this subsection) shall be released to the Purchaser.
6. With respect to any Mortgage Loan as to which the Purchaser has made an
Election to Delay Foreclosure, the Company shall continue to service the
Mortgage Loan in accordance with its customary procedures (other than the delay
in Commencement of Foreclosure as provided herein). If and when the Purchaser
shall notify the Company that it believes that it is appropriate to do so, the
Company shall proceed with the Commencement of Foreclosure. In any event, if the
Mortgage Loan is not brought current by the Mortgagor by the time the loan
becomes 6 months delinquent, the Purchaser's election shall no longer be
effective and at the Purchaser's option, either (i) the Purchaser shall purchase
the Mortgage Loan from the Trust Fund at a purchase price equal to the fair
market value as shown on the Current Appraisal, to be paid by (x) applying any
balance in the Collateral Fund to such purchase price, and (y) to the extent of
any deficiency, by wire transfer of immediately available funds to the Company
or Trustee; or (ii) the Company shall proceed with the Commencement of
Foreclosure.
7. Upon the occurrence of a liquidation with respect to any Mortgage Loan
as to which the Purchaser made an Election to Delay Foreclosure and as to which
the Company proceeded with the Commencement of Foreclosure in accordance with
subsection (f) above, the Company shall calculate the amount, if any, by which
the value shown on the Current Appraisal obtained under subsection (c) exceeds
the actual sales price obtained for the related Mortgaged Property (or stock
allocated to a dwelling unit in the case of a Co-op Loan) (net of Liquidation
Expenses and accrued interest related to the extended foreclosure period), and
the Company shall withdraw the amount of such excess from the Collateral Fund,
shall remit the same to the Trust Fund and in its capacity as Servicer shall
apply such amount as additional Liquidation Proceeds pursuant to the Pooling and
Servicing Agreement. After making such withdrawal, all amounts remaining in the
Collateral Fund in respect of such Mortgage Loan (after adjustment for all
withdrawals and deposits pursuant to subsection (e)) shall be released to the
Purchaser.
Section 2.03 Purchaser's Election to Commence Foreclosure Proceedings.
1. In connection with any Mortgage Loan identified in a report under
Section 2.01(a)(i)(B), the Purchaser may elect, for reasonable cause as
determined by the Purchaser, to instruct the Company to proceed with the
Commencement of Foreclosure as soon as practicable. Such election must be
evidenced by written notice received by the Company by 5:00 p.m., New York City
time, on the third Business Day following the delivery of such report under
Section 2.01(a)(i).
2. Within two Business Days of making any Election to Foreclose, the
Purchaser shall remit to the Company, for deposit in the Collateral Fund, an
amount, as calculated by the Company, equal to 125% of the current Principal
Balance of the Mortgage Loan and three months' interest on the Mortgage Loan at
the applicable Mortgage Rate. If and when any such Mortgage Loan is brought
current by the Mortgagor, all amounts in the Collateral Fund in respect of such
Mortgage Loan shall be released to the Purchaser. The terms of this Agreement
shall no longer apply to the servicing of any Mortgage Loan upon the failure of
the Purchaser to deposit the above amounts relating to the Mortgage Loans within
two Business Days at the Election to Foreclose.
3. With respect to any Mortgage Loan as to which the Purchaser has made an
Election to Foreclose, the Company shall continue to service the Mortgage Loan
in accordance with its customary procedures (other than to proceed with the
Commencement of Foreclosure as provided herein). In connection therewith, the
Company shall have the same rights to make withdrawals for Advances and
Liquidation Expenses from the Collateral Fund as are provided under Section
2.02(e), and the Company shall make reimbursements thereto to the limited extent
provided under such subsection. The Company shall not be required to proceed
with the Commencement of Foreclosure if (i) the same is stayed as a result of
the Mortgagor's bankruptcy or is otherwise barred by applicable law, or to the
extent that all
J-5
legal conditions precedent thereto have not yet been complied with or (ii) the
Company believes there is a breach of representation or warranties by the
Company, which may result in a repurchase or substitution of such Mortgage Loan,
or (iii) the Company reasonably believes the Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) may be contaminated with or
affected by hazardous wastes or hazardous substances (and the Company supplies
the Purchaser with information supporting such belief). The Company will
repurchase or substitute a Mortgage Loan pursuant to the preceding clause (ii)
within the time period specified in the Pooling and Servicing Agreement. Any
foreclosure that has been initiated may be discontinued (i) without notice to
the Purchaser if the Mortgage Loan has been brought current or if a refinancing
or prepayment occurs with respect to the Mortgage Loan (including by means of a
short payoff approved by the Company), or (ii) with notice to the Purchaser if
the Company has reached the terms of a forbearance agreement unless instructed
otherwise by the Purchaser within two Business Days of notification.
4. Upon the occurrence of a liquidation with respect to any Mortgage Loan
as to which the Purchaser made an Election to Foreclose and as to which the
Company proceeded with the Commencement of Foreclosure in accordance with
subsection (c) above, the Company shall calculate the amount, if any, by which
the Principal Balance of the Mortgage Loan at the time of liquidation (plus all
unreimbursed Advances and Liquidation Expenses in connection therewith other
than those paid from the Collateral Fund) exceeds the actual sales price
obtained for the related Mortgaged Property (or stock allocated to a dwelling
unit in the case of a Co-op Loan), and the Company shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Fund and
in its capacity as Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund (after adjustment for
all withdrawals and deposits pursuant to subsection (c)) in respect of such
Mortgage Loan shall be released to the Purchaser.
Section 2.04 Termination.
1. With respect to all Mortgage Loans included in the Trust Fund, the
Purchaser's rights to make any Election to Delay Foreclosure or any Election to
Foreclose and the Company's obligations under Section 2.01 shall terminate (i)
at such time as the Outstanding Certificate Principal Balance of the Class B-5
Certificates has been reduced to zero, (ii) if the greater of (x) ___% (or such
lower or higher percentages that represents the Company's actual historical loss
experience with respect to the Mortgage Loans in the related pool) of the
aggregate principal balance of all Mortgage Loans that are in foreclosure or are
more than 90 days delinquent on a contractual basis and REO properties or if the
aggregate amount that the Company estimates will be required to be withdrawn
from the Collateral Fund with respect to Mortgage Loans as to which the
Purchaser has made an Election to Delay Foreclosure or an Election to Foreclose
exceeds (z) the Outstanding Certificate Principal Balance of the Class B-5
Certificates, or (iii) upon any transfer by the Purchaser of any interest (other
than the minority interest therein, but only if the transferee provides written
acknowledgment to the Company of the Purchaser's right hereunder and that such
transferee will have no rights hereunder) in the Class B-5 Certificates (whether
or not such transfer is registered under the Pooling and Servicing Agreement),
including any such transfer in connection with a termination of the Trust Fund.
Except as set forth above, this Agreement and the respective rights, obligations
and responsibilities of the Purchaser and the Company hereunder shall terminate
upon the later to occur of (i) the final liquidation of the last Mortgage Loan
as to which the Purchaser made any Election to Delay Foreclosure or any Election
to Foreclose and the withdrawal of all remaining amounts in the Collateral Fund
as provided herein and (ii) ten (10) Business Day's notice.
2. Purchaser's rights pursuant to Section 2.02 or 2.03 of this Agreement
shall terminate with respect to a Mortgage loan as to which the Purchaser has
exercised its rights under Section 2.02 or 2.03 hereof, upon Purchaser's failure
to deposit any amounts required pursuant to Section 2.02(d) or 2.03(b).
J-6
3. Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability 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
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent
thereof may rely in good faith on any document of any kind prima facie properly
executed and submitted by an Person respecting any matters arising hereunder.
ARTICLE III
COLLATERAL FUND; SECURITY INTEREST
Section 3.01 Collateral Fund.
1. Upon receipt from the Purchaser of the initial amount required to be
deposited in the Collateral Fund pursuant to Article 11, the Company shall
establish and maintain with itself as a segregated account on its books and
records an account (the "Collateral Fund"), entitled "JPMorgan Chase Bank, N.A.,
as Servicer, for the benefit of registered holders of Chase Mortgage Finance
Trust Series 2007-1, Multi-Class Mortgage Pass-Through Certificates, Series
2007-S3, Class B-5." Amounts in the Collateral Fund shall continue to be the
property of the Purchaser, subject to the first priority security interest
granted hereunder for the benefit of the Certificate holders, until withdrawn
from the Collateral Fund pursuant to Section 2.02 or 2.03 hereof.
2. Upon the termination of this Agreement and the liquidation of all
Mortgage Loans as to which the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose pursuant to Section 2.04 hereof, the
Company shall distribute to the Purchaser all amounts remaining in the
Collateral Fund together with any investment earnings thereon.
3. The Collateral Fund shall be an "outside reserve fund" within the
meaning of the REMIC Provisions, beneficially owned by the Purchaser, who shall
report all income, gain or loss with respect thereto. Any amounts transferred
from the Trust Fund to the Collateral Fund shall be deemed to be transferred to
the Purchaser, as beneficial owner of the Collateral Fund. In no event shall the
Purchaser (i) take or cause the Trustee or the Company to take any action that
could cause any REMIC established under the Trust Agreement to fail to qualify
as a REMIC or cause the imposition on any such REMIC of any "prohibited
transaction" or "prohibited contribution" taxes or (ii) cause the Trustee or the
Company to fail to take any action necessary to maintain the status of any such
REMIC as a REMIC.
Section 3.02. Collateral Fund Permitted Investments.
1. The Company shall, at the written direction of the Purchaser invest the
funds in the Collateral Fund in Collateral Fund Permitted Investments. Such
direction shall not be changed more frequently than quarterly. In the absence of
any direction, the Company shall select such investments in accordance with the
definition of Collateral Fund Permitted Investments in its discretion.
2. All income and gain realized from any investment as well as any
interest earned on deposits in the Collateral Fund (net of any losses on such
investments) and any payments of principal made in respect of any Collateral
Fund Permitted Investment shall be deposited in the Collateral Fund upon
receipt. All costs and realized losses associated with the purchase and sale of
Collateral Fund Permitted Investments shall be borne by the Purchaser and the
amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund. The Company shall periodically (but not more frequently than
monthly) distribute to the Purchaser upon request an amount of cash, to the
extent cash is
J-7
available therefor in the Collateral Fund, equal to the amount by which the
balance of the Collateral Fund, after giving effect to all other distributions
to be made from the Collateral Fund on such date, exceeds the Required
Collateral Fund Balance. Any amounts so distributed shall be released from the
lien and security interest of this Agreement.
Section 3.03 Grant of Security Interest.
1. The Purchaser grants to the Company and the Trustee for the benefit of
the Certificateholders a security interest in and lien on all of the Purchaser's
right, title and interest, whether now owned or hereafter acquired, in and to:
(1) the Collateral Fund, (2) all amounts deposited in the Collateral Fund and
Collateral Fund Permitted Investments in which such amounts are invested (and
the distributions and proceeds of such investments) and (3) all cash and
non-cash proceeds of any of the foregoing, including proceeds of the voluntary
or involuntary conversion thereof (all of the foregoing collectively, the
"Collateral").
2. The Purchaser acknowledges the lien on and security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall take
all actions requested by the Company or the Trustee as may be reasonably
necessary to perfect the security interest created under this Agreement in the
Collateral and cause it to be prior to all other security interests and liens,
including the execution and delivery to the Company for filing of appropriate
financing statements in accordance with applicable law. The Company shall file
appropriate continuation statements, or appoint an agent on its behalf to file
such statements, in accordance with applicable law.
Section 3.04 Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at any time
are insufficient to cover any withdrawals therefrom that the Company or the
Trustee is then entitled to make hereunder, the Purchaser shall be obligated to
pay such amounts to the Company or the Trustee immediately upon demand. Such
obligation shall constitute a general corporate obligation of the Purchaser.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
Section 4.02 Counterparts.
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 4.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section 4.04 Notices.
J-8
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
in the case of the Company,
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
such other address as may hereafter be furnished in writing by the Company, or
in the case of the Purchaser, with respect to notices pursuant to Section 2.01,
[PURCHASER]
______________________________________
[ADDRESS]
Attn: ________________________________
Phone: _______________________________
Fax: _________________________________
with respect to all other notices pursuant to this Agreement,
______________________________________
[ADDRESS]
Attn: ________________________________
Phone: _______________________________
Fax: _________________________________
or such other address as may hereafter be furnished in writing by the Purchaser.
Section 4.05 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever, including regulatory, 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.
Section 4.06 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders; provided,
however, that the rights under this Agreement cannot be assigned by the
Purchaser without the consent of the Company.
Section 4.07 Article and Section Headings.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
J-9
Section 4.08 Confidentiality.
The Purchaser agrees that all information supplied by or on behalf of the
Company pursuant to Sections 2.01 or 2.02, including individual account
information, is the property of the Company and the Purchaser agrees to hold
such information confidential and not to disclose such information.
J-10
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized, all
as of the day and year first above written.
JPMORGAN CHASE BANK, N.A.
By: __________________________________
Name: ________________________________
Title: _______________________________
By: __________________________________
Name: ________________________________
Title:________________________________
J-11
EXHIBIT K
FORM OF CLASS A-R TRANSFEREE'S LETTER
CHASE MORTGAGE FINANCE TRUST SERIES 2007-S3
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York Trust Company, N.A., as trustee
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Services/CMFT 2007-S3
Ladies and Gentlemen:
We propose to purchase Chase Mortgage Finance Corporation's Chase Mortgage
Finance Trust Series 2007-S3, Multi-Class Mortgage Pass-Through Certificates,
Series 2007-S3, Class A-R, described in the Prospectus Supplement, dated April
24, 2007 and Prospectus, dated April 17, 2007.
