Exhibit 4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
WMC MORTGAGE CORP.,
Responsible Party,
DECISION ONE MORTGAGE COMPANY, LLC,
Responsible Party,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Custodian
------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2007
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. TRUST 2007-HE4
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2007-HE4
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans...................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans................
Section 2.03 Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the Mortgage
Loans..........................................................
Section 2.04 Execution and Delivery of Certificates.........................
Section 2.05 REMIC Matters..................................................
Section 2.06 Representations and Warranties of the Depositor................
Section 2.07 Enforcement of Obligations for Breach of Mortgage Loan
Representations................................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans............................
Section 3.02 Subservicing Agreements between a Servicer and Subservicers....
Section 3.03 Successor Subservicers.........................................
Section 3.04 Liability of the Servicers.....................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee........................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee
Section 3.07 Collection of Certain Mortgage Loan Payments...................
Section 3.08 Subservicing Accounts..........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.......................................................
Section 3.10 Collection Accounts............................................
Section 3.11 Withdrawals from the Collection Accounts.......................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account...........................................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage..............................................
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted Mortgage Loans......................
Section 3.16 Release of Mortgage Files......................................
Section 3.17 Title, Conservation and Disposition of REO Property............
Section 3.18 Notification of Adjustments....................................
Section 3.19 Access to Certain Documentation and Information Regarding the
Mortgage Loans.................................................
Section 3.20 Documents, Records and Funds in Possession of the Servicers to
Be Held for the Trustee........................................
Section 3.21 Servicing Compensation.........................................
Section 3.22 Annual Statement as to Compliance..............................
Section 3.23 Annual Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants" Attestation
Report.........................................................
Section 3.24 Trustee to Act as Servicer.....................................
Section 3.25 Compensating Interest..........................................
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.......................
Section 3.27 Optional Purchase of Delinquent Mortgage Loans.................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.......................................................
Section 4.02 Priorities of Distribution.....................................
Section 4.03 Monthly Statements to Certificateholders.......................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.........
Section 4.05 Allocation of Applied Realized Loss Amounts....................
Section 4.06 Swap Account...................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...............................................
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates...................................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..............
Section 5.04 Persons Deemed Owners..........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses......
Section 5.06 Maintenance of Office or Agency................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers......
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.........
Section 6.03 Limitation on Liability of the Depositor, the Servicers and
Others.........................................................
Section 6.04 Limitation on Resignation of a Servicer........................
Section 6.05 Additional Indemnification by the Servicers; Third-Party Claims
ARTICLE VII
DEFAULT
Section 7.01 Events of Default..............................................
Section 7.02 Trustee to Act; Appointment of Successor.......................
Section 7.03 Notification to Certificateholders.............................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee..........................................
Section 8.02 Certain Matters Affecting the Trustee and the Custodian........
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans..........
Section 8.04 Trustee May Own Certificates...................................
Section 8.05 Trustee's Fees and Expenses....................................
Section 8.06 Eligibility Requirements for the Trustee.......................
Section 8.07 Resignation and Removal of the Trustee.........................
Section 8.08 Successor Trustee..............................................
Section 8.09 Merger or Consolidation of the Trustee.........................
Section 8.10 Appointment of Co-Trustee or Separate Trustee..................
Section 8.11 Tax Matters....................................................
Section 8.12 Periodic Filings...............................................
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis Risk
CarryForward Amounts and Class IO Shortfalls; Tax
Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement...................
Section 8.14 Custodial Responsibilities.....................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans.
Section 9.02 Final Distribution on the Certificates.........................
Section 9.03 Additional Termination Requirements............................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment......................................................
Section 10.02 Recordation of Agreement; Counterparts.........................
Section 10.03 Governing Law..................................................
Section 10.04 Intention of Parties...........................................
Section 10.05 Notices........................................................
Section 10.06 Severability of Provisions.....................................
Section 10.07 Assignment; Sales; Advance Facilities..........................
Section 10.08 Limitation on Rights of Certificateholders.....................
Section 10.09 Inspection and Audit Rights....................................
Section 10.10 Certificates Nonassessable and Fully Paid......................
Section 10.11 Rule of Construction...........................................
Section 10.12 Waiver of Jury Trial...........................................
Section 10.13 Opinions of Internal Counsel of WMC............................
Section 10.14 Rights of the Third Parties....................................
Section 10.15 Regulation AB Compliance; Intent of the Parties; Reasonableness
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Saxon, as Servicer
Schedule II-A Further Representations and Warranties of Saxon
Schedule III Representations and Warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. as to the Mortgage Loans
Schedule IV Representations and Warranties of WMC, as to the WMC Loans
Schedule V Representations and Warranties of WMC, as to WMC
Schedule VI Representations and Warranties of Decision One, as to the
Decision One Mortgage Loans
Schedule VII Representations and Warranties of LaSalle, as Custodian
Schedule VIII Representations and Warranties of Countrywide Servicing, as
Servicer
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C-1 Form of Class R Certificate
Exhibit C-2 Form of Class RX Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of [Custodian]/ [Trustee]
Exhibit F Form of Document Certification and Exception Report of
[Custodian]/[Trustee]
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Trustee to
Depositor
Exhibit N Form of Certification to be provided by Saxon to Depositor
Exhibit O WMC Purchase Agreement
Exhibit P Decision One Purchase Agreement
Exhibit Q [Reserved]
Exhibit R Form of Servicer Power of Attorney
Exhibit S Servicing Criteria To Be Addressed in Assessment of
Compliance
Exhibit T Additional Form 10-D Disclosure
Exhibit U Additional Form 10-K Disclosure
Exhibit V Form 8-K Disclosure Information
Exhibit W Interest Rate Swap Agreement
Exhibit X Form of Servicer Reports
Exhibit Y [Reserved]
Exhibit Z [Reserved]
Exhibit AA Form of Additional Disclosure Notification
Exhibit BB Countrywide Amendment Regulation AB
Exhibit CC Representations and Warranties Agreement
Exhibit DD Interest Rate Cap Agreement
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1, 2007
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as a servicer ("Countrywide Servicing"), SAXON MORTGAGE SERVICES,
INC., a Texas corporation, as a servicer ("Saxon" and, together with Countrywide
Servicing, the "Servicers"), WMC MORTGAGE CORP., a California corporation, as a
responsible party ("WMC"), DECISION ONE MORTGAGE COMPANY, LLC, a North Carolina
limited liability company, as a responsible party ("Decision One" and, together
with WMC, the "Responsible Parties"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, as trustee (the "Trustee"), and LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, as custodian (the
"Custodian").
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that five segregated asset pools within
the Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap Assets
and the Interest Rate Cap Agreement, (iii) the Excess Reserve Fund Account, and
(iv) the right of the LIBOR Certificates to receive Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts and the
obligation to pay Class IO Shortfalls) be treated for federal income tax
purposes as comprising five REMICs (Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC, respectively,
and each, a "Trust REMIC"). The Class X Interest, the Class IO Interest and each
Class of LIBOR Certificates (other than the right of each Class of LIBOR
Certificates to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts and the obligation to pay Class IO
Shortfalls) represents ownership of a regular interest in a REMIC for purposes
of the REMIC Provisions. The Class R Certificates represent ownership of the
sole class of residual interest in each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC for purposes of the REMIC
Provisions. The Class RX Certificates represent ownership of the sole class of
residual interest in the Class X REMIC for purposes of the REMIC provisions. The
Startup Day for each Trust REMIC described herein is the date referenced in
Section 2.05. The latest possible maturity date for each regular interest is the
latest date referenced in Section 2.05. The Class X REMIC shall hold as assets
the Class UT-X Interest and the Class UT-IO Interest as set out below. The
Upper-Tier REMIC shall hold as assets the several classes of uncertificated
Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC shall hold as
assets the several classes of uncertificated Pooling-Tier REMIC-2 Regular
Interests. Pooling-Tier REMIC-2 shall hold as assets the several classes of
uncertificated Pooling-Tier REMIC-1 Regular Interests. Pooling-Tier REMIC-1
shall hold as assets the assets of the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets and the Interest Rate Cap Agreement,
(iii) the Excess Reserve Fund Account, and (iv) the right of the LIBOR
Certificates to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts and the obligation to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of LIBOR Certificates
represents a beneficial ownership of a regular interest in the Upper-Tier REMIC,
the right to receive Basis Risk CarryForward Amounts and without duplication,
Upper-Tier CarryForward Amounts, and the obligation to pay Class IO Shortfalls;
the Class X Certificates represent beneficial ownership of the Class X Interest,
the Class IO Interest, the Interest Rate Swap Agreement, the Swap Account and
the Interest Rate Cap Agreement, the Excess Reserve Fund Account and the right
to receive Class IO Shortfalls, subject to the obligation to pay Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts;
and the Class P Certificates represent beneficial ownership of the Prepayment
Premiums, which portions of the Trust Fund shall be treated as a grantor trust
under subpart E, Part I of subchapter J of the Code (the "Grantor Trust").
Pooling-Tier REMIC-1
--------------------
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Pooling-Tier REMIC-1 Pooling-Tier REMIC-1 Initial Pooling-Tier
Interest Interest Rate REMIC-1 Principal Amount
----------------------- -------------------- ---------------------
Class PT1-I-1 (1) $ 19,549,443.99
Class PT1-I-2A (2) $ 555,696.61
Class PT1-I-2B (3) $ 555,696.61
Class PT1-I-3A (2) $ 533,378.74
Class PT1-I-3B (3) $ 533,378.74
Class PT1-I-4A (2) $ 510,996.02
Class PT1-I-4B (3) $ 510,996.02
Class PT1-I-5A (2) $ 488,495.72
Class PT1-I-5B (3) $ 488,495.72
Class PT1-I-6A (2) $ 467,511.29
Class PT1-I-6B (3) $ 467,511.29
Class PT1-I-7A (2) $ 448,228.14
Class PT1-I-7B (3) $ 448,228.14
Class PT1-I-8A (2) $ 428,187.98
Class PT1-I-8B (3) $ 428,187.98
Class PT1-I-9A (2) $ 411,136.67
Class PT1-I-9B (3) $ 411,136.67
Class PT1-I-10A (2) $ 1,946,640.96
Class PT1-I-10B (3) $ 1,946,640.96
Class PT1-I-11A (2) $ 753,711.32
Class PT1-I-11B (3) $ 753,711.32
Class PT1-I-12A (2) $ 271,994.92
Class PT1-I-12B (3) $ 271,994.92
Class PT1-I-13A (2) $ 261,327.41
Class PT1-I-13B (3) $ 261,327.41
Class PT1-I-14A (2) $ 249,502.65
Class PT1-I-14B (3) $ 249,502.65
Class PT1-I-15A (2) $ 240,334.39
Class PT1-I-15B (3) $ 240,334.39
Class PT1-I-16A (2) $ 1,805,726.51
Class PT1-I-16B (3) $ 1,805,726.51
Class PT1-I-17A (2) $ 603,313.23
Class PT1-I-17B (3) $ 603,313.23
Class PT1-I-18A (2) $ 122,525.79
Class PT1-I-18B (3) $ 122,525.79
Class PT1-I-19A (2) $ 118,044.51
Class PT1-I-19B (3) $ 118,044.51
Class PT1-I-20A (2) $ 112,827.56
Class PT1-I-20B (3) $ 112,827.56
Class PT1-I-21A (2) $ 111,552.69
Class PT1-I-21B (3) $ 111,552.69
Class PT1-I-22A (2) $ 1,052,610.54
Class PT1-I-22B (3) $ 1,052,610.54
Class PT1-I-23A (2) $ 334,897.12
Class PT1-I-23B (3) $ 334,897.12
Class PT1-I-24A (2) $ 42,792.58
Class PT1-I-24B (3) $ 42,792.58
Class PT1-I-25A (2) $ 41,303.58
Class PT1-I-25B (3) $ 41,303.58
Class PT1-I-26A (2) $ 39,866.09
Class PT1-I-26B (3) $ 39,866.09
Class PT1-I-27A (2) $ 41,011.98
Class PT1-I-27B (3) $ 41,011.98
Class PT1-I-28A (2) $ 86,689.82
Class PT1-I-28B (3) $ 86,689.82
Class PT1-I-29A (2) $ 52,278.98
Class PT1-I-29B (3) $ 52,278.98
Class PT1-I-30A (2) $ 31,538.98
Class PT1-I-30B (3) $ 31,538.98
Class PT1-I-31A (2) $ 30,469.97
Class PT1-I-31B (3) $ 30,469.97
Class PT1-I-32A (2) $ 29,436.63
Class PT1-I-32B (3) $ 29,436.63
Class PT1-I-33A (2) $ 29,882.27
Class PT1-I-33B (3) $ 29,882.27
Class PT1-I-34A (2) $ 55,743.40
Class PT1-I-34B (3) $ 55,743.40
Class PT1-I-35A (2) $ 35,911.80
Class PT1-I-35B (3) $ 35,911.80
Class PT1-I-36A (2) $ 23,894.44
Class PT1-I-36B (3) $ 23,894.44
Class PT1-I-37A (2) $ 23,100.35
Class PT1-I-37B (3) $ 23,100.35
Class PT1-I-38A (2) $ 22,332.02
Class PT1-I-38B (3) $ 22,332.02
Class PT1-I-39A (2) $ 21,588.64
Class PT1-I-39B (3) $ 21,588.64
Class PT1-I-40A (2) $ 20,869.43
Class PT1-I-40B (3) $ 20,869.43
Class PT1-I-41A (2) $ 20,173.62
Class PT1-I-41B (3) $ 20,173.62
Class PT1-I-42A (2) $ 19,500.48
Class PT1-I-42B (3) $ 19,500.48
Class PT1-I-43A (2) $ 18,849.28
Class PT1-I-43B (3) $ 18,849.28
Class PT1-I-44A (2) $ 18,219.35
Class PT1-I-44B (3) $ 18,219.35
Class PT1-I-45A (2) $ 17,861.57
Class PT1-I-45B (3) $ 17,861.57
Class PT1-I-46A (2) $ 39,662.82
Class PT1-I-46B (3) $ 39,662.82
Class PT1-I-47A (2) $ 15,528.75
Class PT1-I-47B (3) $ 15,528.75
Class PT1-I-48A (2) $ 14,915.93
Class PT1-I-48B (3) $ 14,915.93
Class PT1-I-49A (2) $ 14,426.65
Class PT1-I-49B (3) $ 14,426.65
Class PT1-I-50A (2) $ 13,952.92
Class PT1-I-50B (3) $ 13,952.92
Class PT1-I-51A (2) $ 13,749.58
Class PT1-I-51B (3) $ 13,749.58
Class PT1-I-52A (2) $ 35,994.68
Class PT1-I-52B (3) $ 35,994.68
Class PT1-I-53A (2) $ 11,686.07
Class PT1-I-53B (3) $ 11,686.07
Class PT1-I-54A (2) $ 11,208.11
Class PT1-I-54B (3) $ 11,208.11
Class PT1-I-55A (2) $ 10,849.77
Class PT1-I-55B (3) $ 10,849.77
Class PT1-I-56A (2) $ 10,502.36
Class PT1-I-56B (3) $ 10,502.36
Class PT1-I-57A (2) $ 10,311.35
Class PT1-I-57B (3) $ 10,311.35
Class PT1-I-58A (2) $ 22,918.54
Class PT1-I-58B (3) $ 22,918.54
Class PT1-I-59A (2) $ 8,990.31
Class PT1-I-59B (3) $ 8,990.31
Class PT1-I-60A (2) $ 8,648.46
Class PT1-I-60B (3) $ 8,648.46
Class PT1-I-61A (2) $ 255,805.50
Class PT1-I-61B (3) $ 255,805.50
Class PT1-II-1 (4) $284,631,351.25
Class PT1-II-2A (5) $ 8,090,699.58
Class PT1-II-2B (6) $ 8,090,699.58
Class PT1-II-3A (5) $ 7,765,761.04
Class PT1-II-3B (6) $ 7,765,761.04
Class PT1-II-4A (5) $ 7,439,878.47
Class PT1-II-4B (6) $ 7,439,878.47
Class PT1-II-5A (5) $ 7,112,283.96
Class PT1-II-5B (6) $ 7,112,283.96
Class PT1-II-6A (5) $ 6,806,759.91
Class PT1-II-6B (6) $ 6,806,759.91
Class PT1-II-7A (5) $ 6,526,005.68
Class PT1-II-7B (6) $ 6,526,005.68
Class PT1-II-8A (5) $ 6,234,229.72
Class PT1-II-8B (6) $ 6,234,229.72
Class PT1-II-9A (5) $ 5,985,970.04
Class PT1-II-9B (6) $ 5,985,970.04
Class PT1-II-10A (5) $ 28,342,240.76
Class PT1-II-10B (6) $ 28,342,240.76
Class PT1-II-11A (5) $ 10,973,707.11
Class PT1-II-11B (6) $ 10,973,707.11
Class PT1-II-12A (5) $ 3,960,126.96
Class PT1-II-12B (6) $ 3,960,126.96
Class PT1-II-13A (5) $ 3,804,812.78
Class PT1-II-13B (6) $ 3,804,812.78
Class PT1-II-14A (5) $ 3,632,649.47
Class PT1-II-14B (6) $ 3,632,649.47
Class PT1-II-15A (5) $ 3,499,163.56
Class PT1-II-15B (6) $ 3,499,163.56
Class PT1-II-16A (5) $ 26,290,587.90
Class PT1-II-16B (6) $ 26,290,587.90
Class PT1-II-17A (5) $ 8,783,976.62
Class PT1-II-17B (6) $ 8,783,976.62
Class PT1-II-18A (5) $ 1,783,921.94
Class PT1-II-18B (6) $ 1,783,921.94
Class PT1-II-19A (5) $ 1,718,676.48
Class PT1-II-19B (6) $ 1,718,676.48
Class PT1-II-20A (5) $ 1,642,719.97
Class PT1-II-20B (6) $ 1,642,719.97
Class PT1-II-21A (5) $ 1,624,158.34
Class PT1-II-21B (6) $ 1,624,158.34
Class PT1-II-22A (5) $ 15,325,548.98
Class PT1-II-22B (6) $ 15,325,548.98
Class PT1-II-23A (5) $ 4,875,955.56
Class PT1-II-23B (6) $ 4,875,955.56
Class PT1-II-24A (5) $ 623,041.25
Class PT1-II-24B (6) $ 623,041.25
Class PT1-II-25A (5) $ 601,362.01
Class PT1-II-25B (6) $ 601,362.01
Class PT1-II-26A (5) $ 580,432.78
Class PT1-II-26B (6) $ 580,432.78
Class PT1-II-27A (5) $ 597,116.44
Class PT1-II-27B (6) $ 597,116.44
Class PT1-II-28A (5) $ 1,262,165.79
Class PT1-II-28B (6) $ 1,262,165.79
Class PT1-II-29A (5) $ 761,159.03
Class PT1-II-29B (6) $ 761,159.03
Class PT1-II-30A (5) $ 459,193.80
Class PT1-II-30B (6) $ 459,193.80
Class PT1-II-31A (5) $ 443,629.41
Class PT1-II-31B (6) $ 443,629.41
Class PT1-II-32A (5) $ 428,584.53
Class PT1-II-32B (6) $ 428,584.53
Class PT1-II-33A (5) $ 435,072.81
Class PT1-II-33B (6) $ 435,072.81
Class PT1-II-34A (5) $ 811,599.50
Class PT1-II-34B (6) $ 811,599.50
Class PT1-II-35A (5) $ 522,860.15
Class PT1-II-35B (6) $ 522,860.15
Class PT1-II-36A (5) $ 347,892.54
Class PT1-II-36B (6) $ 347,892.54
Class PT1-II-37A (5) $ 336,331.03
Class PT1-II-37B (6) $ 336,331.03
Class PT1-II-38A (5) $ 325,144.49
Class PT1-II-38B (6) $ 325,144.49
Class PT1-II-39A (5) $ 314,321.21
Class PT1-II-39B (6) $ 314,321.21
Class PT1-II-40A (5) $ 303,849.74
Class PT1-II-40B (6) $ 303,849.74
Class PT1-II-41A (5) $ 293,719.04
Class PT1-II-41B (6) $ 293,719.04
Class PT1-II-42A (5) $ 283,918.38
Class PT1-II-42B (6) $ 283,918.38
Class PT1-II-43A (5) $ 274,437.34
Class PT1-II-43B (6) $ 274,437.34
Class PT1-II-44A (5) $ 265,265.83
Class PT1-II-44B (6) $ 265,265.83
Class PT1-II-45A (5) $ 260,056.62
Class PT1-II-45B (6) $ 260,056.62
Class PT1-II-46A (5) $ 577,473.33
Class PT1-II-46B (6) $ 577,473.33
Class PT1-II-47A (5) $ 226,091.73
Class PT1-II-47B (6) $ 226,091.73
Class PT1-II-48A (5) $ 217,169.39
Class PT1-II-48B (6) $ 217,169.39
Class PT1-II-49A (5) $ 210,045.72
Class PT1-II-49B (6) $ 210,045.72
Class PT1-II-50A (5) $ 203,148.34
Class PT1-II-50B (6) $ 203,148.34
Class PT1-II-51A (5) $ 200,187.87
Class PT1-II-51B (6) $ 200,187.87
Class PT1-II-52A (5) $ 524,066.85
Class PT1-II-52B (6) $ 524,066.85
Class PT1-II-53A (5) $ 170,144.00
Class PT1-II-53B (6) $ 170,144.00
Class PT1-II-54A (5) $ 163,185.20
Class PT1-II-54B (6) $ 163,185.20
Class PT1-II-55A (5) $ 157,967.96
Class PT1-II-55B (6) $ 157,967.96
Class PT1-II-56A (5) $ 152,909.76
Class PT1-II-56B (6) $ 152,909.76
Class PT1-II-57A (5) $ 150,128.81
Class PT1-II-57B (6) $ 150,128.81
Class PT1-II-58A (5) $ 333,683.91
Class PT1-II-58B (6) $ 333,683.91
Class PT1-II-59A (5) $ 130,894.98
Class PT1-II-59B (6) $ 130,894.98
Class PT1-II-60A (5) $ 125,917.84
Class PT1-II-60B (6) $ 125,917.84
Class PT1-II-61A (5) $ 3,724,416.11
Class PT1-II-61B (6) $ 3,724,416.11
Class PT1-R (7) (7)
--------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to a
maximum rate of 9.50%.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if any,
of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group I
WAC Rate over (B) 9.50%.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate subject to a
maximum rate of 9.50%.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if any,
of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group II
WAC Rate over (B) 9.50%.
(7) The Class PT1 R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect
of the Mortgage Loans from the related Loan Group for such Distribution Date
shall be deemed to be distributed to the Pooling-Tier REMIC-1 Regular Interests
at the rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the
outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group I
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the
outstanding Pooling-Tier REMIC-1 Regular Interest relating to the Group II
Mortgage Loans with the lowest numerical denomination until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero, provided that,
with respect to Pooling-Tier REMIC-1 Regular Interests relating to Loan Group II
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier REMIC-1 Principal
Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
--------------------
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in
Pooling-Tier REMIC-2 and shall be represented by the Class R Certificates.
` ` ` ` ` Corresponding
` Pooling-Tier ` Corresponding Corresponding Scheduled
` REMIC-2 Pooling-Tier Pooling-Tier Pooling-Tier Crossover
Pooling-Tier Interest REMIC-2 Initial REMIC-2 IO REMIC-1 Regular Distribution
REMIC-2 Interest Rate Principal Amount Interest Interest Date
------------------ ------------ ---------------- ------------------ ---------------- --------------
Class PT2-I-1 (1) $19,549,443.99 N/A N/A N/A
Class PT2-I-2A (2) $555,696.61 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $555,696.61 N/A N/A N/A
Class PT2-I-3A (2) $533,378.74 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $533,378.74 N/A N/A N/A
Class PT2-I-4A (2) $510,996.02 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $510,996.02 N/A N/A N/A
Class PT2-I-5A (2) $488,495.72 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $488,495.72 N/A N/A N/A
Class PT2-I-6A (2) $467,511.29 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $467,511.29 N/A N/A N/A
Class PT2-I-7A (2) $448,228.14 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $448,228.14 N/A N/A N/A
Class PT2-I-8A (2) $428,187.98 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $428,187.98 N/A N/A N/A
Class PT2-I-9A (2) $411,136.67 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $411,136.67 N/A N/A N/A
Class PT2-I-10A (2) $1,946,640.96 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $1,946,640.96 N/A N/A N/A
Class PT2-I-11A (2) $753,711.32 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $753,711.32 N/A N/A N/A
Class PT2-I-12A (2) $271,994.92 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $271,994.92 N/A N/A N/A
Class PT2-I-13A (2) $261,327.41 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $261,327.41 N/A N/A N/A
Class PT2-I-14A (2) $249,502.65 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $249,502.65 N/A N/A N/A
Class PT2-I-15A (2) $240,334.39 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $240,334.39 N/A N/A N/A
Class PT2-I-16A (2) $1,805,726.51 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $1,805,726.51 N/A N/A N/A
Class PT2-I-17A (2) $603,313.23 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $603,313.23 N/A N/A N/A
Class PT2-I-18A (2) $122,525.79 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $122,525.79 N/A N/A N/A
Class PT2-I-19A (2) $118,044.51 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $118,044.51 N/A N/A N/A
Class PT2-I-20A (2) $112,827.56 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $112,827.56 N/A N/A N/A
Class PT2-I-21A (2) $111,552.69 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $111,552.69 N/A N/A N/A
Class PT2-I-22A (2) $1,052,610.54 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $1,052,610.54 N/A N/A N/A
Class PT2-I-23A (2) $334,897.12 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $334,897.12 N/A N/A N/A
Class PT2-I-24A (2) $42,792.58 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $42,792.58 N/A N/A N/A
Class PT2-I-25A (2) $41,303.58 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $41,303.58 N/A N/A N/A
Class PT2-I-26A (2) $39,866.09 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $39,866.09 N/A N/A N/A
Class PT2-I-27A (2) $41,011.98 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $41,011.98 N/A N/A N/A
Class PT2-I-28A (2) $86,689.82 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $86,689.82 N/A N/A N/A
Class PT2-I-29A (2) $52,278.98 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $52,278.98 N/A N/A N/A
Class PT2-I-30A (2) $31,538.98 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $31,538.98 N/A N/A N/A
Class PT2-I-31A (2) $30,469.97 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $30,469.97 N/A N/A N/A
Class PT2-I-32A (2) $29,436.63 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $29,436.63 N/A N/A N/A
Class PT2-I-33A (2) $29,882.27 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $29,882.27 N/A N/A N/A
Class PT2-I-34A (2) $55,743.40 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $55,743.40 N/A N/A N/A
Class PT2-I-35A (2) $35,911.80 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $35,911.80 N/A N/A N/A
Class PT2-I-36A (2) $23,894.44 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $23,894.44 N/A N/A N/A
Class PT2-I-37A (2) $23,100.35 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $23,100.35 N/A N/A N/A
Class PT2-I-38A (2) $22,332.02 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $22,332.02 N/A N/A N/A
Class PT2-I-39A (2) $21,588.64 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $21,588.64 N/A N/A N/A
Class PT2-I-40A (2) $20,869.43 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $20,869.43 N/A N/A N/A
Class PT2-I-41A (2) $20,173.62 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $20,173.62 N/A N/A N/A
Class PT2-I-42A (2) $19,500.48 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $19,500.48 N/A N/A N/A
Class PT2-I-43A (2) $18,849.28 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $18,849.28 N/A N/A N/A
Class PT2-I-44A (2) $18,219.35 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $18,219.35 N/A N/A N/A
Class PT2-I-45A (2) $17,861.57 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $17,861.57 N/A N/A N/A
Class PT2-I-46A (2) $39,662.82 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $39,662.82 N/A N/A N/A
Class PT2-I-47A (2) $15,528.75 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $15,528.75 N/A N/A N/A
Class PT2-I-48A (2) $14,915.93 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $14,915.93 N/A N/A N/A
Class PT2-I-49A (2) $14,426.65 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $14,426.65 N/A N/A N/A
Class PT2-I-50A (2) $13,952.92 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $13,952.92 N/A N/A N/A
Class PT2-I-51A (2) $13,749.58 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $13,749.58 N/A N/A N/A
Class PT2-I-52A (2) $35,994.68 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $35,994.68 N/A N/A N/A
Class PT2-I-53A (2) $11,686.07 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $11,686.07 N/A N/A N/A
Class PT2-I-54A (2) $11,208.11 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $11,208.11 N/A N/A N/A
Class PT2-I-55A (2) $10,849.77 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $10,849.77 N/A N/A N/A
Class PT2-I-56A (2) $10,502.36 Class PT2-I-IO-56 N/A N/A
Class PT2-I-56B (3) $10,502.36 N/A N/A N/A
Class PT2-I-57A (2) $10,311.35 Class PT2-I-IO-57 N/A N/A
Class PT2-I-57B (3) $10,311.35 N/A N/A N/A
Class PT2-I-58A (2) $22,918.54 Class PT2-I-IO-58 N/A N/A
Class PT2-I-58B (3) $22,918.54 N/A N/A N/A
Class PT2-I-59A (2) $8,990.31 Class PT2-I-IO-59 N/A N/A
Class PT2-I-59B (3) $8,990.31 N/A N/A N/A
Class PT2-I-60A (2) $8,648.46 Class PT2-I-IO-60 N/A N/A
Class PT2-I-60B (3) $8,648.46 N/A N/A N/A
Class PT2-I-61A (2) $255,805.50 Class PT2-I-IO-61 N/A N/A
Class PT2-I-61B (3) $255,805.50 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A March 2008
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A April 2008
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A May 2008
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A June 2008
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A July 2008
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A August 2008
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A September 2008
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A October 2008
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A November 2008
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A December 2008
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A January 2009
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A February 2009
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A March 2009
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A April 2009
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A May 2009
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A June 2009
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A July 2009
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A August 2009
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A September 2009
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A October 2009
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A November 2009
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A December 2009
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A January 2010
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A February 2010
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A March 2010
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A April 2010
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A May 2010
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A June 2010
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A July 2010
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A August 2010
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A September 2010
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A October 2010
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A November 2010
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A December 2010
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A January 2011
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A February 2011
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A March 2011
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A April 2011
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A May 2011
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A June 2011
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A July 2011
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A August 2011
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A September 2011
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A October 2011
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A November 2011
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A December 2011
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A January 2012
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A February 2012
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A March 2012
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A April 2012
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A May 2012
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A June 2012
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A July 2012
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A August 2012
Class PT2-I-IO-56 (4) (4) N/A Class PT1-I-56A September 2012
Class PT2-I-IO-57 (4) (4) N/A Class PT1-I-57A October 2012
Class PT2-I-IO-58 (4) (4) N/A Class PT1-I-58A November 2012
Class PT2-I-IO-59 (4) (4) N/A Class PT1-I-59A December 2012
Class PT2-I-IO-60 (4) (4) N/A Class PT1-I-60A January 2013
Class PT2-I-IO-61 (4) (4) N/A Class PT1-I-61A February 2013
Class PT2-II-1 (5) $284,631,351.25 N/A N/A N/A
Class PT2-II-2A (6) $8,090,699.58 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $8,090,699.58 N/A N/A N/A
Class PT2-II-3A (6) $7,765,761.04 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $7,765,761.04 N/A N/A N/A
Class PT2-II-4A (6) $7,439,878.47 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $7,439,878.47 N/A N/A N/A
Class PT2-II-5A (6) $7,112,283.96 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $7,112,283.96 N/A N/A N/A
Class PT2-II-6A (6) $6,806,759.91 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $6,806,759.91 N/A N/A N/A
Class PT2-II-7A (6) $6,526,005.68 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $6,526,005.68 N/A N/A N/A
Class PT2-II-8A (6) $6,234,229.72 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $6,234,229.72 N/A N/A N/A
Class PT2-II-9A (6) $5,985,970.04 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $5,985,970.04 N/A N/A N/A
Class PT2-II-10A (6) $28,342,240.76 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $28,342,240.76 N/A N/A N/A
Class PT2-II-11A (6) $10,973,707.11 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $10,973,707.11 N/A N/A N/A
Class PT2-II-12A (6) $3,960,126.96 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $3,960,126.96 N/A N/A N/A
Class PT2-II-13A (6) $3,804,812.78 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $3,804,812.78 N/A N/A N/A
Class PT2-II-14A (6) $3,632,649.47 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $3,632,649.47 N/A N/A N/A
Class PT2-II-15A (6) $3,499,163.56 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $3,499,163.56 N/A N/A N/A
Class PT2-II-16A (6) $26,290,587.90 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $26,290,587.90 N/A N/A N/A
Class PT2-II-17A (6) $8,783,976.62 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $8,783,976.62 N/A N/A N/A
Class PT2-II-18A (6) $1,783,921.94 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $1,783,921.94 N/A N/A N/A
Class PT2-II-19A (6) $1,718,676.48 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $1,718,676.48 N/A N/A N/A
Class PT2-II-20A (6) $1,642,719.97 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $1,642,719.97 N/A N/A N/A
Class PT2-II-21A (6) $1,624,158.34 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $1,624,158.34 N/A N/A N/A
Class PT2-II-22A (6) $15,325,548.98 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $15,325,548.98 N/A N/A N/A
Class PT2-II-23A (6) $4,875,955.56 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $4,875,955.56 N/A N/A N/A
Class PT2-II-24A (6) $623,041.25 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $623,041.25 N/A N/A N/A
Class PT2-II-25A (6) $601,362.01 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $601,362.01 N/A N/A N/A
Class PT2-II-26A (6) $580,432.78 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $580,432.78 N/A N/A N/A
Class PT2-II-27A (6) $597,116.44 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $597,116.44 N/A N/A N/A
Class PT2-II-28A (6) $1,262,165.79 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $1,262,165.79 N/A N/A N/A
Class PT2-II-29A (6) $761,159.03 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $761,159.03 N/A N/A N/A
Class PT2-II-30A (6) $459,193.80 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $459,193.80 N/A N/A N/A
Class PT2-II-31A (6) $443,629.41 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $443,629.41 N/A N/A N/A
Class PT2-II-32A (6) $428,584.53 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $428,584.53 N/A N/A N/A
Class PT2-II-33A (6) $435,072.81 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $435,072.81 N/A N/A N/A
Class PT2-II-34A (6) $811,599.50 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $811,599.50 N/A N/A N/A
Class PT2-II-35A (6) $522,860.15 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $522,860.15 N/A N/A N/A
Class PT2-II-36A (6) $347,892.54 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $347,892.54 N/A N/A N/A
Class PT2-II-37A (6) $336,331.03 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $336,331.03 N/A N/A N/A
Class PT2-II-38A (6) $325,144.49 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $325,144.49 N/A N/A N/A
Class PT2-II-39A (6) $314,321.21 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $314,321.21 N/A N/A N/A
Class PT2-II-40A (6) $303,849.74 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $303,849.74 N/A N/A N/A
Class PT2-II-41A (6) $293,719.04 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $293,719.04 N/A N/A N/A
Class PT2-II-42A (6) $283,918.38 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $283,918.38 N/A N/A N/A
Class PT2-II-43A (6) $274,437.34 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $274,437.34 N/A N/A N/A
Class PT2-II-44A (6) $265,265.83 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $265,265.83 N/A N/A N/A
Class PT2-II-45A (6) $260,056.62 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $260,056.62 N/A N/A N/A
Class PT2-II-46A (6) $577,473.33 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $577,473.33 N/A N/A N/A
Class PT2-II-47A (6) $226,091.73 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $226,091.73 N/A N/A N/A
Class PT2-II-48A (6) $217,169.39 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $217,169.39 N/A N/A N/A
Class PT2-II-49A (6) $210,045.72 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $210,045.72 N/A N/A N/A
Class PT2-II-50A (6) $203,148.34 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $203,148.34 N/A N/A N/A
Class PT2-II-51A (6) $200,187.87 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $200,187.87 N/A N/A N/A
Class PT2-II-52A (6) $524,066.85 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $524,066.85 N/A N/A N/A
Class PT2-II-53A (6) $170,144.00 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $170,144.00 N/A N/A N/A
Class PT2-II-54A (6) $163,185.20 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $163,185.20 N/A N/A N/A
Class PT2-II-55A (6) $157,967.96 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $157,967.96 N/A N/A N/A
Class PT2-II-56A (6) $152,909.76 Class PT2-II-IO-56 N/A N/A
Class PT2-II-56B (7) $152,909.76 N/A N/A N/A
Class PT2-II-57A (6) $150,128.81 Class PT2-II-IO-57 N/A N/A
Class PT2-II-57B (7) $150,128.81 N/A N/A N/A
Class PT2-II-58A (6) $333,683.91 Class PT2-II-IO-58 N/A N/A
Class PT2-II-58B (7) $333,683.91 N/A N/A N/A
Class PT2-II-59A (6) $130,894.98 Class PT2-II-IO-59 N/A N/A
Class PT2-II-59B (7) $130,894.98 N/A N/A N/A
Class PT2-II-60A (6) $125,917.84 Class PT2-II-IO-60 N/A N/A
Class PT2-II-60B (7) $125,917.84 N/A N/A N/A
Class PT2-II-61A (6) $3,724,416.11 Class PT2-II-IO-61 N/A N/A
Class PT2-II-61B (7) $3,724,416.11 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A March 2008
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A April 2008
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A May 2008
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A June 2008
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A July 2008
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A August 2008
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A September 2008
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A October 2008
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A November 2008
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A December 2008
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A January 2009
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A February 2009
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A March 2009
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A April 2009
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A May 2009
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A June 2009
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A July 2009
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A August 2009
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A September 2009
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A October 2009
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A November 2009
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A December 2009
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A January 2010
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A February 2010
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A March 2010
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A April 2010
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A May 2010
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A June 2010
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A July 2010
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A August 2010
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A September 2010
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A October 2010
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A November 2010
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A December 2010
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A January 2011
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A February 2011
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A March 2011
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A April 2011
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A May 2011
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A June 2011
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A July 2011
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A August 2011
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A September 2011
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A October 2011
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A November 2011
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A December 2011
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A January 2012
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A February 2012
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A March 2012
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A April 2012
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A May 2012
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A June 2012
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A July 2012
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A August 2012
Class PT2-II-IO-56 (4) (4) N/A Class PT1-II-56A September 2012
Class PT2-II-IO-57 (4) (4) N/A Class PT1-II-57A October 2012
Class PT2-II-IO-58 (4) (4) N/A Class PT1-II-58A November 2012
Class PT2-II-IO-59 (4) (4) N/A Class PT1-II-59A December 2012
Class PT2-II-IO-60 (4) (4) N/A Class PT1-II-60A January 2013
Class PT2-II-IO-61 (4) (4) N/A Class PT1-II-61A February 2013
Class PT2-R (8) (8) N/A N/A N/A
-------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation, provided that, on each Distribution Date on which
interest is distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest (which, for the avoidance of doubt, shall not include any
Distribution Date prior to the Distribution Date in March 2008), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate equal to Swap LIBOR subject to a maximum rate equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in their
class designation.