1. We certify that (a) we are not a disqualified organization, (b) we are
not purchasing such Class A-R Certificate on behalf of a disqualified
organization and (c) we are not an entity that holds such Class A-R Certificate
as nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations; for
this purpose the term "disqualified organization" means the United States, any
state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (except any entity treated as other than an instrumentality of the
foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code of
1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that we are not an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or a plan or arrangement subject to any provisions under any federal,
state, local, non-U.S. or other laws or regulations that are substantively
similar to the
K-1
foregoing provisions of ERISA or the Code (collectively, a "Plan"), and are not
directly or indirectly acquiring the Class A-R Certificate for, on behalf of or
with any assets of any such Plan.
3. We certify that (a) we have historically paid our debts as they became
due, (b) we intend, and believe that we will be able, to continue to pay our
debts as they become due in the future, (c) we understand that, as beneficial
owner of the Class A-R Certificate, we may incur tax liabilities in excess of
any cash flows generated by the Class A-R Certificate, (d) we intend to pay any
taxes associated with holding the Class A-R Certificate as they become due and
(e) we will not cause income from the Class A-R Certificate to be attributable
to a foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
4. We acknowledge that we will be the beneficial owner of the Class A-R
Certificate and:*/
______ The Class A-R Certificate will be registered in our name.
______ The Class A-R Certificate will be held in the name of our
nominee, ____________________, which is not a disqualified
organization.
5. Unless Chase Mortgage Finance Corporation ("CMFC") has consented to the
transfer to us by executing the form of Consent affixed hereto as Appendix B, we
certify that we are a U.S. person; for this purpose the term "U.S. Person" means
a citizen or resident of the United States, a corporation or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to Unites States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more such
U.S. Persons have the authority to control all substantial decisions of such
trust, (or, to the extent provided in applicable Treasury regulations, certain
trusts in existence on August 20, 1996 which are eligible to elect to be treated
as U.S. Persons). We agree that any breach by us of this certification shall
render the transfer of any interest in the Class A-R Certificate to us
absolutely null and void and shall cause no rights in the Class A-R Certificate
to vest in us.
6. We agree that in the event that at some future time we wish to transfer
any interest in the Class A-R Certificate, we will transfer such interest in the
Class A-R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class A-R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person and (iii) has
delivered to CMFC a letter in the form of this letter (including the affidavit
appended hereto) and, if requested by CMFC, an opinion of counsel (in a form
acceptable to CMFC) that the proposed transfer will not cause the interest in
the Class A-R Certificate to be held by a disqualified organization or a person
who is not a U.S. person or (b) with the written consent of CMFC.
7. We hereby designate JPMorgan Chase Bank, N.A. as our fiduciary to act
as the tax matters person for the Series 2007-S3 REMICs.
Very truly yours,
[PURCHASER]
*/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee. -
K-2
By: __________________________________
Name: ________________________________
Title: _______________________________
Accepted as of _______________________, 200_
CHASE MORTGAGE FINANCE CORPORATION
By: _____________________________________
Name: ___________________________________
Title: __________________________________
K-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of
1986, as amended, and (ii) certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is
true:
(1) He or she is an officer of _________________________ (the
"Transferee"),
(2) the Transferee's Employee Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as defined
below), has no plan or intention of becoming a disqualified
organization, and is not acquiring any of its interest in the Chase
Mortgage Finance Corporation, Multi-Class Mortgage Pass-Through
Certificates, Series 2007-S3, Class A-R on behalf of a disqualified
organization or any other entity,
(4) unless Chase Mortgage Finance Corporation ("CMFC") has consented to
the transfer to the Transferee by executing the form of Consent
affixed as Appendix B to the Transferee's Letter to which this
Certificate is affixed as Appendix A, the Transferee is a "U.S.
Person" (as defined below),
(5) that no purpose of the transfer is to avoid or impede the assessment
or collection of tax,
(6) the Transferee has historically paid its debts as they became due,
(7) the Transferee intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the Class
A-R Certificate, it may incur tax liabilities in excess of any cash
flows generated by the Class A-R Certificate,
(9) the Transferee intends to pay any taxes associated with holding the
Class A-R Certificate as they become due,
(10) the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by CMFC (upon
advice of counsel) to constitute a reasonable arrangement to ensure
that the Class A-R Certificate will not be owned directly or
indirectly by a disqualified organization, and
(11) IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class A-R
Certificate to a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of the
Transferee, and as to each of the residual interests represented by
the Class A-R Certificate, the present value of the anticipated tax
liabilities associated with holding such residual interest does not
exceed the sum of:
the present value of any consideration given to the Transferee to
acquire such residual interest;
the present value of the expected future distributions on such
residual interest; and
the present value of the anticipated tax savings associated with
holding such residual interest as the related REMIC generates losses.
K-4
For purposes of this declaration, (i) the Transferee is assumed to
pay tax at a rate equal to the highest rate of tax specified in
Section 11(b)(1) of the Code, but the tax rate specified in Section
55(b)(1)(B) of the Code may be used in lieu of the highest rate
specified in Section 11(b)(1) 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
Federal short-term rate prescribed by Section 1274(d) of the Code
for the month of the transfer and the compounding period used by the
Transferee;]
[Alternative (11) (A) at the time of the transfer, and at the close of each
of the Transferee's two fiscal years preceding the year of
transfer, the Transferee's gross assets for financial
reporting purposes exceed $100 million and its net assets for
financial reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulation Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class A-R Certificate will be to
another eligible corporation in a transaction that satisfies
Treasury regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be
a direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a
domestic corporation.
For purposes of this declaration, (i) the gross assets and net
assets of the Transferee do not include any obligation of any
related person (as defined in Treasury regulation section
1.860E-1(c)(6)(ii)) or any other asset if a principal purpose for
holding or acquiring the other asset is to permit the Transferee to
make this declaration or to satisfy the requirements of Treasury
regulation section 1.860E-1(c)(5)(i);]
[Alternative (11) Intentionally left blank;]
(12) the Transferee represents that it will not cause income from the
Class A-R 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 another U.S. taxpayer;
For purpose of this affidavit, the term "disqualified organization" means
the United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality
of any of the foregoing (except any entity treated as other than an
instrumentality of the foregoing for purposes of Section 168(h)(2)(D) of
the Internal Revenue Code of 1986, as amended (the "Code")), any
organization (other than a cooperative described in Section 521 of the
Code) that is exempt from taxation under the Code (unless such
organization is subject to tax on excess inclusions) and any organization
that is described in Section 1381(a)(2)(C) of the Code and the term "U.S.
Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations
are adopted that provide otherwise) created or organized in or under the
laws of the United States, any state thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal
income tax purposes, an estate whose income is subject to Unites States
federal income tax regardless of its source, or a trust if a court within
the United States is able to exercise primary supervision over the
administration of such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of
K-5
such trust, (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons).
K-6
__________________________________
By: ______________________________
__________________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
__________________________________
__________________________________ , 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 Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this _____ day of ____________, 200 .
Notary Public
County of __________________________
State of ___________________________
My commission expires the ______ day of _____________
By: __________________________________
Name: ________________________________
Title: _______________________________
Dated: _________________
X-0
XXXXXXXX X
CONSENT
_______________________________ (Transferee)
_______________________________
_______________________________
_______________________________
Ladies and Gentlemen:
Chase Mortgage Finance Corporation ("CMFC") hereby consents to the
transfer to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Multi-Class
Mortgage Pass-Through Certificates, Series 2007-S3, Class A-R described in the
Transferee's Letter to which this Consent is appended, notwithstanding CMFC's
knowledge that the Transferee is not a U.S. Person (as defined in such
Transferee's Letter).
CHASE MORTGAGE FINANCE CORPORATION
By: ________________________________
Dated: _______________
K-8
EXHIBIT K-1
FORM OF CLASS A-R TRANSFEROR'S LETTER
CHASE MORTGAGE FINANCE TRUST SERIES 2007-S3
[DATE]
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York Trust Company, N.A., as trustee
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Services/CMFT 2007-S3
We propose to transfer to ___________________ (the "Transferee") Chase
Mortgage Finance Corporation's Chase Mortgage Finance Trust Series 2007-S3,
Multi-Class Mortgage Pass-Through Certificates, Series 2007-S3, Class A-R,
described in the Prospectus Supplement, dated April 24, 2007 and Prospectus,
dated April 17, 2007. We have reviewed the attached affidavit of the Transferee,
and have no actual knowledge that such affidavit is not true, and have no reason
to believe that the Transferee has the intention to impede the assessment or
collection of any federal, state or local taxes legally required to be paid with
respect to the Class A-R Certificate referred to in the attached affidavit. In
addition, we have conducted a reasonable investigation at the time of the
transfer and found that the Transferee has historically paid its debts as they
came due and we found no significant evidence to indicate that the Transferee
will not continue to pay its debts as they become due.
Very truly yours,
___________________________
Name:
Title:
K-9
EXHIBIT L
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
Re: Pooling and Servicing Agreement, dated as of April 1, 2007, by
and among Chase Mortgage Finance Corporation, JPMorgan Chase
Bank, N.A. and The Bank of New York Trust Company, N.A.
relating to the issuance of the Chase Mortgage Finance Trust
Series 2007-S3, Multi-Class Mortgage Pass-Through
Certificates, Series 2007-S3
In connection with the administration of the Mortgage Loans held by you,
as Custodian on behalf of the Trustee, pursuant to the above-captioned Pooling
and Servicing Agreement, we request the release, and hereby acknowledge receipt,
of the Mortgage File for the Mortgage Loan described below, for the reason
indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation
_______ 5. Nonliquidation Reason:
________________________________________________
By: ____________________________________________
(authorized signatory)
Issuer: ________________________________________
Address: _______________________________________
________________________________________________
Date: __________________________________________
L-1
Custodian
JPMorgan Chase Bank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
________________________________
Signature Date
Documents returned to Custodian:
________________________________
Custodian Date
L-2
EXHIBIT M
FORM OF TRANSFEREE ERISA REPRESENTATION LETTER
[DATE]
The Bank of New York Trust Company, N.A.
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Services/CMFT 2007-S3
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Trust Series 2007-S3, Multi-Class
Mortgage Pass-Through Certificates, Series 2007-S3, [Class B-
]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificate") of Chase Mortgage Finance Trust Series
2007-S3, Multi-Class Mortgage Pass-Through Certificates, Series 2007-S3, [Class
B-__] (the "Certificates"), issued pursuant to a pooling and servicing
agreement, dated as of April 1, 2007 (the "Pooling and Servicing Agreement"),
among Chase Mortgage Finance Corporation (the "Depositor"), JPMorgan Chase Bank,
N.A. ("Chase"), as servicer (the "Servicer") and Custodian, and The Bank of New
York Trust Company, N.A., as trustee (the "Trustee") and paying agent. [The
Purchaser intends to register the Transferred Certificate in the name of
____________________, as nominee for __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, we hereby certify, represent and warrant to, and
covenant with, the Depositor that we:
(A) are not an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or a plan subject to any provisions under any federal, state, local,
non-U.S. or other laws or regulations that are substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), and is not directly or indirectly acquiring the Certificate for, on
behalf of or with any assets of any such Plan, (B) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, are an insurance company that
is acquiring the Certificate with assets of an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60"), and the acquisition and holding of the Certificate are
covered and exempt under Sections I and III of PTCE 95-60, or (C) solely in the
case of a Definitive Certificate, will deliver herewith an Opinion of Counsel
satisfactory to the Depositor, and upon which the Depositor shall be entitled to
rely, to the effect that the acquisition and holding of this Certificate by the
prospective transferee will not constitute or result in a nonexempt prohibited
transaction under ERISA or the Code or
M-1
a violation of Similar Law and will not subject the Trustee, the Depositor or
the Servicer to any obligation in addition to those undertaken by such entities
in the Pooling and Servicing Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor or the Servicer.
We agree to indemnify the Trustee, the Servicer and the Depositor against
any liability that may result from any misrepresentation made herein.
M-2
Very truly yours,
[PURCHASER]
By: _____________________________________
Name: ___________________________________
Title: __________________________________
M-3
EXHIBIT N
PERMITTED EXCHANGEABLE CERTIFICATE COMBINATIONS
EXCHANGEABLE INITIAL CERTIFICATES EXCHANGEABLE CERTIFICATES
------------------------------------------------ -------------------------------------------------------
ORIGINAL
CERTIFICATE
PRINCIPAL
BALANCE
OR RELATED RELATED MAXIMUM
EXCHANGEABLE NOTIONAL CERTIFICATE EXCHANGEABLE CERTIFICATE
COMBINATIONS AMOUNT RATE CLASSES PRINCIPAL BALANCE CERTIFICATE RATE
----------------- ------------ ----------- --------------- ----------------- ----------------
EXCHANGEABLE
COMBINATION 1 (1)
Class 1-A14 $ 16,453,428 6.000% Class 1-A20 $ 46,014,619 6.0000%
Class 1-A15 $ 29,561,191 6.000%
EXCHANGEABLE
COMBINATION 2 (2)
Class 1-A21 $178,572,000 5.500% Class 1-A18 $ 178,572,000 (3)
Class 1-A17 $ 14,881,000 6.000%
EXCHANGEABLE
COMBINATION 3 (4)
Class 1-A21 $178,572,000 5.500% Class 1-A22 $ 178,572,000 (3)
Class 1-A17 $ 3,720,250 6.000%
EXCHANGEABLE
COMBINATION 4 (5)
Class 1-A21 $178,572,000 5.500% Class 1-A23 $ 178,572,000 (3)
Class 1-A17 $ 7,440,500 6.000%
EXCHANGEABLE
COMBINATION 5 (6)
Class 1-A21 $178,572,000 5.500% Class 1-A24 $ 178,572,000 (3)
Class 1-A17 $ 11,160,750 6.000%
----------
(1) The Class 1-A14 and Class 1-A15 Certificates must be exchanged in a ratio
of (i) $16,453,428 of Original Certificate Principal Balance to (ii)
$29,561,191 of Original Certificate Principal Balance, respectively.