(4) This Pooling-Tier REMIC-2 IO Interest is an interest-only interest and does
not have a principal balance but has a notional balance ("Pooling-Tier
REMIC-2 IO Notional Balance") equal to the Pooling-Tier REMIC-2 Principal
Amount of the Corresponding Pooling-Tier REMIC-1 Regular Interest. From the
Closing Date through and including the Distribution Date in February 2008,
this Pooling-Tier REMIC-2 IO Interest shall be entitled to receive interest
that accrues on the Corresponding Pooling-Tier REMIC-1 Regular Interest at a
rate equal to the excess, if any, of (i) the Pooling-Tier REMIC-1 Interest
Rate for the Corresponding Pooling-Tier REMIC-1 Regular Interest over (ii)
the Pooling Tier REMIC-1 Interest Rate for the Corresponding Pooling-Tier
REMIC-1 Regular Interest. From and including the Distribution Date in March
2008 through and including the Corresponding Actual Crossover Distribution
Date, this Pooling-Tier REMIC-2 IO Interest shall be entitled to receive
interest that accrues on the Corresponding Pooling-Tier REMIC-1 Regular
Interest at a rate equal to the excess, if any, of (i) the Pooling-Tier
REMIC-1 Interest Rate for the Corresponding Pooling-Tier REMIC-1 Regular
Interest over (ii) Swap LIBOR. After the Corresponding Actual Crossover
Distribution Date, this Pooling-Tier REMIC-2 IO Interest shall not accrue
interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and having
an "A" in their class designation, provided that, on each Distribution Date
on which interest is distributable on the Corresponding Pooling-Tier REMIC-2
IO Interest, this Pooling-Tier REMIC-2 Regular Interest shall bear interest
at a per annum rate equal to Swap LIBOR subject to a maximum rate equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier REMIC-1 Regular Interests relating to Loan Group II and having
an "A" in their class designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect
of the Mortgage Loans from the related Loan Group for such Distribution Date
shall be distributed to the Pooling-Tier REMIC-2 Regular Interests at the
Pooling-Tier REMIC-2 Interest Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group I Mortgage Loans) shall be allocated to the then
outstanding Pooling-Tier REMIC-2 Regular Interests (other than the Pooling-Tier
REMIC-2 IO Interests) relating to the Group I Mortgage Loans with the lowest
numerical denomination until the Pooling-Tier REMIC-2 Principal Amount of such
interest is reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular
Interests relating to the Group I Mortgage Loans with the same numerical
denomination, such Realized Losses, Subsequent Recoveries and payments of
principal shall be allocated pro rata between such Pooling-Tier REMIC-2 Regular
Interests, until the Pooling-Tier REMIC-2 Principal Amount of such interests is
reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans (including,
for the first Distribution Date only, the portion of the Closing Date Deposit
Amount allocable to the Group II Mortgage Loans) shall be allocated to the then
outstanding Pooling-Tier REMIC-2 Regular Interests (other than the Pooling-Tier
REMIC-2 IO Interests) relating to Loan Group II with the lowest numerical
denomination until the Pooling-Tier REMIC-2 Principal Amount of such interest is
reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular Interests
relating to the Group II Mortgage Loans with the same numerical denomination,
such Realized Losses and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-2 Regular Interests, until the Pooling-Tier
REMIC-2 Principal Amount of such interests is reduced to zero.
Lower-Tier REMIC
----------------
The Lower-Tier REMIC shall issue the following interests, and
each such interest, other than the Class LT-R Interest, is hereby designated as
a regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Lower-Tier Lower-Tier Initial Lower-Tier Upper-Tier REMIC
REMIC Interest Interest Rate Principal Amount Regular Interest
-------------- ------------- ----------------------------------- ----------------
Class LT-A-1 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest A-1
Class LT-A-2a (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest A-2a
Class LT-A-2b (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest A-2b
Class LT-A-2c (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest A-2c
Class LT-A-2d (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest A-2d
Class LT-M-1 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest M-1
Class LT-M-2 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest M-2
Class LT-M-3 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest M-3
Class LT-M-4 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest M-4
Class LT-M-5 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest M-5
Class LT-M-6 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest M-6
Class LT-B-1 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest B-1
Class LT-B-2 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest B-2
Class LT-B-3 (1) 1/2 initial Class Certificate
Balance of Corresponding
Upper-Tier Regular Interest B-3
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance
plus 1/2 Subordinated Amount, less
the aggregate initial Lower-Tier
Principal Amount of Class
LT-Group I and Class LT Group II N/A
Class LT-Group I (2) 0.001% aggregate Stated Principal
Balance of Group I Mortgage
Loans(4) N/A
Class LT-Group II (3) 0.001% aggregate Stated Principal
Balance of Group II Mortgage
Loans(4) N/A
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
-------------
(1) The interest rate with respect to any Distribution Date for these interests
is a per annum variable rate equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling Tier REMIC-2 IO Interests) relating to the
Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling Tier REMIC-2 IO Interests) relating to the
Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2a, Class
LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class
LT-B-3 Interests are hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the
Subordinated Amount shall be payable as a reduction of the Lower-Tier Principal
Amount of the LT-Accretion Directed Classes (each such Class will be reduced by
an amount equal to 50% of any increase in the Subordinated Amount that is
attributable to a reduction in the Class Certificate Balance of its
Corresponding Class) and shall be accrued and added to the Lower-Tier Principal
Amount of the Class LT-Accrual Interest. On each Distribution Date, the increase
in the Lower-Tier Principal Amount of the Class LT-Accrual Interest shall not
exceed interest accruals for such Distribution Date for the Class LT-Accrual
Interest. In the event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii) interest accruals on the Class LT-Accrual Interest for such
Distribution Date, the excess for such Distribution Date (accumulated with all
such excesses for all prior Distribution Dates) will be added to any increase in
the Subordinated Amount for purposes of determining the amount of interest
accrual on the Class LT-Accrual Interest payable as principal on the
LT-Accretion Directed Classes on the next Distribution Date pursuant to the
first sentence of this paragraph. All payments of scheduled principal and
prepayments of principal generated by the Mortgage Loans (including, for the
first Distribution Date only, the Closing Date Deposit Amount) and all
Subsequent Recoveries allocable to principal shall be allocated (i) 50% to the
Class LT-Accrual Interest, the Class LT-Group I Interest and Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) and (ii) 50% to the LT-Accretion Directed Classes (such
principal payments and Subsequent Recoveries shall be allocated among such
LT-Accretion Directed Classes in an amount equal to 50% of the principal amounts
and Subsequent Recoveries allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Interest that result in the reduction in the Subordinated Amount
shall be allocated to the Class LT-Accrual Interest (until paid in full).
Realized Losses shall be applied so that after all distributions have been made
on each Distribution Date (i) the Lower-Tier Principal Amount of each of the
LT-Accretion Directed Classes is equal to 50% of the Class Certificate Balance
of their Corresponding Class, and (ii) the Class LT-Accrual Interest, the Class
LT-Group I Interest and the Class LT-Group II Interest (and further allocated
among these Lower-Tier Regular Interests in the manner described below) is equal
to 50% of the aggregate Stated Principal Balance of the Mortgage Loans plus 50%
of the Subordinated Amount. Any increase in the Class Certificate Balance of a
Class of LIBOR Certificates as a result of a Subsequent Recovery shall increase
the Lower-Tier Principal Amount of the Corresponding Lower-Tier Regular Interest
by 50% of such increase, and the remaining 50% of such increase shall increase
the Lower-Tier Principal Amount of the Class LT-Accrual Interest, the Class
LT-Group I Interest and the Class LT-Group II Interest (such increase shall be
further allocated among such Lower-Tier Regular Interests in the manner
described below). As among the Class LT-Accrual Interest, the Class LT-Group I
Interest and the Class LT-Group II Interest, all payments of scheduled principal
and prepayments of principal generated by the Mortgage Loans, all Subsequent
Recoveries and all Realized Losses, allocable to such Lower-Tier Regular
Interests and all increases in the Lower-Tier Principal Amount of such
Lower-Tier Regular Interests as a result of Subsequent Recoveries shall be
allocated (i) to the Class LT-Group I Interest and the Class LT-Group II
Interest, each from the related Loan Group so that their respective Lower-Tier
Principal Amounts (computed to at least eight decimal places) are equal to
0.001% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group and (ii) the remainder to the Class LT-Accrual Interest.
Upper-Tier REMIC
----------------
The Upper-Tier REMIC shall issue the following interests, and
each such interest, other than the Class UT-R Interest, is hereby designated as
a regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier REMIC Upper-Tier Initial Principal Corresponding Class
Interest Interest Rate Upper-Tier Amount of Certificates
---------------- ------------- ----------------- ---------------
Class A-1 (1) $ 36,339,000 Class A-1
Class A-2a (2) $267,710,000 Class A-2a
Class A-2b (2) $ 74,290,000 Class A-2b
Class A-2c (2) $116,150,000 Class A-2c
Class A-2d (2) $ 70,921,000 Class A-2d
Class M-1 (3) $ 28,058,000 Class M-1
Class M-2 (3) $ 22,020,000 Class M-2
Class M-3 (3) $ 12,786,000 Class M-3
Class M-4 (3) $ 11,010,000 Class M-4
Class M-5 (3) $ 11,010,000 Class M-5
Class M-6 (3) $ 9,944,000 Class M-6
Class B-1 (3) $ 9,944,000 Class B-1
Class B-2 (3) $ 7,103,000 Class B-2
Class B-3 (3) $ 7,103,000 Class B-3
Class UT-IO (4) (4) N/A
Class UT-X (5) (5) N/A
Class UT-R (6) (6) Class R
-------------
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest (the "Upper-Tier REMIC Loan Group I Rate") and
(ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO Interest.
This interest shall be beneficially owned by the holders of the Class X
Certificates and shall be held as an asset of the Swap Account.
(5) The Class UT-X Interest has an initial principal balance of $25,931,851.65
but will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class UT-X
Interest shall have a notional principal balance equal to the aggregate of
the Lower-Tier Principal Amounts of the Lower-Tier Regular Interests (other
than the Class LT-IO Interest) as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of the
Upper-Tier REMIC WAC Rate over the product of (i) 2 and (ii) the weighted
average of the Lower-Tier Interest Rates of the Lower-Tier REMIC Interests
(other than the Class LT-IO Interest), where the Lower-Tier Interest Rate on
each of the Class LT-Accrual Interest, Class LT-Group I Interest and Class
LT-Group II Interest is subject to a cap equal to zero and each LT-Accretion
Directed Class is subject to a cap equal to the Upper-Tier Interest Rate on
its Corresponding Class of Upper-Tier Regular Interest. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class UT-X Interest shall be deferred in an amount equal to
any increase in the Subordinated Amount on such Distribution Date. Such
deferred interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of
the Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class UT-IO Interest shall be entitled to receive interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
Class X REMIC
The Class X REMIC shall issue the following classes of interests.
The Class X Interest and the Class IO Interest shall each represent a regular
interest in the Class X REMIC and the Class RX Certificates shall represent the
sole class of residual interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
------------------------- ------------- ----------------
Class X Interest (1) (1)
Class IO Interest (2) (2)
Class RX Certificates (3) (3)
-------------
(1) The Class X Interest has an initial principal balance equal to the initial
principal balance of the Class UT-X Interest and is entitled to 100% of the
interest and principal on the Class UT-X Interest on each Distribution Date.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be entitled
to receive 100% of the interest distributable on the Class UT-IO Interest.
(3) The Class RX Certificates do not have a principal balance or an interest
rate.
The Certificates
Class Pass-Through Class Certificate
Class Designation Rate Balance
----------------- ------------------ ----------------
Class A-1(10) (1) $ 36,339,000
Class A-2a(10) (2) $267,710,000
Class A-2b(10) (3) $ 74,290,000
Class A-2c(10) (4) $116,150,000
Class A-2d(10) (5) $ 70,921,000
Class M-1(10) (6) $ 28,058,000
Class M-2(10) (6) $ 22,020,000
Class M-3(10) (6) $ 12,786,000
Class M-4(10) (6) $ 11,010,000
Class M-5(10) (6) $ 11,010,000
Class M-6(10) (6) $ 9,944,000
Class B-1(10) (6) $ 9,944,000
Class B-2(10) (6) $ 7,103,000
Class B-3(10) (6) $ 7,103,000
Class X (7) $ 0(8)
Class R (8) $ 0(9)
Class RX (9) (10)
-------------
(1) The Class A-1 Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the WAC
Cap.
(2) The Class A-2a Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC
Cap.
(3) The Class A-2b Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC
Cap.
(4) The Class A-2c Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC
Cap.
(5) The Class A-2d Certificates will bear interest during each Interest Accrual
Period at a per annum rate equal to the least of (i) LIBOR plus the
applicable Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC
Cap.
(6) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
B-1, Class B-2 and Class B-3 Certificates will bear interest during each
Interest Accrual Period at a per annum rate equal to the lesser of (i) LIBOR
plus the applicable Pass-Through Margin, and (ii) the WAC Cap.
(7) The Class X Certificates will represent beneficial ownership of the Class X
Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
Interest Rate Cap Agreement, the right to receive Class IO Shortfalls and
amounts in the Excess Reserve Fund Account and the Swap Account, subject to
the obligation to make payments from the Excess Reserve Fund Account in
respect of Basis Risk CarryForward Amounts and amounts in the Swap Account
subject to the obligation to make Net Swap Payments, Swap Termination
Payments and Basis Risk CarryForward Amounts and, without duplication,
Upper Tier CarryForward Amounts. For federal income tax purposes, the
Trustee will treat a Class X Certificateholder's obligation to make
payments from the Excess Reserve Fund Account or the Swap Account as
payments made under a notional principal contract between the Class X
Certificateholders and the holder of each Class of LIBOR Certificates. Such
rights of the Class X Certificateholders and LIBOR Certificateholders shall
be treated as held in the Grantor Trust.
(8) The Class R Certificates do not have an interest rate or a principal
balance.
(9) The Class RX Certificates do not have an interest rate or a principal
balance.
(10) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts and, without duplication,
Upper Tier CarryForward Amounts. Each of these Certificates will also be
subject to the obligation to pay Class IO Shortfalls as described in
Section 8.13. For federal income tax purposes, any amount distributed on
the LIBOR Certificates on any such Distribution Date in excess of the
amount distributable on their Corresponding Class of Upper-Tier Regular
Interest on such Distribution Date shall be treated as having been paid
from the Excess Reserve Fund Account or the Swap Account, as applicable,
and any amount distributable on such Corresponding Class of Upper-Tier
Regular Interest on such Distribution Date in excess of the amount
distributable on the LIBOR Certificates on such Distribution Date shall be
treated as having been paid to the Swap Account, all pursuant to, and as
further provided in, Section 8.13. For federal income tax purposes, the
Trustee will treat an LIBOR Certificateholder's right to receive payments
from the Excess Reserve Fund Account or the Swap Account, subject to the
obligation to pay Class IO Shortfalls, as rights and obligations under a
notional principal contract between the Class X Certificateholders and the
LIBOR Certificateholders.
The minimum denomination for each Class of Certificates, other
than the Class P, Class R, Class RX and the Class X Certificates, will be
$25,000 with integral multiples of $1 in excess thereof. The minimum
denomination for the Class P and the Class X Certificates will each be a 1%
Percentage Interest in such Class. The Class R Certificate and the Class RX
Certificate will each represent a 100% Percentage Interest in the related Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates.................. All Classes of Certificates other than the
Physical Certificates.
Class A Certificates..................... Class A-1, Class A-2a, Class A-2b, Class A-2c and
Class A-2d Certificates.
Class B Certificates..................... Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates..................... Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates.
Delay Certificates....................... None.
ERISA-Restricted Certificates............ Residual, Class P and Class X Certificates; any
certificate with a rating below the
lowest applicable permitted rating
under the Underwriters Exemption.
LIBOR Certificates....................... Class A and Subordinated Certificates.
Non-Delay Certificates................... Class A, Class X and Subordinated Certificates.
Offered Certificates..................... LIBOR Certificates other than the Class A-1
Certificates.
Physical Certificates.................... Class P, Class X and Residual Certificates.
Private Certificates..................... Class A-1, Class P, Class X and Residual
Certificates.
Rating Agencies.......................... ▇▇▇▇▇'▇ and Standard & Poor's.
Regular Certificates..................... All Classes of Certificates other than the Class P
and Residual Certificates.
Residual Certificates.................... Class R and Class RX Certificates.
Subordinated Certificates................ Class M and Class B Certificates.
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution
Account, any Escrow Account, the Excess Reserve Fund Account or the Swap
Account. Each Account shall be an Eligible Account and shall be non-interest
bearing.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Additional Disclosure Notification: A notification in the form of
Exhibit AA.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Due Date on which the related Mortgage Rate adjusts as set forth in the
related Mortgage Note and each Due Date thereafter on which the Mortgage Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom any Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agent: With respect to the Sponsor, the Depositor or any
Affiliate of either of them, a Person that acts for and on behalf of such
Person.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any Distribution Date, the aggregate amount held in each Collection Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation
Proceeds on the Mortgage Loans received after the end of the related Prepayment
Period and (ii) all Scheduled Payments on the Mortgage Loans due after the end
of the related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the Depositor.
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the LIBOR Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicers on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicers
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicers during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased with respect to such
Distribution Date; (vi) the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 9.01; and (vii) the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to which
the Servicers, the Depositor, the Custodian or the Trustee are entitled to be
paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
LIBOR Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass- Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date on such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of LIBOR Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for (x) amounts paid from the Excess Reserve Fund Account to pay any
Basis Risk CarryForward Amount or (y) any Defaulted Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended
from time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a day on which banking and savings and loan institutions, in (a) the States of
California, Delaware, Florida, Maryland, Minnesota, New Jersey, New York, North
Carolina, Utah or Texas,, (b) a State in which any Servicer's servicing
operations are located, or (c) the State in which the Trustee's operations are
located, are authorized or obligated by law or executive order to be closed.
Cap Provider: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the Trustee
in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P, Class R or Class RX Certificates, at any date,
the maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof minus
all distributions of principal previously made with respect thereto and in the
case of any Certificates, reduced by any Applied Realized Loss Amounts allocated
to such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of the Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class X, Class P, Class R and Class RX Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Sponsor, the Depositor or any Affiliate or Agent
of any of them shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however, that if the Sponsor (together with its
Affiliates and Agents) or the Depositor (together with its Affiliates and
Agents) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of the Sponsor, the
Depositor or any such Agent or Affiliate in determining which Certificates are
registered in the name of an Agent or Affiliate of the Sponsor or the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or
the Group II Class A Certificates, as applicable.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (x) 59.20% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $3,551,599.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class A-2d Certificates: All Certificates bearing the class
designation of "Class A-2d".
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $3,551,599.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 90.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$3,551,599.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 92.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $3,551,599.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the
avoidance of doubt, the Class IO Shortfall for any Distribution Date shall equal
the amount payable to the Class X Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Defaulted Swap Termination Payments) from
Available Funds on such Distribution Date, all as further provided in Section
8.13.
Class LT-R Interest: The residual interest in the Lower-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Enhancement Percentage: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Certificate Balances of the Class M and Class B Certificates
(other than the Class M-1 Certificates) and (ii) the Subordinated Amount, in
each case after taking into account the distributions of the related Principal
Distribution Amount and any principal payments on those Classes of Certificates
from the Swap Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 67.10%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $3,551,599.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 73.30% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$3,551,599.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 76.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $3,551,599.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 80.00% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$3,551,599.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 83.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $3,551,599.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 85.90% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$3,551,599.
Class P Certificates: All Certificates bearing the class
designation of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier
REMIC-1 as described in the Preliminary Statement and the related footnote
thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier
REMIC-2 as described in the Preliminary Statement and the related footnote
thereto.
Class R Certificates: All Certificates bearing the class
designation of "Class R".
Class RX Certificates: All Certificates bearing the class
designation of "Class RX".
Class UT-IO Interest: A regular interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class UT-X Interest: A regular interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class X Certificates: All Certificates bearing the class
designation of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum
of (i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class UT-X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class UT-X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund Account to pay Basis Risk CarryForward Amounts, and any Defaulted
Swap Termination Payment payable from Available Funds to the Swap Provider.
Class X Interest: The regular interest in the Class X REMIC
represented by the Class X Certificates as specified and described in the
Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Class X REMIC Regular Interest: Each of the Class X Interest and
Class IO Interest issued by the Class X REMIC.
Closing Date: March 29, 2007.
Closing Date Deposit Amount: $1,596.99 (all of which is allocable
to principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $1,563.26 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans and $33.73 of the Closing Date Deposit Amount
shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to
any Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a)
sum of (i) the outstanding principal balance of the Second Lien Mortgage Loan
and (ii) the outstanding principal balance as of such date of any mortgage loan
or mortgage loans that are senior or equal in priority to the Second Lien
Mortgage Loan and which are secured by the same Mortgaged Property to (b) the
Appraised Value as determined pursuant to the Underwriting Guidelines of the
related Mortgaged Property as of the origination of the Second Lien Mortgage
Loan.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and each
Servicer, the lesser of (a) the amount by which the Prepayment Interest
Shortfall resulting from Principal Prepayments in Full exceeds all Prepayment
Interest Excesses for such Distribution Date on the Mortgage Loans serviced by
the applicable Servicer and (b) the amount of the aggregate Servicing Fee paid
to or retained by the applicable Servicer for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan which contains a provision whereby the Mortgagor is permitted to
convert the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in
accordance with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in
the State of Maryland at which at any particular time its corporate trust
business with respect to this Agreement is administered, which office at the
date of the execution of this Agreement is located (i) for purposes of
Certificate transfers, at ▇▇▇▇▇ Fargo Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client Manager--MSAC 2007-HE4 and (ii)
for all other purposes, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Client Manager--MSAC 2007-HE4, facsimile number (410) 715- 2380, and
which is the address to which notices to and correspondence with the Trustee
should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier, if applicable) of the Interest Rate Swap Agreement
applicable for such Distribution Date, in which case the Corresponding Actual
Crossover Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be
the first Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier
REMIC or Upper-Tier REMIC that corresponds to the class of interests in the
other such REMIC or to a Class of Certificates in the manner set out below:
Corresponding Corresponding Upper-Tier Corresponding
Lower-Tier Class Designation Regular Interest Class of Certificates
---------------------------- ------------------------ ---------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-A-2d Class A-2d Class A-2d
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described
in the reliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in
the Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Countrywide Amendment Regulation AB: The Amendment Regulation AB,
dated as of January 26, 2006, by and among Countrywide Servicing, Countrywide
Home Loans, Inc. and the Sponsor, a copy of which is attached hereto as Exhibit
BB.
Countrywide Serviced Mortgage Loans: The Decision One Mortgage
Loans purchased by the Sponsor pursuant to the Decision One Purchase Agreement
for which Countrywide Servicing is identified as the Servicer on the Mortgage
Loan Schedule.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas limited partnership, and its successors in interest.
Cumulative Loss Percentage: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date through the
last day of the related Prepayment Period and the denominator of which is the
Cut-off Date Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable cumulative
loss percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
------------------------------ -----------------------------------------------------
April 2009 through March 2010 1.400% for the first month, plus an additional 1/12th
of 1.750% for each month thereafter (e.g., 2.275% in
October 2009)
April 2010 through March 2011 3.150% for the first month, plus an additional 1/12th
of 1.750% for each month thereafter (e.g., 4.025% in
October 2010)
April 2011 through March 2012 4.900% for the first month, plus an additional 1/12th
of 1.400% for each month thereafter (e.g., 5.600% in
October 2011)
April 2012 through March 2013 6.300% for the first month, plus an additional 1/12th
of 0.750% for each month thereafter (e.g., 6.675% in
October 2012)
April 2013 and thereafter 7.050%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Custodian, consisting of items (a) - (h) as listed on Exhibit K
hereto.
Custodian: With respect to the Decision One Mortgage Loans,
LaSalle.
Custodian Fee: With respect to each Distribution Date, the
aggregate amount of fees and expenses that the Custodian is entitled to receive,
pursuant to the fee schedule related to the Decision One Mortgage Loans, to
which the Depositor and the Custodian have previously agreed, for custodial
services rendered with respect to the Decision One Mortgage Loans, during the
related Due Period. The Custodian shall inform the Trustee of the Custodian Fee
on or prior to the related Determination Date pursuant to Section 3.07(h).
Custodian Fee Rate: As to any Distribution Date, the Custodian
Fee for such Distribution Date, converted to a per annum rate on (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the close of
business on the day immediately preceding the first day of the related Due
Period and (ii) with respect to the Determination Date in April 2007 only, the
portion of the Closing Date Deposit Amount allocable to principal (calculated on
an actual/360 basis).
Custodian's Weighted Average Percentage: As defined in Section
8.14(e).
Cut-off Date: March 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate of the Cut-off
Date Principal Balances of all Mortgage Loans, plus the portion of the Closing
Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off Date
(after giving effect to payments of principal due on or prior to that date,
whether or not received).
Data Tape Information: The information provided by the
Responsible Parties as of the Cut-off Date to the Depositor or the Sponsor
setting forth the following information with respect to each Mortgage Loan: (1)
the Mortgagor's name; (2) as to each Mortgage Loan, the Scheduled Principal
Balance as of the Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a
code indicating whether the Mortgaged Property is owner occupied; (6) the type
of Mortgaged Property; (7) the first date on which the Scheduled Payment was due
on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (8) the "paid through date" based on
payments received from the related Mortgagor; (9) the original principal amount
of the Mortgage Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage
Loan); (12) a code indicating the purpose of the loan (i.e., purchase, rate and
term refinance, equity take out refinance); (13) a code indicating the
documentation style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Responsible Party with
respect to such Mortgage Loan; (23) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; and (24) if such Mortgage Loan is covered by a
primary mortgage insurance policy or a lender-paid primary mortgage insurance
policy, the primary mortgage insurance rate. With respect to the Mortgage Loans
in the aggregate, the Data Tape Information shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Decision One: Decision One Mortgage Company, LLC, a North
Carolina limited liability company, and its successors in interest.
Decision One Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Decision One Purchase Agreement for which Decision One
is identified as Responsible Party on the Mortgage Loan Schedule.
Decision One Purchase Agreement: The Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2006, by and
between Decision One and the Sponsor, a copy of which is attached hereto as
Exhibit P.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
Defaulting Party (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement) (other than
Illegality or a Tax Event that is not a Tax Event Upon Merger (each as defined
in the Interest Rate Swap Agreement )) with respect to which the Swap Provider
is the sole Affected Party (as defined in the Interest Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Loss Trigger Event: With respect to any Distribution
Date, the circumstances in which the quotient (expressed as a percentage) of (x)
the rolling three month average of the aggregate unpaid principal balance of 60+
Day Delinquent Mortgage Loans (including Mortgage Loans in foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the aggregate Class
Certificate Balance of the Class A Certificates have been reduced to zero, the
aggregate unpaid principal balance of the Mortgage Loans for such Distribution
Date equals or exceeds 39.22% of the prior period's Senior Enhancement
Percentage and (2) after the aggregate Class Certificate Balance of the Class A
Certificates have been reduced to zero, the aggregate unpaid principal balance
of the Mortgage Loans for such Distribution Date equals or exceeds 48.63% of the
prior period's Class M-1 Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by Standard & Poor's (to
the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
18th day (or if such day is not a Business Day, the immediately preceding
Business Day) in the case of Countrywide Servicing, and the 15th day (or if such
day is not a Business Day, the immediately preceding Business Day) in the case
of Saxon, of the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "▇▇▇▇▇ Fargo Bank,
National Association in trust for registered Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2007-HE4 Mortgage Pass-Through Certificates, Series
2007-HE4." Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if
such day is not a Business Day, the next succeeding Business Day, commencing in
April 2007.