(2) The Class 1-A21 and Class 1-A17 Certificates must be exchanged in a ratio
of (i) $178,572,000
N-1
of Original Certificate Principal Balance to (ii) $14,881,000 of Original
Certificate Principal Balance, respectively.
(3) The Certificate Rate on the Class 1-A18, Class 1-A22, Class 1-A23 and Class
1-A24 Certificates will equal a per annum rate equal to, for any
Distribution Date (x) prior to the Credit Support Depletion Date, 6.000%,
5.625%, 5.750% and 5.875%, respectively, or (y) on or after the Credit
Support Depletion date, the sum of (A) 5.50% and (B) a fraction, the
numerator of which is the product of (i) 12, (ii) the interest accrued on
the Class 1-A17 Certificates (without taking account of any exchanges) for
such distribution date and (iii) (a) 14,881,000, (b) 3,720,250, (c)
7,440,500 and (d) 11,160,750, respectively, and the denominator of which is
the product of (i) the Outstanding Certificate Principal Balance of the
Class 1-A18, Class 1-A22, Class 1-A23 or Class 1-A24 Certificates, as
applicable, and (ii) 16,443,500. If the Outstanding Certificate Principal
Balance of the Class 1-A18, Class 1-A22, Class 1-A23 or Class 1-A24
Certificates is reduced to zero while any such Class of Certificates is
entitled to receive interest amounts from the portion of the Class 1-A17
Certificates exchanged for such class, such interest entitlement will not
be expressed as a Certificate Rate and such class will be entitled to
interest amounts that would otherwise be paid to the Class 1-A17
Certificates exchanged for such class.
(4) The Class 1-A21 and Class 1-A17 Certificates must be exchanged in a ratio
of (i) $178,572,000 of Original Certificate Principal Balance to (ii)
$3,720,250 of Original Certificate Principal Balance, respectively.
(5) The Class 1-A21 and Class 1-A17 Certificates must be exchanged in a ratio
of (i) $178,572,000 of Original Certificate Principal Balance to (ii)
$7,440,500 of Original Certificate Principal Balance, respectively.
(6) The Class 1-A21 and Class 1-A17 Certificates must be exchanged in a ratio
of (i) $178,572,000 of Original Certificate Principal Balance to (ii)
$11,160,750 of Original Certificate Principal Balance, respectively.
N-2
EXHIBIT O
FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Reference is made to each pooling and servicing agreement listed on Exhibit
A hereto (each, an "Agreement") in which The Bank of New York Trust Company,
N.A. has been appointed the paying agent (the "Paying Agent"). I, [ ], an [ ]
of the Paying Agent, hereby certify to Chase Mortgage Finance Corporation (the
"Depositor"), and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification that:
1. The Bank of New York Trust Company, N.A. has served as Paying agent for
the Depositor during the period of time from [ ] through [ ] and
the following certifications and statements of the Paying Agent set forth
below relate solely to that period of time and for no other periods.
2. I have reviewed (i) the annual report on Form 10-K (including the
exhibits provided by the Depositor to the Paying Agent for attachment
thereto) for the fiscal year [ ] (the "Annual Report"), (ii) all reports
on Form 10-D containing distribution reports filed in respect of periods
included in the year covered by that annual report, relating to each of the
trusts created pursuant to each Agreement and (iii) all reports on Form 8-K
(if any) containing information provided by the Paying Agent, required to
be filed in respect of the period covered by the Annual Report
(collectively with the related reports on Form 10-D and Form 8-K (if any),
the "Reports");
3. Based on my knowledge, the information included in the Reports, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact required by the respective pooling and servicing
agreement to be included therein and necessary to make the statements made,
in light of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by the Reports; and
4. In compiling the distribution information, the Paying Agent has relied
upon information furnished to it by the Servicer under each pooling and
servicing agreement. The Paying Agent shall have no responsibility or
liability for any inaccuracy in such reports resulting from information so
provided by the Servicer.
THE BANK OF NEW YORK TRUST COMPANY, N.A.
By:____________________________________________
Name:__________________________________________
Title:
O-1
EXHIBIT P
LETTER OF REPRESENTATIONS
[INTENTIONALLY OMITTED]
P-1
EXHIBIT Q
FORM OF TRUST AGREEMENT
[INTENTIONALLY OMITTED]
Q-1
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
[TO BE UPDATED]
DEFINITIONS KEY:
PRIMARY SERVICER - transaction party having borrower contact X - obligation
CUSTODIAN - safe keeper of certain pool assets
TRUSTEE - fiduciary of the transaction
PAYING AGENT - agent of the Trustee
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
THE BANK OF THE BANK OF
NEW YORK NEW YORK
JPMORGAN* TRUST TRUST JPMORGAN
CHASE BANK, COMPANY, COMPANY, CHASE BANK,
REG AB N.A. N.A. (PAYING N.A. N.A.
REFERENCE SERVICING CRITERIA (SERVICER) AGENT) (TRUSTEE) (CUSTODIAN)
--------------- ------------------------------------------- ------------ ------------- --------------- ----------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures X X
are instituted to monitor any
performance or other triggers and
events of default in accordance with
the transaction agreements.
1122(d)(1)(ii) If any material servicing activities X IF APPLICABLE IF APPLICABLE
are outsourced to third parties, FOR A FOR A
policies and procedures are instituted TRANSACTION TRANSACTION
to monitor the third party's PARTICIPANT PARTICIPANT
performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction X N/A N/A
agreements to maintain a back-up
servicer for the Pool Assets are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and X
omissions policy is in effect on the
party participating in the servicing
function throughout the reporting
period in the amount of coverage
required by and otherwise in
accordance with the terms of the
transaction agreements.
R-1
THE BANK OF THE BANK OF
NEW YORK NEW YORK
JPMORGAN* TRUST TRUST JPMORGAN
CHASE BANK, COMPANY, COMPANY, CHASE BANK,
REG AB N.A. N.A. (PAYING N.A. N.A.
REFERENCE SERVICING CRITERIA (SERVICER) AGENT) (TRUSTEE) (CUSTODIAN)
--------------- ------------------------------------------- ------------ ------------- --------------- ----------------
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are deposited X X
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business
days following receipt, or such other
number of days specified in the
transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer X X
on behalf of an obligor or to an
investor are made only by authorized
personnel.
1122(d)(2)(iii) Advances of funds or guarantees X
regarding collections, cash flows or
distributions, and any interest or other
fees charged for such advances, are
made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the X X
transaction, such as cash reserve
accounts or accounts established as a
form of over collateralization, are
separately maintained (e.g., with
respect to commingling of cash) as set
forth in the transaction agreements.
1122(d)(2)(v)** Each custodial account is maintained at X X
a federally insured depository
institution as set forth in the
transaction agreements. For purposes
of this criterion, "federally insured
depository institution" with respect to a
foreign financial institution means a
foreign financial institution that meets
the requirements of Rule 13k-1(b)(1)
of the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as X If applicable
to prevent unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a X X
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
R-2
THE BANK OF THE BANK OF
NEW YORK NEW YORK
JPMORGAN* TRUST TRUST JPMORGAN
CHASE BANK, COMPANY, COMPANY, CHASE BANK,
REG AB N.A. N.A. (PAYING N.A. N.A.
REFERENCE SERVICING CRITERIA (SERVICER) AGENT) (TRUSTEE) (CUSTODIAN)
--------------- ------------------------------------------- ------------ ------------- --------------- ----------------
person who prepared the
reconciliation; and (D) contain
explanations for reconciling items.
These reconciling items are resolved
within 90 calendar days of their
original identification, or such other
number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to X X
be filed with the Commission, are (not
maintained in accordance with the including (c))
transaction agreements and applicable
Commission requirements.
Specifically, such reports (A) are
prepared in accordance with timeframes
and other terms set forth in the
transaction agreements; (B) provide
information calculated in accordance with
the terms specified in the transaction
agreements; (C) are filed with the
Commission as required by its rules and
regulations; and (D) agree with
investors' or the trustee's records as to
the total unpaid principal balance and
number of Pool Assets serviced by the
Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated X X
and remitted in accordance with
timeframes, distribution priority and
other terms set forth in the transaction
agreements.
1122(d)(3)(iii) Disbursements made to an investor are X X
posted within two business days to the
Servicer's investor records, or such
other number of days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the X X
investor reports agree with cancelled
checks, or other form of payment, or
custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is X X
maintained as required by the
transaction agreements or related pool
asset documents.
1122(d)(4)(ii) Pool assets and related documents are X X
safeguarded as required by the
transaction agreements
1122(d)(4)(iii) Any additions, removals or X
substitutions to the asset pool are
R-3
THE BANK OF THE BANK OF
NEW YORK NEW YORK
JPMORGAN* TRUST TRUST JPMORGAN
CHASE BANK, COMPANY, COMPANY, CHASE BANK,
REG AB N.A. N.A. (PAYING N.A. N.A.
REFERENCE SERVICING CRITERIA (SERVICER) AGENT) (TRUSTEE) (CUSTODIAN)
--------------- ------------------------------------------- ------------ ------------- --------------- ----------------
made, reviewed and approved in
accordance with any conditions or
requirements in the transaction
agreements.
1122(d)(4)(iv) Payments on pool assets, including any X
payoffs, made in accordance with the
related pool asset 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 pool asset documents.
1122(d)(4)(v) The Servicer's records regarding the X
pool assets agree with the Servicer's
records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or X
status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are
made, reviewed and approved by
authorized personnel in accordance
with the transaction agreements and
related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions X
(e.g., forbearance plans, modifications
and deeds in lieu of foreclosure,
foreclosures and repossessions, as
applicable) are initiated, conducted and
concluded in accordance with the
timeframes or other requirements
established by the transaction
agreements.
1122(d)(4)(viii) Records documenting collection X
efforts are maintained during the
period a pool asset 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 pool assets including, for
example, phone calls, letters and
payment rescheduling plans in cases
where delinquency is deemed
temporary (e.g., illness or
unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of X
R-4
THE BANK OF THE BANK OF
NEW YORK NEW YORK
JPMORGAN* TRUST TRUST JPMORGAN
CHASE BANK, COMPANY, COMPANY, CHASE BANK,
REG AB N.A. N.A. (PAYING N.A. N.A.
REFERENCE SERVICING CRITERIA (SERVICER) AGENT) (TRUSTEE) (CUSTODIAN)
--------------- ------------------------------------------- ------------ ------------- --------------- ----------------
return for pool assets with variable
rates are computed based on the related
pool asset documents.
1122(d)(4)(x) Regarding any funds held in trust for X
an obligor (such as escrow accounts):
(A) such funds are analyzed, in
accordance with the obligor's pool
asset 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
pool asset documents and state laws;
and (C) such funds are returned to the
obligor within 30 calendar days of full
repayment of the related pool assets, or
such other number of days specified in
the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor X
(such as tax or insurance payments) are
made on or before the related penalty
or expiration dates, as indicated on the
appropriate bills or notices for such
payments, provided that such support
has been received by the servicer at
least 30 calendar days prior to these
dates, or such other number of days
specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in X
connection with any payment to be
made on behalf of an obligor are paid
from the Servicer's funds and not
charged to the obligor, unless the late
payment was due to the obligor's error
or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an X
obligor are posted within two business
days to the obligor's records
maintained by the servicer, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and X
uncollectible accounts are recognized
and recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other X
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
transaction agreements.
R-5
----------
* Certain obligations will be satisfied by Chase Home Finance LLC as
subservicer.
** Subject to further interpretation by the SEC.
R-6
EXHIBIT S
FORM OF XXXXXXXX-XXXXX CERTIFICATION
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Trust Series 2007-S3, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-S3
I, [identify the certifying individual], certify that:
I have reviewed the report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of [identify the issuing entity] (the "Exchange Act periodic reports");
1. Based on my knowledge, the Exchange Act periodic 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 report;
2. 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 report is included in the Exchange Act periodic reports;
3. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]
4. All of the reports on assessment of compliance with servicing criteria
for ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
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 report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.
[In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties [name of servicer,
sub-servicer, co-servicer, depositor or trustee].]
Date:_________________________ ________________________________
[Signature]
[Title]
S-1
EXHIBIT T
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Trust Series 2007-S3, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-S3
I, [identify name of certifying individual], [title of certifying individual] of
JPMorgan Chase Bank, N.A. (the "Servicer"), hereby certify that:
(1) A review of the activities of the Servicer during the preceding calendar
year and of the performance of the Servicer under the Agreement has been made
under my supervision; and
(2) To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Agreement in all material respects
throughout such year or a portion thereof[, or, if there has been a failure to
fulfill any such obligation in any material respect, I have specified below each
such failure known to me and the nature and status thereof].
Date:
JPMorgan Chase Bank, N.A.,
as Servicer
By:___________________________________
Name:_________________________________
Title:________________________________
T-1
EXHIBIT U
FORM OF CLASS 1-A1 YIELD MAINTENANCE AGREEMENT
April 25, 2007
Rate Collar Transaction
Chase Mortgage Finance Trust 2007-S3
Attn: Xxxxx Xxxxxxx
Re: Interest Rate Transaction No: [ ]
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the rate collar transaction (the "Interest Rate Transaction") entered into
between JPMorgan Chase Bank, N.A. (the "Derivative Provider") and The Bank of
New York Trust Company, N.A., not in its individual capacity, but solely as
Paying Agent on behalf of Chase Mortgage Finance Trust 2007-S3 (the
"Counterparty") on April 25, 2007. This agreement constitutes a "Confirmation"
as referred to in and supplements, forms part of, and is subject to, the ISDA
Master Agreement between the parties hereto.