Document Certification and Exception Report: The report attached
to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or state-chartered depository institution or trust company that complies with
the definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicers and the Trustee) (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c)
in the name of the Trustee for the benefit of the Regular Certificateholders and
designated "▇▇▇▇▇ Fargo Bank, National Association, in trust for registered
Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4, Mortgage
Pass-Through Certificates, Series 2007-HE4." Funds in the Excess Reserve Fund
Account shall be held in trust for the Regular Certificateholders for the uses
and purposes set forth in this Agreement. Amounts on deposit in the Excess
Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Subordinated Amount on such Distribution
Date over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate
equal to the sum of the Servicing Fee Rate, the Trustee Fee Rate and the
Custodian Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Trustee Fee, the Custodian Fee and any lender-paid primary mortgage
insurance fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇
▇▇▇ Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan or any REO Property (other than any Mortgage Loan or REO Property
purchased by the applicable Responsible Party or the Depositor, as applicable,
as contemplated by this Agreement), a determination made by the applicable
Servicer that all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and other payments or recoveries which the applicable Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. Each Servicer shall maintain records, prepared
by a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date in
February 2037.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4, or such other address as Fitch may
hereafter furnish to the Depositor, the Trustee and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Grantor Trust: As described in the Preliminary Statement.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2a Certificates, the
Class A-2b Certificates, the Class A-2c Certificates and the Class A-2d
Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time to time in effect for the adjustment of the Mortgage Rate set forth as such
on the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in
the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs (or,
in the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date) and ending on the
day immediately preceding the current Distribution Date. With respect to the
Class LT-Accrual, Class LT Group-I, Class LT-Group II, Class LT-IO, Class UT-X,
Class UT-IO, Class X and Class IO Interests and each Pooling-Tier REMIC-1
Regular Interest and Pooling-Tier REMIC-2 Regular Interest and any Distribution
Date, the calendar month preceding such Distribution Date. For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Cap Agreement: The interest rate cap agreement
relating to the LIBOR Certificates, dated as of the Closing Date, between the
Cap Provider and the Trustee (a copy of which is attached hereto as Exhibit DD).
Interest Rate Cap Payment: With respect to the Distribution Date,
the payment, if any, required to be made by the Cap Provider under the Interest
Rate Cap Agreement with respect to such Distribution Date.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between the Swap Provider and the Trustee (a copy
of which is attached hereto as Exhibit W).
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, the portion of Available Funds
attributable to interest received or advanced on such Mortgage Loans, net of the
fees payable to the Servicers, the Custodian and the Trustee, and net of any Net
Swap Payments and any Swap Termination Payments, other than Defaulted Swap
Termination Payments, payable to the Swap Provider from Available Funds
attributable to such Loan Group with respect to that Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers"), or any comparable exemption available under Similar Law.
LaSalle: LaSalle Bank National Association, a national banking
association, and its successors in interest.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Reuters Page LIBOR01 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Reuters Page
LIBOR01, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the applicable Servicer has certified to the Trustee that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan including the final disposition of an REO Property, or (b) is
a Second Lien Mortgage Loan (1) that is delinquent 180 days or longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan, and (3) as to
which the applicable Servicer has certified to the Trustee that it does not
believe there is a reasonable likelihood that any further net proceeds will be
received or recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as
of any Distribution Date, the weighted average of the Adjusted Net Mortgage
Rates then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and the first
Distribution Date, the Loan Group I Cap shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group I Mortgage Loans and the denominator of which is the portion of the
Cut-off Date Pool Principal Balance relating to the Group I Mortgage Loans.
Loan Group II Cap: With respect to the Group II Mortgage Loans as
of any Distribution Date, the weighted average of the Adjusted Net Mortgage
Rates then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. With respect to the first Due Period and the first
Distribution Date, the Loan Group II Cap shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group II Mortgage Loans and the denominator of which is the portion of
the Cut-off Date Pool Principal Balance relating to the Group II Mortgage Loans.
Loan-to-Value Ratio or LTV: With respect to any First Lien
Mortgage Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary
Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-A-2d, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2, Class LT-B-3, Class LT-IO, Class LT-Group I, Class LT-Group II and
Class LT-Accrual Interests as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Responsible Parties have designated or will designate MERS as, and have taken or
will take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Responsible Parties, in accordance with MERS
Procedure Manual and (b) the Responsible Parties have designated or will
designate the Trustee as the Investor on the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and its successors in
interest. If ▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b), the address for notices to Moody's
shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Trustee and the
Servicers.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Delaware corporation.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject
of this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes, without limitation, the Mortgage File, the Scheduled Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition proceeds, Prepayment Charges, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and the Custodian and referred to on Schedule I, such schedule
setting forth the following information with respect to each Mortgage Loan: (1)
the Mortgage Loan number; (2) the city, state and zip code of the Mortgaged
Property; (3) the number and type of residential units constituting the
Mortgaged Property; (4) the current Mortgage Rate; (5) the current net Mortgage
Rate; (6) the current Scheduled Payment; (7) with respect to each Adjustable
Rate Mortgage Loan, the Gross Margin; (8) the original term to maturity; (9) the
scheduled maturity date; (10) the principal balance of the Mortgage Loan as of
the Cut-off Date after deduction of payments of principal due on or before the
Cut-off Date whether or not collected; (11) with respect to each Adjustable Rate
Mortgage Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
whether such Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage
Loan; (16) the identity of the Responsible Party and the date such Mortgage Loan
was sold by the applicable Responsible Party to the Sponsor, (17) whether such
Mortgage Loan provides for a Prepayment Charge as well as the term and amount of
such Prepayment Charge, if any; (18) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; (19) the applicable Servicer's name; and (20) the
date on which servicing of the Mortgage Loan was transferred to the applicable
Servicer.
Mortgage Note: The note or other evidence of the indebtedness of
a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time in the case of an Adjustable
Rate Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
portion of Available Funds remaining for distribution pursuant to subsection
4.02(a)(iii)(before giving effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) payable by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed
by some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Schedule Payment is, as of the last day of the
prior Due Period, three months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, and
(ii) each REO Property.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the applicable Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property, which, in accordance with Accepted Servicing Practices, will not or,
in the case of a proposed Servicing Advance, would not be ultimately recoverable
from related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of any
Servicer or Subservicer with responsibility for the servicing of the Mortgage
Loans required to be serviced by such Servicer or Subservicer and listed on a
list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee (and/or such other Persons as may be set forth herein), provided that
any Opinion of Counsel relating to (a) qualification of any Trust REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of such
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in such Servicer of the Mortgage Loans or in an
Affiliate thereof and (iii) is not connected with such Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 5% or less of the Cut-off Date Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the applicable Servicer in respect of any Remittance Date representing
the aggregate of all payments of principal and interest, net of the Servicing
Fee, that were due during the related Due Period on the Mortgage Loans and that
were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of LIBOR
Certificates (except as set forth in the following sentence), the following
percentages: Class A-1 Certificates, 0.1300%; Class A-2a Certificates, 0.1100%;
Class A-2b Certificates, 0.1800%; Class A-2c Certificates, 0.2300%; Class A-2d
Certificates, 0.3600%; Class M-1 Certificates, 0.4500%; Class M-2 Certificates,
0.5500%; Class M-3 Certificates, 0.7500%; Class M-4 Certificates, 1.1500%; Class
M-5 Certificates, 1.3500%; Class M-6 Certificates, 1.7500%; Class B-1
Certificates, 2.0000%; Class B-2 Certificates, 2.0000%; and Class B-3
Certificates, 2.0000%. On the first Distribution Date after the Optional
Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.2600%; Class A-2a Certificates, 0.2200%; Class A-2b
Certificates, 0.3600%; Class A-2c Certificates, 0.4600%; Class A-2d
Certificates, 0.7200%; Class M-1 Certificates, 0.6750%; Class M-2 Certificates,
0.8250%; Class M-3 Certificates, 1.1250%; Class M-4 Certificates, 1.7250%; Class
M-5 Certificates, 2.0250%; Class M-6 Certificates, 2.6250%; Class B-1
Certificates, 3.0000%; Class B-2 Certificates, 3.0000%; and Class B-3
Certificates, 3.0000%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular Interest,
and each Class X REMIC Regular Interest, the per annum rate set forth or
calculated in the manner described in the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal to
the percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by any Servicer, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) demand and time deposits in, certificates of deposit
of, or bankers" acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers"
acceptances, shall in no event have an original maturity of more
than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars and issued by, any
Depository Institution and rated "P-1" by Moody's, "F1+" by Fitch
and "A-1+" by Standard & Poor's (to the extent they are Rating
Agencies hereunder and are so rated by such Rating Agency);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the laws of
the United States of America or any State thereof and that are
rated by each Rating Agency that rates such securities in its
highest long-term unsecured rating categories at the time of such
investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the
date of acquisition thereof) that is rated by each Rating Agency
that rates such securities in its highest short-term unsecured
debt rating available at the time of such investment;
(vi) units of money market funds, including money market
funds advised by the Depositor, the Trustee or an Affiliate
thereof, that have been rated "Aaa" by Moody's, "AAAm" by
Standard & Poor's and at least "AA" by Fitch (to the extent they
are Rating Agencies hereunder and such funds are so rated by such
Rating Agency); and
(vii) if previously confirmed in writing to the Trustee,
any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the
Rating Agencies as a permitted investment of funds backing "Aaa"
or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
international organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by Section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in Section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty of such
Person or any other U.S. Person, or a U.S. Person treated as a partnership for
U.S. federal income tax purposes, any direct or indirect beneficial owner of
which (other than through a U.S. corporation) is (or is permitted to be under
the related partnership agreement) not a U.S. Person, (vi) an "electing large
partnership" within the meaning of Section 775 of the Code and (vii) any other
Person so designated by the Depositor based upon an Opinion of Counsel that the
Transfer of an Ownership Interest in a Residual Certificate to such Person may
cause any Trust REMIC to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of ▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Loan Group I WAC Rate: With respect to the
Group I Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the
Pooling-Tier REMIC-1 Loan Group I WAC Rate shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group I Mortgage Loans and the denominator of which is the portion of the
Cut-off Date Pool Principal Balance relating to the Group I Mortgage Loans.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date, the
Pooling-Tier REMIC-1 Loan Group II WAC Rate shall be reduced by a fraction, the
numerator of which is the portion of the Closing Date Deposit Amount allocable
to the Group II Mortgage Loans and the denominator of which is the portion of
the Cut-off Date Pool Principal Balance relating to the Group II Mortgage Loans.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2: As described in the Preliminary Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date, any interest collected by a Servicer with respect to any Mortgage Loan
serviced by such Servicer as to which a Principal Prepayment in Full occurs from
the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the 1st
day of such month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was during the portion of the
Prepayment Period from and including the 16th day of the month preceding the
month in which such Distribution Date occurs (or from the day following the
Cut-off Date, in the case of the first Distribution Date) through the last day
of such month, the subject of a Principal Prepayment which is not accompanied by
an amount equal to one month of interest that would have been due on such
Mortgage Loan on the Due Date in the following month and which was applied by
the applicable Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and any
Servicer, the period commencing on the 16th day of the month preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, from and including the Cut-off Date) to and including the
15th day of the month in which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received by the applicable Servicer in advance of its
scheduled Due Date, excluding any Prepayment Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date, the amount equal to the sum of the following amounts (without duplication)
with respect to the related Due Period: (i) each scheduled payment of principal
on a Mortgage Loan due during such Due Period and received by the applicable
Servicer on or prior to the related Determination Date or advanced by the
applicable Servicer for the related Remittance Date, and all Principal
Prepayments received during the related Prepayment Period; (ii) all Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans
allocable to principal actually collected by the applicable Servicer during the
related Prepayment Period; (iii) the portion of the Repurchase Price allocable
to principal with respect to each Mortgage Loan repurchased with respect to such
Distribution Date; (iv) all Substitution Adjustment Amounts allocable to
principal received in connection with the substitutions of Mortgage Loans with
respect to such Distribution Date; (v) with respect to the Distribution Date in
April 2007 only, the portion of the Closing Date Deposit Amount allocable to
principal; and (vi) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 9.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated March 28,
2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the WMC Purchase Agreement and
the Decision One Purchase Agreement.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and
any Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the applicable Servicer in connection
with the liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Definitive Certificate, the Record Date shall be
the close of business on the last Business Day of the month preceding the month
in which the applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest collectible
on such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the
second Business Day immediately preceding such Distribution Date with respect to
Countrywide Servicing and the 21st day (or if such day is a Saturday, then the
first Business Day immediately preceding that day, or if such day is a Sunday or
otherwise not a Business Day, then the immediately following Business Day) of
the month of each related Distribution Date with respect to Saxon.
REO Disposition: The final sale by the applicable Servicer of any
REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement interest rate
swap agreement.
Reportable Event: As defined in Section 8.12(f).
Representations and Warranties Agreement: The Representations and
Warranties Agreement, dated as of March 29, 2007, between the Depositor and the
Sponsor, a copy of which is attached hereto as Exhibit CC.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation and warranty made by the Depositor or a Responsible
Party hereunder exists, an amount equal to the sum of (i) the unpaid principal
balance of such Mortgage Loan as of the date of repurchase, (ii) interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage Rate from
the last date through which interest has been paid and distributed to the
Trustee to the date of repurchase, (iii) all unreimbursed Servicing Advances,
(iv) all costs and expenses incurred by the Trustee arising out of or based upon
such breach, including without limitation, costs and expenses relating to the
Trustee's enforcement of the repurchase obligation of the Depositor or a
Responsible Party hereunder, and (v) any costs and damages incurred by the Trust
in connection with any violation by such Mortgage Loan of any predatory lending
law or abusive lending law. In addition to the Repurchase Price, the applicable
Responsible Party is obligated to make certain payments for material breaches of
representations and warranties as further set forth in Section 2.03(o) in this
Agreement.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the Custodian, as applicable,
substantially in the form of Exhibit J.
Reuters Page LIBOR01: The display page currently so designated on
the Reuters 3000 Xtra Service (or such other page as may replace that page on
that service or any successor service for the purpose of displaying comparable
rates or prices).
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any
managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any associate, or any other
officer of the Trustee, customarily performing functions similar to those
performed by any of the above designated officers who at such time shall be
officers to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Agreement.
Responsible Parties: WMC and Decision One.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation, and
its successors in interest.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount, including any principal payments on those Classes of
Certificates from the Swap Account, on that Distribution Date, by (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 40.80%.
Servicer: Countrywide Servicing or Saxon , and if a successor
Servicer to any is appointed hereunder, such successor. When the term "Servicer"
is used in this Agreement in connection with the administration of servicing
obligations with respect to any Mortgage Loan, Mortgaged Property, REO Property
or Mortgage File, "Servicer" shall mean the Person identified as the Servicer of
such Mortgage Loan on the Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(e).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management and liquidation of any REO Property
(including, with respect to Saxon, reasonable fees paid to any independent
contractor in connection therewith) and (iv) the performance of its obligations
under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing Advances shall also
include any reasonable "out-of-pocket" costs and expenses (including legal fees)
incurred by the applicable Servicer in connection with executing and recording
instruments of satisfaction, deeds of reconveyance or Assignments of Mortgage in
connection with any foreclosure in respect of any Mortgage Loan to the extent
not recovered from the Mortgagor or otherwise payable under this Agreement. No
Servicer shall be required to make any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit S
hereto. With respect to Countrywide Servicing, "servicing criteria" shall have
the meaning set forth in the Countrywide Amendment Regulation AB.
Servicing Fee: With respect to each Servicer, each Mortgage Loan
serviced by such Servicer and for any calendar month, an amount equal to one
month's interest at the Servicing Fee Rate on the applicable Stated Principal
Balance of such Mortgage Loan as of the close of business on the day immediately
preceding the first day of the related Due Period. Such fee shall be payable
monthly, solely from the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds
and proceeds received with respect to REO Properties, to the extent permitted by
Section 3.11) of such Scheduled Payment collected by such Servicer, or as
otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Custodian in the
Custodial File and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by such Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Servicing Transfer Date: With respect to each Mortgage Loan, the
date on which servicing of such Mortgage Loan was transferred to the applicable
Servicer (as set forth in the Mortgage Loan Schedule).
Significant Change to a Permitted Activity: With respect to any
amendment or other instrument entered into pursuant to Section 10.01, a change
to the activities of the Trust that would significantly change its permitted
activities and thus cause the Trust to cease to be a "qualifying special purpose
entity" under accounting principles generally accepted in the United States.
This definition shall be interpreted in a manner consistent with the
requirements of Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, or any successor to that accounting standard, and any other
relevant authoritative accounting literature, as such requirements are
applicable from time to time.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more delinquent, including, without
limitation, such Mortgage Loans that are subject to bankruptcy proceedings, (ii)
each Mortgage Loan in foreclosure and (iii) each REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount equal to 3.65% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 7.30% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then aggregate Stated Principal Balance of the Mortgage Loans
but will instead remain the same as the prior period's Specified Subordinated
Amount until the Distribution Date on which a Trigger Event is no longer in
effect. When the Class Certificate Balance of each Class of LIBOR Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Sponsor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors in interest. If Standard
& Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Mortgage Surveillance Group - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE4, or such other address as Standard & Poor's may hereafter furnish
to the Depositor, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: As defined in Section 2.05.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Trustee with respect to the related Mortgage Loan representing payments or
recoveries of principal including advances in respect of scheduled payments of
principal. For purposes of any Distribution Date, the Stated Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of principal
received by the related Servicer on or prior to the related Determination Date
or advanced by the related Servicer for the related Remittance Date and any
unscheduled principal payments and other unscheduled principal collections
received during the related Prepayment Period, and the Stated Principal Balance
of any Mortgage Loan that has prepaid in full or has become a Liquidated
Mortgage Loan during the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of
(a) the Distribution Date in April 2010 and (b) the Distribution Date following
the Distribution Date on which the aggregate Class Certificate Balances of the
Class A Certificates have been reduced to zero and (ii) the first Distribution
Date on which the Senior Enhancement Percentage (calculated for this purpose
only after taking into account payments of principal on the Mortgage Loans
applied to reduce the Stated Principal Balances of the Mortgage Loans for the
applicable Distribution Date but prior to any allocation of the Principal
Distribution Amount and principal payments from the Swap Account to the
Certificates on such Distribution Date) is greater than or equal to the Senior
Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor,
subcontractor or other Person utilized by a Servicer, a Subservicer, the Trustee
or the Custodian, as applicable, that is not responsible for the overall
servicing (as "servicing" is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans. With respect to Countrywide Servicing, "Subcontractor" shall
have the meaning set forth in the Countrywide Amendment Regulation AB.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the LIBOR Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date,
the excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
a Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by a Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB. With respect to Countrywide
Servicing, "Subservicer" shall have the meaning set forth in the Countrywide
Amendment Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by the
applicable Responsible Party for a Deleted Mortgage Loan that satisfies the
criteria set forth in the definition of "Qualified Substitute Mortgage Loan" in
the applicable Purchase Agreement or (ii) substituted by the Depositor for a
Deleted Mortgage Loan, which, if substituted by the Depositor, must, on the date
of such substitution, as confirmed in a Request for Release, substantially in
the form of Exhibit J, (a) have a Stated Principal Balance, after deduction of
the principal portion of the Scheduled Payment due in the month of substitution,
not in excess of, and not more than 10% less than, the Stated Principal Balance
of the Deleted Mortgage Loan; (b) be accruing interest at a rate no lower than
and not more than 1% per annum higher than, that of the Deleted Mortgage Loan;
(c) have a Loan-to-Value Ratio or a Combined Loan-to-Value Ratio, as applicable,
no higher than that of the Deleted Mortgage Loan; (d) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; and (e) comply with each applicable representation and
warranty set forth in Section 2.03 and in the Representations and Warranties
Agreement.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate
Swap Agreement, the Class IO Interest and the right to receive Class IO
Shortfalls, subject to the obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the
related Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in
the Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the LIBOR Certificates divided
by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment (other
than a Defaulted Swap Termination Payment) payable from Available Funds to the
Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement); provided
that a Swap Termination Payment shall not be paid from Available Funds to the
extent already paid by a replacement swap provider as a Replacement Swap
Provider Payment.
Tax Matters Person: The Holder of the (i) Class R and (ii) Class
RX Certificates designated as "tax matters person" of (i) Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC, and (ii)
the Class X REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest on the Mortgage Loans
received by the Servicers on or prior to the related Determination Date (other
than Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date, (B) any Net Swap Payments to the Swap Provider and (C) any Swap
Termination Payment (other than a Defaulted Swap Termination Payment) payable to
the Swap Provider from Available Funds.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Loss Trigger
Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of (i) the Mortgage Loans and all principal outstanding as the close of business
on the Cut-off Date (after giving effect to payments of principal due on or
prior to the Cut-off Date, whether or not received) and interest due and accrued
on the Mortgage Loan after the Cut-off Date (or, if the Due Date for any
Mortgage Loan is other than on the first day of the month, after the Due Date
immediately preceding the Cut-off Date); (ii) the Collection Accounts, the
Excess Reserve Fund Account, the Distribution Account, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) property
that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure or otherwise; (iv) the Closing Date Deposit Amount; (v) the Swap
Assets; (vi) the Depositor's rights under the Representations and Warranties
Agreement; (vii) the Interest Rate Cap Agreement; and (viii) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the Lower-Tier REMIC, the Upper-Tier REMIC, or the Class X REMIC, as applicable.
Trustee: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, and its successors in interest and, if a successor trustee
is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of (a) one twelfth of the Trustee Fee Rate and (b)(i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the close of business on
the date immediately preceding the first day of the related Due Period and (ii)
with respect to the Distribution Date in April 2007 only, the portion of the
Closing Date Deposit Amount allocable to principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.007% per
annum.
Trustee Float Period: With respect to the Distribution Date and
the related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the Purchase Agreements.
Unpaid Interest Amount: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
LIBOR Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Upper-Tier Regular Interest on such
Distribution Date taking into account the Upper-Tier REMIC Loan Group I Rate or
Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier
REMIC WAC Rate and (B) the Upper-Tier CarryForward Amount for such Class of
Certificates for all previous Distribution Dates not previously paid, together
with interest thereon at a rate equal to the applicable Upper-Tier Interest Rate
for such Class of Certificates for such Distribution Date, without giving effect
to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II
Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Loan Group I Rate: As described in the
Preliminary Statement.
Upper-Tier REMIC Loan Group II Rate: As described in the
Preliminary Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the
weighted average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests (other than the Class LT-IO Interest) as of the first day of the
related Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal Amounts of such Lower-Tier Regular Interests as of the first day of
the related Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution Date, the weighted average of the Adjusted Net Mortgage Rates then
in effect on the beginning of the related Due Period on the Mortgage Loans minus
the Swap Payment Rate, adjusted in each case to accrue on the basis of a 360-day
year and the actual number of days in the related Interest Accrual Period. With
respect to the first Due Period and the first Distribution Date only, the WAC
Cap shall be reduced by a fraction, the numerator of which is the Closing Date
Deposit Amount and the denominator of which is the Cut-off Date Pool Principal
Balance.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, and its successors in interest.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Mortgage Loans: The Mortgage Loans purchased by the Sponsor
pursuant to the WMC Purchase Agreement for which WMC is identified as
Responsible Party on the Mortgage Loan Schedule.
WMC Purchase Agreement: The Fifth Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of November 1, 2006, by and
between WMC and the Sponsor, a copy of which is attached hereto as Exhibit O.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund. On the Closing Date, the Depositor shall pay,
without any right of reimbursement from the Trust, to the Cap Provider the
"Fixed Amount" (as defined in the Interest Rate Cap Agreement) due and payable
to the Cap Provider pursuant to the terms of the Interest Rate Cap Agreement.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
Custodian, with respect to the Decision One Mortgage Loans, and to the Trustee
with respect to the remaining Mortgage Loans, for the benefit of the
Certificateholders the following documents or instruments with respect to each
Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________, without
recourse" and signed (which may be by facsimile signature) in the name
of the last endorsee by an authorized officer. To the extent that there
is no room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, unless the Trustee or the
Custodian, as applicable, is advised in writing by the applicable
Responsible Party (if required by the applicable Purchase Agreement) or
the Depositor that state law does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note, if any;
(iii) the original Mortgage with evidence of recording thereon or
a certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the applicable Responsible Party shall deliver or
cause to be delivered to the Trustee or the Custodian, as applicable, a
photocopy of such Mortgage certified by the applicable Responsible
Party, originator, the Depositor, title company, escrow company or
attorney, as applicable, to be a true and complete copy of such Mortgage
and shall forward to the Trustee or the Custodian, as applicable, such
original recorded Mortgage within 14 days following the applicable
Responsible Party's receipt of such Mortgage from the applicable public
recording office; or in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy
of such Mortgage certified by such public recording office to be a true
and complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank, which may, except with respect to the WMC Mortgage
Loans, be included in a blanket assignment or assignments (except with
respect to MERS Designated Mortgage Loans);
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage Loan)
to the last endorsee with evidence of recording thereon or a certified
true copy of such intervening assignments of Mortgage submitted for
recording, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of Mortgage,
the applicable Responsible Party shall deliver or cause to be delivered
a photocopy of such intervening assignment, certified by the applicable
Responsible Party, originator, Depositor, title company, escrow company
or attorney, as applicable, to be a true and complete copy of such
intervening assignment and shall forward to the Trustee or the
Custodian, as applicable, such original recorded intervening assignment
within 14 days following the applicable Responsible Party's receipt of
such from the applicable public recording office; or in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original mortgagee title insurance policy, a photocopy
of the mortgage title insurance policy, or attorney's opinion of title
and abstract of title, or, in the event such title policy is
unavailable, a copy of the related policy binder or commitment for title
from the title insurance company; and
(viii) the original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage (if
provided).
The applicable Responsible Party shall cause to be delivered to
the Trustee or the Custodian, as applicable, the applicable recorded document
promptly upon receipt from the respective recording office.
If any Mortgage has been recorded in the name of Mortgage
Electronic Registration System, Inc. ("MERS") or its designee, no Assignment of
Mortgage in favor of the Trustee will be required to be prepared or delivered
and instead, the applicable Servicer shall take all reasonable actions as are
necessary at the expense of the applicable Responsible Party to cause the Trust
to be shown as the owner of the related Mortgage Loan on the records of MERS for
the purpose of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee or the Custodian, as applicable,
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan in accordance with
the terms of this Agreement upon receipt of such documents. All such mortgage
documents held by the Trustee or the Custodian, as applicable, as to each
Mortgage Loan shall constitute the "Custodial File".
On or prior to the Closing Date, each Responsible Party shall
deliver to the Custodian or the Trustee, as applicable, Assignments of
Mortgages, in blank, for each Mortgage Loan. The Responsible Parties shall cause
the Assignments of Mortgages and complete recording information to be provided
to the applicable Servicer in a reasonably acceptable manner. No later than
thirty (30) Business Days following the later of the Closing Date and the date
of receipt by the applicable Servicer of the complete recording information for
a Mortgage, the applicable Servicer shall promptly submit or cause to be
submitted for recording, at the expense of the applicable Responsible Party as
required pursuant to the related Purchase Agreement and at no expense to the
Trust Fund, the Trustee, the applicable Servicer, or the Depositor, in the
appropriate public office for real property records, each Assignment of Mortgage
referred to in Section 2.01(b)(v). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan (i) if the Trustee,
the Custodian and each Rating Agency have received an Opinion of Counsel,
satisfactory in form and substance to the Trustee and each Rating Agency to the
effect that the recordation of such Assignments of Mortgage in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note, (ii) if such Mortgage Loan is a MERS Designated Mortgage Loan or
(iii) if the Rating Agencies have each notified the Depositor in writing that
not recording any such Assignments of Mortgage would not cause the initial
ratings on any LIBOR Certificates to be downgraded or withdrawn; provided,
however, that no Servicer shall be held responsible or liable for any loss that
occurs because an Assignment of Mortgage was not recorded, but only to the
extent the applicable Servicer does not have prior knowledge of the act or
omission that causes such loss. Unless the Depositor gives the Servicers notice
to the contrary, the Depositor is deemed to have given the Servicers notice that
the condition set forth in clause (iii) above is applicable. However, with
respect to the Assignments of Mortgage referred to in clauses (i) and (ii)
above, if foreclosure proceedings occur against a Mortgaged Property, the
applicable Servicer shall record such Assignment of Mortgage at the expense of
the applicable Responsible Party (and at no expense to such Servicer) as
required pursuant to the related Purchase Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to "▇▇▇▇▇ Fargo Bank,
National Association, as trustee under the Pooling and Servicing Agreement dated
as of March 1, 2007, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4." In the
event that any such Assignment of Mortgage is lost or returned unrecorded
because of a defect therein, the applicable Responsible Party shall promptly
cause to be delivered a substitute Assignment of Mortgage to cure such defect
and thereafter cause each such assignment to be duly recorded.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian or the Trustee, as applicable, within one year following the
date such Mortgage Loan was sold by such Responsible Party to the Sponsor, and
in the event that such Responsible Party does not cure such failure within 30
days of discovery or receipt of written notification of such failure from the
Depositor, the related Mortgage Loan shall, upon the request of the Depositor,
be repurchased by such Responsible Party at the price and in the manner
specified in Section 2.03. The foregoing repurchase obligation shall not apply
in the event that the applicable Responsible Party cannot deliver such original
or copy of any document submitted for recordation to the appropriate public
recording office within the specified period due to a delay caused by the
recording office in the applicable jurisdiction; provided, that such Responsible
Party shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of an officer
of such Responsible Party, confirming that such document has been accepted for
recording.
Notwithstanding anything to the contrary contained in this
Section 2.01, in those instances where the public recording office retains or
loses the original Mortgage or assignment after it has been recorded, the
obligations of the applicable Responsible Party shall be deemed to have been
satisfied upon delivery by the applicable Responsible Party to the Custodian or
the Trustee, as applicable, prior to the Closing Date of a copy of such Mortgage
or assignment, as the case may be, certified (such certification to be an
original thereof) by the public recording office to be a true and complete copy
of the recorded original thereof.
On or prior to the Closing Date, the Depositor shall deliver to
the Trustee and the Custodian, as applicable, a copy of the Data Tape
Information in an electronic, machine readable medium in a form acceptable to
the Depositor, the Trustee or the Custodian, as applicable.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL
I INC. TRUST 2007-HE4" and ▇▇▇▇▇ Fargo Bank, National Association is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representations and warranties set
forth in paragraph (aaa) of Schedule IV and paragraph (yy) of Schedule VI to
this Agreement. The Trust's fiscal year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and
the Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans and the Representations and
Warranties Agreement) pursuant to Section 2.01(a). The Trustee on behalf of the
Trust is hereby directed to enter into the Interest Rate Swap Agreement and the
Interest Rate Cap Agreement.
(e) The Depositor shall use reasonable effort to assist the
Trustee in enforcing the obligations of the Sponsor under the Representations
and Warranties Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee and the Custodian shall acknowledge, on the Closing Date, receipt by the
Trustee or the Custodian, as applicable, on behalf of the Trustee, of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit E, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee and the Custodian shall maintain possession of the related Mortgage
Notes in the States of California, Illinois, Minnesota or Utah unless otherwise
permitted by the Rating Agencies. Furthermore, the Trustee solely in its
capacity as trustee hereunder, and on behalf of the Trust, hereby assumes the
obligations of the Depositor under the Representations and Warranties Agreement
from and after the Closing Date and solely insofar as they relate to the
Mortgage Loans.
As provided above, in connection with the Closing Date, the
Trustee and the Custodian shall be required to deliver via facsimile or
electronically in .pdf format (with original to follow the next Business Day) to
the Depositor and the Servicers an Initial Certification on the Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage for each
applicable Mortgage Loan. Neither the Trustee nor the Custodian shall be
responsible to verify the validity, sufficiency, genuineness, perfection or
priority of any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee and the
Custodian shall, for the benefit of the Holders of the Certificates, ascertain
that all documents identified in the Document Certification and Exception Report
in the form attached hereto as Exhibit F with respect to the Mortgage Loans for
which it is acting as a custodian, are in its possession, and shall deliver to
the Depositor, the Servicers and the Trustee, if delivered by the Custodian, a
Document Certification and Exception Report, in the form annexed hereto as
Exhibit F, to the effect that, as to each applicable Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such certification): (i) all documents identified in the Document
Certification and Exception Report and required to be reviewed by it are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; (iii) based on its examination and
only as to the foregoing documents, the information set forth in items (1), (2),
(7) and (9) of the Mortgage Loan Schedule and items (1), (9) and (17) of the
Data Tape Information respecting such Mortgage Loan accurately reflects the
information set forth in the Custodial File; and (iv) each Mortgage Note has
been endorsed as provided in Section 2.01 of this Agreement. Neither the Trustee
nor the Custodian shall be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the applicable Servicer
(for the benefit of the Holders of the Certificates, based solely on the list of
MERS Designated Mortgage Loans and screen printouts from the MERS(R) System
provided to such Servicer by each applicable Responsible Party no later than 45
days after the Closing Date) shall confirm, on behalf of the Trust, that the
Trustee is shown as the Investor with respect to each MERS Designated Mortgage
Loan on such screen printouts. If the Trustee is not shown as the Investor with
respect to any MERS Designated Mortgage Loans on such screen printouts, the
applicable Servicer shall promptly notify the applicable Responsible Party of
such fact, and such Person shall then either cure such defect or repurchase such
Mortgage Loan in accordance with Section 2.03.
The Trustee and the Custodian shall retain possession and custody
of each applicable Custodial File in accordance with and subject to the terms
and conditions set forth herein. The applicable Servicer shall promptly deliver
to the Trustee or the Custodian, as applicable, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Custodial File as come into the possession of such Servicer from time to time.
Each Responsible Party shall deliver to the applicable Servicer
copies of all trailing documents required to be included in the Custodial File
at the same time the original or certified copies thereof are delivered to the
Trustee or the Custodian, as applicable, including but not limited to such
documents as the title insurance policy and any other Mortgage Loan Documents
upon return from the public recording office. Such documents shall be delivered
by the applicable Responsible Party at such Responsible Party's expense to such
Servicer.
Section 2.03 Representations and Warranties; Remedies for
Breaches of Representations and Warranties with Respect to the Mortgage Loans.
(a) Saxon hereby makes the representations and warranties set forth in Schedules
II and II-A hereto to the Depositor and the Trustee. Countrywide Servicing in
its capacity as Servicer hereby makes the representations and warranties set
forth in Schedule VIII hereto to the Depositor and the Trustee as of the dates
set forth in such Schedule.
(b) WMC hereby makes the representations and warranties set forth
in Schedule IV and Schedule V hereto to the Depositor, the Servicers and the
Trustee as of the dates set forth in such Schedules. Decision One hereby makes
the representations and warranties set forth in Schedule VI hereto to the
Depositor, the Servicers and the Trustee as of the dates set forth in such
Schedule.
(c) LaSalle in its capacity as Custodian hereby makes the
representations and warranties, set forth in Schedule VII hereto to the Trustee
as of the dates set forth in such Schedule.
(d) The Depositor hereby makes the representations and warranties
set forth in Schedule III hereto to the Trustee as of the dates set forth in
such Schedule.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by any of the parties to this Agreement of a
breach of any of the foregoing representations and warranties that materially
and adversely affect the value of any Mortgage Loan or the interest of the
Trustee or the Certificateholders therein, the party discovering such breach
shall give prompt written notice to the other parties.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor or a Responsible Party, as
applicable, under this Agreement, that materially and adversely affects the
value of any Mortgage Loan or the interests of the Trustee or the
Certificateholders therein, the party discovering such breach shall give prompt
written notice thereof to the other parties. Upon receiving written notice of a
breach of a representation and warranty or written notice that a Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the Trustee shall in turn notify the applicable
Responsible Party in writing to correct or cure, in accordance with this
Agreement, any such breach of a representation or warranty made by the
applicable Responsible Party under this Agreement within sixty (60) days from
the date of notice from the Trustee or the discovery by the applicable
Responsible Party of the breach, and if the applicable Responsible Party fails
or is unable to correct or cure the defect or breach within such period, the
Trustee (upon receiving such notice or having actual knowledge) shall notify the
Depositor of such failure to correct or cure. Unless otherwise directed by the
Depositor within five (5) Business Days after notifying the Depositor of such
failure by the applicable Responsible Party to correct or cure, the Trustee
shall notify the applicable Responsible Party to repurchase the Mortgage Loan (a
"Deleted Mortgage Loan") at the Repurchase Price or, if permitted hereunder,
substitute a Substitute Mortgage Loan for such Mortgage Loan, in each case,
pursuant to this Agreement. Notwithstanding the foregoing, in the event that the
Trustee receives notice of a breach by (i) WMC of any of the representations and
warranties set forth in paragraphs (g), (i), (rr), (zz), (aaa), (jjj), (kkk),
(lll), (mmm), (nnn), (ooo), (ppp), (qqq) and (rrr) of Schedule IV, or (ii)
Decision One of any representations and warranties set forth in paragraphs (g),
(i), (xx), (yy), (ggg), (hhh), (iii), (jjj), (kkk), (lll), (mmm), (nnn) and
(ooo), (ppp), (qqq), (sss) and (ttt) of Schedule VI, the Trustee shall notify
the applicable Responsible Party to repurchase the Mortgage Loan at the
Repurchase Price within sixty (60) days of the applicable Responsible Party's
receipt of such notice. If, by the end of such sixty (60) day period, such
Responsible Party fails to repurchase such Mortgage Loan, the Trustee shall
notify the Depositor of such failure. The Trustee shall pursue all legal
remedies available to the Trustee against the applicable Responsible Party under
this Agreement, if the Trustee has received written notice from the Depositor
directing the Trustee to pursue such remedies.
(g) Within 90 days of the earlier of either discovery by or
notice to the Depositor of any breach of a representation or warranty set forth
on Schedule III hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Depositor shall purchase such Mortgage Loan at the Repurchase Price or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such Mortgage
Loan. Within 90 days of the earlier of discovery by the Depositor or receipt of
notice by the Depositor of the breach of any representation and warranty set
forth in Schedule VI to this Agreement (with respect to the Decision One
Mortgage Loans), that (1) materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan and (2) has not been cured, repurchased
or substituted for by Decision One in accordance with the terms of this
Agreement, (i) the Depositor shall, within the time period permitted therefor
under this Agreement take such action described in Section 2.03(h) of this
Agreement in respect of such Mortgage Loan, as if the Depositor were Decision
One, and (ii) the Trustee shall promptly deliver to the Depositor or its
designee the related Mortgage File in accordance with the applicable Servicer's
direction in a Request for Release and shall assign to the Depositor all of its
rights with respect to Decision One's breach under this Agreement, which
assignment shall be evidenced by a writing prepared by the Depositor and
executed by the Trustee in favor of the Depositor. Any obligation of the
Depositor under this subsection shall terminate upon receipt by the Trustee of a
confirmation from each Rating Agency that such termination will not cause a
downgrade, qualification or withdrawal of the rating then assigned to any Class
of Certificates by any Rating Agency.
(h) Upon the Depositor's discovery of or receipt of notice of a
breach of a representation and warranty of WMC set forth on Schedule IV hereto
that materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan and that has not been cured, repurchased or substituted for by
WMC in accordance with the terms of this Agreement, the Depositor shall have the
option, exercisable in its sole discretion, to repurchase such Mortgage Loan at
the Repurchase Price, or, if permitted hereunder, substitute a Substitute
Mortgage Loan for such Mortgage Loan. The Trustee shall promptly deliver to the
Depositor or its designee the related Mortgage File in accordance with the
Servicer's direction in a Request for Release and, upon the Depositor's request
and repurchase, shall assign to the Depositor all of its rights with respect to
WMC's breach, under this Agreement, which assignment shall be evidenced by a
writing prepared by the Depositor and executed by the Trustee in favor of the
Depositor.
(i) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's or the Custodian's review of the
related Custodial File, the Trustee or the Custodian, as applicable, shall
notify the applicable Responsible Party, the applicable Servicer, the Trustee
(if applicable) and the Depositor by delivery of the certification of the
Custodian or Trustee required by Section 2.02 to such parties, which shall be a
request that such Responsible Party correct or cure such defect as required
under this Agreement, and if such Responsible Party fails or is unable to
correct or cure the defect within the period set forth in this Agreement, the
Trustee or the Custodian, as applicable, shall notify the Depositor and the
Trustee of such failure to correct or cure. Unless otherwise directed by the
Depositor within five (5) Business Days after such notice to the Depositor and
the Trustee of such failure by the applicable Responsible Party to correct or
cure, the Trustee or the Custodian, as applicable, shall notify the applicable
Responsible Party to repurchase the Mortgage Loan at the Repurchase Price or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such Mortgage
Loan, in each case, pursuant to the terms of this Agreement, as applicable. If,
within ten (10) Business Days of receipt of such notice by the applicable
Responsible Party, such Responsible Party fails to repurchase such Mortgage
Loan, the Trustee shall notify the Depositor of such failure. The Trustee shall
pursue all legal remedies available to the Trustee against the applicable
Responsible Party under this Agreement, if the Trustee has received written
notice from the Depositor directing the Trustee to pursue such remedies.
(j) Within 90 days of the earlier of either discovery by or
notice to the applicable Responsible Party of any breach of a representation or
warranty set forth on Schedule IV or Schedule VI, as applicable, that materially
and adversely affects the value of any Mortgage Loan or the interest of the
Trustee or the Certificateholders therein, the applicable Responsible Party
shall use its best efforts to promptly cure such breach in all material respects
and, if such defect or breach cannot be remedied, the applicable Responsible
Party shall, at the Depositor's option, purchase such Mortgage Loan at the
Repurchase Price or, if permitted hereunder, substitute a Substitute Mortgage
Loan for such Mortgage Loan, if applicable.
(k) Any substitution of a Substitute Mortgage Loan by a
Responsible Party shall be made in accordance with the substitution procedures
set forth in the applicable Purchase Agreement, which provisions shall be as set
forth in such agreements as if they were set forth herein. With respect to any
Substitute Mortgage Loan or Loans substituted by the Depositor or any
Responsible Party, the Sponsor, the Depositor or such Responsible Party, as
applicable, shall deliver to the Trustee or the Custodian, as applicable, for
the benefit of the Certificateholders the Mortgage Note, the Mortgage, the
related Assignment of Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. Notwithstanding anything to the contrary
set forth in this Agreement, no substitution under this Agreement is permitted
to be made (a) in any calendar month after the Determination Date for such month
or (b) if the substitution were to be made on or after the second anniversary of
the Closing Date. Scheduled Payments due with respect to Substitute Mortgage
Loans in the Due Period of substitution shall not be part of the Trust Fund and
will be retained by the Depositor or the applicable Responsible Party, as
applicable, on the next succeeding Distribution Date. For the Due Period of
substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the
Sponsor, the Depositor or the applicable Responsible Party, as applicable, shall
be entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
(l) Based upon information provided by the Depositor or the
applicable Responsible Party, as applicable, the applicable Servicer shall
include information regarding the removal of such Deleted Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans in its Servicer Remittance
Report delivered to the Trustee pursuant to Section 4.03(e) or the Custodian, as
applicable) for the Determination Date immediately following the receipt of such
information, to the extent such information is required to be included in the
Servicer Remittance Report. Upon such substitution, the Substitute Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects, and,
if the substitution is made by the Sponsor or the Depositor, as applicable, the
Sponsor or the Depositor, as applicable, shall be deemed to have made with
respect to such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to such Substitute Mortgage Loan. Upon receipt of a Request
for Release in connection with any such substitution and certification by the
applicable Servicer to the Trustee or the Custodian, as applicable, that the
deposit into the applicable Collection Account of the amount required to be
deposited therein in connection with such substitution as described in Section
2.03(l), the Trustee or the Custodian, as applicable, shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the applicable Responsible Party and the Trustee shall execute
and deliver at the direction of the Depositor or the applicable Responsible
Party, as applicable, such instruments of transfer or assignment prepared by the
Sponsor, the Depositor or the applicable Responsible Party, as applicable, in
each case without recourse, representation or warranty, as shall be necessary to
vest title in the Sponsor, the Depositor or the applicable Responsible Party, as
applicable, of the Trustee's interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
(m) For any month in which the Sponsor, the Depositor or any
Responsible Party substitutes one or more Substitute Mortgage Loans for one or
more Deleted Mortgage Loans, the applicable Servicer will determine the amount
(if any) by which the aggregate unpaid principal balance of all such Substitute
Mortgage Loans as of the date of substitution is less than the aggregate unpaid
principal balance of all such Deleted Mortgage Loans. The amount of such
shortage, plus an amount equal to the sum of (i) any accrued and unpaid interest
on the Deleted Mortgage Loans and (ii) all unreimbursed Servicing Advances with
respect to such Deleted Mortgage Loans, or the amount of any similar shortage
with respect to a Substitute Mortgage Loan substituted by a Responsible Party
under this Agreement (collectively, the "Substitution Adjustment Amount"), shall
be deposited into the applicable Collection Account of the related Servicer by
the Sponsor, the Depositor or the applicable Responsible Party, as applicable,
on or before the Distribution Account Deposit Date for the Distribution Date
following the Prepayment Period during which the related Mortgage Loan became
required to be purchased or replaced hereunder.
(n) Any Mortgage Loan repurchased pursuant to this Section 2.03
will be removed from the Trust Fund. The applicable Servicer shall include
information regarding such repurchase in its Servicer Remittance Report
delivered to the Trustee pursuant to Section 4.03(e) or the Custodian, as
applicable, for the Determination Date immediately following the receipt of
information regarding such repurchase, to the extent such information is
required to be included in the Servicer Remittance Report. For purposes of
determining the applicable Repurchase Price, any such repurchase shall occur or
shall be deemed to occur as of the last day of the applicable Prepayment Period.
(o) In the event that any Mortgage Loan shall have been
repurchased pursuant to this Agreement or the Representations and Warranties
Agreement, the Repurchase Price therefor shall be deposited by the applicable
Servicer in the applicable Collection Account of the related Servicer pursuant
to Section 3.10 on or before the Distribution Account Deposit Date for the
Distribution Date following the Prepayment Period during which such Mortgage
Loan was repurchased and upon such deposit of the Repurchase Price and receipt
of a Request for Release in the form of Exhibit J hereto, indicating such
deposit, the Trustee or the Custodian, as applicable, shall release the related
Custodial File held for the benefit of the Certificateholders to such Person as
directed by the applicable Servicer, and the Trustee shall execute and deliver
at such Person's direction such instruments of transfer or assignment prepared
by such Person, in each case without recourse, representation or warranty, as
shall be necessary to transfer title from the Trustee.
(p) In addition to any repurchase or substitution obligation by
any Responsible Party under this Agreement, each Responsible Party shall
indemnify the Depositor and its Affiliates, the Servicers, the Sponsor, the
Trustee, the Custodian and the Trust for any breach of any representation and
warranty of such Responsible Party set forth in this Agreement, in accordance
with the indemnification provisions relating to breaches of representations and
warranties (including without limitation, the representations and warranties set
forth in paragraph (aaa) of Schedule IV and paragraph (yy) of Schedule VI, as
applicable, to this Agreement) and defective Mortgage Loans set forth in the WMC
Purchase Agreement or the Decision One Purchase Agreement, as applicable, as if
such indemnification provisions were set forth herein for the benefit of the
Depositor and its Affiliates, the Servicers, the Sponsor, the Trustee, the
Custodian and the Trust. This indemnity shall survive the termination of this
Agreement.
(q) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement or any Responsible Party under
this Agreement to cure, repurchase or substitute any Mortgage Loan as to which a
breach of a representation and warranty has occurred and is continuing, together
with any related indemnification obligations set forth herein, shall constitute
the sole remedies against such Persons respecting such breach available to
Certificateholders, the Depositor (if applicable), or the Trustee on their
behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee or the Custodian, as applicable, for
the benefit of the Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized Denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth
the designations for federal income tax purposes of all interests created
hereby. The "Startup Day" of each Trust REMIC for purposes of the REMIC
Provisions shall be the Closing Date. The "latest possible maturity date" of the
regular interests in each Trust REMIC is the Distribution Date occurring in
February 2037, which is the Distribution Date in the month following the month
in which the latest maturity date of any Mortgage Loan occurs. Amounts
distributable to the Class X Certificates (prior to any reduction for any Basis
Risk Payment, Upper-Tier CarryForward Amount, Net Swap Payment or Swap
Termination Payment), exclusive of any amounts received from the Swap Provider
or the Cap Provider, shall be deemed paid from the Upper-Tier REMIC to the Class
X REMIC in respect of the Class UT-X Interest and the Class UT-IO Interest and
then from the Class X REMIC in respect of the Class X Interest and the Class IO
Interest to the Holders of the Class X Certificates prior to distribution of any
Basis Risk Payments or Upper-Tier CarryForward Amounts to the LIBOR Certificates
and Net Swap Payments or Swap Termination Payments to the Swap Provider. For
federal income tax purposes, any amount distributed on the LIBOR Certificates on
any Distribution Date in excess of the amount distributable on their
Corresponding Class of Upper-Tier Regular Interest on such Distribution Date
shall be treated as having been paid from the Excess Reserve Fund Account or the
Swap Account, as applicable, and any amount distributable on such Corresponding
Class of Upper-Tier Regular Interest on such Distribution Date in excess of the
amount distributable on the Corresponding Class of LIBOR Certificates on such
Distribution Date shall be treated as having been paid to the Swap Account, all
pursuant to and as further provided in Section 8.13.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicers that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee or the Custodian, as applicable, and
shall inure to the benefit of the Trustee.
Section 2.07 Enforcement of Obligations for Breach of Mortgage
Loan Representations. Upon discovery by any of the parties hereto of a breach of
a representation or warranty made by the Sponsor pursuant to the Representations
and Warranties Agreement, the party discovering such breach shall give prompt
written notice thereof to the other parties to this Agreement and the Sponsor.
The Trustee shall pursue all legal remedies available to the Trustee with
respect to such breach under the Representations and Warranties Agreement, as
may be necessary or appropriate to enforce the rights of the Trust with respect
thereto, if the Trustee has received written notice from the Depositor directing
the Trustee to pursue such remedies.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, each Servicer shall service and administer the
Mortgage Loans for which it is acting as Servicer in accordance with the terms
of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, each Servicer shall seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, each Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when the applicable Servicer believes it appropriate in its best
judgment in accordance with Accepted Servicing Practices, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. Each Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the applicable Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement. Each Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16, the Trustee or the
Custodian, as applicable, shall execute, at the written request of a Servicer,
and furnish to such Servicer and any Subservicer such documents provided to the
Trustee or the Custodian, as applicable, as are necessary or appropriate to
enable such Servicer or any Subservicer to carry out its servicing and
administrative duties hereunder, and the Trustee hereby grants to each Servicer,
and this Agreement shall constitute, a power of attorney to carry out such
duties, including a power of attorney in the form of Exhibit R hereto to take
title to Mortgaged Properties after foreclosure in the name of and on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
each Servicer for the purposes described herein to the extent necessary or
desirable to enable each Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of any Servicer or any Subservicers under
such powers of attorney. Notwithstanding anything contained herein to the
contrary, no Servicer or Subservicer shall without the Trustee's consent: (i)
initiate any action, suit or proceeding solely under the Trustee's name without
indicating such Servicer's or Subservicer's, as applicable, representative
capacity, or (ii) take any action with the intent to, or which actually does
cause, the Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards
of the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by a Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, a
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01 and except for Servicing Advances) and none
of the Servicers shall, except with respect to any Mortgage Loan in default or,
which in the judgment of the applicable Servicer, a default is reasonably
foreseeable, (i) permit any modification with respect to any Mortgage Loan that
would change the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (except for a reduction of interest payments
resulting from the application of the Servicemembers Civil Relief Act or any
similar state statutes) or (ii) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup
date" under the REMIC Provisions, (iii) except as provided in Section 3.07(a),
waive any Prepayment Charges, or (iv) accept payment from the related Mortgagor
of an amount less than the unpaid principal balance of such Mortgage Loan in
final satisfaction thereof, if in such Servicer's determination such action is
not materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action).
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the applicable Servicer shall be entitled to waive any such provisions on behalf
of the Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
(f) Notwithstanding anything to the contrary contained in
Sections 3.02(a), 3.02(d), 3.02(e), 3.03, 3.22, 3.23, 4.03(e), 6.02, 8.12 and
10.14, the obligations of Countrywide Servicing with respect to Regulation AB
and the Countrywide Serviced Mortgage Loans shall be solely as set forth in the
Countrywide Amendment Regulation AB with respect to the servicing of the
Countrywide Serviced Mortgage Loans.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). Each Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. The applicable Servicer shall give
notice to the Depositor and the Trustee of any such Subservicer and Subservicing
Agreement, which notice shall contain all information (including without
limitation a copy of the Subservicing Agreement) reasonably necessary to enable
the Trustee, pursuant to Section 8.12(g), to accurately and timely report the
event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports
under the Exchange Act are required to be filed under the Exchange Act). No
Subservicing Agreement shall be effective until 30 days after such written
notice is received by both the Depositor and the Trustee. The Trustee shall not
be required to review or consent to such Subservicing Agreements and shall have
no liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement to which it is a party
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
Each Servicer and the respective Subservicers may enter into and make amendments
to the Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon such Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys" fees against the party against whom such
enforcement is directed.
(d) Each Servicer shall cause any Subservicer engaged by such
Servicer (or by any Subservicer) for the benefit of the Depositor and the
Trustee to comply with the provisions of this Section 3.02 and with Sections
3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as if such
Subservicer were such Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12 of this Agreement. Such Servicer
shall be responsible for obtaining from each such Subservicer and delivering to
applicable Persons any servicer compliance statement required to be delivered by
such Subservicer under Section 3.22 and any assessment of compliance report and
related accountant's attestation required to be delivered by such Subservicer
under Section 3.23, in each case as and when required to be delivered.
(e) Subject to the conditions set forth in this Section 3.02(e),
each Servicer and any Subservicer engaged by such Servicer is permitted to
utilize one or more Subcontractors to perform certain of its obligations
hereunder. Such Servicer shall promptly upon request provide to the Depositor a
written description (in form and substance satisfactory to the Depositor) of the
role and function of each Subcontractor utilized by such Servicer or any such
Subservicer, specifying no later than the date specified for delivery of the
annual report on assessment of compliance set forth in Section 3.23(b) (i) the
identity of each such Subcontractor, if any, that is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, and (ii)
which elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (i) of
this paragraph. As a condition to the utilization by such Servicer or any such
Subservicer of any Subcontractor determined to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, such
Servicer shall cause any such Subcontractor used by such Servicer (or by any
such Subservicer) for the benefit of the Depositor and the Trustee to comply
with the provisions of Section 3.23 of this Agreement to the same extent as if
such Subcontractor were such Servicer. Such Servicer shall be responsible for
obtaining from each such Subcontractor and delivering to the applicable Persons
any assessment of compliance report and related accountant's attestation
required to be delivered by such Subcontractor under Section 3.23, in each case
as and when required to be delivered.
Notwithstanding the foregoing, if a Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, such Servicer shall be responsible for determining whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If a Servicer determines, pursuant
to the preceding sentence, that such Subcontractor is a "servicer" within the
meaning of Item 1101 of Regulation AB and meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB, then such Subcontractor shall be
deemed to be a Subservicer for purposes of this Agreement, the engagement of
such Subservicer shall not be effective unless and until notice is given
pursuant to Section 3.02(a) and such Servicer shall comply with Section 3.02(d)
with respect thereto.
Section 3.03 Successor Subservicers. Each Servicer shall be
entitled to terminate any Subservicing Agreement to which such Servicer is a
party and the rights and obligations of any Subservicer pursuant to any such
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement; provided, however, that the termination, resignation or
removal of a Subservicer shall not be effective until 30 days after written
notice is received by the Depositor and the Trustee that contains all
information reasonably necessary to enable the Trustee, pursuant to Section
8.12(g), to accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act). In the event of termination of any
Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the applicable Servicer party to the related Subservicing
Agreement without any act or deed on the part of such Subservicer or such
Servicer, and such Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer who is party to the related Subservicing Agreement shall, for any
reason, no longer be a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any other successor to such
Servicer) shall be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements
by Trustee. In the event a Servicer at any time shall for any reason no longer
be a Servicer (including by reason of the occurrence of an Event of Default),
the Trustee, as successor Servicer, or its designee, or another successor
Servicer if the successor is not the Trustee, shall thereupon assume all of the
rights and obligations of such Servicer under each Subservicing Agreement that
such Servicer may have entered into, with copies thereof provided to the
Trustee, or another successor Servicer if the successor is not the Trustee,
prior to the Trustee, or such other successor Servicer if the successor is not
the Trustee, assuming such rights and obligations, unless the Trustee elects to
terminate any Subservicing Agreement in accordance with its terms as provided in
Section 3.03.
Upon such assumption, the Trustee, as successor Servicer, its
designee or the successor Servicer shall be deemed, subject to Section 3.03, to
have assumed all of such Servicer's interest therein and to have replaced such
Servicer as a party to each Subservicing Agreement to which the predecessor
servicer was a party to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) such Servicer shall not
thereby be relieved of any liability or obligations under any such Subservicing
Agreement that arose before it ceased to be a Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor to such Servicer shall
be deemed to have assumed any liability or obligation of such Servicer that
arose before it ceased to be a Servicer.
Each Servicer at its expense shall, upon request of the Trustee,
its designee or the successor Servicer deliver to the assuming party all
documents and records relating to each Subservicing Agreement to which it is a
party and the Mortgage Loans then being serviced by it and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a)
Each Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Mortgage Loans, and shall, to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any applicable Insurance Policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing and
Accepted Servicing Practices, each Servicer may (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the Due Dates for
the Scheduled Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the applicable Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to Section
4.01 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements, subject to Section
4.01(d) pursuant to which such Servicer shall not be required to make any such
advances that are Nonrecoverable P&I Advances. Notwithstanding anything in this
Agreement to the contrary, a Servicer may waive, or permit a Subservicer to
waive, in whole or in part, a Prepayment Charge only under the following
circumstances: (i) such waiver relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of such Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan; provided, however, that the applicable
Servicer or Subservicer may (and with respect to any Group I Mortgage Loan
shall) waive such Prepayment Charge if the Mortgage Loan is accelerated or
paid-off in connection with the workout of a delinquent Mortgage Loan or due to
the related Mortgagor's default, notwithstanding that the terms of the Mortgage
Loan or federal or state law might permit the imposition of such Prepayment
Charge, (ii) such Prepayment Charge is not permitted to be collected by
applicable federal, state or local law or regulation or (iii) the collection of
such Prepayment Charge would be considered "predatory" pursuant to written
guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters. If a Prepayment Charge is waived other than as permitted by
the prior sentence, then the applicable Servicer is required to pay the amount
of such waived Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the related Collection Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the related Collection Account; provided,
however, that the applicable Servicer shall not have an obligation to pay the
amount of any uncollected Prepayment Charge if the failure to collect such
amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve Fund Account, on behalf of the Class X Certificateholders, to receive
any Basis Risk Payment and any Interest Rate Cap Payment and to secure their
limited recourse obligation to pay to the LIBOR Certificateholders Basis Risk
CarryForward Amounts (prior to using any Net Swap Receipts). For the avoidance
of doubt, any Basis Risk CarryForward Amounts shall be paid to the LIBOR
Certificates first from the Excess Reserve Fund Account and then from the Swap
Account.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment and any Interest Rate Cap Payment made
for the benefit of the LIBOR Certificates for such date into the Excess
Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk CarryForward Amount on any Class of Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x) the Class X
Distributable Amount (without regard to the reduction in clause (iii) in the
definition thereof) (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(R)) and (y) the aggregate Basis Risk CarryForward
Amounts for such Distribution Date and (2) withdraw from the Excess Reserve Fund
Account amounts necessary to pay to such Class or Classes of Certificates the
Basis Risk CarryForward Amount. Such payments, along with payments from the Swap
Account, shall be allocated to those Classes on a pro rata basis based upon the
amount of Basis Risk CarryForward Amount owed to each such Class and shall be
paid in the priority set forth in Sections 4.02(a)(iii)(T) and (U).
(ii) The Trustee shall account for the Excess Reserve Fund
Account as an asset of the Grantor Trust and not an asset of any Trust
REMIC. The beneficial owners of the Excess Reserve Fund Account are the
Class X Certificateholders. For all federal tax purposes, amounts
transferred by the Upper-Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to
the LIBOR Certificateholders shall be accounted for by the Trustee as
amounts paid first to the Holders of the Class X Certificates and then
to the respective Class or Classes of LIBOR Certificates. In addition,
the Trustee shall account for the LIBOR Certificateholders" rights to
receive payments of Basis Risk CarryForward Amounts (along with payments
of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts from the Swap Account) and the obligation to pay
Class IO Shortfalls as rights and obligations under a notional principal
contract between the Class X Certificateholders and the Holders of the
LIBOR Certificates.
(iv) Notwithstanding any provision contained in this Agreement,
the Trustee shall not be required to make any payments from the Excess
Reserve Fund Account except as expressly set forth in this Section
3.07(c) and Sections 4.02(a)(iii)(T) and (W).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Depositor shall cause to be
deposited into the Distribution Account on the Closing Date the Closing Date
Deposit Amount. The Trustee shall, promptly upon receipt, deposit in the
Distribution Account and shall retain therein the following:
(i) the aggregate amounts remitted by the Servicers to the
Trustee pursuant to Section 3.11;
(ii) any amounts deposited by the Servicers pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to
be deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 4.02.
(e) The Trustee may invest the funds in the Distribution Account,
in one or more Permitted Investments, in accordance with Section 3.12. Each
Servicer shall direct the Trustee to withdraw from the Distribution Account and
to remit to such Servicer no less than monthly, all income and gain realized
from the investment of the portion of funds deposited in the Distribution
Account by such Servicer (except during the Trustee Float Period). The Trustee
may withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein during the Trustee Float Period for its
own benefit.
(f) Each Servicer shall give notice to the Trustee, and the
Trustee shall give notice to each Rating Agency and the Depositor of any
proposed change of the location of the related Collection Account within a
reasonable period of time prior to any change thereof.
(g) In order to comply with laws, rules and regulations
applicable to banking institutions, including those relating to the funding of
terrorist activities and money laundering, the Trustee is required to obtain,
verify and record certain information relating to individuals and entities which
maintain a business relationship with the Trustee. Accordingly, each of the
parties agrees to provide to the Trustee upon its request from time to time such
party's complete name, address, tax identification number and such other
identifying information together with copies of such party's constituting
documentation, securities disclosure documentation and such other identifying
documentation as may be available for such party.
(h) On or prior to the Determination Date, the Custodian shall
deliver an invoice to the Trustee, setting forth the amount of the Custodian Fee
for the related Distribution Date. On each Distribution Date, the Trustee shall
remit the Custodian Fee to the Custodian from funds in the Distribution Account.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
related Servicer. The Subservicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the related Collection Account of the applicable
Servicer or remit such proceeds to such Servicer for deposit in the related
Collection Account of such Servicer not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, such Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) Each Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by such
Servicer. Each Tax Service Contract shall be assigned to the Trustee, or a
successor Servicer at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) above, each Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by such Servicer. To the extent the
related Mortgage provides for Escrow Payments, the related Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
Each Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day (two Business Days in
the case of Saxon) after such Servicer's receipt thereof, all collections from
the Mortgagors (or related advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums and comparable items for the account of
the Mortgagors ("Escrow Payments") collected on account of the Mortgage Loans
and shall thereafter deposit such Escrow Payments in the Escrow Accounts, in no
event more than two Business Days (one Business Day in the case of Saxon) after
the deposit of such funds in the clearing account, for the purpose of effecting
the payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from an Escrow Account may be made only to (i) effect
payment of taxes, assessments, hazard insurance premiums, and comparable items;
(ii) reimburse such Servicer (or a Subservicer to the extent provided in the
related Subservicing Agreement) out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as
may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of such Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; or (vii) recover amounts deposited in error. As part of its
servicing duties, each Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the applicable Servicer shall determine whether any such payments are made by
the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The applicable
Servicer assumes full responsibility for the payment of all such bills within
such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided, however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee,
each Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, each Servicer shall deposit or cause to be deposited
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day (two Business Days in the case of Saxon) after such
Servicer's receipt thereof, and shall thereafter deposit in the related
Collection Account, in no event more than two Business Days (one Business Day in
the case of Saxon) after the deposit of such funds into the clearing account, as
and when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent such Insurance Proceeds and Condemnation Proceeds are not to be
applied to the restoration of the related Mortgaged Property or released
to the related Mortgagor in accordance with the express requirements of
law or in accordance with Accepted Servicing Practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer
pursuant to the second paragraph of Section 3.13(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to
Section 3.07(a)) by such Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Trustee of the location of the related
Collection Account maintained by it when established and prior to any change
thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Trustee
(A) the Trustee Fee with respect to such Distribution Date and (B) all
Available Funds (without reduction for amounts owed to the Depositor,
the Trustee or the Custodian as provided for in the definition of
"Available Funds") in respect of the related Distribution Date together
with all amounts representing Prepayment Charges from the Mortgage Loans
received by the applicable Servicer during the related Prepayment
Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect
to each Mortgage Loan serviced by such Servicer or Subservicer, but only
to the extent of any Late Collections, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds or other amounts as may be
collected by such Servicer from a Mortgagor, or otherwise received with
respect to such Mortgage Loan (or the related REO Property) (such
Servicer's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(iv) to pay to such Servicer as servicing compensation (in
addition to the Servicing Fee) on each Remittance Date any interest or
investment income earned on funds deposited in its Collection Account
and to withdraw any net Prepayment Interest Excesses in accordance with
Section 3.21(b);
(v) to pay to the Sponsor, the Depositor or the applicable
Responsible Party, as applicable, with respect to each Mortgage Loan
that has previously been repurchased or replaced pursuant to this
Agreement, all amounts received thereon subsequent to the date of
purchase or substitution, as further described herein;
(vi) to reimburse such Servicer for (A) any P&I Advance or
Servicing Advance previously made which such Servicer has determined to
be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent
not recoverable from Liquidation Proceeds, Insurance Proceeds or other
amounts received with respect to the related Second Lien Mortgage Loan
under Section 3.11(a)(iii) (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(vii) to pay, or to reimburse such Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
serviced by such Servicer pursuant to Section 3.15 (such Servicer's
right for recovery or reimbursement has priority over the Trust);
(viii) to reimburse the such Servicer or the Depositor for
expenses incurred by or reimbursable to such Servicer or the Depositor,
as the case may be, pursuant to Section 6.03 (such Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(ix) to reimburse such Servicer or the Trustee, as the case may
be, for expenses reasonably incurred in respect of the breach or defect
giving rise to the repurchase obligation of any Responsible Party or the
Depositor, as applicable, that were included in the Repurchase Price of
the Mortgage Loan, including any expenses arising out of the enforcement
of the repurchase obligation, to the extent not otherwise paid pursuant
to the terms hereof (such Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection
Account and not required to be remitted to the Trustee on the Remittance
Date occurring in the month in which such amounts are deposited into
such Collection Account, to reimburse such Servicer for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement.
(b) Each Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each Servicer shall provide written notification (as set forth
in Section 4.01(d)) to the Trustee, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and
reconciling the applicable Collection Account in accordance with Accepted
Servicing Practices. Each Servicer shall act promptly to resolve any
discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts
and the Distribution Account. (a) Each Servicer may invest the funds in the
related Collection Account and the related Escrow Account (to the extent
permitted by law and the related Mortgage Loan documents) and the Trustee may
(but is not obligated to) invest funds in the Distribution Account during the
Trustee Float Period, and, with respect to the portion of funds in the
Distribution Account deposited by a Servicer, shall (except during the Trustee
Float Period) invest such funds in the Distribution Account at the direction of
such Servicer in the ▇▇▇▇▇ Fargo Advantage Prime Investments Money Market Fund
(for purposes of this Section 3.12, such Accounts are referred to as an
"Investment Account"), in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement; provided, however,
that the Trustee shall have no obligation to invest funds deposited into the
Distribution Account by a Servicer on the Remittance Date later than 10:00 a.m.
(Pacific Standard Time). If no investment instruction is given in a timely
manner, the Trustee shall hold the funds in the Distribution Account uninvested.