The particular Interest Rate Transaction to which this Confirmation relates is a
Rate Collar Transaction, the terms of which are set forth below.
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. The Interest Rate Transaction relates to the Class 1-A1 Certificates
issued pursuant to the Pooling and Servicing Agreement dated as of March 1, 2007
among Chase Mortgage Finance Corporation, as Depositor, The Bank of New York
Trust Company, N.A, as Trustee and Paying Agent and JPMorgan Chase Bank, N.A.,
as Servicer (the "Pooling and Servicing Agreement").
In consideration of the payment of the sum of USD $[ ] (the "Premium") by X.X.
Xxxxxx Securities, Inc. on behalf of Chase Home Finance, LLC to the Derivative
Provider on or about April 25, 2007 and in consideration of the promise by the
Derivative Provider to make payments to the Counterparty in accordance with
Section 2 hereof, the parties hereto agree as follows
1. Definitions
a. "Ceiling Rate" means, with respect to any Calculation Period, the
rate set forth as the "Ceiling Rate" on the attached Schedule I.
b. "Floor Rate" means, with respect to any Calculation Period, the rate
set forth as the "Strike Rate" on the attached Schedule I.
U-1
c. "Business Day" means any day which is both a New York Business Day
and a London Business Day.
d. "Calculation Period" means, with respect to a Payment Date, the
period, as set forth on the attached Schedule I, from the
Calculation Period Start Date to but excluding the Calculation
Period End Date, and including such Payment Date.
e. "Designated Maturity" means 1 month(s).
f. "Effective Date" means the first Calculation Period Start Date.
g. "Floating Rate" means, with respect to a Payment Date, the rate
determined by the Derivative Provider to be (i) the per annum rate
for deposits in U.S. dollars for a period of the Designated Maturity
which appears on the Telerate Page 3750 Screen as of 11:00 a.m.,
London time, on the day that is two London Business Days prior to
the Reset Date of the Calculation Period of such Payment Date
(rounded upwards, if necessary, to the nearest 1/100,000 of 1%);
(ii) if such rate does not appear on the Telerate Page 3750 Screen,
the Floating Rate shall be the arithmetic mean (rounded as
aforesaid) of the offered quotations obtained by the Derivative
Provider from the Reference Banks for deposits in U.S. dollars to
leading banks in the London interbank market as of approximately
11:00 a.m., London time, on the day that is two London Business Days
prior to the Reset Date of the Calculation Period of such Payment
Date; or (iii) if fewer than two Reference Banks provide the
Derivative Provider with such quotations, the Floating Rate shall be
the rate per annum which the Derivative Provider determines to be
the arithmetic mean (rounded as aforesaid) of the offered quotations
which leading banks in New York City selected by the Derivative
Provider are quoting in the New York interbank market on the Reset
Date of the Calculation Period of such Payment Date for deposits in
U.S. dollars to the Reference Banks or, if fewer than two such
quotations are available, to leading European and Canadian Banks.
h. "London Business Day" means any day on which banks are open for
business in London and on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
i. "Maximum Derivative Payment Amount" means, for any Payment Date, an
amount which the Paying Agent shall calculate in accordance with the
Pooling and Servicing Agreement and provide to the Derivative
Provider no later than one Business Day prior to each Payment Date.
j. "New York Business Day" means any day on which banks are not
required or authorized by law to close in New York City.
k. "Notional Principal Amount" means, with respect to any Calculation
Period, the notional amount set forth in the attached Schedule I.
l. "Payment Date" means the day that is two New York business days
prior to each Calculation Period End Date, provided that if such
Payment Date is not a Business Day, such Payment Date shall be the
next preceding Business Day.
m. "Reference Banks" means four major banks in the London interbank
market selected by the Derivative Provider.
U-2
n. "Reset Date" means the first day of each Calculation Period.
o. "Telerate Page 3750 Screen" means the display designated as "Page
3750" on the Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits).
p. "Termination Date" means the last Calculation Period End Date.
2. Payments
a. The Derivative Provider agrees, subject to the payment of the
Premium, to pay to the Counterparty, on each Payment Date on which
the related Floating Rate is determined to be greater than the Floor
Rate and less than the Ceiling Rate, an amount equal to the lesser
of 1) the Maximum Derivative Payment Amount for such Payment Date
and 2) product of (x) the amount by which the Floating Rate exceeds
the Floor Rate with respect to the Calculation Period ending on or
nearest such Payment Date, (y) the Notional Principal Amount and (z)
30 divided by 360.
b. All payments to the Derivative Provider shall be made as follows.
Payments in USD
JPMORGAN CHASE BANK NA
JPMORGAN CHASE BANK NA
c. All payments to the Counterparty shall be made as follows:
Wire Transfer:
The Bank of New York
REF: Chase Mortgage Finance Trust 2007-S3 Class 1-A1
Attn: Xxxxx Xxxxxxx/Xxxxxxx Xxxx
3. Notices. Any notices hereunder 1) shall be in writing and hand-delivered
or sent by first-class mail, postage prepaid, return receipt requested,
and shall be addressed to the intended recipient at its address set forth
on the signature page hereof or at such other address as such party shall
have last specified by notice to the other party and 2) shall be effective
(a) if delivered by hand or sent by overnight courier, on the day it is
delivered, unless delivery is made after the close of business or on a day
that is not a Business Day, in which case such notice will be effective on
the next Business Day,
U-3
or (b) if sent by certified or registered mail or the equivalent (return
receipt requested), three Business Days after dispatch.
All notices and queries to the Derivative Provider should be sent to:
JPMorgan Chase Bank, N.A. Client Service Group
Telephone: (000) 0000000000
Facsimile: (000) 0000000000
Please quote the JPMorgan deal number(s): [ ]
All notices and queries to the Counterparty should be sent to:
Bank of New York Trust Company, N.A.
000 Xxxxxx 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
4. Governing Law. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
5. Assignments. Neither party shall have the right to assign its rights or
obligations under this letter agreement without the prior written consent
of the other party.
6. Set-off; Counterclaim. All payments under this letter agreement will be
made without set-off or counterclaim, except that each party will have the
right to set-off, counterclaim or withhold payment in respect of any
default by the other party under this letter agreement or under any other
agreement between the parties.
7. Each Party's Reliance on its Own Judgment. Each party has entered into
this Rate Collar Transaction solely in reliance on its own judgment.
Neither party has any fiduciary obligation to the other party relating to
this Rate Collar Transaction. In addition, neither party has held itself
out as advising, or has held out any of its employees or agents as having
the authority to advise, the other party as to whether or not the other
party should enter into this Rate Collar Transaction, any subsequent
actions relating to this Rate Collar Transaction or any other matters
relating to this Rate Collar Transaction. Neither party shall have any
responsibility or liability whatsoever in respect of any advice of this
nature given, or views expressed, by it or any of such persons to the
other party relating to this Rate Collar Transaction, whether or not such
advice is given or such views are expressed at the request of the other
party.
8. Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury with respect to any legal proceeding
arising out of or relating to this letter agreement or the Rate Collar
Transaction.
9. Limitation of Liability. It is expressly understood and agreed by the
parties hereto that (a) this Rate Collar Transaction is executed and
delivered by the Counterparty, not individually or personally but solely
as Paying Agent of the Trust, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement, (b)
each of the representations, undertakings and agreements herein made on
the part of the Trust is made and intended for the purpose of binding only
the Trust (c) nothing herein shall be construed as creating any liability
on the Counterparty, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties who are signatories to this letter
U-4
agreement and by any person claiming by, through or under such parties,
and (d) under no circumstances shall the Counterparty be personally liable
for the payment of any indebtedness or expenses of the Trust or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Rate Collar
Transaction.
10. Reporting. Counterparty agrees to deliver, promptly upon request by the
Derivative Provider, or with respect to any particular type of report or
other document as to which the Derivative Provider has previously made
request to receive all reports or documents of that type, promptly upon
delivery or receipt of such report or document by the Counterparty, any
report or other document required to be delivered by or to the
Counterparty under the terms of the Pooling and Servicing Agreement, other
than those required to be delivered directly by the Counterparty to the
Derivative Provider thereunder.
11. Written confirmation. No later than each Reset Date, the Derivative
Provider agrees to deliver to the Counterparty a written confirmation
containing the results of the Calculations performed on each Reset Date
and the amount which is to be paid to the Counterparty on the next Payment
Date.
12. Compliance with Regulation AB.
(i) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") with respect to the
Certificates, in the reasonable determination made in good faith of
Chase Mortgage Finance Corporation the aggregate "significance
percentage" (as defined in Regulation AB ("Regulation AB") under the
Securities Act of 1933, as amended, and the Exchange Act) of all
derivative instruments (contemplated by Item 1115 of Regulation AB)
provided by the Derivative Provider and any of its affiliates to the
Counterparty is at least 10% but less than 20%, the Derivative
Provider shall, subject to subparagraph [(iii)] below, within five
(5) Business Days following request therefor provide the financial
information required under Item 1115(b)(1) of Regulation AB for the
Derivative Provider (and for the group of affiliated entities, if
applicable) (the "Item 1115(b)(1) Information"). Any such Item
1115(b)(1) Information shall be in a form suitable for conversion to
the format required for filing by the Depositor with the Securities
and Exchange Commission via the Electronic Data Gathering and
Retrieval System (XXXXX).
(ii) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Exchange Act with
respect to the Certificates, in the reasonable determination made in
good faith of Chase Mortgage Finance Corporation, the aggregate
"significance percentage" of all derivative instruments
(contemplated by Item 1115 of Regulation AB) provided by the
Derivative Provider and any of its affiliates to the Counterparty is
at least 20%, the Derivative Provider shall, subject to subparagraph
[(iii)] below, within five (5) Business Days following request
therefor provide the financial information required under Item
1115(b)(2) of Regulation AB for the Derivative Provider (and for the
group of affiliated entities, if applicable) (the "Item 1115(b)(2)
Information", and together with the Item 1115(b)(1) Information, the
"Additional Information"). Any such Item 1115(b)(2) Information
shall be in a form suitable for conversion to the format required
for filing by the Depositor with the Securities and Exchange
Commission via the Electronic Data Gathering and Retrieval System
(XXXXX). In addition, any such Item 1115(b)(2) Information shall be
accompanied by any necessary auditor's consents.
(iii) If the Derivative Provider is unable to provide any such Additional
Information if, as and when required, the Derivative Provider shall,
at its option, within ten (10) Business Days following
U-5
request therefor, (1) promptly post collateral satisfactory to Chase
Mortgage Finance Corporation in an amount which is reasonably
determined in good faith to be sufficient to reduce the aggregate
"significance percentage" to (x) in the case of subparagraph (A)
above, below 10%, and (y) in the case of subparagraph (B) above,
provided the Derivative Provider is able to meet the requirements of
subparagraph (A) above, below 20%, in each case pursuant to a
[credit support annex] or similar agreement reasonably satisfactory
to the Chase Mortgage Finance Corporation, or (2) at the sole
expense of the Derivative Provider, without any expense or liability
to the Counterparty, transfer or assign its obligations under this
Agreement to a substitute counterparty reasonably acceptable to the
Counterparty that (x) is able to provide such Additional Information
if, as and when required, and (y) enters into an agreement similar
in form to this Agreement pursuant to which such substitute
counterparty agrees to provide the Additional Information if, as and
when required.
(iv) The Derivative Provider's obligation to provide any such Additional
Information shall terminate beginning in any such year in which the
Counterparty's obligation to file periodic reports under the
Exchange Act has terminated.
U-6
JPMorgan Chase Bank, N.A.