All such Permitted Investments shall be held to maturity, unless payable on
demand. Any investment of funds in an Investment Account (other than investments
made during the Trustee Float Period) shall be made in the name of the Trustee
in Permitted Investments selected by the applicable Servicer. The applicable
Servicer shall be entitled to income from (except with respect to investment
direction of funds and any income and gain realized on any investment in the
Distribution Account during the Trustee Float Period, which shall be for the
sole benefit of the Trustee) over each such related investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the applicable Servicer, or with respect to investments
during the Trustee Float Period, the Trustee or its agent (with a copy to the
Trustee or its agent if related to investment of funds in the Distribution
Account not during the Trustee Float Period), together with any document of
transfer necessary to transfer title to such investment to the applicable
Servicer, or with respect to investments during the Trustee Float Period, the
Trustee or its agent. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
applicable Servicer, or with respect to investments during the Trustee Float
Period, the Trustee may:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Such
Servicer shall deposit in its Collection Account or Escrow Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of the
portion of funds deposited in the Distribution Account by a Servicer and held by
the Trustee, shall be for the benefit of such Servicer (except for any income or
gain realized from the investment of funds on deposit in the Distribution
Account during the Trustee Float Period, which shall be for the benefit of the
Trustee) and shall be subject to the Trustee's withdrawal in the manner set
forth in Section 3.07(e). Each Servicer shall deposit in the Distribution
Account (except with respect to losses incurred during the Trustee Float Period)
the amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(d) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account (except that if any losses
are incurred from the investment of funds deposited in the Distribution Account
during the Trustee Float Period, the Trustee shall be responsible for
reimbursing the Trust for such loss immediately upon realization of such loss)
if made in accordance with this Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) Each Servicer shall cause to be maintained
for each Mortgage Loan serviced by such Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by such
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Trustee, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to the applicable laws and regulations as shall at any time be in force
and as shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the applicable Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that any Servicer shall obtain and maintain a
blanket policy with an insurer either (i) acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac or (ii) having a General Policy Rating of B:III or better from Best's (or
such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case such Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the related Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, each Servicer agrees to prepare and present, on behalf of itself and the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, unless such Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Each Servicer shall provide the Trustee upon
request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days" prior written notice to the Trustee. Each Servicer shall also cause each
Subservicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, such Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If a Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Trustee that any such substitution, modification
or assumption agreement has been completed and shall forward to the Trustee or
the Custodian, as applicable, the executed original of such substitution or
assumption agreement, which document shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Trustee, taking into
account, among other things, the timing of foreclosure proceedings; provided,
however, with respect to any Second Lien Mortgage Loan for which the related
first lien mortgage loan is not included in the Trust Fund, if, after such
Mortgage Loan becomes 180 days or more delinquent, the applicable Servicer
determines that a significant net recovery is not possible through foreclosure,
such Mortgage Loan may be charged off and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, a Servicer shall not be required
to expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to the Trustee, after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by such Servicer through Insurance Proceeds, Condemnation Proceeds
or Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 3.11. Each Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the applicable Servicer or any Subservicer for any related
unreimbursed Servicing Advances, pursuant to Section 3.11 or 3.17; second, to
reimburse the applicable Servicer for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances,
pursuant to Section 3.11; third, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the date of the
liquidation or REO Disposition, or to the Due Date prior to the Remittance Date
on which such amounts are to be distributed if not in connection with a
liquidation or REO Disposition; and fourth, as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to interest is less
than a full recovery thereof, that amount will be allocated as follows: first,
to unpaid Servicing Fees; and second, as interest at the Mortgage Rate (net of
the Servicing Fee Rate). The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the applicable Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
applicable Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to Section 3.17(f) with
respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, such Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the
applicable Servicer shall determine consistent with Accepted Servicing Practices
how such Servicer shall proceed with respect to the Mortgaged Property. In the
event (a) the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes and (b) the
applicable Servicer determines, consistent with Accepted Servicing Practices, to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, such
Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean-up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse
such Servicer, such Servicer shall be entitled to be reimbursed from amounts in
the related Collection Account pursuant to Section 3.11. In the event the
applicable Servicer determines not to proceed with foreclosure or acceptance of
a deed in lieu of foreclosure, such Servicer shall be reimbursed from general
collections for all Servicing Advances made with respect to the related
Mortgaged Property from the related Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination made by the
applicable Servicer pursuant to this paragraph or otherwise.
In the event Saxon or Countrywide Servicing elects to charge-off
a Second Lien Mortgage Loan 180 days or more delinquent pursuant to this Section
3.15, no Second Lien Mortgage Loan shall be characterized as a Liquidated
Mortgage Loan, unless the Depositor consents in writing to such characterization
after Saxon or Countrywide Servicing, as applicable, has provided the Depositor
with a combined equity analysis of such Second Lien Mortgage Loan and the
related first lien mortgage loan; provided, that if the Depositor has failed to
notify Saxon or Countrywide Servicing, as applicable, within 3 Business Days of
receipt of such combined equity analysis, then the Depositor shall be deemed to
have consented to such characterization. In the event Saxon or Countrywide
Servicing elects to charge off a Second Lien Mortgage Loan 180 days or more
delinquent pursuant to this Section 3.15, Saxon or Countrywide Servicing, as
applicable, shall notify the Trustee of such election, which notice may be
provided in a Servicer Remittance Report delivered pursuant to Section 4.03(d).
Section 3.16 Release of Mortgage Files. (a) Upon the payment in
full of any Mortgage Loan, the applicable Servicer will deposit all amounts
received in connection with such payment which are required to be deposited in
the related Collection Account pursuant to Section 3.10 and shall request
delivery to it of the Custodial File by submitting a Request for Release (in
writing or an electronic format acceptable to the Trustee or the Custodian, as
applicable) to the Trustee or the Custodian, as applicable. Upon receipt of such
Request for Release, the Trustee or the Custodian, as applicable, shall promptly
release the related Custodial File to such Servicer within five (5) Business
Days. No expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the related Collection Account or to
the Trustee.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee or the
Custodian, as applicable, shall, upon request of a Servicer and delivery to the
Trustee or the Custodian, as applicable, of a Request for Release in written or
electronic form, release the related Custodial File to such Servicer, and the
Trustee shall, at the direction of such Servicer, execute such documents as
shall be necessary to the prosecution of any such proceedings and such Servicer
shall retain the Mortgage File in trust for the benefit of the Trustee. Such
Request for Release shall obligate the applicable Servicer to return each and
every document previously requested from the Custodial File to the Trustee or
the Custodian, as applicable, when the need therefor by such Servicer no longer
exists, unless the Mortgage Loan has been charged off or liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
related Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non- judicially, and such Servicer has delivered to the Trustee or the
Custodian, as applicable, a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was charged
off or liquidated and that all amounts received or to be received in connection
with such liquidation that are required to be deposited into the related
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or the Custodian, as applicable, to the applicable Servicer or its
designee upon request therefor. Upon receipt of a Request for Release under this
Section 3.16, the Trustee or the Custodian, as applicable, shall deliver the
related Custodial File to the requesting Servicer; provided, however, that in
the event a Servicer has not previously received copies of the relevant Mortgage
Loan Documents necessary to service the related Mortgage Loan in accordance with
Accepted Servicing Practices, the applicable Responsible Party shall reimburse
the Trustee or the Custodian, as applicable, for any overnight courier charges
incurred for the requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the applicable Servicer copies of any court
pleadings, requests for trustee's sale or other documents reasonably necessary
to the foreclosure or trustee's sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity, or shall exercise and deliver to such Servicer a
power of attorney sufficient to authorize such Servicer to execute such
documents on its behalf. Each such certification shall include a request that
such pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
applicable Servicer shall cause the deed or certificate of sale to be issued in
the name of the Trustee, on behalf of the Certificateholders. Upon written
request by the applicable Servicer, the Trustee shall provide such Servicer with
a power of attorney prepared by such Servicer with respect to such REO Property
in the form of Exhibit R.
(b) Each Servicer shall manage, conserve, protect and operate
each related REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. Each Servicer, either itself or through an agent selected
by such Servicer, shall manage, conserve, protect and operate the REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. Each Servicer
shall attempt to sell the same (and may temporarily rent the same for a period
not greater than one year, except as otherwise provided below) on such terms and
conditions as such Servicer deems to be in the best interest of the Trustee. An
independent contractor, as the agent of Saxon, may be retained by Saxon to
perform functions relating to the title, management and disposition of REO
Property. Saxon shall be responsible for such independent contractor's fees and
expenses relating to a REO Property and shall be entitled to reimbursement
thereof from the Liquidation Proceeds with respect to the related Mortgaged
Property, as Servicing Advances or, if applicable, as Nonrecoverable Servicing
Advances. The Trustee shall have no obligations with respect to any REO
Dispositions.
(c) Each Servicer shall segregate and hold all funds collected and received in
connection with the operation of any REO Property separate and apart from its
own funds and general assets and shall deposit such funds in the related
Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following such Servicer's receipt thereof, in the related
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess
of the unpaid principal balance of the related Mortgage Loan, plus all unpaid
REO Imputed Interest thereon through the date of the REO Disposition, shall be
retained by the applicable Servicer as additional servicing compensation.
(g) Each Servicer shall use its reasonable best efforts, to sell,
or cause its Subservicer to sell, in accordance with Accepted Servicing
Practices, any REO Property serviced by such Servicer or Subservicer as soon as
possible, but in no event later than the conclusion of the third calendar year
beginning after the year of its acquisition by Pooling-Tier REMIC-1 unless (i)
such Servicer applies for and receives an extension of such period from the
Internal Revenue Service pursuant to the REMIC Provisions and Code Section
856(e)(3), in which event such REO Property shall be sold within the applicable
extension period, or (ii) such Servicer obtains for the Trustee an Opinion of
Counsel, addressed to the Depositor, the Trustee and such Servicer, to the
effect that the holding by Pooling-Tier REMIC-1 of such REO Property subsequent
to such period will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code or cause any Trust REMIC to
fail to qualify as a REMIC under the REMIC Provisions or comparable provisions
of relevant state laws at any time. Each Servicer shall manage, conserve,
protect and operate each REO Property serviced by such Servicer for the Trustee
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) or result in the receipt by Pooling-Tier
REMIC-1 of any "income from non permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
efforts to sell such REO Property, the applicable Servicer shall either itself
or through an agent selected by such Servicer protect and conserve such REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Trustee on behalf of the Certificateholders,
rent the same, or any part thereof, as such Servicer deems to be in the best
interest of the Trustee on behalf of the Certificateholders for the period prior
to the sale of such REO Property; provided, however, that any rent received or
accrued with respect to such REO Property qualifies as "rents from real
property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the applicable Servicer shall adjust the Mortgage
Rate on the related Adjustment Date and shall adjust the Scheduled Payment on
the related mortgage payment adjustment date, if applicable, in compliance with
the requirements of applicable law and the related Mortgage and Mortgage Note.
In the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each Servicer shall execute
and deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. Each Servicer shall promptly, upon written
request therefor, deliver to the Trustee such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by a Servicer or the receipt of
notice from the Trustee that a Servicer has failed to adjust a Mortgage Rate or
Scheduled Payment in accordance with the terms of the related Mortgage Note,
such Servicer shall deposit in the related Collection Account from its own funds
the amount of any interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
any Subservicer to provide, to the Depositor and the Trustee, and at the request
of the OTS or the FDIC and the examiners and supervisory agents thereof, access
to the documentation regarding the Mortgage Loans in its possession required by
applicable regulations of the OTS. Such access shall be afforded without charge,
but only upon five (5) Business Days prior written request and during normal
business hours at the offices of the applicable Servicer or any Subservicer.
Nothing in this Section shall derogate from the obligation of any such party to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of any such party to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee. Each Servicer shall account fully to the
Trustee for any funds received by such Servicer or which otherwise are collected
by such Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan serviced by such Servicer. All Mortgage
Files and funds collected or held by, or under the control of, a Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including, but not limited to,
any funds on deposit in its Collection Account, shall be held by such Servicer
for and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
Each Servicer also agrees that it shall not create, incur or subject any
Mortgage File or any funds that are deposited in any Collection Account, the
Distribution Account or any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that such Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to such Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each Servicer shall, with respect to each Mortgage Loan
serviced by it, be entitled to retain from deposits to its Collection Account
and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, each Servicer shall be entitled to recover unpaid Servicing Fees out
of related late collections to the extent permitted in Section 3.11. The right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of a Servicer's responsibilities and
obligations under this Agreement; provided, however, that each Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption
or modification fees, late payment charges, NSF fees, reconveyance fees and
other similar fees and charges (other than Prepayment Charges) shall be retained
by a Servicer only to the extent such fees or charges are received by such
Servicer. Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv)
to withdraw from the related Collection Account, and pursuant to Section
3.07(e), to direct the Trustee to withdraw from the Distribution Account and
remit to the applicable Servicer (except for monies invested during the Trustee
Float Period), as additional servicing compensation, interest or other income
earned on the related portions of deposits therein. Each Servicer shall also be
entitled, as additional servicing compensation, to interest or other income
earned on deposits in the related Escrow Account (to the extent permitted by law
and the related Mortgage Loan documents) in accordance with Section 3.12. Each
Servicer shall also be entitled to retain net Prepayment Interest Excesses (to
the extent not required to offset Prepayment Interest Shortfalls), but only to
the extent such amounts are received by such Servicer.
(c) Each Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including payment
of premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer
shall deliver or cause to be delivered, and shall cause each Subservicer engaged
by such Servicer to deliver or cause to be delivered to the Trustee (and the
Trustee shall deliver or otherwise make available to the Depositor and the
Rating Agencies) on or before March 5th (March 15th with respect to Saxon) of
each calendar year, commencing in 2008, an Officer's Certificate stating, as to
each signatory thereof, that (i) a review of the activities of such Servicer or
Subservicer, as applicable, during the preceding calendar year and of its
performance under this Agreement or the applicable Subservicing Agreement, as
the case may be, has been made under such officers' supervision, and (ii) to the
best of such officers' knowledge, based on such review, such Servicer or
Subservicer, as applicable, has fulfilled all of its obligations under this
Agreement or the applicable Subservicing Agreement, as the case may be, in all
material respects, throughout such year, or, if there has been a default in the
fulfillment of any such obligation in any material respect, specifying each such
default known to such officers and the nature and status thereof. Promptly after
receipt of each such Officer's Certificate, the Depositor shall review each such
Officer's Certificate and, if applicable, consult with the applicable Servicer
or Subservicer as to the nature of any defaults by the applicable Servicer or
any related Subservicer in the fulfillment of any of such Servicer's or any
related Subservicer's obligations. The obligations of each Servicer and each
Subservicer under this Section apply to each Servicer and each Subservicer that
serviced a Mortgage Loan during the applicable period, whether or not such
Servicer or such Subservicer is acting as a Servicer or a Subservicer at the
time such Officer's Certificate is required to be delivered. None of the
Servicers or Subservicer or any Servicing Function Participant shall be required
to cause the delivery of any Officer's Certificate required by this Section
until March 10th (March 15th with respect to Saxon) in any given year so long as
it has received written confirmation from the Depositor that a Form 10-K is not
required to be filed in respect of the Trust for the preceding calendar year.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants" Attestation Report.
(a) Not later than March 5th (March 15th with respect to Saxon)
of each calendar year commencing in 2008, each Servicer shall deliver, and shall
cause each Subservicer engaged by such Servicer to deliver, and the Trustee and
the Custodian, as applicable, shall deliver or otherwise make available, and
each Servicer and the Trustee and the Custodian shall cause each Subcontractor
utilized by such Servicer (or by any such Subservicer), the Trustee or the
Custodian, as applicable, and determined by such Servicer, the Trustee or the
Custodian, as applicable, pursuant to Section 3.02(e) to be "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB (in
each case, a "Servicing Function Participant"), to deliver, each at its own
expense, to the Trustee (and the Trustee shall make available to the Depositor
as part of the filing package forwarded to the Depositor for review and
verification) a report on an assessment of compliance with the Servicing
Criteria applicable to it that contains (A) a statement by such party of its
responsibility for assessing compliance with the Servicing Criteria applicable
to it, (B) a statement that such party used the Servicing Criteria to assess
compliance with the applicable Servicing Criteria, (C) such party's assessment
of compliance with the applicable Servicing Criteria as of and for the period
ending the end of the fiscal year covered by the Form 10-K required to be filed
pursuant to Section 8.12, including, if there has been any material instance of
noncompliance with the applicable Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a statement that a registered
public accounting firm has issued an attestation report on such Person's
assessment of compliance with the applicable Servicing Criteria as of and for
such period. Each such assessment of compliance report shall be addressed to the
Depositor and signed by an authorized officer of the applicable company, and
shall address each of the applicable Servicing Criteria set forth on Exhibit S
hereto, or as set forth in the notification furnished to the Depositor and the
Trustee pursuant to Section 3.23(c). The Servicers, the Trustee and the
Custodian hereby acknowledge and agree that their respective assessments of
compliance will cover the items identified on Exhibit S hereto as being covered
by such party. The parties to this Agreement acknowledge that where a particular
Servicing Criteria has multiple components, each party's assessment of
compliance (and related attestation of compliance) will relate only to those
components that are applicable to such party. Promptly after receipt of each
such report on assessment of compliance, (i) the Depositor shall review each
such report and, if applicable, consult with the applicable Servicer, the
Trustee or the Custodian as to the nature of any material instance of
noncompliance with the Servicing Criteria applicable to it (and each Subservicer
or Servicing Function Participant engaged or utilized by the applicable
Servicer, such Subservicer, the Trustee or the Custodian, as applicable), as the
case may be. None of the Servicers, the Trustee, the Custodian or any
Subservicer or any Servicing Function Participant shall be required to cause the
delivery of any such assessments until March 10th (March 15th with respect to
Saxon) in any given year, and the Custodian shall not be required to deliver any
such assessment, so long as it has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect of the Trust
for the preceding calendar year.
(b) Not later than March 5th (March 15th with respect to Saxon)
of each calendar year commencing in 2008, each Servicer, the Trustee and the
Custodian shall cause, and such Servicer shall cause each Subservicer engaged by
such Servicer and such Servicer, the Trustee and the Custodian shall cause each
Servicing Function Participant utilized by the Trustee, the Custodian or such
Servicer, as applicable (or by any Subservicer engaged by such Servicer) to
cause, each at its own expense, a registered public accounting firm (which may
also render other services to such party) and that is a member of the American
Institute of Certified Public Accountants to furnish a report to the Trustee
(and the Trustee shall make available to the Depositor as part of the filing
package forwarded to the Depositor for review and verification, with a copy to
the Rating Agencies), to the effect that (i) it has obtained a representation
regarding certain matters from the management of such Person, which includes an
assertion that such Person has complied with the Servicing Criteria applicable
to it pursuant to Section 3.23(a) and (ii) on the basis of an examination
conducted by such firm in accordance with standards for attestation engagements
issued or adopted by the PCAOB, that attests to and reports on such Person's
assessment of compliance with the Servicing Criteria applicable to it. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Each such related accountant's attestation report shall be made in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act. Such report must be available for general
use and not contain restricted use language. Promptly after receipt of each such
accountants' attestation report, the Depositor shall review the report and, if
applicable, consult with the applicable Servicer, the Trustee or the Custodian
as to the nature of any defaults by the applicable Servicer, the Trustee or the
Custodian (and each Subservicer or Servicing Function Participant engaged or
utilized by any Servicer, the Trustee or the Custodian, as applicable, or by any
Subservicer engaged by a Servicer), as the case may be, in the fulfillment of
any of the Servicer's, the Trustee's, the Custodian's, any of the Custodian's or
the applicable Subservicer's or Servicing Function Participant's obligations
hereunder or under any applicable sub-servicing agreement. None of the
Servicers, the Trustee, the Custodian or any Servicing Function Participant
shall be required to cause the delivery of any such attestation required by this
paragraph until March 10th (March 15th with respect to Saxon) in any given year,
and the Custodian shall not be required to deliver any such assessment, so long
as it has received written confirmation from the Depositor that a Form 10-K is
not required to be filed in respect of the Trust for the preceding calendar
year.
(c) Promptly upon written request from the Depositor, each
Servicer shall notify the Trustee and the Depositor as to the name of each
Subservicer engaged by such Servicer and each Servicing Function Participant
utilized by such Servicer and by each Subservicer engaged by such Servicer, but
only to the extent there has been a change in the information in such
notification from notices previously delivered and the Trustee shall notify the
Depositor as to the name of each Servicing Function Participant utilized by it,
and each such notice will specify what specific Servicing Criteria will be
addressed in the report on assessment of compliance prepared by such Subservicer
and Servicing Function Participant in each case, to the extent of any change
from the prior year's notice, if any. When a Servicer or the Trustee submits its
assessment pursuant to Section 3.23(a), such Servicer and the Trustee, as
applicable, will also at such time include the assessment (and related
attestation pursuant to Section 3.23(b)) of each Servicing Function Participant
utilized by it and by each Subservicer engaged by it.
(d) The obligations of the Trustee, the Custodian, each Servicer
or Subservicer under this Section apply to the Trustee, the Custodian, and each
Servicer and Subservicer that serviced a Mortgage Loan during the applicable
period, whether or not such Trustee, Custodian, Servicer or Subservicer is
acting as Trustee, Custodian, Servicer or Subservicer, as applicable, at the
time such assessment of compliance with Servicing Criteria and related
accountant's attestation is required to be delivered.
Section 3.24 Trustee to Act as Servicer. (a) Subject to Section
7.02, in the event that any Servicer shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of such predecessor servicer pursuant to Section 3.10 or any
acts or omissions of such predecessor servicer hereunder), (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of such predecessor servicer pursuant to Section 2.03
or (iv) deemed to have made any representations and warranties of such Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If any Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
such Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of such Servicer thereunder; and such Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The applicable Servicer shall, upon request of the Trustee,
but at the expense of such Servicer, deliver to the assuming party all documents
and records relating to each Subservicing Agreement (if any) to which it is
party and the Mortgage Loans then being serviced thereunder and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of such Subservicing Agreement to the
assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit to
the Trustee on each Remittance Date for deposit in the Distribution Account an
amount from such Servicer's own funds equal to the Compensating Interest payable
by such Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. (a) With
respect to each Mortgage Loan, each Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
Section 3.27 Optional Purchase of Delinquent Mortgage Loans.
Either (i) the applicable Servicer (or its assignee) or (ii) the Holders of a
majority (by Percentage Interest) of the Class X Certificates (or, if the Class
X Certificates have been pledged to secure any NIM Securities, the holders of a
majority of the equity interests in the related NIM Issuer) may, at its or their
option, purchase any 90+ Delinquent Mortgage Loans from the Trust by payment to
the Trust of a purchase price equal to 100% of the unpaid principal balance of
such Mortgage Loan plus accrued and unpaid interest on the related Mortgage Loan
at the applicable Mortgage Interest Rate, plus the amount of any unreimbursed
Servicing Advances made by the applicable Servicer; provided, however, that
neither the Depositor nor any Affiliate of the Depositor may exercise the
foregoing option, or have the power to direct either the Holders of the majority
(by Percentage Interest) of the Class X Certificates or of the equity interests
in the related NIM Issuer, as the case may be, to exercise the foregoing option,
under this Section 3.27).
Upon receipt of such purchase price, the applicable Servicer
shall provide to the Trustee or the Custodian, as applicable, a Request for
Release (with a copy to the Trustee in the case of the Custodian) and the
Trustee or the Custodian, as applicable, shall promptly release to such Servicer
(or its assignee) or such Class X Certificateholders (or their designee), as
applicable, the Mortgage File relating to the Mortgage Loan being repurchased.
No Person holding the foregoing option under this Section 3.27
shall use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made
by each Servicer for any Remittance Date shall equal, subject to Section
4.01(c), the sum of (i) the aggregate amount of Scheduled Payments (with each
interest portion thereof net of the related Servicing Fee), due during the Due
Period immediately preceding such Remittance Date in respect of the Mortgage
Loans serviced by such Servicer, which Scheduled Payments were not received as
of the close of business on the related Determination Date (provided, however,
that with respect to any Balloon Loan that is delinquent on its maturity date,
the applicable Servicer will not be required to advance the principal portion of
the related balloon payment but will be required to continue to make P&I
Advances in accordance with this Section 4.01(a) with respect to such Balloon
Loan in an amount equal to the assumed scheduled interest that would otherwise
be due based on the original amortization schedule for such Balloon Loan (with
interest at the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO
Property serviced by such Servicer, which REO Property was acquired during or
prior to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, each Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties serviced by such Servicer for the related Remittance Date either
(i) from its own funds or (ii) from the related Collection Account, to the
extent of funds held therein for future distribution (in which case, such
Servicer will cause to be made an appropriate entry in the records of the
related Collection Account that Amounts Held for Future Distribution have been,
as permitted by this Section 4.01, used by such Servicer in discharge of any
such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by such Servicer with
respect to such Mortgage Loans and REO Properties. Any Amounts Held for Future
Distribution and so used shall be appropriately reflected in such Servicer's
records and replaced by such Servicer by deposit in the related Collection
Account on or before any future Remittance Date to the extent required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by any
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall allocate from amounts then on deposit in the
Distribution Account in the following order of priority and to the extent of the
Available Funds and, on such Distribution Date, shall make distributions on the
Certificates in accordance with such allocation:
(i) to the holders of each Class of LIBOR Certificates and to the
Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap
Payments, and (y) any Swap Termination Payment, other than a
Defaulted Swap Termination Payment, owed to the Swap Provider
with respect to such Distribution Date (to the extent a
Replacement Swap Provider Payment has not been made to the Swap
Account);
(B) from the Interest Remittance Amounts for both the
Loan Groups, to the Class A Certificates, the related Accrued
Certificate Interest Distribution Amounts and any related Unpaid
Interest Amounts for such Distribution Date, pursuant to the
allocation set forth in clauses (iv) and (v) of this Section
4.02(a);
(C) from any remaining Interest Remittance Amounts, to
the Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to
the Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to
the Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to
the Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to
the Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to
the Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to
the Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to
the Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(K) from any remaining Interest Remittance Amounts, to
the Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date
or (2) with respect to which a Trigger Event is in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distributions of principal as set forth below, from amounts
remaining on deposit in the Distribution Account after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(1) to the Class A Certificates, allocated as described
in Section 4.02(c), until the respective Class Certificate
Balances thereof are reduced to zero; and
(2) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class
B-3 Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown Date
and (2) as long as a Trigger Event is not in effect, to the holders of
the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are
reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and to the Class M-1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in clause
(ii)(B)(c) above and (y) the Class M-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above and to the Class M-3 Certificates in clause
(ii)(B)(d) above and (y) the Class M-4 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above and to the Class M-4 Certificates in clause
(ii)(B)(e) above and (y) the Class M-5 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(7) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above and to the Class M-5 Certificates in clause
(ii)(B)(f) above and (y) the Class M-6 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(8) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above and to the Class M-6 Certificates in clause
(ii)(B)(g) above and (y) the Class B-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(9) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above, to the Class M-6 Certificates in clause
(ii)(B)(g) above and to the Class B-1 Certificates in clause
(ii)(B)(h) above and (y) the Class B-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero; and
(10) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above, to the Class M-6 Certificates in clause
(ii)(B)(g) above, to the Class B-1 Certificates in clause
(ii)(B)(h) above and to the Class B-2 Certificates in clause
(ii)(B)(i) above and (y) the Class B-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest
Amount for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest
Amount for
such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest
Amount for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest
Amount for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized
Loss Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest
Amount for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized
Loss Amount for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest
Amount for such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized
Loss Amount for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest
Amount for such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest
Amount for such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest
Amount for such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(T) from any Interest Rate Cap Payment on deposit in the
Excess Reserve Fund Account with respect to that Distribution
Date, an amount equal to any unpaid Basis Risk CarryForward
Amount with respect to the LIBOR Certificates for that
Distribution Date, allocated (a) first, among those Classes of
Certificates, pro rata, based upon their respective Class
Certificate Balances and (b) second, any remaining amounts to
those Classes of Certificates, pro rata, based on any Basis Risk
CarryForward Amounts remaining unpaid, in order to reimburse such
unpaid amounts;
(U) from funds on deposit in the Excess Reserve Fund
Account (not including any Interest Rate Cap Payment included in
that account) with respect to such Distribution Date, an amount
equal to any remaining Basis Risk CarryForward Amount with
respect to the LIBOR Certificates for such Distribution Date,
allocated to the LIBOR Certificates in the same order and
priority in which the Accrued Certificate Interest Distribution
Amount is allocated among such Classes of Certificates, with the
allocation to the Class A Certificates being (a) first, among the
Class A Certificates, pro rata, based on their respective Class
Certificate Balances and (b) second, any remaining amounts to the
Class A Certificates, pro rata, based on any Basis Risk
CarryForward Amounts remaining unpaid, in order to reimburse such
unpaid amounts;
(V) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(W) to the Class X Certificates, the remainder of the
Class X Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(V) (including any remaining Interest Rate Cap
Payments on deposit in such account);
(X) to the Class R Certificates, any remaining amount in
the Trust REMICs, in respect of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier
REMIC; and
(Y) to the Class RX Certificates, any remaining amount,
in respect of the Class X REMIC.
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will
be allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2a, Class A-2b,
Class A-2c and Class A-2d Certificates, pro rata (based on the
amounts distributable or payable under Section 4.02(a)(i)(B) to
such Classes of Certificates), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amount for the Class
A-2a, Class A-2b, Class A-2c and Class A-2d Certificates,
respectively, to the extent not otherwise previously paid from
the Interest Remittance Amount attributable to Group II Mortgage
Loans.
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will
be allocated:
(1) first, concurrently, to the Class A-2a, Class A-2b,
Class A-2c and Class A-2d Certificates, pro rata (based on the
amounts distributable or payable under Section 4.02(a)(i)(B) to
such Classes of Certificates), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amount for the Class
A-2a, Class A-2b, Class A-2c and Class A-2d Certificates,
respectively; and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates, to the extent not
otherwise previously paid from the Interest Remittance Amount
attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing
allocation rules, any Class of Class A Certificates does not receive in full the
related Accrued Certificate Interest Distribution Amount or the related Unpaid
Interest Amount, if any, then such shortfall will be allocated to the Holders of
such Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
(d) Any principal distributions allocated to the Group II Class A
Certificates shall be allocated sequentially, to the Class A-2a Certificates,
until their Class Certificate Balance has been reduced to zero, then to the
Class A-2b Certificates, until their Class Certificate Balance has been reduced
to zero, then to the Class A-2c Certificates, until their Class Certificate
Balance has been reduced to zero, and then to the Class A-2d Certificates, until
their Class Certificate Balance has been reduced to zero. Notwithstanding the
foregoing, on and after the Distribution Date on which the aggregate Class
Certificate Balances of the Subordinated Certificates and the principal balance
of the Class X Certificates have been reduced to zero, any principal
distributions allocated to the Group II Class A Certificates shall be allocated
pro rata among the Classes of Group II Class A Certificates, based on their
respective Class Certificate Balances, until their respective Class Certificate
Balances have been reduced to zero.
(e) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee as a reduction in the following order:
(1) first, to the portion of the Class X Distributable
Amount allocable to interest; and
(2) second, pro rata, as a reduction of the Accrued
Certificate Interest Distribution Amount for the Class A, Class M
and Class B Certificates, based on the amount of interest to
which such Classes would otherwise be entitled.
(f) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments made or received under the Interest Rate Swap Agreement and the
Interest Rate Cap Agreement and payments to Certificateholders of interest or
original issue discount that the Trustee reasonably believes are applicable
under the Code. The consent of Certificateholders shall not be required for such
withholding. If the Trustee does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Trustee shall indicate the amount withheld
to such Certificateholders. Such amounts shall be deemed to have been
distributed to such Certificateholders for all purposes of this Agreement.
(g) For purposes of this Agreement, any Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments) shall be
allocated by the Trustee between Loan Groups based on the respective aggregate
Stated Principal Balance of the Mortgage Loans in each Loan Group.
Section 4.03 Monthly Statements to Certificateholders. (a) Not
later than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicers, the Depositor, and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date and
the LIBOR Determination Date for such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal, the
Principal Remittance Amount (separately identifying the components
thereof) and the Principal Distribution Amount (separately identifying
the components thereof);
(iv) the amount of Available Funds allocable to interest and each
Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class
included in such distribution and any remaining Unpaid Interest Amounts
after giving effect to such distribution, any Basis Risk CarryForward
Amount for each Class and the amount of such Basis Risk CarryForward
Amount covered by withdrawals from the Excess Reserve Fund Account on
such Distribution Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation of the shortfall as between
principal and interest, including any Basis Risk CarryForward Amount not
covered by amounts in the Excess Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(viii) the Pool Stated Principal Balance for the Distribution
Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicers and the Trustee (stated separately and in the aggregate) with
respect to such Distribution Date;
(x) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(xi) the amount of P&I Advances included in the distribution on
such Distribution Date reported by the Servicers (and the Trustee as
successor Servicer and any other successor Servicer, if applicable) as
of the close of business on the Determination Date immediately preceding
such Distribution Date;
(xii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(xiii) with respect to any Mortgage Loans that became REO
Properties during the preceding calendar month, the aggregate number of
such Mortgage Loans and the aggregate Stated Principal Balance of such
Mortgage Loans as of the close of business on the last Business Day of
the immediately preceding month;
(xiv) the total number and outstanding principal balance of any
REO Properties (and market value, if available) as of the close of
business on the last Business Day of the immediately preceding month;
(xv) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event);
(xvi) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xvii) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xviii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders
with respect to Unpaid Interest Amounts, Unpaid Realized Loss Amounts or
Basis Risk CarryForward Amounts;
(xix) the amount of any Net Swap Payments, Net Swap Receipts,
Swap Termination Payments or Defaulted Swap Termination Payments;
(xx) the calculations of LIBOR and Swap LIBOR;
(xxi) the Subordinated Amount and Specified Subordinated Amount;
(xxii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicers;
(xxiii) the Cumulative Loss Percentage and the aggregate amount
of Realized Losses used to calculate the Cumulative Loss Percentage;
(xxiv) the amount distributed on the Class X Certificates;
(xxv) the amount of any Subsequent Recoveries for such
Distribution Date;
(xxvi) the number of Mortgage Loans at the end of the applicable
reporting period, the pool factor (being the Stated Principal Balance of
the Mortgage Loans for the related Distribution Date divided by the
Cut-off Date Principal Balance), and the weighted average interest rate,
and weighted average remaining term; and
(xxvii) the Interest Rate Cap Payment, if any, for such
Distribution Date.
In addition, each Form 10-D prepared and filed by the Trustee
pursuant to Section 8.12 shall include the following information with
respect to the related distribution:
(i) material breaches of Mortgage Loan representations and
warranties under this Agreement of which the Trustee has actual
knowledge or has received written notice; and
(ii) material breaches of any covenants under this Agreement of
which the Trustee has actual knowledge or received written notice;
provided that, if the Trustee receives written notice of the events described in
(i) and/or (ii) above from any Servicer, such Servicer shall be responsible for
providing information to the Trustee for inclusion in the applicable Form 10-D.
(b) The Trustee's responsibility for providing the above
statement to the Certificateholders, each Rating Agency and the Depositor is
limited, if applicable, to the availability, timeliness and accuracy of the
information derived from the Servicers and the Swap Provider. The Trustee shall
make available the above statement via the Trustee's internet website. The
Trustee's website will initially be located at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇ and
assistance in using the website can be obtained by calling the Trustee's
customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the
website are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The Trustee may change
the way the monthly statements to Certificateholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trustee shall provide timely and adequate notification to all
above parties regarding any such changes. As a condition to access the Trustee's
internet website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee will not be liable for the dissemination of information
in accordance with this Agreement.
The Trustee shall make available to each Analytics Company,
either electronically or via the Trustee's internet website, each statement to
Certificateholders prepared pursuant to Section 4.03(a). The Trustee (and the
applicable Servicer, if such discrepancy results from or arises out of any
information provided by the applicable Servicer pursuant to this Agreement)
shall cooperate in good faith with the Depositor to reconcile any discrepancies
in such statements, and the Trustee shall provide any corrections to such
statements to each Analytics Company as soon as reasonably practicable after the
related Distribution Date.
The Trustee will also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement to Certificateholders
and may affix thereto any disclaimer it deems appropriate in its reasonable
discretion (without suggesting liability on the part of any other party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) The Trustee shall be entitled to rely on information provided
by third parties for purposes of preparing the foregoing report, but shall not
be responsible for the accuracy of such information.
(e) No later than the 18th day of each month, or if such date is
not a Business Day, the next succeeding Business Day (but in no event later than
the 20th day of each month), each Servicer shall furnish to the Trustee, a
monthly remittance advice statement (the "Servicer Remittance Report")
containing the data fields set forth on Exhibit X attached hereto in a format
mutually agreed upon by the applicable Servicer and the Trustee and such
information as shall be reasonably requested (i) by the Depositor to enable the
Depositor to disclose "static pool information", as required by Item 1105 of
Regulation AB, with respect to the Mortgage Loans, and (ii) by the Trustee to
enable the Trustee to provide the reports required by Section 4.03(a) as to the
accompanying remittance and applicable Due Period and Prepayment Period to which
such remittance relates.
The Servicer Remittance Report shall, at a minimum, document, on
such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such
Servicer during the current distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to such Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days and 91 or
more days; (b) as to which foreclosure or bankruptcy proceedings of the
related mortgagor have commenced; and (c) as to which REO Property has
been acquired.
The Trustee shall promptly make available the Servicer Remittance
Report and the related supplemental statement to the Depositor.
(f) [Reserved].
(g) For all purposes of this Agreement, with respect to any
Mortgage Loan, delinquencies shall be determined by the Trustee from information
provided by the Servicers and reported by the Trustee based on the "OTS"
methodology for determining delinquencies on mortgage loans similar to the
Mortgage Loans. By way of example, a Mortgage Loan would be delinquent with
respect to a Scheduled Payment due on a Due Date if such Scheduled Payment is
not made by the close of business on the Mortgage Loan's next succeeding Due
Date, and a Mortgage Loan would be more than 30-days Delinquent with respect to
such Scheduled Payment if such Scheduled Payment were not made by the close of
business on the Mortgage Loan's second succeeding Due Date. Each Servicer hereby
represents and warrants to the Depositor that such Servicer is not subject to
any delinquency recognition policy established by the primary safety and
soundness regulator, if any, of such Servicer, that is more restrictive than the
foregoing delinquency recognition policy.
Section 4.04 Certain Matters Relating to the Determination of
LIBOR. LIBOR shall be calculated by the Trustee in accordance with the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full, the
Trustee shall at all times retain at least four Reference Banks for the purpose
of determining LIBOR with respect to each LIBOR Determination Date. The Trustee
initially shall designate the Reference Banks (after consultation with the
Depositor). Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Trustee and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the Trustee
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Trustee shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR or (ii) any inability to retain at least four Reference Banks which is
caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are Outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Trustee to the most
junior Class of Subordinated Certificates then Outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Trustee shall
establish and maintain in its name, a separate non-interest bearing trust
account for the benefit of the holders of the Certificates (the "Swap Account")
as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
On the Business Day immediately preceding each Distribution Date,
Swap Termination Payments (including, without duplication, Replacement Swap
Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap
Receipts and, without duplication, amounts distributable on the Class IO
Interest for that Distribution Date will be deposited into the Swap Account.
Funds in the Swap Account will be distributed in the following order of
priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to
the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, owed to the Swap Provider for
that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent
unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and,
in the same manner and order of priority as set forth, in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to restore the Subordinated Amount to the Specified
Subordinated Amount for prior or current Realized Losses that have not
yet been reimbursed, after giving effect to payments and distributions
from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro
rata, based on their Class Certificate Balances for such Distribution
Date, up to the Swap Payment Allocation for each Class of Class A
Certificates and to the extent unpaid from Available Funds (including
Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay Basis Risk CarryForward Amounts, and, without
duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment
Allocation for each Class of Class M and Class B Certificates and to the
extent unpaid from Available Funds (including Basis Risk Payments on
deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any remaining unpaid Basis Risk
CarryForward Amounts, and, without duplication, Upper-Tier CarryForward
Amounts, pro rata, based on their respective remaining unpaid Basis Risk
CarryForward Amounts or, without duplication, Upper-Tier CarryForward
Amounts after the allocation of payments as set forth in clauses (vi)
and (vii) above;
(ix) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay any Unpaid Realized Loss Amount, to the extent
unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap
Termination Payment owed to the Swap Provider for that Distribution
Date; and
(xi) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding the foregoing, in the event that the Trust
receives a Swap Termination Payment, the Trustee shall use the Swap Termination
Payment to enter into a replacement interest rate swap agreement as directed by
the Depositor with a successor swap provider (or its guarantor) meeting the
ratings requirements set forth in the Interest Rate Swap Agreement being
terminated on the same remaining terms as those in the Interest Rate Swap
Agreement being terminated, so long as the Swap Termination Payment is
sufficient to obtain such replacement interest rate swap agreement. In the event
that the Trust receives a Swap Termination Payment and a successor swap provider
cannot be obtained, then the Trustee shall deposit the Swap Termination Payment
into the reserve account that is a sub-account of the Swap Account. On each
subsequent Distribution Date (so long as funds are available in the reserve
account), the Trustee shall withdraw from the reserve account and deposit into
the Swap Account an amount equal to the amount of any Net Swap Receipt due the
Trust (calculated in accordance with the terms of the original Interest Rate
Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of
determining the distributions from the Swap Account. The remaining amount in the
reserve account will remain in that account and will not be treated as a Swap
Termination Payment for purposes of determining the distributions from the Swap
Account until the final Distribution Date. In no event shall the Trustee be
responsible for the selection of any successor or replacement Swap Provider or
any shortfalls caused by a failure to enter into a replacement interest rate
swap agreement.
Upon termination of the Trust, any amounts remaining in the Swap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
In the event that the Trust enters into a replacement interest
rate swap agreement and the Trust is entitled to receive a Replacement Swap
Provider Payment from a replacement swap provider, the Trustee shall direct the
replacement swap provider (or its guarantor) to make such Replacement Swap
Provider Payment to the Swap Account. Notwithstanding the foregoing, any
Replacement Swap Provider Payment shall be made from the Swap Account to the
Swap Provider immediately upon receipt of such payment, regardless of whether
the date of receipt thereof is a Distribution Date. To the extent that any
Replacement Swap Provider Payment is made to an account other than the Swap
Account, then, notwithstanding anything to the contrary contained in this
Agreement, any Replacement Swap Provider Payment shall be paid to the Swap
Provider immediately upon receipt of such Replacement Swap Provider Payment by
the Trust, regardless of whether the date of receipt thereof is a Distribution
Date and without regard to anything to the contrary contained in this Agreement.
For the avoidance of doubt, the parties agree that the Swap Provider shall have
first priority to any Replacement Swap Provider Payment over the payment by the
Trust to Certificateholders, any Servicer, the Custodian, any Responsible Party,
the Trustee or any other Person. However, to the extent any Replacement Swap
Provider Payment received from a replacement swap provider and paid to the Swap
Provider being replaced is less than the full amount of a Swap Termination
Payment owed to the Swap Provider, any remaining amount of the Swap Termination
Payment shall be paid to the Swap Provider on subsequent Distribution Dates in
accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap
Provider Payment is paid to the Swap Provider on a Distribution Date, in which
case such remaining amounts will be paid on such Distribution Date).
The Trustee shall account for the Swap Account as an asset of the
Grantor Trust and not as an asset of any Trust REMIC created pursuant to this
Agreement. The beneficial owners of the Swap Account are the Class X
Certificateholders. For federal income tax purposes, Net Swap Payments and Swap
Termination Payments (without duplication of previously paid Replacement Swap
Provider Payments) payable to the Swap Provider shall be deemed to be paid to
the Swap Account from the Class X REMIC, first, by the Holder of the Class X
Certificates (in respect of the Class IO Interest and, if applicable, the Class
X Interest) and second, other than any Defaulted Swap Termination Payment, from
the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR
Certificates (in respect of Class IO Shortfalls) as and to the extent provided
in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Trustee to the LIBOR
Certificateholders shall be accounted for by the Trustee, for federal income tax
purposes, as amounts paid first to the Holders of the Class X Certificates in
respect of the Class X Interest and (to the extent remaining after payments to
the Swap Provider) the Class IO Interest, and then to the respective Class or
Classes of LIBOR Certificates. In addition, the Trustee shall account for the
rights of Holders of each Class of LIBOR Certificates to receive payments of
Basis Risk CarryForward Amounts and, without duplication, Upper-Tier
CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward
Amounts payable from the Excess Reserve Fund Account), subject to the obligation
to pay Class IO Shortfalls, as rights and obligations under a separate limited
recourse notional principal contract between the Class X Certificateholders and
Holders of each such Class.
The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the Swap
Account for all federal income tax purposes, and shall be taxable on all income
earned thereon.
With respect to the failure of the Swap Provider to perform any
of its obligations under the Interest Rate Swap Agreement, the breach by the
Swap Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Schedule to the Interest
Rate Swap Agreement, the Trustee shall send any notices and make any demands, on
behalf of the Trust as are required under the Interest Rate Swap Agreement. To
the extent that the Swap Provider fails to make any payment required under the
terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall
immediately demand that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the guarantor of the Swap Provider's
obligations under the guarantee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ relating to the Interest Rate
Swap Agreement, make any and all payments then required to be made by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ pursuant to such guarantee. In addition, in the event a "Delivery
Amount" (as defined in the Interest Rate Swap Agreement) payable but not
delivered by the Swap Provider as required by the Interest Rate Swap Agreement,
the Trustee shall deliver a notice of failure to transfer collateral on the next
Business Day following such failure, in accordance with the terms of the
Schedule to the Interest Rate Swap Agreement. The Trustee shall cause any
replacement swap provider to provide a copy of the related replacement interest
rate swap agreement to the Trustee and the Depositor.
If a Responsible Officer of the Trustee receives written notice
that the Swap Provider or its guarantor has been downgraded below the levels set
forth in Part 5(f) of the Interest Rate Swap Agreement and the posting of
collateral is required in accordance with the terms of Part 5(f) of the Interest
Rate Swap Agreement, the Trustee shall demand that the Swap Provider or its
guarantor post collateral in accordance with the terms of Part 5(f) of the
Interest Rate Swap Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
and Class P Certificates in the name of the Depositor or its designee. On a date
as to which the Depositor notifies the Trustee, the Trustee shall transfer the
Class X and Class P Certificates in the name of the NIM Trustee, or such other
name or names as the Depositor shall request, and to deliver the Class X and
Class P Certificates to the NIM Trustee or to such other Person or Persons as
the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such Holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of this Section 5.02, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to (i) the
transfer of the Class X, Class P or Residual Certificates to the Depositor or an
Affiliate of the Depositor or, in the case of the Class RX Certificates, the
initial transfer by an Affiliate of the Depositor, (ii) the transfer of the
Class X or Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
transfer of the Class X or Class P Certificates from the NIM Issuer or the NIM
Trustee to the Depositor or an Affiliate of the Depositor, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Trustee in writing the
facts surrounding the transfer in substantially the form set forth in Exhibit H
(the "Transferor Certificate") and either (i) there shall be delivered to the
Trustee a letter in substantially the form of Exhibit I (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made without registration under
the Securities Act. In the event that a transfer of a Private Certificate which
is a Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicers shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and each Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of Class X or Class P
Certificates or the Residual Certificates to the Depositor or an Affiliate of
the Depositor or, in the case of the Class RX Certificates, the initial transfer
by an Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, no transfer of an ERISA-Restricted
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal, state
or local law ("Similar Law") materially similar to the foregoing provisions of
ERISA or the Code, nor a Person acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such transfer, or
(ii) in the case of an ERISA-Restricted Certificate other than a Residual
Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee, which Opinion of Counsel shall not be an expense of the Servicers, the
Depositor, the Trustee or the Trust Fund, addressed to the Trustee, to the
effect that the purchase or holding of such ERISA-Restricted Certificate will
not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Depositor, the Trustee or the Servicers to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Physical Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of the Investor-Based
Exemptions.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) Other than in the case of the Depositor or an Affiliate of
the Depositor that is a Permitted Transferee, no Ownership Interest in a
Residual Certificate may be registered on the Closing Date or thereafter
transferred, and the Trustee shall not register the Transfer of any
Residual Certificate unless, in addition to the certificates required to
be delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached hereto
as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Residual Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Residual
Certificate and (C) not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge that
such Person is a Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Residual Certificate in violation of the provisions
of this Section 5.02(c), then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive to the
date of registration of Transfer of such Residual Certificate. The
Trustee shall not have any liability to any Person for any registration
of Transfer of a Residual Certificate that is in fact not permitted by
Section 5.02(b) and this Section 5.02(c) or for making any payments due
on such Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related
Transfer Affidavit, Transferor Certificate and the Rule 144A Letter. The
Trustee shall be entitled but not obligated to recover from any Holder
of a Residual Certificate that was in fact a Non-Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became a
Non-Permitted Transferee, all payments made on such Residual Certificate
at and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code
as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund or the Trustee, to the
effect that the elimination of such restrictions will not cause any Trust REMIC
hereunder to fail to qualify as a REMIC at any time that the Certificates are
Outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement which, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is a Non-Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by a
Person that is a Non-Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall
at all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository (and the Trustee consents) of its intent to terminate the book-entry
system through the Depository, and, upon receipt of notice of such intent from
the Depository, the Depository Participants holding beneficial interests in the
Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the Servicers, the
Depositor or the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
(f) No transfer of any Private Certificate presented or
surrendered for registration of transfer or exchange shall be made unless the
transfer or exchange is accompanied by a written instrument of transfer and
accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments)
or W-9 duly executed by the Certificateholder or its representative or nominee
duly authorized in writing. The Trustee shall promptly forward any such IRS Form
(other than with respect to the Residual Certificates) received to the Swap
Provider and the Cap Provider located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: NY ISD SPV Team, Fax: (▇▇▇) ▇▇▇-▇▇▇▇. Each such Private
Certificateholder by its purchase of such Private Certificate is deemed to
consent to any IRS Form being so forwarded. The Trustee shall not be liable for
the completeness, accuracy, content or truthfulness of any such tax
certification provided to it.
(g) Each Certificate presented or surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Trustee in accordance with its customary practice. No service charge shall be
made for any registration of transfer or exchange of Private Certificates, but
the Trustee may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicers and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicers, the Trustee,
the Depositor, and any agent of a Servicer, the Depositor or the Trustee may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the Servicers, the
Trustee, the Depositor, or any agent of a Servicer, the Depositor or the Trustee
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, such Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in the United States where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates its
offices located at ▇▇▇▇▇ Fargo Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - MSAC
2007-HE4, for such purposes. The Trustee shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a
Servicer. The Depositor and each of the Servicers will each keep in full effect
its existence, rights and franchises as a corporation or federally chartered
savings bank, as the case may be, under the laws of the United States or under
the laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged
or consolidated, or any Person resulting from any merger or consolidation to
which the Depositor or a Servicer, shall be a party, or any person succeeding to
the business of the Depositor or a Servicer (including through the acquisition
of substantially all of the assets of a Servicer), shall be the successor of the
Depositor or such Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (except that any person
succeeding to the business of a Servicer shall be required to assume all of such
Servicer's future obligations under this Agreement and satisfy all of the
requirements of this Agreement to be a successor servicer); provided, however,
that the successor or surviving Person to such Servicer shall be qualified to
service mortgage loans on behalf of, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. As a condition
to the succession to any Servicer under this Agreement by any Person (i) into
which a Servicer may be merged or consolidated or whom succeeds to the business
of a Servicer, or (ii) which may be appointed as a successor to a Servicer, such
Servicer shall provide to the Depositor, at least 15 calendar days prior to the
effective date of such succession or appointment, (x) written notice to the
Depositor of such succession or appointment and (y) in writing to the Depositor
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary to enable the Trustee, pursuant to Section
8.12(g), to accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are then
required to be filed under the Exchange Act).
Section 6.03 Limitation on Liability of the Depositor, the
Servicers and Others. Neither the Depositor, the Servicers nor any of their
respective directors, officers, employees or agents shall be under any liability
to the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Servicers or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicers or any such Person from any liability which would otherwise be imposed
by reasons of willful misfeasance, bad faith or negligence (or gross negligence
in the case of the Depositor) in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, each
Servicer and any director, officer, employee or agent of the Depositor and each
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and its Affiliates, the Sponsor, each Servicer and any director,
officer, employee or agent of the Depositor, the Sponsor or each Servicer shall
be indemnified by the Trust Fund and held harmless against any loss, liability
or expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates other than any loss, liability or
expense related to any specific Mortgage Loan or Mortgage Loans (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor any
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and which
in its opinion may involve it in any expense or liability; provided, however,
that each of the Depositor and each Servicer may in its discretion undertake any
such action (or direct the Trustee to undertake such actions pursuant to Section
2.03 for the benefit of the Certificateholders) that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Depositor and the applicable Servicer shall be entitled to be reimbursed
therefor out of the applicable Collection Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject to
Sections 7.01 and 10.07, no Servicer shall assign this Agreement or resign from
the obligations and duties hereby imposed on it except by mutual consent of the
applicable Servicer, the Depositor and the Trustee or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by such Servicer without the incurrence of
unreasonable expense. Any such determination permitting the resignation of a
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Depositor and the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Depositor and the Trustee. No such resignation shall
become effective until a successor shall have assumed such Servicer's
responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its sole discretion
has consented, which consent shall not be unreasonably withheld, (ii) the Rating
Agencies' ratings of the Certificates in effect immediately prior to such action
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies) and (iii) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided, further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Trustee, the Custodian, the Depositor, the other Servicers hereunder,
any sub-servicer, the successor Servicer and each Certificateholder harmless
against any and all claims, losses, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments, and any other costs, fees and expenses
that such party may sustain in any way related to such assignment except with
respect to a successor Servicer's failure to comply with the terms of this
Agreement. No assignment by such Servicer shall become effective until a
successor Servicer acceptable to the Depositor and the Trustee shall have
assumed in writing such Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement. Any such assignment shall not relieve the
applicable Servicer of responsibility for any of the obligations specified
herein except to the extent that such responsibilities have been expressly
assumed by the successor Servicer.
Section 6.05 Additional Indemnification by the Servicers;
Third-Party Claims. (a) Each Servicer, severally and not jointly, shall
indemnify the applicable Responsible Party, the Depositor, the Sponsor, the
Trustee and any director, officer, employee or agent of the Depositor, the
Sponsor or the Trustee and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to (i) any breach by such Servicer of
any of its representations and warranties referred to in Section 2.03(a), (ii)
any error in any tax or information return prepared by such Servicer or (iii)
the failure of such Servicer to perform its duties and service the Mortgage
Loans in compliance with the terms of this Agreement (including, without
limitation, the failure to deliver accurate and complete information on a timely
basis pursuant to Section 4.03(e). The applicable Servicer immediately shall
notify the Depositor and the Trustee if such claim is made by a third-party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Sponsor, the applicable Responsible Party or
the Trustee in respect of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, each Servicer shall indemnify the Depositor, the Sponsor, the Trustee
and any director, officer, employee or agent of the Depositor, the Sponsor or
the Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any failure by such Servicer or any Subservicer
engaged by such Servicer or any Subcontractor utilized by such Servicer to
deliver any information, report, certification or accountants' letter when and
as required under Sections 3.22, 3.23, 6.02 or 8.12, including without
limitation any failure by such Servicer to identify pursuant to Section 3.02(e)
any Subcontractor "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then such Servicer shall contribute to the amount
paid or payable to the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and
such Servicer, on the other, in connection with such Servicer's obligations
pursuant to this Section 6.05. This Section 6.05 shall survive the termination
of this Agreement or the earlier resignation or removal of each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used
herein, means, with respect to each Servicer individually, any one of the
following events:
(a) any failure by a Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to such
Servicer by the Depositor or the Trustee, or to such Servicer, the Depositor and
the Trustee by Certificateholders entitled to at least 25% of the Voting Rights
in the Certificates; or
(b) any failure on the part of a Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of such Servicer set forth in this Agreement which continues unremedied for
a period of sixty (60) days (except that (x) such number of days shall be
fifteen (15) in the case of a failure to pay any premium for any insurance
policy required to be maintained under this Agreement and (y) such number of
days shall be ten (10) in the case of a failure of Countrywide Servicing to
observe or perform any of its obligations under the provisions of the
Countrywide Amendment Regulation AB incorporated by reference into this
Agreement pursuant to Section 3.01(f) which are equivalent to a Servicer's
obligations under Sections 3.02, 3.22 and 3.23 of this Agreement, zero (0) with
respect to Saxon, in the case of a failure to observe or perform any of the
obligations set forth in Sections 3.02, 3.22, 3.23, 6.02 or 8.12) and such
number of days shall be after the earlier of (i) the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to such Servicer by the Depositor or the Trustee, or to such Servicer, the
Depositor and the Trustee by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates and (ii) actual knowledge of such failure by a
Servicing Officer of such Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to a
Servicer or of or relating to all or substantially all of its property; or
(e) a Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Trustee or the Depositor, or to such Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(g) with respect to Saxon, any withdrawal or downgrade of two or
more levels (i.e., from "Above Average" to "Below Average" or the equivalent) of
Saxon's rating, as of the Closing Date which results in a downgrade,
qualification or withdrawal of the rating assigned to any Class of Certificates
by any Rating Agency.
If an Event of Default described in clauses (a) through (g) of
this Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Trustee may, and at the
direction of a majority of the Voting Rights, the Trustee shall, by notice in
writing to the applicable Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the Mortgage Loans serviced by such Servicer and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that the Trustee shall not be required to give written notice
to such Servicer of the occurrence of an Event of Default described in clauses
(b) through (g) of this Section 7.01 unless and until a Responsible Officer of
the Trustee has actual knowledge of the occurrence of such an event. In the
event that a Responsible Officer of the Trustee has actual knowledge of the
occurrence of an Event of Default described in clause (a) of this Section 7.01,
the Trustee shall give written notice to the applicable Servicer of the
occurrence of such an event within one Business Day of the first day on which
such Responsible Officer obtains actual knowledge of such occurrence; provided,
that if such failure is the failure to make a P&I Advance, the Trustee shall
send such notice prior to 12:00 noon New York time on the Distribution Date and,
if the Event of Default of such Servicer was the failure to make a P&I Advance,
the Trustee, as successor Servicer, shall make such P&I Advance on the
Distribution Date that such notice was delivered. On and after the receipt by
such Servicer of such written notice, all authority and power of such Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. Subject to Section 7.02, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of such Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of such Servicer to pay amounts owed pursuant to
Article VIII. Such Servicer agrees to cooperate with the Trustee in effecting
the termination of such Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the related Collection Account of such
predecessor Servicer, or thereafter be received with respect to the Mortgage
Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, such Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and
after the time a Servicer receives a notice of termination pursuant to Section
3.24 or Section 7.01, the Trustee shall, subject to a transition period not to
exceed 90 days for the transfer of actual servicing to the successor servicer,
and subject to and to the extent provided in Section 3.05, be the successor to
such Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on such
Servicer by the terms and provisions hereof and applicable law including the
obligation to make P&I Advances, whether or not this 90 days transition period
has elapsed, and after such transition period, if any, the obligation to make
Servicing Advances pursuant to Section 3.24 or Section 7.01. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that such Servicer would have been entitled to charge to its Collection
Account if such Servicer had continued to act hereunder including, if such
Servicer was receiving the Servicing Fee, the Servicing Fee and the income on
investments or gain related to its Collection Account and the Distribution
Account which such Servicer would be entitled to receive (in addition to income
on investments or gain related to the Distribution Account for the benefit of
the Trustee during the Trustee Float Period). Notwithstanding the foregoing, if
the Trustee has become the successor to such Servicer in accordance with Section
7.01, (a) the Trustee, as successor servicer, shall have a period not to exceed
90 days to complete the transfer of servicing and all data and to correct or
manipulate such servicing data as may be required by the Trustee, as successor
servicer, to correct any errors or insufficiencies in the servicing data or
otherwise enable the Trustee, as successor servicer, or other successor Servicer
to service the Mortgage Loans in accordance with Accepted Servicing Practices
and (b) the Trustee as successor servicer may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making P&I Advances
and Servicing Advances pursuant to Section 4.01, if it is otherwise unable to so
act or at the written request of Certificateholders entitled to at least a
majority of the Voting Rights, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to such servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of such servicer hereunder. Any successor to such servicer shall be
an institution which is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such terminated servicer (other than liabilities
of such terminated servicer under Section 6.03 incurred prior to termination of
such Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided, that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to the predecessor
servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor Servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the predecessor servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that a Servicer is terminated pursuant to Section
7.01, such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor Servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to a Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that each Servicer
is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and to each Rating
Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each such Event of Default hereunder known to the Trustee,
unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and
is continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming on their face to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
The Trustee shall be permitted to utilize one or more
Subcontractors for the performance of certain of its obligations under this
Agreement, provided that the Trustee complies with Section 3.02(e) as if the
Trustee were a "Servicer" pursuant to that Section. The Trustee shall indemnify
the Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to the failure of the Trustee to
perform any of its obligations under Section 3.22 or Section 3.23, including
without limitation any failure by the Trustee to identify pursuant to Section
3.02(e) any Subcontractor that is a Servicing Function Participant with respect
to the Trustee. This indemnity shall survive the termination of this Agreement
or the earlier resignation or removal of the Trustee.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodian. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodian may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties and neither the
Trustee nor the Custodian shall have responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(b) the Trustee and the Custodian may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) neither the Trustee nor the Custodian shall be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder; provided, further, the Trustee shall
not be responsible for any act or omission of the Custodian;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of the
investment security and with respect to the investment of funds in the
Distribution Account during the Trustee Float Period);
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an Event of Default, the Trustee shall not be
deemed to have knowledge of an Event of Default, until a Responsible Officer of
the Trustee shall have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, the Interest Rate Swap Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and authentication of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or a
Servicer of any funds paid to the Depositor or a Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from any Collection Account or the
Distribution Account by the Depositor or a Servicer.
The Trustee shall have no responsibility for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and
any interest or investment income earned on funds deposited in the Distribution
Account during the Trustee Float Period. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Trust Fund against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any error in any tax or information return prepared by any Servicer or
incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Certificates or the Interest Rate Swap Agreement, or (c) the
performance of any of the Trustee's duties under this Agreement (including any
unreimbursed out-of-pocket costs resulting from a servicing transfer), the
Certificates or the Interest Rate Swap Agreement, other than any loss,
liability, or expense (i) resulting from any breach of any Servicer's
obligations in connection with this Agreement for which the related Servicer has
performed its obligation to indemnify the Trustee pursuant to Section 6.05, (ii)
resulting from any breach of any Responsible Party's obligations in connection
with this Agreement for which the related Responsible Party has performed its
obligations to indemnify the Trustee pursuant to Section 2.03(o) or (iii)
incurred because of willful misconduct, bad faith, or negligence in the
performance of any of the Trustee's duties under this Agreement. This indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Trustee under this Agreement. Without limiting the foregoing, except as
otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith, or willful misconduct, the Trust Fund shall pay or reimburse the
Trustee, for all reasonable expenses, disbursements, and advances incurred or
made by the Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and
disbursements of its counsel not associated with the closing of
the issuance of the Certificates, and
(B) the reasonable compensation, expenses, and
disbursements of any accountant, engineer, or appraiser that is
not regularly employed by the Trustee, to the extent that the
Trustee must engage them to perform services under this
Agreement.
Except as otherwise provided in this Agreement or a separate
letter agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
that no expense shall be reimbursed by the Trust Fund under this Agreement if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The
Trustee hereunder shall at all times be a corporation or association organized
and doing business under the laws of a state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating which would
not cause any of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicers and their Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor or a
Servicer other than the Trustee in its role as successor to Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice of resignation to the Depositor, the Servicers and each
Rating Agency not less than 60 days before the date specified in such notice,
when, subject to Section 8.08, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.08 meeting the
qualifications set forth in Section 8.06. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed
as provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee and the Servicers an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The Depositor, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, such person shall notify the Depositor
of such succession or appointment and shall furnish to the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary for the Depositor to accurately and timely
report, pursuant to Section 8.12(g), the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee as successor Servicer
under this Agreement to advance funds, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to a
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument appointing
any separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to each Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC and that in such
capacity it shall:
(a) prepare, sign and file, in a timely manner, a U.S. Real
Estate Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
Trust REMIC containing such information and at the times and in the manner as
may be required by the Code or state or local tax laws, regulations, or rules,
and furnish to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby;
(b) apply for an employer identification number from the Internal
Revenue Service via Form SS-4 or any other acceptable method for all tax
entities (i.e., the Trust REMICs and the Grantor Trust), furnish to the
Depositor, not later than the Closing Date in the case of the Grantor Trust (the
corpus of which includes the Interest Rate Swap Agreement and the Interest Rate
Cap Agreement) and within thirty days of the Closing Date in the case of the
Trust REMICs, copies of such Form SS-4 requesting the employer identification
numbers, use its best efforts to obtain, as promptly as practicable, employer
identification numbers for any other Trust REMICs or Grantor Trusts created
pursuant to this Agreement (and provide such employer identification numbers to
the Depositor promptly upon receipt thereof), furnish to the Internal Revenue
Service, on Form 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code;
(c) deliver or cause to be delivered the federal taxpayer
identification number of the Grantor Trust on a correct, complete and duly
executed IRS Form W-9 of the Grantor Trust to the Swap Provider and the Cap
Provider promptly upon receipt of such number after applying for it pursuant to
8.11(b) above and, in any event, no later than the first Payment Date under the
Interest Rate Swap Agreement and the Interest Rate Cap Agreement, and, if
requested by the Swap Provider or the Cap Provider, an applicable IRS Form
W-8IMY;
(d) make an election that each of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC, the Upper-Tier REMIC and the Class X
REMIC be treated as a REMIC on the federal tax return for its first taxable year
(and, if necessary, under applicable state law);
(e) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(f) provide information necessary for the computation of tax
imposed on the Transfer of a Residual Certificate to a Person that is a
Non-Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax);
(g) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
Outstanding so as to maintain the status of each Trust REMIC as a REMIC under
the REMIC Provisions;
(h) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of any
Trust REMIC created hereunder;
(i) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings);
(j) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other Person as may be required to
sign such returns by the Code or state or local laws, regulations or rules; and
(k) maintain records relating to each Trust REMIC created
hereunder, including the income, expenses, assets, and liabilities thereof on a
calendar year basis and on the accrual method of accounting and the fair market
value and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information.
The Holder of the largest Percentage Interest of the Class RX
Certificates shall act as Tax Matters Person for the Class X REMIC, and the
holder of the largest Percentage Interest of the Class R Certificates shall act
as Tax Matters Person for Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC, in each case, within the meaning of
Treasury Regulations Section 1.860F-4(d), and the Trustee is hereby designated
as agent of such Certificateholder for such purpose (or if the Trustee is not so
permitted, such Holder shall be the Tax Matters Person in accordance with the
REMIC Provisions). In such capacity, the Trustee shall, as and when necessary
and appropriate, represent each Trust REMIC created hereunder in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each Trust REMIC created hereunder, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of each Trust REMIC created hereunder, and
otherwise act on behalf of each Trust REMIC in relation to any tax matter or
controversy involving it.