_________________________________________________
Name: __________________________________________
Title: __________________________________________
Chase Mortgage Finance Trust 2007-S3
By: Bank of New York Trust Company, N.A, not in its individual capacity, but
solely as Paying Agent on behalf of Chase Mortgage Finance Trust 2007-S3
Name:
Title:
U-7
Schedule I
CALCULATION PERIOD START CALCULATION PERIOD END
DATE DATE NOTIONAL STRIKE (%) CEILING (%)
---- ---- -------- ---------- -----------
April 25, 2007 May 25, 2007 185,000,000.00 5.40 19.40
May 25, 2007 June 25, 2007 184,479,061.47 5.40 19.40
June 25, 2007 July 25, 2007 183,725,821.73 5.40 19.40
July 25, 2007 August 25, 2007 183,077,498.28 5.40 19.40
August 25, 2007 September 25, 2007 182,625,285.30 5.40 19.40
September 25, 2007 October 25, 2007 182,266,991.61 5.40 19.40
October 25, 2007 November 25, 2007 180,745,747.29 5.40 19.40
November 25, 2007 December 25, 2007 178,854,298.97 5.40 19.40
December 25, 2007 January 25, 2008 176,738,960.64 5.40 19.40
January 25, 2008 February 25, 2008 174,402,990.68 5.40 19.40
February 25, 2008 March 25, 2008 171,850,176.12 5.40 19.40
March 25, 2008 April 25, 2008 169,084,827.14 5.40 19.40
April 25, 2008 May 25, 2008 166,111,769.84 5.40 19.40
May 25, 2008 June 25, 2008 162,936,337.36 5.40 19.40
June 25, 2008 July 25, 2008 159,564,359.21 5.40 19.40
July 25, 2008 August 25, 2008 156,002,149.04 5.40 19.40
August 25, 2008 September 25, 2008 152,256,490.61 5.40 19.40
September 25, 2008 October 25, 2008 148,334,622.24 5.40 19.40
October 25, 2008 November 25, 2008 144,244,219.60 5.40 19.40
November 25, 2008 December 25, 2008 139,993,376.96 5.40 19.40
December 25, 2008 January 25, 2009 135,590,587.00 5.40 19.40
January 25, 2009 February 25, 2009 131,044,719.10 5.40 19.40
February 25, 2009 March 25, 2009 126,365,005.02 5.40 19.40
March 25, 2009 April 25, 2009 121,561,230.21 5.40 19.40
April 25, 2009 May 25, 2009 116,643,373.73 5.40 19.40
May 25, 2009 June 25, 2009 111,621,713.98 5.40 19.40
June 25, 2009 July 25, 2009 106,506,781.40 5.40 19.40
July 25, 2009 August 25, 2009 101,310,190.14 5.40 19.40
August 25, 2009 September 25, 2009 96,052,729.25 5.40 19.40
September 25, 2009 October 25, 2009 90,803,980.96 5.40 19.40
October 25, 2009 November 25, 2009 85,656,366.12 5.40 19.40
November 25, 2009 December 25, 2009 80,656,462.49 5.40 19.40
December 25, 2009 January 25, 2010 75,801,109.67 5.40 19.40
January 25, 2010 February 25, 2010 71,087,210.83 5.40 19.40
February 25, 2010 March 25, 2010 66,511,731.46 5.40 19.40
March 25, 2010 April 25, 2010 62,071,698.16 5.40 19.40
April 25, 2010 May 25, 2010 57,764,197.37 5.40 19.40
May 25, 2010 June 25, 2010 53,586,374.27 5.40 19.40
June 25, 2010 July 25, 2010 49,535,431.56 5.40 19.40
July 25, 2010 August 25, 2010 45,608,628.32 5.40 19.40
August 25, 2010 September 25, 2010 41,803,278.93 5.40 19.40
September 25, 2010 October 25, 2010 38,116,751.96 5.40 19.40
October 25, 2010 November 25, 2010 34,546,469.09 5.40 19.40
November 25, 2010 December 25, 2010 31,089,904.08 5.40 19.40
December 25, 2010 January 25, 2011 27,744,581.70 5.40 19.40
January 25, 2011 February 25, 2011 24,508,076.78 5.40 19.40
February 25, 2011 March 25, 2011 21,378,013.17 5.40 19.40
March 25, 2011 April 25, 2011 18,352,062.78 5.40 19.40
April 25, 2011 May 25, 2011 15,427,944.62 5.40 19.40
May 25, 2011 June 25, 2011 12,603,423.92 5.40 19.40
June 25, 2011 July 25, 2011 9,876,311.16 5.40 19.40
July 25, 2011 August 25, 2011 7,244,461.15 5.40 19.40
August 25, 2011 September 25, 2011 4,705,772.25 5.40 19.40
September 25, 2011 October 25, 2011 2,258,185.41 5.40 19.40
Thereafter 0.00 N/A N/A
U-8
EXHIBIT U-1
FORM OF CLASS 1-A8 YIELD MAINTENANCE AGREEMENT
April 25, 2007
Rate Collar Transaction
Chase Mortgage Finance Trust 2007-S3
Attn: Xxxxx Xxxxxxx
Re: Interest Rate Transaction No: [ ]
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the rate collar transaction (the "Interest Rate Transaction") entered into
between JPMorgan Chase Bank, N.A. (the "Derivative Provider") and The Bank of
New York Trust Company, N.A., not in its individual capacity, but solely as
Paying Agent on behalf of Chase Mortgage Finance Trust 2007-S3 (the
"Counterparty") on April 25, 2007. This agreement constitutes a "Confirmation"
as referred to in and supplements, forms part of, and is subject to, the ISDA
Master Agreement between the parties hereto.
The particular Interest Rate Transaction to which this Confirmation relates is a
Rate Collar Transaction, the terms of which are set forth below.
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. The Interest Rate Transaction relates to the Class 1-A8 Certificates
issued pursuant to the Pooling and Servicing Agreement dated as of March 1, 2007
among Chase Mortgage Finance Corporation, as Depositor, The Bank of New York
Trust Company, N.A, as Trustee and Paying Agent and JPMorgan Chase Bank, N.A.,
as Servicer (the "Pooling and Servicing Agreement").
In consideration of the payment of the sum of USD $[ ] (the "Premium") by X.X.
Xxxxxx Securities, Inc. on behalf of Chase Home Finance, LLC to the Derivative
Provider on or about April 25, 2007 and in consideration of the promise by the
Derivative Provider to make payments to the Counterparty in accordance with
Section 2 hereof, the parties hereto agree as follows
13. Definitions
a. "Ceiling Rate" means, with respect to any Calculation Period, the
rate set forth as the "Ceiling Rate" on the attached Schedule I.
b. "Floor Rate" means, with respect to any Calculation Period, the rate
set forth as the "Strike Rate" on the attached Schedule I.
c. "Business Day" means any day which is both a New York Business Day
and a London Business Day.
U-1-1
d. "Calculation Period" means, with respect to a Payment Date, the
period, as set forth on the attached Schedule I, from the
Calculation Period Start Date to but excluding the Calculation
Period End Date, and including such Payment Date.
e. "Designated Maturity" means 1 month(s).
f. "Effective Date" means the first Calculation Period Start Date.
g. "Floating Rate" means, with respect to a Payment Date, the rate
determined by the Derivative Provider to be (i) the per annum rate
for deposits in U.S. dollars for a period of the Designated Maturity
which appears on the Telerate Page 3750 Screen as of 11:00 a.m.,
London time, on the day that is two London Business Days prior to
the Reset Date of the Calculation Period of such Payment Date
(rounded upwards, if necessary, to the nearest 1/100,000 of 1%);
(ii) if such rate does not appear on the Telerate Page 3750 Screen,
the Floating Rate shall be the arithmetic mean (rounded as
aforesaid) of the offered quotations obtained by the Derivative
Provider from the Reference Banks for deposits in U.S. dollars to
leading banks in the London interbank market as of approximately
11:00 a.m., London time, on the day that is two London Business Days
prior to the Reset Date of the Calculation Period of such Payment
Date; or (iii) if fewer than two Reference Banks provide the
Derivative Provider with such quotations, the Floating Rate shall be
the rate per annum which the Derivative Provider determines to be
the arithmetic mean (rounded as aforesaid) of the offered quotations
which leading banks in New York City selected by the Derivative
Provider are quoting in the New York interbank market on the Reset
Date of the Calculation Period of such Payment Date for deposits in
U.S. dollars to the Reference Banks or, if fewer than two such
quotations are available, to leading European and Canadian Banks.
h. "London Business Day" means any day on which banks are open for
business in London and on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
i. "Maximum Derivative Payment Amount" means, for any Payment Date, an
amount which the Paying Agent shall calculate in accordance with the
Pooling and Servicing Agreement and provide to the Derivative
Provider no later than one Business Day prior to each Payment Date.
j. "New York Business Day" means any day on which banks are not
required or authorized by law to close in New York City.
k. "Notional Principal Amount" means, with respect to any Calculation
Period, the notional amount set forth in the attached Schedule I.
l. "Payment Date" means the day that is two New York business days
prior to each Calculation Period End Date, provided that if such
Payment Date is not a Business Day, such Payment Date shall be the
next preceding Business Day.
m. "Reference Banks" means four major banks in the London interbank
market selected by the Derivative Provider.
n. "Reset Date" means the first day of each Calculation Period.
U-1-2
o. "Telerate Page 3750 Screen" means the display designated as "Page
3750" on the Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits).
p. "Termination Date" means the last Calculation Period End Date.
14. Payments
a. The Derivative Provider agrees, subject to the payment of the
Premium, to pay to the Counterparty, on each Payment Date on which
the related Floating Rate is determined to be greater than the Floor
Rate and less than the Ceiling Rate, an amount equal to the lesser
of 1) the Maximum Derivative Payment Amount for such Payment Date
and 2) product of (x) the amount by which the Floating Rate exceeds
the Floor Rate with respect to the Calculation Period ending on or
nearest such Payment Date, (y) the Notional Principal Amount and (z)
30 divided by 360.
b. All payments to the Derivative Provider shall be made as follows.
Payments in USD
JPMORGAN CHASE BANK NA
JPMORGAN CHASE BANK NA
c. All payments to the Counterparty shall be made as follows:
Wire Transfer:
The Bank of New York
REF: Chase Mortgage Finance Trust 2007-S3 Class 1-A8
Attn: Xxxxx Xxxxxxx/Xxxxxxx Xxxx
15. Notices. Any notices hereunder 1) shall be in writing and hand-delivered
or sent by first-class mail, postage prepaid, return receipt requested,
and shall be addressed to the intended recipient at its address set forth
on the signature page hereof or at such other address as such party shall
have last specified by notice to the other party and 2) shall be effective
(a) if delivered by hand or sent by overnight courier, on the day it is
delivered, unless delivery is made after the close of business or on a day
that is not a Business Day, in which case such notice will be effective on
the next Business Day, or (b) if sent by certified or registered mail or
the equivalent (return receipt requested), three Business Days after
dispatch.
U-1-3
All notices and queries to the Derivative Provider should be sent to:
JPMorgan Chase Bank, N.A. Client Service Group
Telephone: (000) 0000000000
Facsimile: (000) 0000000000
Please quote the JPMorgan deal number(s): [ ]
All notices and queries to the Counterparty should be sent to:
Bank of New York Trust Company, N.A.
000 Xxxxxx 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
16. Governing Law. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. Assignments. Neither party shall have the right to assign its rights or
obligations under this letter agreement without the prior written consent
of the other party.
18. Set-off; Counterclaim. All payments under this letter agreement will be
made without set-off or counterclaim, except that each party will have the
right to set-off, counterclaim or withhold payment in respect of any
default by the other party under this letter agreement or under any other
agreement between the parties.
19. Each Party's Reliance on its Own Judgment. Each party has entered into
this Rate Collar Transaction solely in reliance on its own judgment.
Neither party has any fiduciary obligation to the other party relating to
this Rate Collar Transaction. In addition, neither party has held itself
out as advising, or has held out any of its employees or agents as having
the authority to advise, the other party as to whether or not the other
party should enter into this Rate Collar Transaction, any subsequent
actions relating to this Rate Collar Transaction or any other matters
relating to this Rate Collar Transaction. Neither party shall have any
responsibility or liability whatsoever in respect of any advice of this
nature given, or views expressed, by it or any of such persons to the
other party relating to this Rate Collar Transaction, whether or not such
advice is given or such views are expressed at the request of the other
party.
20. Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury with respect to any legal proceeding
arising out of or relating to this letter agreement or the Rate Collar
Transaction.
21. Limitation of Liability. It is expressly understood and agreed by the
parties hereto that (a) this Rate Collar Transaction is executed and
delivered by the Counterparty, not individually or personally but solely
as Paying Agent of the Trust, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement, (b)
each of the representations, undertakings and agreements herein made on
the part of the Trust is made and intended for the purpose of binding only
the Trust (c) nothing herein shall be construed as creating any liability
on the Counterparty, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties who are signatories to this letter
agreement and by any person claiming by, through or under such parties,
and (d) under no circumstances shall the Counterparty be personally liable
for the payment of any indebtedness or
U-1-4
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust under this Rate Collar Transaction.
22. Reporting. Counterparty agrees to deliver, promptly upon request by the
Derivative Provider, or with respect to any particular type of report or
other document as to which the Derivative Provider has previously made
request to receive all reports or documents of that type, promptly upon
delivery or receipt of such report or document by the Counterparty, any
report or other document required to be delivered by or to the
Counterparty under the terms of the Pooling and Servicing Agreement, other
than those required to be delivered directly by the Counterparty to the
Derivative Provider thereunder.
23. Written confirmation. No later than each Reset Date, the Derivative
Provider agrees to deliver to the Counterparty a written confirmation
containing the results of the Calculations performed on each Reset Date
and the amount which is to be paid to the Counterparty on the next Payment
Date.
24. Compliance with Regulation AB.
(i) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") with respect to the
Certificates, in the reasonable determination made in good faith of
Chase Mortgage Finance Corporation the aggregate "significance
percentage" (as defined in Regulation AB ("Regulation AB") under the
Securities Act of 1933, as amended, and the Exchange Act) of all
derivative instruments (contemplated by Item 1115 of Regulation AB)
provided by the Derivative Provider and any of its affiliates to the
Counterparty is at least 10% but less than 20%, the Derivative
Provider shall, subject to subparagraph [(iii)] below, within five
(5) Business Days following request therefor provide the financial
information required under Item 1115(b)(1) of Regulation AB for the
Derivative Provider (and for the group of affiliated entities, if
applicable) (the "Item 1115(b)(1) Information"). Any such Item
1115(b)(1) Information shall be in a form suitable for conversion to
the format required for filing by the Depositor with the Securities
and Exchange Commission via the Electronic Data Gathering and
Retrieval System (XXXXX).
(ii) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Exchange Act with
respect to the Certificates, in the reasonable determination made in
good faith of Chase Mortgage Finance Corporation, the aggregate
"significance percentage" of all derivative instruments
(contemplated by Item 1115 of Regulation AB) provided by the
Derivative Provider and any of its affiliates to the Counterparty is
at least 20%, the Derivative Provider shall, subject to subparagraph
[(iii)] below, within five (5) Business Days following request
therefor provide the financial information required under Item
1115(b)(2) of Regulation AB for the Derivative Provider (and for the
group of affiliated entities, if applicable) (the "Item 1115(b)(2)
Information", and together with the Item 1115(b)(1) Information, the
"Additional Information"). Any such Item 1115(b)(2) Information
shall be in a form suitable for conversion to the format required
for filing by the Depositor with the Securities and Exchange
Commission via the Electronic Data Gathering and Retrieval System
(XXXXX). In addition, any such Item 1115(b)(2) Information shall be
accompanied by any necessary auditor's consents.
(iii) If the Derivative Provider is unable to provide any such Additional
Information if, as and when required, the Derivative Provider shall,
at its option, within ten (10) Business Days following request
therefor, (1) promptly post collateral satisfactory to Chase
Mortgage Finance Corporation in an amount which is reasonably
determined in good faith to be sufficient to reduce the
U-1-5
aggregate "significance percentage" to (x) in the case of
subparagraph (A) above, below 10%, and (y) in the case of
subparagraph (B) above, provided the Derivative Provider is able to
meet the requirements of subparagraph (A) above, below 20%, in each
case pursuant to a [credit support annex] or similar agreement
reasonably satisfactory to the Chase Mortgage Finance Corporation,
or (2) at the sole expense of the Derivative Provider, without any
expense or liability to the Counterparty, transfer or assign its
obligations under this Agreement to a substitute counterparty
reasonably acceptable to the Counterparty that (x) is able to
provide such Additional Information if, as and when required, and
(y) enters into an agreement similar in form to this Agreement
pursuant to which such substitute counterparty agrees to provide the
Additional Information if, as and when required.
(iv) The Derivative Provider's obligation to provide any such Additional
Information shall terminate beginning in any such year in which the
Counterparty's obligation to file periodic reports under the
Exchange Act has terminated.
U-1-6
JPMorgan Chase Bank, N.A.
______________________________________________
Name: _______________________________________
Title: _______________________________________
Chase Mortgage Finance Trust 2007-S3
By: Bank of New York Trust Company, N.A, not in its individual capacity, but
solely as Paying Agent on behalf of Chase Mortgage Finance Trust 2007-S3
Name:
Title:
U-1-7
Schedule I
CALCULATION PERIOD START CALCULATION PERIOD END
DATE DATE NOTIONAL STRIKE (%) CEILING (%)
---- ---- -------- ---------- -----------
April 25, 2007 May 25, 2007 3,000,000.00 5.00 8.75
May 25, 2007 June 25, 2007 3,000,000.00 5.00 8.75
June 25, 2007 July 25, 2007 3,000,000.00 5.00 8.75
July 25, 2007 August 25, 2007 3,000,000.00 5.00 8.75
August 25, 2007 September 25, 2007 3,000,000.00 5.00 8.75
September 25, 2007 October 25, 2007 3,000,000.00 5.00 8.75
October 25, 2007 November 25, 2007 3,000,000.00 5.00 8.75
November 25, 2007 December 25, 2007 3,000,000.00 5.00 8.75
December 25, 2007 January 25, 2008 3,000,000.00 5.00 8.75
January 25, 2008 February 25, 2008 3,000,000.00 5.00 8.75
February 25, 2008 March 25, 2008 3,000,000.00 5.00 8.75
March 25, 2008 April 25, 2008 3,000,000.00 5.00 8.75
April 25, 2008 May 25, 2008 3,000,000.00 5.00 8.75
May 25, 2008 June 25, 2008 3,000,000.00 5.00 8.75
June 25, 2008 July 25, 2008 3,000,000.00 5.00 8.75
July 25, 2008 August 25, 2008 3,000,000.00 5.00 8.75
August 25, 2008 September 25, 2008 3,000,000.00 5.00 8.75
September 25, 2008 October 25, 2008 3,000,000.00 5.00 8.75
October 25, 2008 November 25, 2008 3,000,000.00 5.00 8.75
November 25, 2008 December 25, 2008 3,000,000.00 5.00 8.75
December 25, 2008 January 25, 2009 3,000,000.00 5.00 8.75
January 25, 2009 February 25, 2009 3,000,000.00 5.00 8.75
February 25, 2009 March 25, 2009 3,000,000.00 5.00 8.75
March 25, 2009 April 25, 2009 3,000,000.00 5.00 8.75
April 25, 2009 May 25, 2009 3,000,000.00 5.00 8.75
May 25, 2009 June 25, 2009 3,000,000.00 5.00 8.75
June 25, 2009 July 25, 2009 3,000,000.00 5.00 8.75
July 25, 2009 August 25, 2009 3,000,000.00 5.00 8.75
August 25, 2009 September 25, 2009 3,000,000.00 5.00 8.75
September 25, 2009 October 25, 2009 3,000,000.00 5.00 8.75
October 25, 2009 November 25, 2009 3,000,000.00 5.00 8.75
November 25, 2009 December 25, 2009 3,000,000.00 5.00 8.75
December 25, 2009 January 25, 2010 3,000,000.00 5.00 8.75
January 25, 2010 February 25, 2010 3,000,000.00 5.00 8.75
February 25, 2010 March 25, 2010 3,000,000.00 5.00 8.75
March 25, 2010 April 25, 2010 3,000,000.00 5.00 8.75
Thereafter NA NA NA
U-1-8
EXHIBIT V
PLANNED PRINCIPAL BALANCES FOR THE CLASS 1-A16, CLASS 1-A18, CLASS 1-A19, CLASS
1-A21, CLASS 1-A22, CLASS 1-A23 AND CLASS 1-A24 CERTIFICATES
PLANNED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
Initial.............................. 283,298,000.00
May 25, 2007......................... 282,715,243.96
June 25, 2007........................ 282,038,698.12
July 25, 2007........................ 281,268,573.96
August 25, 2007...................... 280,405,075.73
September 25, 2007................... 279,448,455.80
October 25, 2007..................... 278,399,014.61
November 25, 2007.................... 277,257,100.56
December 25, 2007.................... 276,023,109.91
January 25, 2008..................... 274,697,486.62
February 25, 2008.................... 273,280,722.11
March 25, 2008....................... 271,773,355.03
April 25, 2008....................... 270,175,970.97
May 25, 2008......................... 268,489,202.11
June 25, 2008........................ 266,713,726.90
July 25, 2008........................ 264,850,269.57
August 25, 2008...................... 262,899,599.74
September 25, 2008................... 260,862,531.90
October 25, 2008..................... 258,739,924.88
November 25, 2008.................... 256,532,681.28
December 25, 2008.................... 254,241,746.87
January 25, 2009..................... 251,868,109.93
February 25, 2009.................... 249,412,804.24
March 25, 2009....................... 246,876,999.26
April 25, 2009....................... 244,261,864.06
May 25, 2009......................... 241,568,620.08
June 25, 2009........................ 238,798,532.78
July 25, 2009........................ 235,953,278.85
August 25, 2009...................... 233,038,447.71
September 25, 2009................... 230,080,788.28
October 25, 2009..................... 227,118,259.61
November 25, 2009.................... 224,171,117.27
December 25, 2009.................... 221,239,283.28
January 25, 2010..................... 218,322,680.05
February 25, 2010.................... 215,421,230.43
March 25, 2010....................... 212,534,857.62
April 25, 2010....................... 209,663,485.28
May 25, 2010......................... 206,807,037.43
June 25, 2010........................ 203,965,438.49
July 25, 2010........................ 201,138,613.29
August 25, 2010...................... 198,326,487.04
September 25, 2010................... 195,528,985.36
October 25, 2010..................... 192,746,034.24
November 25, 2010.................... 189,977,560.06
December 25, 2010.................... 187,223,489.60
January 25, 2011..................... 184,483,750.00
February 25, 2011.................... 181,758,268.79
March 25, 2011....................... 179,046,973.90
April 25, 2011....................... 176,349,793.61
May 25, 2011......................... 173,666,656.59
June 25, 2011........................ 170,997,491.87
July 25, 2011........................ 168,342,228.88
August 25, 2011...................... 165,700,797.39
September 25, 2011................... 163,073,127.55
October 25, 2011..................... 160,459,149.87
November 25, 2011.................... 157,858,795.25
December 25, 2011.................... 155,271,994.92
January 25, 2012..................... 152,698,680.49
February 25, 2012.................... 150,138,783.92
March 25, 2012....................... 147,592,237.52
April 25, 2012....................... 145,058,973.98
May 25, 2012......................... 142,681,668.63
June 25, 2012........................ 140,317,299.63
July 25, 2012........................ 137,965,800.92
August 25, 2012...................... 135,627,106.77
September 25, 2012................... 133,301,151.82
October 25, 2012..................... 130,987,871.04
November 25, 2012.................... 128,687,199.74
December 25, 2012.................... 126,399,073.58
January 25, 2013..................... 124,123,428.55
February 25, 2013.................... 121,860,200.98
March 25, 2013....................... 119,609,327.54
April 25, 2013....................... 117,370,745.22
May 25, 2013......................... 115,190,577.88
June 25, 2013........................ 113,022,390.35
July 25, 2013........................ 110,866,120.94
August 25, 2013...................... 108,721,708.28
September 25, 2013................... 106,589,091.33
October 25, 2013..................... 104,468,209.36
November 25, 2013.................... 102,359,001.98
December 25, 2013.................... 100,261,409.09
January 25, 2014..................... 98,175,370.94
February 25, 2014.................... 96,100,828.08
March 25, 2014....................... 94,037,721.36
April 25, 2014....................... 91,985,991.96
May 25, 2014......................... 90,034,862.90
June 25, 2014........................ 88,094,466.09
July 25, 2014........................ 86,164,745.25
August 25, 2014...................... 84,245,644.38
September 25, 2014................... 82,342,016.74
October 25, 2014..................... 80,476,000.80
November 25, 2014.................... 78,646,909.69
December 25, 2014.................... 76,854,068.55
January 25, 2015..................... 75,096,814.31
February 25, 2015.................... 73,374,495.50
March 25, 2015....................... 71,686,472.04
April 25, 2015....................... 70,032,115.06
May 25, 2015......................... 68,605,735.28
June 25, 2015........................ 67,206,716.61
July 25, 2015........................ 65,834,556.36
V-1
PLANNED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
August 25, 2015...................... 64,488,760.81
September 25, 2015................... 63,168,845.03
October 25, 2015..................... 61,874,332.74
November 25, 2015.................... 60,604,756.17
December 25, 2015.................... 59,359,655.87
January 25, 2016..................... 58,138,580.64
February 25, 2016.................... 56,941,087.30
March 25, 2016....................... 55,766,740.60
April 25, 2016....................... 54,615,113.09
May 25, 2016......................... 53,642,156.18
June 25, 2016........................ 52,686,017.79
July 25, 2016........................ 51,746,412.48
August 25, 2016...................... 50,823,059.58
September 25, 2016................... 49,915,683.15
October 25, 2016..................... 49,024,011.87
November 25, 2016.................... 48,147,778.97
December 25, 2016.................... 47,286,722.15
January 25, 2017..................... 46,440,479.74
February 25, 2017.................... 45,607,856.74
March 25, 2017....................... 44,782,855.02
April 25, 2017....................... 43,961,404.31
May 25, 2017......................... 43,149,809.25
June 25, 2017........................ 42,352,533.02
July 25, 2017........................ 41,569,329.56
August 25, 2017...................... 40,799,956.96
September 25, 2017................... 40,044,177.41
October 25, 2017..................... 39,301,757.13
November 25, 2017.................... 38,572,466.27
December 25, 2017.................... 37,856,078.90
January 25, 2018..................... 37,152,372.90
February 25, 2018.................... 36,461,129.89
March 25, 2018....................... 35,782,135.23
April 25, 2018....................... 35,115,177.87
May 25, 2018......................... 34,460,050.36
June 25, 2018........................ 33,816,548.76
July 25, 2018........................ 33,184,472.59
August 25, 2018...................... 32,563,624.76
September 25, 2018................... 31,953,811.51
October 25, 2018..................... 31,354,842.39
November 25, 2018.................... 30,766,530.16
December 25, 2018.................... 30,188,690.77
January 25, 2019..................... 29,621,143.27
February 25, 2019.................... 29,063,709.80
March 25, 2019....................... 28,516,215.51
April 25, 2019....................... 27,978,488.52
May 25, 2019......................... 27,450,359.86
June 25, 2019........................ 26,931,663.45
July 25, 2019........................ 26,422,236.00
August 25, 2019...................... 25,921,917.02
September 25, 2019................... 25,430,548.73
October 25, 2019..................... 24,947,976.05
November 25, 2019.................... 24,474,046.50
December 25, 2019.................... 24,008,610.24
January 25, 2020..................... 23,551,519.93
February 25, 2020.................... 23,102,630.78
March 25, 2020....................... 22,661,800.43
April 25, 2020....................... 22,228,888.96
May 25, 2020......................... 21,803,758.82
June 25, 2020........................ 21,386,274.81
July 25, 2020........................ 20,976,304.02
August 25, 2020...................... 20,573,715.83
September 25, 2020................... 20,178,381.81
October 25, 2020..................... 19,790,175.74
November 25, 2020.................... 19,408,973.55
December 25, 2020.................... 19,034,653.27
January 25, 2021..................... 18,667,095.03
February 25, 2021.................... 18,306,180.99
March 25, 2021....................... 17,951,795.33
April 25, 2021....................... 17,603,824.19
May 25, 2021......................... 17,262,155.66
June 25, 2021........................ 16,926,679.75
July 25, 2021........................ 16,597,288.34
August 25, 2021...................... 16,273,875.15
September 25, 2021................... 15,956,335.73
October 25, 2021..................... 15,644,567.41
November 25, 2021.................... 15,338,469.25
December 25, 2021.................... 15,037,942.08
January 25, 2022..................... 14,742,888.38
February 25, 2022.................... 14,453,212.34
March 25, 2022....................... 14,168,819.75
April 25, 2022....................... 13,889,618.04
May 25, 2022......................... 13,615,516.22
June 25, 2022........................ 13,346,424.84
July 25, 2022........................ 13,082,255.99
August 25, 2022...................... 12,822,923.28
September 25, 2022................... 12,568,341.78
October 25, 2022..................... 12,318,428.04
November 25, 2022.................... 12,073,100.01
December 25, 2022.................... 11,832,277.06
January 25, 2023..................... 11,595,879.95
February 25, 2023.................... 11,363,830.79
March 25, 2023....................... 11,136,053.04
April 25, 2023....................... 10,912,471.45
May 25, 2023......................... 10,693,012.08
June 25, 2023........................ 10,477,602.25
July 25, 2023........................ 10,266,170.55
V-2
PLANNED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
August 25, 2023...................... 10,058,646.77
September 25, 2023................... 9,854,961.91
October 25, 2023..................... 9,655,048.17
November 25, 2023.................... 9,458,838.91
December 25, 2023.................... 9,266,268.64
January 25, 2024..................... 9,077,272.98
February 25, 2024.................... 8,891,788.68
March 25, 2024....................... 8,709,753.57