The Trustee shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Swap Account (subject to the obligation to pay Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts) and the rights of the
LIBOR Certificateholders to receive Basis Risk CarryForward Amounts and, without
duplication, Upper-Tier CarryForward Amounts as the beneficial ownership of
interests in the Grantor Trust, and not as obligations of any Trust REMIC
created hereunder, for federal income tax purposes. The Trustee shall file or
cause to be filed with the Internal Revenue Service Form 1041 or such other form
as may be applicable and, as described above, shall apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for the Grantor Trust and shall furnish or cause to be
furnished, to the Class P Certificateholders, Class X Certificateholders and
LIBOR Certificateholders, the respective amounts described above that are
received, in the time or times and in the manner required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, if any, to each
Class of Certificates of the right to receive Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts and,
without duplication, Upper-Tier CarryForward Amounts from the Swap Account.
Thereafter, the Depositor shall provide to the Trustee promptly upon written
request therefor any additional information or data that the Trustee may, from
time to time, reasonably request to enable the Trustee to perform its duties
under this Agreement; provided, however, that the Depositor shall not be
required to provide any information regarding the Mortgage Loans that the
applicable Servicer is required to provide to the Trustee pursuant to this
Agreement. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims, or expenses of the Trustee arising from any errors
or miscalculations of the Trustee that result from any failure of the Depositor
to provide pursuant to this paragraph accurate information or data to the
Trustee on a timely basis.
None of the Servicers nor the Trustee shall (i) permit the
creation of any interests in any Trust REMIC other than the regular and residual
interests set forth in the Preliminary Statement, (ii) receive any amount
representing a fee or other compensation for services (except as otherwise
permitted by this Agreement or the related Mortgage Loan documents) or (iii)
otherwise knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any Trust REMIC as a REMIC or (ii)
result in the imposition of a tax upon any Trust REMIC or the Trust Fund
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Trustee receives an Opinion of Counsel (at the expense of
the party seeking to take such action or, if such party fails to pay such
expense, at the expense of the Trust Fund, but in no event at the expense of the
Trustee) to the effect that the contemplated action will not, with respect to
the Trust Fund, any Trust REMIC created hereunder, endanger such status or
result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24878 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee, if such
tax arises out of or results from negligence of the Trustee, as applicable, in
the performance of any of its obligations under this Agreement, (ii) the
applicable Servicer and the applicable Responsible Party, jointly, in the case
of any such minimum tax, and the applicable Servicer if such tax arises out of
or results from a breach by such Servicer of any of its obligations under this
Agreement, (iii) the applicable Responsible Party if such tax arises out of or
results from the applicable Responsible Party's obligation to repurchase a
Mortgage Loan pursuant to Section 2.03, (iv) the Sponsor if such tax arises out
of or results from the Sponsor's obligation to repurchase a Mortgage Loan
pursuant to the Representations and Warranties Agreement, or (v) in all other
cases, or if the Trustee, the applicable Servicer or the applicable Responsible
Party fails to honor its obligations under the preceding clause (i), (ii), (iii)
or (iv), any such tax will be paid with amounts otherwise to be distributed to
the Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and each Servicer
shall reasonably cooperate with the Depositor in connection with the reporting
requirements of the Trust under the Exchange Act. The Trustee shall prepare for
execution by the Depositor any Forms 8-K (other than the initial Form 8-K
relating to this Agreement, which shall be the responsibility of the Depositor
to prepare and file), 10-D and 10-K required by the Exchange Act and the rules
and regulations of the Commission thereunder, in order to permit the timely
filing thereof, pursuant to the terms of this Section 8.12, and the Trustee
shall file (via the Commission's Electronic Data Gathering and Retrieval System,
or ▇▇▇▇▇) such Forms executed by the Depositor. Each of Form 10-D and Form 10-K
requires the Depositor to indicate (by checking "yes" or "no") that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." A "yes" shall be indicated on each
Form 10-D and 10-K unless the Depositor shall notify the Trustee in writing, no
later than the fifth calendar day after the related Distribution Date with
respect to the filing of a report on Form 10-D and no later than March 15th with
respect to the filing of a report on Form 10-K, that a "no" should be indicated.
The Trustee shall be entitled to rely on such notice (or lack thereof) in
preparing, executing and/or filing any such report.
(b) The Trustee shall prepare and file on behalf of the Trust any
Form 10-D required by the Exchange Act, in form and substance as required by the
Exchange Act. The Trustee will utilize reasonable best efforts to file such Form
10-D on or by the 14th calendar day after each Distribution Date, but in no
event later than the filing deadline for such Form 10-D (subject to permitted
extensions under the Exchange Act). The Trustee shall file each Form 10-D with a
copy of the related Monthly Statement attached thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be prepared by the party responsible
for preparing such disclosure as set forth in Exhibit T hereto and the Trustee
shall compile such disclosure pursuant to the following paragraph. The Trustee
will have no duty or liability for any failure hereunder to determine or prepare
any Additional Form 10-D Disclosure, except as set forth in the next paragraph.
As set forth on Exhibit T hereto, within 5 calendar days after
the related Distribution Date, certain parties to this Agreement shall be
required to provide to the Trustee and the Depositor, in ▇▇▇▇▇-compatible
format, or in such other form as otherwise agreed upon by the Trustee and such
party, to the extent known by such applicable parties, any Additional Form 10-D
Disclosure, if applicable, together with an Additional Disclosure Notification
in the form of Exhibit AA hereto ("Additional Disclosure Notification"). The
Depositor will approve as to form and substance, or disapprove, as the case may
be, the inclusion of the Additional Form 10-D Disclosure. The Depositor will be
responsible for all reasonable fees and expenses assessed or incurred by the
Trustee in connection with including any Additional Form 10-D Disclosure on Form
10-D pursuant to this paragraph, including converting any such disclosure to an
▇▇▇▇▇-compatible format
The Trustee shall prepare and forward electronically a draft copy
of the Form 10-D to the Depositor sufficiently far in advance of, but in no
event later than the 11th calendar day after the related Distribution Date, for
the Depositor to review and verify such Form 10-D. In the absence of receipt of
any written changes or approval, the Trustee shall be entitled to assume that
such Form 10-D is in final form and the Trustee may proceed with procuring the
execution of and filing the Form 10-D. No later than 2 Business Days prior to
the 15th calendar day after the related Distribution Date, a duly authorized
representative of the Depositor shall sign the Form 10-D and return an
electronic or fax copy of such signed Form 10-D (with an original executed hard
copy to follow by overnight mail) to the Trustee. If a Form 10-D cannot be filed
on time or if a previously filed Form 10-D needs to be amended, the Trustee will
follow the procedures set forth in Section 8.12(f)(ii). Promptly (but in any
case within one Business Day) after filing with the Commission, the Trustee will
make available on its internet website a final executed copy of each Form 10-D.
The signing party at the Depositor can be contacted at the Depositor's address
for notices set forth in Section 10.5(b)(ii)(a), or such other address as to
which the Depositor has provided prior written notice to the Trustee. The
Depositor acknowledges that the performance by the Trustee of its duties under
this Section 8.12(b) related to the timely preparation and filing of Form 10-D
is contingent, in part, upon each Servicer, and the Depositor and any other
Person obligated to provide Additional Form 10-D Disclosure as set forth on
Exhibit T hereto, observing all applicable deadlines in the performance of their
duties under this Section 8.12(b). The Trustee shall have no liability for any
loss, expense, damage, or claim arising out of or with respect to any failure to
properly prepare and/or timely file such Form 10-D, where such failure results
from the Trustee's inability or failure to obtain or receive, on a timely basis,
any information from any party hereto (other than the Trustee or any
Subcontractor utilized by the Trustee) needed to prepare, arrange for execution
or file such Form 10-D, not resulting from its own negligence, bad faith or
willful misconduct.
(c) On any date within 90 days (including the 90th day) after the
end of each fiscal year of the Trust or such earlier date as may be required by
the Exchange Act (the "10-K Filing Deadline"), commencing in March 2008, the
Trustee shall prepare and file on behalf of the Trust a Form 10-K, in form and
substance as required by the Exchange Act. Each such Form 10-K shall include the
following items, in each case to the extent they have been delivered to the
Trustee within the applicable time frames set forth in this Agreement, (i) an
annual compliance statement for each Servicer and each Subservicer engaged by
any Servicer and the Trustee, as described under Section 3.22, (ii)(A) the
annual reports on assessment of compliance with servicing criteria for the
Trustee, each Servicer, the Custodian, each Subservicer engaged by any Servicer
and each Servicing Function Participant utilized by a Servicer, the Custodian or
the Trustee, as described under Section 3.23, and (B) if any such report on
assessment of compliance with servicing criteria described under Section 3.23
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or such report on assessment of compliance with
servicing criteria described under Section 3.23 is not included as an exhibit to
such Form 10-K, disclosure that such report is not included and an explanation
why such report is not included, (iii)(A) the registered public accounting firm
attestation report for the Trustee, each Servicer, the Custodian, each
Subservicer engaged by a Servicer and each Servicing Function Participant
utilized by a Servicer, the Trustee or the Custodian, as described under Section
3.23, and (B) if any registered public accounting firm attestation report
described under Section 3.23 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a certification substantially in the form
attached hereto as Exhibit L, with such changes as may be necessary or
appropriate as a result of changes promulgated by the Commission (the "Sarbanes
Certification"), which shall be signed by the senior officer of the Depositor in
charge of securitization. Any disclosure or information in addition to (i)
through (iv) above that is required to be included on Form 10-K ("Additional
Form 10-K Disclosure") shall be prepared by the party responsible for preparing
such disclosure as set forth on Exhibit U hereto and provided to the Trustee in
▇▇▇▇▇-compatible form at the email address for the Trustee set forth in Section
10.05, using Exhibit AA and the Trustee shall compile such disclosure pursuant
to the following paragraph. The Trustee will have no duty or liability for any
failure hereunder to determine or prepare any Additional Form 10-K Disclosure,
except as set forth in the next paragraph.
As set forth on Exhibit U hereto, no later than March 1st of each
year (or, in the case of each Servicer, March 5th of each year) that the Trust
is subject to the Exchange Act reporting requirements, commencing in 2008, the
parties to this Agreement shall be required to provide to the Trustee and the
Depositor, in ▇▇▇▇▇-compatible format, or in such other form as otherwise agreed
upon by the Trustee and such party, to the extent known by such applicable
parties, any Additional Form 10-K Disclosure, if applicable, together with an
Additional Disclosure Notification. The Depositor will approve as to form and
substance, or disapprove, as the case may be, the inclusion of the Additional
Form 10-K Disclosure. The Depositor will be responsible for all reasonable fees
and expenses assessed or incurred by the Trustee in connection with including
any Additional Form 10-K Disclosure on Form 10-K pursuant to this paragraph,
including converting any such disclosure to an ▇▇▇▇▇-compatible format. The
Trustee shall compile all such information provided to it in a Form 10-K
prepared by it.
The Trustee shall prepare and forward electronically a draft copy
of the Form 10-K to the Depositor sufficiently far in advance of, but in no
event less than three (3) Business Days prior to, when the Depositor is required
to execute such Form 10-K to permit the Depositor to review, verify and execute
such Form 10-K. In the absence of receipt of any written changes or approval,
the Trustee shall be entitled to assume that such Form 10-K is in final form and
the Trustee may proceed with procuring the execution of and filing the Form
10-K. No later than 5:00 p.m. Eastern Standard Time on the 4th Business Day
prior to the 10-K Filing Deadline, an officer of the Depositor shall sign the
Form 10-K and return an electronic or fax copy of such signed Form 10-K (with an
original executed hard copy to follow by overnight mail) to the Trustee. If a
Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be
amended, the Trustee will follow the procedures set forth in Section
8.12(f)(ii). Promptly (but in any case within one Business Day) after filing
with the Commission, the Trustee will make available on its internet website a
final executed copy of each Form 10-K prepared and filed by the Trustee. The
Depositor acknowledges that the performance by the Trustee of its duties under
this Section 8.12(c) related to the timely preparation and filing of Form 10-K
is contingent, in part, upon each Servicer (and any Subservicer or Servicing
Function Participant engaged by a Servicer) and the Depositor and any other
Person obligated to provide Additional Form 10-K Disclosure as set forth on
Exhibit U hereto, observing all applicable deadlines in the performance of their
duties under this Section 8.12(c), Section 8.12(d), Section 3.22 and Section
3.23. The Trustee shall have no liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare and/or timely
file such Form 10-K, where such failure results from the Trustee's inability or
failure to obtain or receive, on a timely basis, any information or signature
from any party hereto (other than the Trustee or any Subcontractor utilized by
the Trustee) needed to prepare, arrange for execution or file such Form 10-K,
not resulting from its own negligence, bad faith or willful misconduct.
(d) Each of the Trustee and each Servicer shall provide, and each
such party shall cause any Servicing Function Participant engaged by it to
provide, to the Person who signs the Sarbanes Certification (the "Certifying
Person"), by March 10th (March 15th with respect to Saxon) (or if such day is
not a Business Day, the immediately preceding Business Day) of each year in
which the Trust is subject to the reporting requirements of the Exchange Act and
otherwise within a reasonable period of time upon request, a certification
(each, a "Back-Up Certification"), substantially in the form attached hereto as
Exhibit M (with respect to the Trustee) or Exhibit N (with respect to other such
parties) (in any instance, with such changes as may be necessary or appropriate
as a result of changes promulgated by the Commission) upon which the Certifying
Person, the entity for which the Certifying Person acts as an officer, and such
entity's officers, directors and Affiliates (collectively with the Certifying
Person, "Certification Parties") can reasonably rely. The senior officer of the
Depositor in charge of securitization shall serve as the Certifying Person on
behalf of the Trust. In the event any such party or any Servicing Function
Participant engaged by such party is terminated or resigns pursuant to the terms
of this Agreement, or any applicable sub-servicing agreement, as the case may
be, such party shall provide a Back-Up Certification to the Certifying Person
pursuant to this Section 8.12(d) with respect to the period of time it was
subject to this Agreement or any applicable sub-servicing agreement, as the case
may be. In the event that prior to the filing date of the Form 10-K in March of
each year, a Servicer, or the Trustee has actual knowledge of information
material to the Sarbanes Certification, that party shall promptly notify the
Depositor and each of the other parties signing the certifications. In addition,
(i) the Trustee shall indemnify and hold harmless the Depositor and the Sponsor
and their officers, directors, employees, agents and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon any breach of the Trustee's obligations under this Section
8.12(d) or any material misstatement or material omission in (w) any compliance
certificate delivered by the Trustee or any Subcontractor of the Trustee
pursuant to Section 3.22 of this Agreement, (x) any assessment or attestation
delivered by or on behalf of the Trustee or any Subcontractor of the Trustee
pursuant to Section 3.23 of this Agreement, (y) any Back-Up Certification in the
form of Exhibit M delivered by the Trustee pursuant to Section 8.12(d) of this
Agreement or (z) any information about the Trustee provided by it pursuant to
Item 2 (Legal Proceedings) of Exhibit T, Item 1117 and Item 1119 of Exhibit U or
Item 6.02 (Change of Trustee) of Exhibit V (collectively, the "Trustee
Information"), or the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (ii) each Servicer, severally and not jointly, shall
indemnify and hold harmless the Depositor, the Sponsor, the Trustee and their
respective officers, directors, employees, agents and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of such Servicer's obligations under
this Section 8.12(d) or any material misstatement or material omission,
negligence, bad faith or willful misconduct of such Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless any indemnified party, then (i) the Trustee agrees
in connection with a breach of the Trustee's obligations under this Section
8.12(d) or any material misstatement or material omission contained in any
Trustee Information, or any negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor and the Sponsor as a result of the losses, claims, damages or
liabilities of the Depositor and the Sponsor in such proportion as is
appropriate to reflect the relative fault of the Depositor and the Sponsor on
the one hand and the Trustee on the other and (ii) each Servicer, several and
not jointly, agrees that it shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or liabilities
of such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, on the one hand, and such Servicer, on
the other hand, in connection with a breach of such Servicer's obligations under
this Section 8.12(d) or any material misstatement or material omission,
negligence, bad faith or willful misconduct of such Servicer in connection
therewith.
The obligations of the Trustee, each Servicer and each Servicing
Function Participant under this Section 8.12(d) shall apply to the Trustee, each
Servicer and each Servicing Function Participant that serviced a Mortgage Loan
during the applicable period, whether or not the Trustee, such Servicer or such
Servicing Function Participant is acting as Trustee, a Servicer or a Servicing
Function Participant, as applicable, at the time such certification is required
to be delivered. The indemnification and contribution obligations set forth in
this Section 8.12(d) shall survive the termination of this Agreement or the
earlier resignation or removal of the Trustee or the applicable Servicer, as
applicable.
(e) (i) The obligations set forth in paragraphs (a) through (d)
of this Section 8.12 shall only apply with respect to periods for which reports
are required to be filed with respect to the Trust under the Exchange Act. Prior
to January 30 of the first year in which the Trustee is able to do so under
applicable law, the Trustee shall prepare and file a Form 15 Suspension
Notification with respect to the Trust, with a copy to the Depositor. At the
beginning of the immediately succeeding calendar year after the filing of a Form
15 Suspension Notification, if the number of Holders of the Offered Certificates
of record exceeds the number set forth in Section 15(d) of the Exchange Act or
the regulations promulgated pursuant thereto which would cause the Trust to
again become subject to the reporting requirements of the Exchange Act, the
Trustee shall recommence preparing and filing reports on Form 10-K, 10-D and 8-K
as required pursuant to this Section 8.12 and the parties hereto shall again
have the obligations set forth in this Section.
(ii) In the event that the Trustee is unable to timely file with
the Commission all or any required portion of any Form 8-K (other than
the initial Form 8-K filed by the Depositor with respect to this
Agreement), 10-D or 10-K required to be filed pursuant to this Agreement
because required disclosure information was either not delivered to it
or delivered to it after the delivery deadlines (and the expiration of
the applicable grace period with respect to such deadline prior to such
failure to deliver resulting in an Event of Default) set forth in this
Agreement, the Trustee will promptly electronically notify the Depositor
and if necessary, the Servicers. In the case of Form 10-D and 10-K, the
Depositor, Servicers and the Trustee will thereupon cooperate to prepare
and timely file a Form 12b-25 and a 10-D/A and 10-K/A as applicable,
pursuant to Rule 12b-25 of the Exchange Act. In the case of Form 8-K,
the Trustee will, upon receipt of all disclosure information required to
be included on Form 8-K and as directed by the Depositor, include such
disclosure information on the next Form 10-D. In the event that any
previously filed Form 8-K, 10-D or 10-K needs to be amended, the party
to this Agreement deciding that an amendment to such Form 8-K, 10-D or
10-K is required will notify the Depositor, the Trustee, the Servicers
and such parties will cooperate to prepare any necessary Form 8-K/A,
10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to Form 8-K,
10-D or 10-K shall be signed by an officer of the Depositor. The
Depositor acknowledges that the performance by the Trustee of its duties
under this Section 8.12(f) related to the timely preparation and filing
of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is
contingent, in part, upon the Servicers and the Depositor observing all
applicable deadlines (and the related grace periods thereto) in the
performance of their duties under this Section 8.12 and Sections 3.22
and 3.23. The Trustee shall have no liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file any such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results from
the Trustee's inability or failure to obtain or receive, on a timely
basis, any information from any party hereto (other than the Trustee or
any Subcontractor utilized by the Trustee) needed to prepare, arrange
for execution or file such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
(f) On any date within four (4) Business Days after the
occurrence of an event requiring disclosure on Form 8-K (each such event, a
"Reportable Event"), and also if requested by the Depositor, the Trustee shall
prepare and file on behalf of the Trust any Form 8-K, as required by the
Exchange Act, provided that the Depositor shall file the initial Form 8-K in
connection with the issuance of the Certificates. Any disclosure or information
related to a Reportable Event or that is otherwise required to be included on
Form 8-K ("Form 8-K Disclosure Information") shall be reported and prepared by
the party responsible for preparing such disclosure as set forth on Exhibit V
hereto and compiled by the Trustee pursuant to the following paragraph. The
Trustee will have no duty or liability for any failure hereunder to determine or
prepare any Form 8-K Disclosure Information or any Form 8-K, except as set forth
in the next paragraph.
As set forth on Exhibit V hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than noon (Eastern
Standard Time) on the 2nd Business Day after the occurrence of a Reportable
Event, certain parties to this Agreement shall be required to provide to the
Depositor and the Trustee, in ▇▇▇▇▇-compatible format, or in such other form as
otherwise agreed upon by the Trustee and such party, to the extent known by such
applicable parties, any Form 8-K Disclosure Information, if applicable, together
with an Additional Disclosure Notification. The Depositor will be responsible
for all reasonable fees and expenses assessed or incurred by the Trustee in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph, including the conversion of any such disclosure into
an ▇▇▇▇▇-compatible format. The Depositor will approve as to form and substance,
or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information.
The Trustee shall prepare and forward electronically a draft copy
of the Form 8-K to the Depositor sufficiently far in advance of, but in no event
later than noon (Eastern Standard Time) on the 3rd Business Day after a
Reportable Event, to permit the Depositor to review and verify such Form 8-K.
Promptly, but no later than the close of business on the 3rd Business Day after
the Reportable Event, the Depositor shall notify the Trustee in writing (which
may be furnished electronically) of any changes to or approval of such Form 8-K.
In the absence of receipt of any written changes or approval, the Trustee shall
be entitled to assume that such Form 8-K is in final form and the Trustee may
proceed with procuring the execution and filing of the Form 8-K. A duly
authorized representative of the Depositor shall sign each Form 8-K and return
an electronic or fax copy of such signed Form 8-K (with an original executed
hard copy to follow by overnight mail) to the Trustee. If a Form 8-K cannot be
filed on time or if a previously filed Form 8-K needs to be amended, the Trustee
will follow the procedures set forth in Section 8.12(f)(ii). Promptly (but in
any case within one Business Day) after filing with the Commission, the Trustee
will make available on its internet website a final executed copy of each Form
8-K prepared and filed by the Trustee. The Depositor acknowledges that the
performance by the Trustee of its duties under this Section 8.12(g) related to
the timely preparation and filing of Form 8-K is contingent, in part, upon each
Servicer and the Depositor and any other Person obligated to provide Form 8-K
Disclosure Information as set forth on Exhibit V hereto, observing all
applicable deadlines in the performance of their duties under this Section
8.12(g). The Trustee shall have no liability for any loss, expense, damage or
claim arising out of or with respect to any failure to properly prepare and/or
timely file such Form 8-K, where such failure results from the Trustee's
inability or failure to obtain or receive, on a timely basis, any information or
signature from any party hereto (other than the Trustee or any Subcontractor
utilized by the Trustee) needed to prepare, arrange for execution or file such
Form 8-K, not resulting from its own negligence, bad faith or willful
misconduct.
(g) The Trustee shall have no liability for any loss, expense,
damage or claim arising out of or resulting from (i) the accuracy or inaccuracy
of any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form
8-K Disclosure Information (excluding any information therein provided by the
Trustee or any Subcontractor utilized by the Trustee) provided to the Trustee in
connection with the preparation of Forms 10-D, 10-K and 8-K pursuant to this
Section 8.12, or (ii) the failure of the Depositor to timely execute and return
for filing any Forms 10-D, 10-K and 8-K required to be filed by the Trustee
pursuant to this Section 8.12, in either case, not resulting from the Trustee's
own negligence, bad faith or misconduct.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts,
Basis Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of
the Excess Reserve Fund Account, Swap Account and the Interest Rate Swap
Agreement. For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account and the Swap Account as beneficially owned by the holders
of the Class X Certificates and shall treat such portion of the Trust Fund as a
grantor trust, within the meaning of subpart E, Part I of subchapter J of the
Code. The Trustee shall treat the rights that each Class of LIBOR Certificates
has to receive payments of Basis Risk CarryForward Amounts, and to the extent
not paid from the Excess Reserve Fund Account, Basis Risk CarryForward Amounts
and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account
(together with Basis Risk CarryForward Amounts from the Excess Reserve Fund
Account), subject to the obligation to pay Class IO Shortfalls, as rights and
obligations under a notional principal contract between the Class X
Certificateholder and each such Class and beneficially owned by each such Class
through the Grantor Trust. Accordingly, each Class of Certificates (excluding
the Class X, Class P, the Class R and the Class RX Certificates) will be
comprised of two components - an Upper-Tier Regular Interest and an interest in
a notional principal contract, and the Class X Certificates will be comprised of
the following components: two Class X REMIC Regular Interests (the Class X
Interest and the Class IO Interest), an interest in the Excess Reserve Fund
Account (including the Interest Rate Cap Agreement), subject to obligation to
pay Basis Risk CarryForward Amounts, ownership of the Swap Account and the
Interest Rate Swap Agreement, subject to the obligation to pay Basis Risk
CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts,
and the right to receive Class IO Shortfalls. The Trustee shall allocate the
issue price for a Class of Certificates among the respective components for
purposes of determining the issue price of the Upper-Tier Regular Interest
component based on information received from the Depositor. Unless otherwise
advised by the Depositor in writing, for federal income tax purposes, the
Trustee is hereby directed to assign a value of zero to the right of each Holder
of an LIBOR Certificate to receive the related Basis Risk CarryForward Amounts
and, without duplication, the related Upper-Tier CarryForward Amounts for
purposes of allocating the purchase price of an LIBOR Certificate acquired by an
initial Holder thereof between such right and the related Upper-Tier Regular
Interest.
Holders of LIBOR Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X Interest available
for such payments and amounts payable on the Class IO Interest (such excess, a
"Class IO Shortfall"), first from interest and then from principal distributable
on the LIBOR Certificates. A Class IO Shortfall payable from interest
collections shall be allocated pro rata among such LIBOR Certificates based on
the amount of interest otherwise payable to such Class of LIBOR Certificates,
and a Class IO Shortfall payable from principal collections shall be allocated
in reverse sequential order beginning with the most subordinate Class of LIBOR
Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of LIBOR
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of LIBOR Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment or otherwise, such excess shall be deemed first paid to the
related Upper-Tier Regular Interest and then paid to the Class X Certificates in
a manner analogous to Class IO Shortfalls.
Section 8.14 Custodial Responsibilities. (a) The Custodian shall
provide access to the Mortgage Loan Documents in possession of the Custodian
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Trustee, the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC, such access being afforded only upon two (2) Business
Days' prior written request and during normal business hours at the office of
the Custodian. The Custodian shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at the expense of the person requesting such access.
Upon receipt of a written request made by a Servicer in the form
of the Request for Release, the Custodian shall release within five Business
Days the related Mortgage File in accordance with Section 3.16.
(b) The Custodian and any of its respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to this Agreement
or the performance of any of the Custodian's duties under this Agreement other
than any loss, liability, or expense incurred (i) resulting from any breach of a
Servicer's obligations in connection with this Agreement for which such Servicer
has performed its obligations to indemnify the Custodian pursuant to Section
6.05, (ii) resulting from any breach of the applicable Responsible Party's
obligations in connection with this Agreement for which the applicable
Responsible Party has performed its obligations to indemnify the Custodian
pursuant to Section 2.03(o), or (iii) because of willful misfeasance, bad faith,
or negligence in the performance of any of the Custodian's duties under this
Agreement. This indemnity shall survive the termination of this Agreement or the
earlier resignation or removal of the Custodian. Except as otherwise provided in
this Agreement or a separate letter agreement between the Depositor and the
Custodian, the Custodian shall not be entitled to payment or reimbursement for
any routine ongoing expenses incurred by the Custodian in the ordinary course of
its duties as Custodian under this Agreement or for any other expenses incurred
by the Custodian; provided, however, that no expense shall be reimbursed by the
Trust Fund under this Agreement if it would not constitute an "unanticipated
expense incurred by the REMIC" within the meaning of the REMIC Provisions.
(c) The Custodian may resign from its obligations hereunder upon
60 days' prior written notice to the Trustee, the Depositor and the Servicers.
Such resignation shall take effect upon (i) the appointment of a successor
Custodian reasonably acceptable to the Trustee within such 60 day period; and
(ii) delivery of all Custodial Files to the successor Custodian. The Trustee
shall have the right, but not the obligation, to become the successor Custodian.
If no successor Custodian is appointed within 60 days after written notice of
the Custodian's resignation is received by the Trustee, the Custodian may
petition a court of competent jurisdiction to appoint a successor Custodian.
Upon such resignation and appointment of successor Custodian, the
Custodian shall, at the Custodian's expense (unless for nonpayment, then at the
expense of the Trust), promptly transfer to the successor Custodian, as directed
in writing by the Trustee, all Mortgage Files being administered under this
Agreement.
(d) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, the Custodian shall
not utilize any Subcontractor for the performance of its duties hereunder if
such Subcontractor would be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB. The Custodian shall indemnify the
Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to the breach by the Custodian of its
obligation set forth in the preceding sentence or the failure of the Custodian
to perform any of its obligations under Section 3.23. This indemnity shall
survive the termination of this Agreement or the earlier resignation or removal
of the Custodian.
(e) Notwithstanding anything in this Agreement to the contrary,
the Custodian shall not be required to deliver, or to cause to be delivered,
information relating to Item 1117 of Regulation AB pursuant to Sections 8.12(b)
and (c) and Exhibits T and U to this Agreement for any reporting period of the
Trust in which the Custodian's Weighted Average Percentage is less than 20%. The
"Custodian's Weighted Average Percentage" means, for the applicable reporting
period of the Trust and the Custodian, the quotient, expressed as a percentage,
of (A) the aggregate of the Stated Principal Balance for each Distribution Date
in such reporting period of the Mortgage Loans for which the Custodian acted as
Custodian divided by (B) the aggregate of the Pool Stated Principal Balance for
each Distribution Date in such reporting period.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Sections 9.02 and 9.03, the obligations and
responsibilities of the Depositor, the Servicers and the Trustee created hereby
with respect to the Trust Fund shall terminate upon the earlier of (a) the
purchase, on or after the Optional Termination Date, by Saxon or Countrywide
Servicing, individually or together, of all Mortgage Loans (and REO Properties)
at the price equal to the sum of (i) 100% of the unpaid principal balance of
each Mortgage Loan (other than in respect of REO Property) plus accrued and
unpaid interest thereon at the applicable Mortgage Rate, (ii) the lesser of (x)
the appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by Saxon or
Countrywide Servicing, individually or together, at the expense of Saxon or
Countrywide Servicing, individually or together, plus accrued and unpaid
interest on each Mortgage Loan at the applicable Mortgage Rate and (y) the
unpaid principal balance of each Mortgage Loan related to any REO Property, in
each case plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, and (iii) any Swap Termination Payment owed to the Swap Provider pursuant
to the Interest Rate Swap Agreement, and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no
such purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 9.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall have deposited in the related
Collection Account an amount to be remitted to the NIM Trustee that, together
with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the NIM Securities, to
the extent the NIM Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Accounts, Saxon or Countrywide Servicing, individually or together,
shall direct the Trustee promptly to send a Notice of Final Distribution to each
Certificateholder and the Swap Provider. If Saxon or Countrywide Servicing
individually elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, such Servicer shall notify the other Servicer of such election by
the 15th day of the month preceding the month of the final distribution and the
other Servicer shall have 5 days to elect, by notice to the other Servicer, to
purchase the Mortgage Loans it services. If Saxon or Countrywide Servicing,
individually or together, so elect to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, by the 25th day of the month preceding the month of
the final distribution, such Servicer or Servicers shall notify the Depositor
and the Trustee of the date such Servicer or Servicers intend to terminate the
Trust Fund and of the applicable repurchase price of the Mortgage Loans and REO
Properties.
A Notice of Final Distribution, specifying the Distribution Date
on which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month of such final distribution. Any such Notice of
Final Distribution shall specify (a) the Distribution Date upon which final
distribution on the Certificates will be made upon presentation and surrender of
Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Trustee will give such Notice of Final Distribution to each
Rating Agency at the time such Notice of Final Distribution is given to
Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee or the Custodian, as applicable, of a
Request for Release therefor, the Trustee or the Custodian, as applicable, shall
promptly release to the applicable Servicer the Custodial Files for the Mortgage
Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicers, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event
the applicable Servicer or both Servicers exercise their purchase option with
respect to the Mortgage Loans as provided in Section 9.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
the Trustee has been supplied with an Opinion of Counsel, at the expense of the
applicable Servicer or all of the Servicers, as the case may be, to the effect
that the failure to comply with the requirements of this Section 9.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on any Trust
REMIC as defined in Section 860F of the Code, or (ii) cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are Outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the applicable Servicer and, no later than the next Distribution Date after such
sale, shall distribute to the Certificateholders the proceeds of such sale in
complete liquidation of each Trust REMIC; and
(b) The Trustee shall attach a statement to the final federal
income tax return for each Trust REMIC stating that pursuant to Treasury
Regulations Section 1.860F-1, the first day of the 90-day liquidation period for
each such Trust REMIC was the date on which the Trustee sold the assets of the
Trust Fund to the applicable Servicer or Servicers, as the case may be.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time
to time by the Depositor, the Servicers, the Responsible Parties, the Custodian
and the Trustee without the consent of any of the Certificateholders (i) to cure
any ambiguity or mistake, (ii) to correct any defective provision herein or to
supplement any provision herein which may be inconsistent with any other
provision herein, (iii) to add to the duties of the Depositor, the Custodian or
the Servicers, (iv) to add any other provisions with respect to matters or
questions arising hereunder or (v) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; provided that any
amendment pursuant to clauses (iv) or (v) above shall not, as evidenced by an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that any such
amendment pursuant to clause (iv) or (v) above shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
by such Rating Agency as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating. The Trustee, the Custodian, the Depositor, the Responsible Parties and
the Servicers also may at any time and from time to time amend this Agreement,
but without the consent of the Certificateholders to modify, eliminate or add to
any of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of each Trust REMIC and Grantor Trust under the Code,
(ii) avoid or minimize the risk of the imposition of any tax on any Trust REMIC
or Grantor Trust pursuant to the Code that would be a claim at any time prior to
the final redemption of the Certificates or (iii) comply with any other
requirements of the Code or to facilitate the administration and reporting of
each Trust REMIC or Grantor Trust; provided that the Trustee has been provided
an Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code;
provided, however, that any amendment that would otherwise require the consent
of Holders pursuant to the next paragraph shall be made only pursuant to the
terms of the next paragraph.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Responsible Parties, the Custodian and the Trustee
with the consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66(2)/3% of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66(2)/3%, or (iii) reduce the aforesaid percentages of Certificates
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then Outstanding; provided,
further, that, without the consent of the Holders of a majority of the
Certificates then Outstanding, no such amendment shall result in a Significant
Change to a Permitted Activity.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to
fail to qualify as a grantor trust at any time that any Certificates are
Outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies and the Swap Provider (with a copy of such
notice to the Trustee) of such amendment, stating the provisions of the
Agreement to be amended.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into
an amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and that
all requirements for amending this Agreement have been complied with (including
the obtaining of any required consents); and (ii) either (A) the amendment does
not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 10.01.