April 25, 2024....................... 8,531,106.54
May 25, 2024......................... 8,355,787.56
June 25, 2024........................ 8,183,737.60
July 25, 2024........................ 8,014,898.67
August 25, 2024...................... 7,849,213.78
September 25, 2024................... 7,686,626.91
October 25, 2024..................... 7,527,083.02
November 25, 2024.................... 7,370,528.01
December 25, 2024.................... 7,216,908.72
January 25, 2025..................... 7,066,172.91
February 25, 2025.................... 6,918,269.22
March 25, 2025....................... 6,773,147.21
April 25, 2025....................... 6,630,757.30
May 25, 2025......................... 6,491,050.76
June 25, 2025........................ 6,353,979.71
July 25, 2025........................ 6,219,497.08
August 25, 2025...................... 6,087,556.66
September 25, 2025................... 5,958,112.98
October 25, 2025..................... 5,831,121.41
November 25, 2025.................... 5,706,538.05
December 25, 2025.................... 5,584,319.81
January 25, 2026..................... 5,464,424.29
February 25, 2026.................... 5,346,809.88
March 25, 2026....................... 5,231,435.64
April 25, 2026....................... 5,118,261.39
May 25, 2026......................... 5,007,247.61
June 25, 2026........................ 4,898,355.48
July 25, 2026........................ 4,791,546.87
August 25, 2026...................... 4,686,786.59
September 25, 2026................... 4,584,097.66
October 25, 2026..................... 4,483,418.25
November 25, 2026.................... 4,384,720.41
December 25, 2026.................... 4,287,947.14
January 25, 2027..................... 4,193,111.67
February 25, 2027.................... 4,100,193.61
March 25, 2027....................... 4,009,103.15
April 25, 2027....................... 3,919,771.78
May 25, 2027......................... 3,832,167.69
June 25, 2027........................ 3,746,259.64
July 25, 2027........................ 3,662,016.92
August 25, 2027...................... 3,579,409.37
September 25, 2027................... 3,498,407.35
October 25, 2027..................... 3,418,981.74
November 25, 2027.................... 3,341,103.92
December 25, 2027.................... 3,264,745.78
January 25, 2028..................... 3,189,879.70
February 25, 2028.................... 3,116,478.54
March 25, 2028....................... 3,044,515.63
April 25, 2028....................... 2,973,964.78
May 25, 2028......................... 2,904,800.25
June 25, 2028........................ 2,836,996.75
July 25, 2028........................ 2,770,529.44
August 25, 2028...................... 2,705,373.90
September 25, 2028................... 2,641,506.15
October 25, 2028..................... 2,578,902.65
November 25, 2028.................... 2,517,540.23
December 25, 2028.................... 2,457,396.16
January 25, 2029..................... 2,398,448.09
February 25, 2029.................... 2,340,674.09
March 25, 2029....................... 2,284,052.58
April 25, 2029....................... 2,228,562.39
May 25, 2029......................... 2,174,182.71
June 25, 2029........................ 2,120,893.08
July 25, 2029........................ 2,068,673.43
August 25, 2029...................... 2,017,504.03
September 25, 2029................... 1,967,365.50
October 25, 2029..................... 1,918,238.79
November 25, 2029.................... 1,870,105.20
December 25, 2029.................... 1,822,946.37
January 25, 2030..................... 1,776,744.23
February 25, 2030.................... 1,731,481.07
March 25, 2030....................... 1,687,139.45
April 25, 2030....................... 1,643,702.29
May 25, 2030......................... 1,601,152.76
June 25, 2030........................ 1,559,474.37
July 25, 2030........................ 1,518,650.89
August 25, 2030...................... 1,478,666.40
September 25, 2030................... 1,439,505.25
October 25, 2030..................... 1,401,152.08
November 25, 2030.................... 1,363,591.78
December 25, 2030.................... 1,326,809.54
January 25, 2031..................... 1,290,790.79
February 25, 2031.................... 1,255,521.21
March 25, 2031....................... 1,220,986.78
April 25, 2031....................... 1,187,173.67
May 25, 2031......................... 1,154,068.34
June 25, 2031........................ 1,121,657.48
July 25, 2031........................ 1,089,928.01
V-3
PLANNED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
August 25, 2031...................... 1,058,867.08
September 25, 2031................... 1,028,462.09
October 25, 2031..................... 998,700.64
November 25, 2031.................... 969,570.57
December 25, 2031.................... 941,059.93
January 25, 2032..................... 913,156.99
February 25, 2032.................... 885,850.21
March 25, 2032....................... 859,128.29
April 25, 2032....................... 833,001.93
May 25, 2032......................... 807,437.79
June 25, 2032........................ 782,425.16
July 25, 2032........................ 757,953.52
August 25, 2032...................... 734,012.55
September 25, 2032................... 710,592.10
October 25, 2032..................... 687,682.21
November 25, 2032.................... 665,273.11
December 25, 2032.................... 643,355.18
January 25, 2033..................... 621,919.00
February 25, 2033.................... 600,955.30
March 25, 2033....................... 580,455.00
April 25, 2033....................... 560,409.15
May 25, 2033......................... 540,809.00
June 25, 2033........................ 521,645.92
July 25, 2033........................ 502,911.47
August 25, 2033...................... 484,597.35
September 25, 2033................... 466,695.39
October 25, 2033..................... 449,197.61
November 25, 2033.................... 432,096.13
December 25, 2033.................... 415,383.25
January 25, 2034..................... 399,051.38
February 25, 2034.................... 383,093.09
March 25, 2034....................... 367,501.08
April 25, 2034....................... 352,268.17
May 25, 2034......................... 337,387.33
June 25, 2034........................ 322,851.64
July 25, 2034........................ 308,654.32
August 25, 2034...................... 294,788.70
September 25, 2034................... 281,248.25
October 25, 2034..................... 268,026.55
November 25, 2034.................... 255,117.29
December 25, 2034.................... 242,514.28
January 25, 2035..................... 230,211.45
February 25, 2035.................... 218,202.84
March 25, 2035....................... 206,482.59
April 25, 2035....................... 195,044.96
May 25, 2035......................... 183,884.31
June 25, 2035........................ 172,995.09
July 25, 2035........................ 162,371.88
August 25, 2035...................... 152,009.33
September 25, 2035................... 141,902.22
October 25, 2035..................... 132,045.40
November 25, 2035.................... 122,433.82
December 25, 2035.................... 113,062.54
January 25, 2036..................... 103,926.70
February 25, 2036.................... 95,021.51
March 25, 2036....................... 86,342.31
April 25, 2036....................... 77,884.49
May 25, 2036......................... 69,643.54
June 25, 2036........................ 61,615.05
July 25, 2036........................ 53,794.66
August 25, 2036...................... 46,178.11
September 25, 2036................... 38,761.22
October 25, 2036..................... 31,539.87
November 25, 2036.................... 24,510.06
December 25, 2036.................... 17,670.58
January 25, 2037..................... 11,038.19
February 25, 2037.................... 4,874.79
March 25, 2037....................... 672.78
April 25, 2037....................... 0.00
V-4
EXHIBIT W
TARGETED PRINCIPAL BALANCES FOR THE CLASS 1-A1 AND CLASS 1-A3 CERTIFICATES
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
Initial.............................. 185,025,000.00
May 25, 2007......................... 184,289,794.04
June 25, 2007........................ 183,649,139.94
July 25, 2007........................ 183,102,875.16
August 25, 2007...................... 182,650,789.06
September 25, 2007................... 182,292,622.89
October 25, 2007..................... 182,028,069.81
November 25, 2007.................... 181,856,775.00
December 25, 2007.................... 181,778,335.79
January 25, 2008..................... 181,766,484.81
February 25, 2008.................... 181,754,574.58
March 25, 2008....................... 181,742,604.79
April 25, 2008....................... 181,730,575.16
May 25, 2008......................... 181,718,485.38
June 25, 2008........................ 181,706,335.15
July 25, 2008........................ 181,694,124.17
August 25, 2008...................... 181,681,852.13
September 25, 2008................... 181,669,518.73
October 25, 2008..................... 181,657,123.67
November 25, 2008.................... 181,644,666.63
December 25, 2008.................... 181,632,147.31
January 25, 2009..................... 181,619,565.38
February 25, 2009.................... 181,606,920.55
March 25, 2009....................... 181,594,212.50
April 25, 2009....................... 181,581,440.90
May 25, 2009......................... 181,568,605.45
June 25, 2009........................ 181,555,705.82
July 25, 2009........................ 181,542,741.69
August 25, 2009...................... 181,529,712.74
September 25, 2009................... 181,516,618.65
October 25, 2009..................... 181,503,459.09
November 25, 2009.................... 181,490,233.72
December 25, 2009.................... 181,476,942.23
January 25, 2010..................... 181,463,584.29
February 25, 2010.................... 181,450,159.55
March 25, 2010....................... 181,436,667.69
April 25, 2010....................... 181,423,108.37
May 25, 2010......................... 181,409,481.26
June 25, 2010........................ 181,395,786.01
July 25, 2010........................ 181,382,022.28
August 25, 2010...................... 181,368,189.73
September 25, 2010................... 181,354,288.02
October 25, 2010..................... 181,340,316.81
November 25, 2010.................... 181,326,275.73
December 25, 2010.................... 181,312,164.45
January 25, 2011..................... 181,297,982.62
February 25, 2011.................... 181,283,729.87
March 25, 2011....................... 181,269,405.87
April 25, 2011....................... 181,255,010.24
May 25, 2011......................... 181,240,542.63
June 25, 2011........................ 181,226,002.69
July 25, 2011........................ 181,211,390.04
August 25, 2011...................... 181,196,704.33
September 25, 2011................... 181,181,945.20
October 25, 2011..................... 181,167,112.27
November 25, 2011.................... 181,152,205.17
December 25, 2011.................... 181,137,223.54
January 25, 2012..................... 181,122,167.00
February 25, 2012.................... 181,107,035.18
March 25, 2012....................... 181,091,827.69
April 25, 2012....................... 181,076,544.18
May 25, 2012......................... 181,061,184.24
June 25, 2012........................ 181,045,747.50
July 25, 2012........................ 181,030,233.58
August 25, 2012...................... 181,014,642.09
September 25, 2012................... 180,998,972.65
October 25, 2012..................... 180,983,224.85
November 25, 2012.................... 180,967,398.32
December 25, 2012.................... 180,951,492.65
January 25, 2013..................... 180,935,507.46
February 25, 2013.................... 180,919,442.34
March 25, 2013....................... 180,903,296.89
April 25, 2013....................... 180,887,070.72
May 25, 2013......................... 180,870,763.41
June 25, 2013........................ 180,854,374.57
July 25, 2013........................ 180,837,903.79
August 25, 2013...................... 180,821,350.65
September 25, 2013................... 180,804,714.75
October 25, 2013..................... 180,787,995.66
November 25, 2013.................... 180,771,192.98
December 25, 2013.................... 180,754,306.29
January 25, 2014..................... 180,737,335.16
February 25, 2014.................... 180,720,279.18
March 25, 2014....................... 180,703,137.92
April 25, 2014....................... 180,685,910.95
May 25, 2014......................... 180,668,597.85
June 25, 2014........................ 180,651,198.18
July 25, 2014........................ 180,633,711.52
August 25, 2014...................... 180,616,137.42
September 25, 2014................... 180,598,475.45
W-1
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
October 25, 2014..................... 180,580,725.16
November 25, 2014.................... 180,562,886.13
December 25, 2014.................... 180,544,957.91
January 25, 2015..................... 180,526,940.04
February 25, 2015.................... 180,508,832.08
March 25, 2015....................... 180,490,633.58
April 25, 2015....................... 180,472,344.09
May 25, 2015......................... 180,453,963.16
June 25, 2015........................ 180,435,490.32
July 25, 2015........................ 180,416,925.11
August 25, 2015...................... 180,398,267.08
September 25, 2015................... 180,379,515.75
October 25, 2015..................... 180,360,670.68
November 25, 2015.................... 180,341,731.37
December 25, 2015.................... 180,322,697.37
January 25, 2016..................... 180,303,568.20
February 25, 2016.................... 180,284,343.38
March 25, 2016....................... 180,265,022.44
April 25, 2016....................... 180,245,604.90
May 25, 2016......................... 180,226,090.26
June 25, 2016........................ 180,206,478.06
July 25, 2016........................ 180,186,767.79
August 25, 2016...................... 180,166,958.97
September 25, 2016................... 180,147,051.11
October 25, 2016..................... 180,127,043.71
November 25, 2016.................... 180,106,936.27
December 25, 2016.................... 180,086,728.29
January 25, 2017..................... 180,066,419.28
February 25, 2017.................... 180,046,008.72
March 25, 2017....................... 180,025,496.10
April 25, 2017....................... 180,004,880.92
May 25, 2017......................... 179,984,162.67
June 25, 2017........................ 179,963,340.83
July 25, 2017........................ 179,942,414.87
August 25, 2017...................... 179,921,384.29
September 25, 2017................... 179,900,248.55
October 25, 2017..................... 179,879,007.14
November 25, 2017.................... 179,857,659.52
December 25, 2017.................... 179,836,205.16
January 25, 2018..................... 179,814,643.53
February 25, 2018.................... 179,792,974.09
March 25, 2018....................... 179,771,196.30
April 25, 2018....................... 179,749,309.62
May 25, 2018......................... 179,727,313.51
June 25, 2018........................ 179,705,207.42
July 25, 2018........................ 179,682,990.80
August 25, 2018...................... 179,660,663.10
September 25, 2018................... 179,638,223.76
October 25, 2018..................... 179,615,672.22
November 25, 2018.................... 179,593,007.92
December 25, 2018.................... 179,570,230.30
January 25, 2019..................... 179,547,338.80
February 25, 2019.................... 179,524,332.83
March 25, 2019....................... 179,501,211.84
April 25, 2019....................... 179,477,975.24
May 25, 2019......................... 179,454,622.46
June 25, 2019........................ 179,431,152.92
July 25, 2019........................ 179,407,566.02
August 25, 2019...................... 179,383,861.20
September 25, 2019................... 179,360,037.84
October 25, 2019..................... 179,336,095.38
November 25, 2019.................... 179,312,033.19
December 25, 2019.................... 179,287,850.70
January 25, 2020..................... 179,263,547.30
February 25, 2020.................... 179,239,122.38
March 25, 2020....................... 179,214,575.33
April 25, 2020....................... 179,189,905.55
May 25, 2020......................... 179,165,112.42
June 25, 2020........................ 179,140,195.33
July 25, 2020........................ 179,115,153.65
August 25, 2020...................... 179,089,986.76
September 25, 2020................... 179,064,694.03
October 25, 2020..................... 179,039,274.84
November 25, 2020.................... 179,013,728.56
December 25, 2020.................... 178,988,054.55
January 25, 2021..................... 178,962,252.16
February 25, 2021.................... 178,936,320.76
March 25, 2021....................... 178,910,259.71
April 25, 2021....................... 178,884,068.35
May 25, 2021......................... 178,857,746.04
June 25, 2021........................ 178,831,292.11
July 25, 2021........................ 178,804,705.91
August 25, 2021...................... 178,777,986.78
September 25, 2021................... 178,751,134.06
October 25, 2021..................... 178,724,147.07
November 25, 2021.................... 178,697,025.15
December 25, 2021.................... 178,669,767.62
January 25, 2022..................... 178,642,373.80
February 25, 2022.................... 178,614,843.01
March 25, 2022....................... 178,587,174.57
W-2
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
April 25, 2022....................... 178,559,367.78
May 25, 2022......................... 178,531,421.97
June 25, 2022........................ 178,503,336.42
July 25, 2022........................ 178,475,110.44
August 25, 2022...................... 178,446,743.34
September 25, 2022................... 178,418,234.40
October 25, 2022..................... 178,389,582.91
November 25, 2022.................... 178,360,788.17
December 25, 2022.................... 178,331,849.45
January 25, 2023..................... 178,302,766.04
February 25, 2023.................... 178,273,537.21
March 25, 2023....................... 178,244,162.24
April 25, 2023....................... 178,214,640.39
May 25, 2023......................... 178,184,970.94
June 25, 2023........................ 178,155,153.14
July 25, 2023........................ 178,125,186.24
August 25, 2023...................... 178,095,069.52
September 25, 2023................... 178,064,802.21
October 25, 2023..................... 178,034,383.56
November 25, 2023.................... 178,003,812.82
December 25, 2023.................... 177,973,089.23
January 25, 2024..................... 177,942,212.02
February 25, 2024.................... 177,911,180.42
March 25, 2024....................... 177,879,993.66
April 25, 2024....................... 177,848,650.97
May 25, 2024......................... 177,817,151.57
June 25, 2024........................ 177,785,494.67
July 25, 2024........................ 177,753,679.49
August 25, 2024...................... 177,721,705.23
September 25, 2024................... 177,689,571.10
October 25, 2024..................... 177,657,276.29
November 25, 2024.................... 177,624,820.02
December 25, 2024.................... 177,592,201.46
January 25, 2025..................... 177,559,419.81
February 25, 2025.................... 177,526,474.25
March 25, 2025....................... 177,493,363.97
April 25, 2025....................... 177,460,088.13
May 25, 2025......................... 177,426,645.91
June 25, 2025........................ 177,393,036.48
July 25, 2025........................ 177,359,259.01
August 25, 2025...................... 177,325,312.65
September 25, 2025................... 177,291,196.55
October 25, 2025..................... 177,256,909.88
November 25, 2025.................... 177,222,451.77
December 25, 2025.................... 177,187,821.37
January 25, 2026..................... 177,153,017.82
February 25, 2026.................... 177,118,040.25
March 25, 2026....................... 177,082,887.79
April 25, 2026....................... 176,151,884.37
May 25, 2026......................... 174,899,145.55
June 25, 2026........................ 173,642,622.51
July 25, 2026........................ 172,382,341.27
August 25, 2026...................... 171,118,425.62
September 25, 2026................... 169,853,452.68
October 25, 2026..................... 168,586,438.82
November 25, 2026.................... 167,317,783.33
December 25, 2026.................... 166,046,625.39
January 25, 2027..................... 164,775,057.83
February 25, 2027.................... 163,503,768.51
March 25, 2027....................... 162,230,456.17
April 25, 2027....................... 160,953,636.61
May 25, 2027......................... 159,673,329.36
June 25, 2027........................ 158,389,553.32
July 25, 2027........................ 157,102,326.83
August 25, 2027...................... 155,811,667.65
September 25, 2027................... 154,517,592.96
October 25, 2027..................... 153,220,119.42
November 25, 2027.................... 151,919,263.11
December 25, 2027.................... 150,615,039.59
January 25, 2028..................... 149,307,463.87
February 25, 2028.................... 147,996,550.47
March 25, 2028....................... 146,682,313.38
April 25, 2028....................... 145,364,766.08
May 25, 2028......................... 144,043,921.54
June 25, 2028........................ 142,719,792.27
July 25, 2028........................ 141,392,390.28
August 25, 2028...................... 140,061,727.12
September 25, 2028................... 138,727,813.84
October 25, 2028..................... 137,390,661.05
November 25, 2028.................... 136,050,278.92
December 25, 2028.................... 134,706,677.15
January 25, 2029..................... 133,359,865.02
February 25, 2029.................... 132,009,851.34
March 25, 2029....................... 130,656,644.54
April 25, 2029....................... 129,300,252.60
May 25, 2029......................... 127,940,683.09
June 25, 2029........................ 126,577,943.18
July 25, 2029........................ 125,212,039.65
August 25, 2029...................... 123,842,978.84
September 25, 2029................... 122,470,766.75
October 25, 2029..................... 121,095,408.97
November 25, 2029.................... 119,716,910.73
W-3
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------------------------- --------------
December 25, 2029.................... 118,335,276.84
January 25, 2030..................... 116,950,511.81
February 25, 2030.................... 115,562,619.74
March 25, 2030....................... 114,171,604.41
April 25, 2030....................... 112,777,469.19
May 25, 2030......................... 111,380,217.18
June 25, 2030........................ 109,979,851.07
July 25, 2030........................ 108,576,373.27
August 25, 2030...................... 107,169,785.82
September 25, 2030................... 105,760,090.44
October 25, 2030..................... 104,347,288.55
November 25, 2030.................... 102,931,381.24
December 25, 2030.................... 101,512,369.26
January 25, 2031..................... 100,090,253.10
February 25, 2031.................... 98,665,032.93
March 25, 2031....................... 97,236,708.57
April 25, 2031....................... 95,805,279.64
May 25, 2031......................... 94,370,745.39
June 25, 2031........................ 92,933,104.80
July 25, 2031........................ 91,492,356.59
August 25, 2031...................... 90,048,499.20
September 25, 2031................... 88,601,530.75
October 25, 2031..................... 87,151,449.14
November 25, 2031.................... 85,698,251.98
December 25, 2031.................... 84,241,936.61
January 25, 2032..................... 82,782,500.12
February 25, 2032.................... 81,319,939.33
March 25, 2032....................... 79,854,250.82
April 25, 2032....................... 78,387,744.88
May 25, 2032......................... 76,918,109.19
June 25, 2032........................ 75,445,339.60
July 25, 2032........................ 73,969,431.72
August 25, 2032...................... 72,490,380.91
September 25, 2032................... 71,008,182.31
October 25, 2032..................... 69,522,830.82
November 25, 2032.................... 68,034,321.11
December 25, 2032.................... 66,542,647.64
January 25, 2033..................... 65,047,804.63
February 25, 2033.................... 63,549,786.10
March 25, 2033....................... 62,048,585.81
April 25, 2033....................... 60,544,197.38
May 25, 2033......................... 59,036,614.13
June 25, 2033........................ 57,525,829.25
July 25, 2033........................ 56,011,835.67
August 25, 2033...................... 54,494,626.14
September 25, 2033................... 52,974,193.21
October 25, 2033..................... 51,450,529.21
November 25, 2033.................... 49,923,626.30
December 25, 2033.................... 48,393,476.43
January 25, 2034..................... 46,860,071.38
February 25, 2034.................... 45,323,402.69
March 25, 2034....................... 43,783,461.76
April 25, 2034....................... 42,240,239.79
May 25, 2034......................... 40,693,727.79
June 25, 2034........................ 39,143,916.60
July 25, 2034........................ 37,590,796.87
August 25, 2034...................... 36,034,359.09
September 25, 2034................... 34,474,593.55
October 25, 2034..................... 32,911,490.36
November 25, 2034.................... 31,345,039.51
December 25, 2034.................... 29,775,230.78
January 25, 2035..................... 28,202,053.78
February 25, 2035.................... 26,625,497.96
March 25, 2035....................... 25,045,552.62
April 25, 2035....................... 23,462,206.87
May 25, 2035......................... 21,875,449.69
June 25, 2035........................ 20,285,269.88
July 25, 2035........................ 18,691,656.09
August 25, 2035...................... 17,094,596.81
September 25, 2035................... 15,494,080.36
October 25, 2035..................... 13,890,094.95
November 25, 2035.................... 12,282,628.59
December 25, 2035.................... 10,671,669.17
January 25, 2036..................... 9,057,204.41
February 25, 2036.................... 7,439,221.92
March 25, 2036....................... 5,817,709.11
April 25, 2036....................... 4,192,653.29
May 25, 2036......................... 2,564,041.61
June 25, 2036........................ 931,861.05
July 25, 2036........................ 0.00
W-4
SCHEDULE X
ITEM ON FORM 8-K PARTY RESPONSIBLE
*Item 1.01- Entry into a Material Definitive Agreement All parties
*Item 1.02- Termination of a Material Definitive Agreement All parties
Item 1.03- Bankruptcy or Receivership Depositor
Item 2.04- Triggering Events that Accelerate or Increase a Depositor
Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
*Item 3.03- Material Modification to Rights of Security Depositor, Servicer
Holders
Item 5.03- Amendments of Articles of Incorporation or Depositor
Bylaws; Change of Fiscal Year
Item 6.01- ABS Informational and Computational Material Depositor
*Item 6.02- Change of Servicer or Trustee Servicer, Trustee (as to change of Trustee only), Paying
Agent (as to change of Paying Agent only)
*Item 6.03- Change in Credit Enhancement or External Depositor
Support
*Item 6.04- Failure to Make a Required Distribution Paying Agent
Item 6.05- Securities Act Updating Disclosure Depositor
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 Depositor
Item 9.01 Depositor
X-1
SCHEDULE Y
ITEM ON FORM 10-D PARTY RESPONSIBLE
Item 1: Distribution and Pool Performance Information Paying Agent through the Item 602 statement based on
Plus any information required by Item 1121 which is NOT information provided to it by the Servicer Servicer
included on the monthly statement to Certificateholders
Item 2: Legal Proceedings per Item 1117 of Reg AB All parties to the PSA (as to themselves), the
depositor/trustee/paying agent/servicer (to the extent known)
as to the issuing entity, the depositor/servicer as to the
sponsor, 1106(b) originator and any 1100(d)(1) party
Item 3: Sale of Securities and Use of Proceeds Depositor
Item 4: Defaults Upon Senior Securities Servicer, Paying Agent (except as to 9.01(b) or (d)) and
Trustee (to the extent of knowledge thereof)
Item 5: Submission of Matters to a Vote of Security Depositor, Paying Agent (to the extent it is submitting a
Holders matter to vote) and the Trustee (to the extent it is
submitting a matter to vote)
Item 6: Significant Obligors of Pool Assets Depositor/Sponsor/Mortgage Loan Seller/ Servicer
Item 7: Significant Enhancement Provider Information Depositor/Sponsor
Item 8: Other Information Servicer, Paying Agent and any other party responsible for
disclosure items on Form 10-D
Item 9: Exhibits Servicer
Y-1
SCHEDULE Z
ITEM ON FORM 10-K PARTY RESPONSIBLE
Item 1B: Unresolved Staff Comments Depositor
*Item 9B: Other Information Servicer, Paying Agent and any other party responsible
for disclosure items on Form 8-K
*Item 15: Exhibits, Financial Statement Schedules Servicer/subservicers/Depositor
*Additional Item: All parties to the PSA (as to themselves), the
Depositor/Trustee/Paying Agent/Servicer (to the extent
Disclosure per Item 1117 of Reg AB known) as to the issuing entity, the
depositor/servicer as to the sponsor, 1106(b)
originator, any 1100(d)(1) party
*Additional Item: All parties to the PSA, the sponsor, originator,
Disclosure per Item 1119 of Reg AB significant obligor, enhancement or support provider
Additional Item: Depositor/Sponsor/Mortgage Loan Seller/Servicer
Disclosure per Item 1112(b) of Reg AB
Additional Item: Depositor/Sponsor
Disclosure per Items 1114(b) and 1115(b) of Reg AB
Z-1