Notwithstanding the foregoing, any amendment to this Agreement
shall require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 10.02 Recordation of Agreement; Counterparts. This
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the applicable Servicer at the direction and expense of the
Depositor, but only upon receipt of an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of
the parties hereto that the conveyance (i) of the Mortgage Loans by the
Depositor and (ii) of the Trust Fund by the Depositor to the Trustee each be,
and be construed as, an absolute sale thereof. It is, further, not the intention
of the parties that such conveyances be deemed a pledge thereof. However, in the
event that, notwithstanding the intent of the parties, such assets are held to
be the property of the Depositor, as the case may be, or if for any other reason
this Agreement is held or deemed to create a security interest in either such
assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices. (a) The Trustee shall promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of a Servicer or the Trustee
and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies (which may be provided electronically via the Trustee's
website) of the following:
(i) Each report to Certificateholders described in Section 4.03;
and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be
in writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. (1) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - SPG Finance,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (2) ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ - Servicing Oversight, ▇▇▇▇ ▇-▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇; (3) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Whole Loan Operations, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; (4) ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and (5) in the case of a
direction or demand, notification to the following email addresses:
▇▇▇▇.▇▇▇▇▇▇▇▇@ ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇.▇▇▇▇▇▇▇▇@ ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of Countrywide Servicing in its capacity
as Servicer, to Countrywide Home Loans Servicing LP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇, Email:
lupe_montero@ ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; (c) in the case of Saxon, to Saxon Mortgage
Services, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇
▇▇▇▇, President, with a copy to Saxon Capital, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department, or such other address
as may be hereafter furnished to the parties in writing; (d) in the case of the
Trustee, the Corporate Trust Office or, in the case of Mortgage Loan document
release requests and other document inquiries to ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: MSAC 2007-HE4 or such other address as
the Trustee may hereafter furnish to the other parties hereto and the Swap
Provider and the Cap Provider by the Trustee in writing; provided, however, all
reports, statements, certifications and information required to be provided to
the Trustee pursuant to Section 8.12 for filing shall be electronically
forwarded to ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇; (e) in the case of WMC, WMC
Mortgage Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to General Counsel,
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may be hereafter
furnished to the other parties hereto and the Swap Provider by WMC in writing;
(f) in the case of Decision One, Decision One Mortgage Company, LLC, ▇▇▇▇ ▇▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or such other
address as may be hereafter furnished to the other parties hereto and the Swap
Provider and the Cap Provider by Decision One in writing; (g) in the case of
LaSalle, LaSalle Bank National Association, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter furnished to
the other parties hereto and the Swap Provider by LaSalle in writing; (h) in the
case of the Swap Provider and the Cap Provider, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services
Inc., Transaction Management Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Chief Legal Officer, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or
such other address as may be hereafter furnished to the other parties hereto by
the Swap Provider and the Cap Provider in writing; and (i) in the case of each
of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency. Notices to Certificateholders
shall be deemed given when mailed, first class postage prepaid, to their
respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities.
Notwithstanding anything to the contrary contained herein, except as provided in
Section 6.04, this Agreement may not be assigned by any Servicer without the
prior written consent of the Trustee and the Depositor; provided, however, each
Servicer is hereby authorized to enter into an Advance Facility under which (l)
such Servicer sells, assigns or pledges to an Advancing Person the Servicer's
rights under this Agreement to be reimbursed for any P&I Advances or Servicing
Advances and/or (2) an Advancing Person agrees to fund some or all P&I Advances
or Servicing Advances required to be made by such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect
of P&I Advances and/or Servicing Advances made with respect to the Mortgage
Loans for which a Servicer would be permitted to reimburse itself in accordance
with this Agreement, assuming such Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any
successor Servicer a detailed accounting on a loan-by-loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the applicable Servicer to
provide to the related Advancing Person or its designee loan-by-loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each applicable Mortgage Loan. The
applicable Servicer shall remain entitled to be reimbursed by the Advancing
Person or Advance Facility trustee for all P&I Advances and Servicing Advances
funded by such Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Responsible Parties, the Custodian and
the Servicers without the consent of any Certificateholder, notwithstanding
anything to the contrary in this Agreement, upon receipt by the Trustee of an
Opinion of Counsel that such amendment has no material adverse effect on the
Certificateholders or written confirmation from the Rating Agencies that such
amendment will not adversely affect the ratings on the Certificates. Prior to
entering into an Advance Facility, the applicable Servicer shall notify the
lender under such facility in writing that: (a) the Advances financed by and/or
pledged to the lender are obligations owed to such Servicer on a non-recourse
basis payable only from the cash flows and proceeds received under this
Agreement for reimbursement of Advances only to the extent provided herein, and
the Trustee and the Trust are otherwise obligated or liable to repay any
Advances financed by the lender; (b) such Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as reimbursement
for Advances funded by the lender, subject to the restrictions and priorities
created in this Agreement; and (c) the Trustee shall have any responsibility to
track or monitor the administration of the financing arrangement between the
applicable Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third-party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. Each Servicer agrees
that, on 5 Business Days prior notice, it will permit any representative of the
Depositor or the Trustee during such Person's normal business hours, to examine
all the books of account, records, reports and other papers of such Person
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision each Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of a Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by such Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is
the intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rule of Construction. Article and section headings
are for the convenience of the reader and shall not be considered in
interpreting this Agreement or the intent of the parties hereto.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.13 Opinions of Internal Counsel of WMC. WMC
acknowledges and agrees that, in connection with any legal opinions delivered by
any internal counsel of WMC in connection with the execution, delivery and/or
performance by WMC of this Agreement (including any opinions rendered on the
Closing Date), WMC shall be liable to the addressees thereon for any and all
claims or demands arising out of or based upon any such legal opinion.
Section 10.14 Rights of the Third Parties. Each of the Swap
Provider, the Cap Provider and each Person entitled to indemnification hereunder
who is not a party hereto, shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto and shall have the
right to enforce its rights under this Agreement.
Section 10.15 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with all reasonable requests made by the Depositor in good faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the Trust, each Servicer,
the Trustee and the Custodian shall cooperate fully with the Depositor to
deliver to the Depositor (including its assignees or designees), any and all
statements, reports, certifications, records and any other information available
to such party and reasonably necessary in the good faith determination of the
Depositor to permit the Depositor to comply with the provisions of Regulation
AB, together with such disclosures relating to each Servicer, the Trustee and
the Custodian, as applicable, reasonably believed by the Depositor to be
necessary in order to effect such compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By: __________________________________
Name:
Title:
SAXON MORTGAGE SERVICES, INC.,
as Servicer
By: __________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
By: __________________________________
Name:
Title:
WMC MORTGAGE CORP.,
as Responsible Party
By: __________________________________
Name:
Title:
DECISION ONE MORTGAGE
COMPANY, LLC,
as Responsible Party
By: __________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK NATIONAL ASSOCIATION,
solely as Trustee and not in its
individual capacity
By: __________________________________
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By: __________________________________
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Custodian and the Trustee
and not attached to the Pooling and Servicing Agreement)
SCHEDULE II
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of Saxon
Saxon hereby makes with respect to the Mortgage Loans the
following representations and warranties to the Depositor and the Trustee as of
the Closing Date. Capitalized terms used but not otherwise defined shall have
the meaning ascribed thereto in the Agreement to which this Schedule II is
attached.
(a) The Servicer is duly organized as a corporation and is
validly existing and in good standing under the laws of the State of Texas and
is licensed and qualified to transact any and all business contemplated by this
Pooling and Servicing Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property securing a Mortgage Loan is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement;
(b) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing Agreement
and has duly authorized by all necessary action on the part of the Servicer the
execution, delivery and performance of this Pooling and Servicing Agreement; and
this Pooling and Servicing Agreement, assuming the due authorization, execution
and delivery thereof by the other parties thereto, constitutes a legal, valid
and binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except to the extent that (a) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought;
(c) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Servicer and will not (A) result
in a breach of any term or provision of the organizational documents of the
Servicer or (B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material agreement or
instrument to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the Servicer to
perform its obligations under this Pooling and Servicing Agreement or (y) the
business, operations, financial condition, properties or assets of the Servicer
taken as a whole;
(d) The Servicer is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac;
(e) No action, suit, proceeding or investigation is pending or,
to the best of the Servicer's knowledge, threatened against the Servicer, before
any court, administrative agency or other tribunal asserting the invalidity of
this Pooling and Servicing Agreement, seeking to prevent the consummation of any
of the transactions contemplated by this Pooling and Servicing Agreement or
which, either in any one instance or in the aggregate, may reasonably be
expected to result in a material adverse change in business, operations,
financial conditions, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the part of the
Servicer, or which would draw into question the validity of this Pooling and
Servicing Agreement or the Mortgage Loans or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein, or which
would be likely to impair materially the ability of the Servicer to perform
under the terms of this Pooling and Servicing Agreement;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this Pooling
and Servicing Agreement or the consummation by the Servicer of the transactions
contemplated by this Pooling and Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date;
(g) The Servicer represents that its computer and other systems
used in servicing the Mortgage Loans operate in a manner such that the Servicer
can service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement; and
a. With respect to each Mortgage Loan, to the extent the
Servicer serviced such Mortgage Loan and to the extent the
Servicer provided monthly reports to the three credit
repositories, the Servicer has fully furnished, in
accordance with the Fair Credit Reporting Act and its
implementing regulation, accurate and complete information
i.e., favorable and unfavorable) on its borrower credit
files to Equifax, Experian, and Trans Union Credit
Information Company (three of the national credit
repositories), on a monthly basis.
SCHEDULE II-A
Further Representations and Warranties of Saxon
(h) Mortgage Loan Schedule. With respect to each Mortgage Loan, as of
the applicable Cut-off Date, each of (1) the last Due Date on which a payment
was actually applied to the outstanding principal balance of each Mortgage Loan;
(2) the Stated Principal Balance of each Mortgage Loan, after deduction of
payments of principal due and collected on or before the applicable Cut-off
Date; and (3) the Servicing Transfer Date for each Mortgage Loan, in each case,
as listed on the Mortgage Loan Schedule, is true and correct;
(i) Payments Current. Unless otherwise indicated on the related Mortgage
Loan Schedule, with respect to each Mortgage Loan, no Scheduled Payment is 30
days or more Delinquent as of the Cut-off Date nor has any Payment been 30 days
or more Delinquent at any time from and after the Servicing Transfer Date
through the Cut-off Date;
(j) Original Terms Unmodified. With respect to each Mortgage Loan, the
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified by or on behalf of the Servicer from and after the Servicing
Transfer Date;
(k) No Satisfaction of Mortgage. With respect to each Mortgage Loan,
since the related Servicing Transfer Date and except for prepayments in full,
the Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. From
and after the Servicing Transfer Date, the Servicer has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Servicer waived any default resulting from any action or inaction by the
Mortgagor;
(l) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
Delinquent, there is no material default, breach, violation or event which would
permit acceleration existing under the Mortgage or the Mortgage Note;
(m) Escrow Payments/Interest Rate Adjustments. With respect to each
Mortgage Loan, since the Servicing Transfer Date, the servicing and collection
practices used by the Servicer with respect to such Mortgage Loan have been in
all material respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all material respects legal
and proper. With respect to escrow deposits and Escrow Payments, if any, all
such deposits and payments received by the Servicer are in the possession of, or
under the control of, the Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage (to the
extent not otherwise prohibited by law). From and after the Servicing Transfer
Date, all Mortgage Rate adjustments (if any) have been made in strict compliance
with state and federal law and the terms of the related Mortgage Note;
(n) Other Insurance Policies. The improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage and
coverage for such other hazards as are customary in the area where the Mortgaged
Property is located; and
(o) Servicemembers Civil Relief Act. With respect to each Mortgage Loan,
from and after the Servicing Transfer Date, no Mortgagor has notified the
Servicer, and the Servicer has no knowledge, of any relief requested and allowed
to the Mortgagor under the Servicemembers Civil Relief Act or any similar state
or local law.
SCHEDULE III
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect to the Mortgage Loans the
following representations and warranties to the Trustee as of the Closing Date.
Capitalized terms used but not otherwise defined shall have the meaning ascribed
thereto in the Agreement to which this Schedule III is attached.
(1) Immediately prior to the transfer of the Mortgage Loans by the Depositor
to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or
encumbrances whatsoever.
(2) The original principal balance of each Group I Mortgage Loan was within
▇▇▇▇▇▇▇ Mac's and ▇▇▇▇▇▇ Mae's dollar amount limits for conforming one-
to four-family mortgage loans and the original principal balance for each
Group I Mortgage Loan which is a Second Lien Mortgage Loan was within
one-half of ▇▇▇▇▇▇▇ Mac's and ▇▇▇▇▇▇ Mae's dollar amount limits for
one-unit conforming one-to four-family mortgage loans for first lien
mortgage loans, without regard to the number of units in the related
Mortgaged Property.
(3) None of the Group I Mortgage Loans originated on or after October 1, 2002
has a prepayment premium period at origination in excess of three years.
(4) With respect to each Group I Mortgage Loan which is a Second Lien
Mortgage Loan (A) such lien is on a one-to four-family residence that is
the principal residence of the related Mortgagor, and (B) the original
principal balance of the related first lien mortgage loan plus the
original principal balance of any subordinate lien mortgage loans
relating to the same Mortgaged Property was within ▇▇▇▇▇▇▇ Mac's and
▇▇▇▇▇▇ Mae's dollar amount limits for first lien mortgage loans for that
property type.
SCHEDULE IV
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of WMC as to the Mortgage Loans
With respect to the Mortgage Loans for which WMC is specific as the
Responsible Party on the Mortgage Loan Schedule, WMC hereby makes the following
representations and warranties set forth in this Schedule IV to the Depositor,
the Servicers and the Trustee as of the Closing Date. Capitalized terms used but
not otherwise defined in the Agreement shall have the meanings ascribed thereto
in the WMC Purchase Agreement.
(a) Mortgage Loans as Described. WMC Mortgage Corp. has delivered
to the Sponsor, as of March 1, 2007, the Data Tape Information and that
Data Tape Information set forth on the Mortgage Loan Schedule (other
than information regarding the Stated Principal Balances or Due Dates)
are true and correct, including, without limitation, the terms of the
Prepayment Charges, if any, as of the Closing Date. As of the Transfer
Date (as defined below) and with respect to each Mortgage Loan, the
information regarding the Stated Principal Balances and Due Dates set
forth on the Data Tape Information and the Mortgage Loan Schedule are
true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent, exclusive of any period of grace, at any time since the
origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within
the grace period, all in accordance with the terms of the related
Mortgage Note;
(c) No Outstanding Charges. As of the related Transfer Date,
there are no defaults in complying with the terms of the Mortgage, and
all taxes, governmental assessments, insurance premiums, water, sewer
and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or an escrow of funds
has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and
payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month
the related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the related Transfer Date,
the terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, from the date of origination
except by a written instrument which has been recorded, if necessary to
protect the interests of the Purchaser, and which has been delivered to
the Custodian or to such other Person as the Purchaser shall designate
in writing, and the terms of which are reflected in the related Mortgage
Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the
extent required by the policy, and its terms are reflected on the
related Mortgage Loan Schedule, if applicable. As of the related
Transfer Date, no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the
issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered
to the Custodian or to such other Person as the Purchaser shall
designate in writing and the terms of which are reflected in the related
Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto,
subject to bankruptcy, equitable principles and laws affecting creditor
rights;
(f) Hazard Insurance. As of the related Transfer Date, pursuant
to the terms of the Mortgage, all buildings or other improvements upon
the Mortgaged Property are insured by an insurer acceptable in
accordance with Seller's Underwriting Guidelines against loss by fire,
hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is situated as well as all
additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. As of the related Transfer Date, if required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect
which policy conforms to Seller's Underwriting Guidelines as well as all
additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. As of the related Transfer Date, all individual
insurance policies contain a standard mortgagee clause naming the
originator and its successors and assigns as mortgagee, and all premiums
thereon have been paid. As of the related Transfer Date, the Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state
law or regulation, the Mortgagor has been given an opportunity to choose
the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium,
or any hazard insurance policy covering the common facilities of a
planned unit development. As of the related Transfer Date, the hazard
insurance policy is the valid and binding obligation of the insurer, is
in full force and effect, and will be in full force and effect and inure
to the benefit of the Trustee upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has
no knowledge of the Mortgagor's having engaged in, any act or omission
which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of
either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to prepayment penalties, have been
complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
or the Trustee's inspection, and shall deliver to the Purchaser or the
Trustee upon demand, evidence of compliance with all such requirements
to the extent compliance therewith can be demonstrated and if required
by applicable law. This representation and warranty is a Deemed Material
and Adverse Representation;
(h) No Satisfaction of Mortgage. As of the related Transfer Date,
the Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure
to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which
the use of a leasehold estate for residential properties is a
widely-accepted practice, that consists of one or more separate and
complete tax parcels of real property improved by a Residential
Dwelling; provided, however, that any condominium unit or planned unit
development (other than a de minimis planned unit development) shall
conform with the Underwriting Guidelines. In the case of any Mortgaged
Properties that are Manufactured Homes (a "Manufactured Home Mortgage
Loans"), (i) the related manufactured dwelling is permanently affixed to
the land, (ii) the related manufactured dwelling and the related land
are subject to a Mortgage properly filed in the appropriate public
recording office and naming Seller as mortgagee, (iii) the applicable
laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged
Property to be a part of the real property on which such dwelling is
located, (iv) as of the origination date of such Manufactured Home
Mortgage Loan, the related Mortgagor occupied the related Manufactured
Home as its primary residence, and (v) such Manufactured Home Mortgage
Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided,
that Mortgaged Properties which contain a home office shall not be
considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is
not storing any chemicals or raw materials other than those commonly
used for homeowner repair, maintenance and/or household purposes. None
of the Mortgaged Properties are log homes, mobile homes, geodesic domes
or other unique property types. Clause (iv) above is a Deemed Material
and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting and enforceable first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) on the
Mortgaged Property, including all buildings and improvements on the
Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to
such buildings, and all additions, alterations and replacements made at
any time with respect to the foregoing. The lien of the Mortgage is
subject only to (collectively, the "Permitted Exceptions"):
(A) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and
assessments not yet due and payable;
(C) covenants, conditions and restrictions, rights of
way, easements and other matters of the public
record as of the date of recording acceptable to
prudent mortgage lending institutions generally and
specifically referred to in the lender's title
insurance policy delivered to the originator of the
Mortgage Loan and which do not adversely affect the
Appraised Value of the Mortgaged Property set forth
in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the
benefits of the security intended to be provided by
the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and first lien (with respect to
a First Lien Loan) or second lien (with respect to a Second Lien Loan)
and first priority (with respect to a First Lien Loan) or second
priority (with respect to a Second Lien Loan) security interest on the
property described therein and the Seller has full right to sell and
assign the same to the Purchaser subject to the Permitted Exceptions;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor
in connection with a Mortgage Loan are genuine, and each is the legal,
valid and binding obligation of the maker thereof enforceable in
accordance with its terms (including, without limitation, any provisions
therein relating to prepayment penalties), subject to bankruptcy,
equitable principles and laws affecting creditor rights. All parties to
the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the
Mortgage Note, the Mortgage and any other such related agreement have
been duly and properly executed by other such related parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of the
Seller in connection with the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan.
Notwithstanding the foregoing, but without limiting the other
representations and warranties set forth elsewhere in this Agreement, if
any error, omission or negligence in the origination of such Mortgage
Loan occurred despite Seller's conformance with its Underwriting
Guidelines (as in effect at the time such Mortgage Loan was made), then
there shall be a presumptive conclusion that there was no error,
omission or negligence. No fraud, misrepresentation, or similar
occurrence or, to Seller's knowledge, error, omission, or negligence
with respect to a Mortgage Loan has taken place on the part of any
Person (other than Seller), including without limitation, the Mortgagor,
any appraiser, any builder or developer, or any other party involved in
the origination of the Mortgage Loan or in the application for any
insurance in relation to such Mortgage Loan. The Seller has reviewed all
of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder, and any and
all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage;
(m) Ownership. Immediately prior to the transfer contemplated by
the WMC Purchase Agreement, the Seller was the sole owner of record and
holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the Sponsor,
the Seller retained the Mortgage Files or any part thereof with respect
thereto not delivered to the Custodian, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. The Mortgage Loan was not assigned or
pledged, and the Seller had good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to
the Purchaser free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full
right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement and following the sale of each Mortgage Loan,
the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest;
(n) Doing Business. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is
located to the extent required to ensure enforceability of the Mortgage
Loan, and (2) either (i) organized under the laws of such state, or (ii)
qualified to do business in such state, or (iii) a federal savings and
loan association, a savings bank or a national bank having a principal
office in such state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV or a CLTV greater than 100%;
(p) Title Insurance. As of the related Transfer Date, the
Mortgage Loan is covered by an ALTA lender's title insurance policy, or
with respect to any Mortgage Loan for which the related Mortgaged
Property is located in California a CLTA lender's title insurance
policy, or other generally acceptable form of policy or insurance
acceptable pursuant to Seller's Underwriting Guidelines and each such
title insurance policy is issued by a title insurer acceptable to
prudent lenders in the secondary mortgage market and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring the originator, its successors and assigns, as to the first
(with respect to a First Lien Loan) or second (with respect to a Second
Lien Loan) priority lien of the Mortgage in the original principal
amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization
in accordance with the Mortgage), subject only to the Permitted
Exceptions, and in the case of Adjustable Rate Mortgage Loans, against
any loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage providing for adjustment
to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to
choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures
ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller (or its predecessor in
interest), its successors and assigns, are the sole insureds of such
lender's title insurance policy, and such lender's title insurance
policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated
by this Agreement. As of the related Transfer Date, no claims have been
made under such lender's title insurance policy, and no prior holder of
the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's
title insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(q) No Defaults. As of the related Transfer Date, there is no
default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event
which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any
default, breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. As of the related Transfer Date, there
are no mechanics' or similar liens or claims which have been filed for
work, labor or material (and no rights are outstanding that under the
law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property. No
improvement located on or being part of the Mortgaged Property is in
violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated
by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing
Act, a savings and loan association, a savings bank, a commercial bank,
credit union, insurance company or other similar institution which is
supervised and examined by a federal or state authority, except with
respect to a Mortgage Loan purchased from a correspondent as indicated
on the Mortgage Loan Schedule. Principal payments on the Mortgage Loan
commenced no more than seventy days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well
as, in the case of an Adjustable Rate Mortgage Loan, the Lifetime Rate
Cap and the Periodic Cap are as set forth on the related Mortgage Loan
Schedule. Unless specified on the related Mortgage Loan Schedule as an
interest-only loan or a Balloon Mortgage Loan, the Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage
Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage
Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization (or forty years
for Mortgage Loans identified on the Mortgage Loan Schedule as a Balloon
Mortgage Loan with a forty year amortization period). Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month and the Mortgage Loan does not
require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including,
(i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. Upon default
by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale
of, the Mortgaged Property pursuant to the proper procedures, the holder
of the Mortgage Loan will be able to deliver good and merchantable title
to the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and right of redemption or similar
law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines, as may be amended from time to time by the Seller (a copy of
which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to prudent
mortgage lenders in the secondary mortgage market and no representations
have been made to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the related
Closing Date the Mortgaged Property is lawfully occupied under
applicable law. As of the related Transfer Date, all inspections,
licenses and certificates required to be made or issued with respect to
all occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including but not limited to certificates
of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities. Unless otherwise specified on
the related Mortgage Loan Schedule, the Mortgagor represented at the
time of origination of the Mortgage Loan that the Mortgagor would occupy
the Mortgaged Property as the Mortgagor's primary residence;
(x) No Additional Collateral. As of the related Transfer Date,
the Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding Mortgage and the security interest
of any applicable security agreement or chattel mortgage referred to in
paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, authorized and duly qualified under applicable law
to serve as such, has been properly designated and currently so serves
and is named in the Mortgage, and no fees or expenses are or will become
payable by the Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor;
(z) [Reserved].
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete,
true and accurate Mortgage File in compliance with Exhibit A hereto,
except for such documents the originals of which have been delivered to
the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than
a de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance
with, and the Mortgaged Property meets the guidelines set forth in the
Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to
each Mortgage Loan is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the Mortgage contains an provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder, and to the best of the Seller's
knowledge, such provision is enforceable subject to applicable
bankruptcy, equitable principles and laws affecting creditors' rights;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents do not allow an assumption of such
Mortgage Loan by any other party;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. As of the related Transfer Date, the Mortgage Loan does not
contain provisions pursuant to which Monthly Payments are paid or
partially paid with funds deposited in any separate account established
by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or
paid by any source other than the Mortgagor nor does it contain any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage
Loan does not have a shared appreciation or other contingent interest
feature;
(gg) Consolidation of Future Advances. Any future advances made
to the Mortgagor prior to the applicable Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as
having first (with respect to a First Lien Loan) or second (with respect
to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest
or by other title evidence acceptable to prudent mortgage lenders in the
secondary market. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
As of the related Transfer Date, there is no proceeding pending or, to
Seller's knowledge, threatened for the total or partial condemnation of
the Mortgaged Property. The Mortgaged Property is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises were
intended and each Mortgaged Property is in at least the same condition
or better than its condition at the time of its appraisal. Since the
time of its appraisal, there have not been any condemnation proceedings
with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
the Seller and the Interim Servicer with respect to the Mortgage Loan
have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all
respects legal and proper. As of the related Transfer Date, with respect
to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, the Seller or the Interim
Servicer and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made.
As of the related Transfer Date, all Escrow Payments have been collected
in full compliance with state and federal law and the provisions of the
related Mortgage Note and Mortgage. As of the related Transfer Date, an
escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in strict compliance
with state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with
respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related
Mortgage Note. As of the related Transfer Date, the Seller or the
Interim Servicer executed and delivered any and all notices required
under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. As of the related Transfer Date, any interest required to
be paid pursuant to state, federal and local law has been properly paid
and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does
not contain a provision whereby the Mortgagor is permitted to convert
the Mortgage Interest Rate from adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has
existed on or prior to the Closing Date that has resulted or will result
in the exclusion from, denial of, or defense to coverage under any
applicable hazard insurance policy, PMI Policy or bankruptcy bond
(including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured),
irrespective of the cause of such failure of coverage. In connection
with the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Seller or by any
officer, director, or employee of the Seller or any designee of the
Seller or any corporation in which the Seller or any officer, director,
or employee had a financial interest at the time of placement of such
insurance;
(ll) No Violation of Environmental Laws. As of the related
Transfer Date and to the best of the Seller's knowledge, (i) there is no
pending action or proceeding directly involving the Mortgaged Property
in which compliance with any environmental law, rule or regulation is an
issue; and (ii) there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act or other
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage
Loan application by a Qualified Appraiser who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both
satisfy the requirements of Seller's Underwriting Guidelines and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials
required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in
which the Mortgaged Property is located, the original lender has filed
for record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing
of the existence of the Second Lien Loan and requested notification of
any action to be taken against the Mortgagor by the senior lienholder.
Either (a) no consent for the Second Lien Loan is required by the holder
of the related first lien or (b) such consent has been obtained and is
contained in the Mortgage File;
(rr) Credit Reporting. As of the related Transfer Date, the
Seller (or its sub-servicer) has caused to be fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and
Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis. This representation and warranty is a
Deemed Material and Adverse Representation;
(ss) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with
respect to each MERS Designated Mortgage Loan;
(tt) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim
Funder on the MERS(R) System;
(uu) No Default Under First Lien. As of the related Transfer
Date, with respect to each Second Lien Loan, the related First Lien Loan
related thereto is in full force and effect, and as of the related
Transfer Date, there is no default, breach, violation or event which
would permit acceleration existing under such first Mortgage or Mortgage
Note, and as of the related Transfer Date, no event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under
the Mortgage Loan and allows such mortgagee to cure any default under
the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined
in the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by the Seller to the Purchaser, that Seller has
full right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage. The Seller shall hold the Purchaser harmless
from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in
connection with the Purchaser's secondary marketing operations and the
purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, such lease conforms to the requirements required by ▇▇▇▇▇▇ ▇▇▇
pursuant to the ▇▇▇▇▇▇ Mae Guide;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is
identified on the related Mortgage Loan Schedule. Each such Prepayment
Penalty is in an amount not more than the maximum amount permitted under
applicable law and no such Prepayment Penalty may be imposed for a term
in excess of five (5) years with respect to Mortgage Loans originated
prior to October 1, 2002. With respect to Mortgage Loans originated on
or after October 1, 2002, the duration of the Prepayment Penalty period
shall not exceed three (3) years from the date of the Mortgage Note
unless the Mortgage Loan was modified to reduce the Prepayment Penalty
period to no more than three (3) years from the date of the related
Mortgage Note and the Mortgagor was notified in writing of such
reduction in Prepayment Penalty period. The second and third sentences
of this representation and warranty are a Deemed Material and Adverse
Representation;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High
Cost Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed
by the Georgia Fair Lending Act. No Mortgage Loan is covered by the Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any comparable state or local law. This representation and
warranty is a Deemed Material and Adverse Representation;
(bbb) [Reserved];
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a
paid in full, life of loan, tax service contract issued by Fidelity
National Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the Mortgagor to repay and the extension of credit which
has no apparent benefit to the Mortgagor, were employed in the
origination of the Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the
assignment to the Purchaser) have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien
thereof as against creditors of the Seller, or is in the process of
being recorded;
(ggg) Mortgagor Bankruptcy. As of the related Transfer Date, on
or prior to the date 60 days after the related Closing Date, the
Mortgagor has not filed and will not file a bankruptcy petition or has
not become the subject and will not become the subject of involuntary
bankruptcy proceedings or has not consented to or will not consent to
the filing of a bankruptcy proceeding against it or to a receiver being
appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not been previously
rejected by a third-party purchaser;
(iii) [Reserved];
(jjj) ▇▇▇▇▇▇ ▇▇▇ Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending
eligibility for purchase requirements of ▇▇▇▇▇▇ Mae Guides. This
representation and warranty is a Deemed Material and Adverse
Representation;
(kkk) Mortgagor Selection. No Mortgagor was encouraged or
required to select a Mortgage Loan product offered by the Seller which
is a higher cost product designed for less creditworthy mortgagors,
unless at the time of the Mortgage Loan's origination, such Mortgagor
did not qualify taking into account credit history and debt-to-income
ratios for a lower-cost credit product then offered by the Seller or any
Affiliate of the Seller with which the Seller has a referral
relationship or mechanism in place. If, at the time of loan application,
the Mortgagor may have qualified for a lower-cost credit product then
offered by any mortgage lending Affiliate of the Seller with which the
Seller has a referral relationship or mechanism in place, the Seller
referred the related Mortgagor's application to such Affiliate for
underwriting consideration. This representation and warranty is a Deemed
Material and Adverse Representation;
(lll) Underwriting Methodology. The methodology used in
underwriting the extension of credit for each Mortgage Loan employs
objective mathematical principles which relate the related Mortgagor's
income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the related
Mortgagor's equity in the collateral as the principal determining factor
in approving such credit extension. Such underwriting methodology
confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on
the Mortgage Loan. This representation and warranty is a Deemed Material
and Adverse Representation;
(mmm) Mortgage Loans with Prepayment Premiums. With respect to
any Mortgage Loan that contains a provision permitting imposition of a
premium upon a prepayment prior to maturity: (i) prior to the Mortgage
Loan's origination, the related Mortgagor agreed to such premium in
exchange for a monetary benefit, including but not limited to a rate or
fee reduction, (ii) prior to the Mortgage Loan's origination, the
related Mortgagor was offered the option of obtaining a mortgage loan
that did not require payment of such a premium; provided, that such
offer may have been evidenced by the Seller's rate sheet/pricing grid
relating to such Mortgage Loan, which provided that the Mortgage Loan
had a full prepayment premium buy-out pricing adjustment available,
(iii) the prepayment premium is disclosed to the related Mortgagor in
the Mortgage Loan documents pursuant to applicable state and federal
law, and (iv) notwithstanding any state or federal law to the contrary,
the Seller, as servicer, shall not impose such prepayment premium in any
instance when the mortgage debt is accelerated as the result of the
related Mortgagor's default in making the Mortgage Loan payments. This
representation and warranty is a Deemed Material and Adverse
Representation;
(nnn) Purchase of Insurance. No Mortgagor was required to
purchase any single premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment or health
insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit insurance policy (e.g., life, mortgage,
disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan. No
proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
(ooo) Points and Fees. No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i) $1,000, or (ii)
5% of the principal amount of such Mortgage Loan, whichever is greater.
For purposes of this representation, such 5% limitation is calculated in
accordance with ▇▇▇▇▇▇ Mae's anti-predatory lending requirements as set
forth in the ▇▇▇▇▇▇ Mae Guides and "points and fees" (x) include
origination, underwriting, broker and finder fees and charges that the
mortgagee imposed as a condition of making the Mortgage Loan, whether
they are paid to the mortgagee or a third party; and (y) exclude bona
fide discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage Loan (such as attorneys'
fees, notaries fees and fees paid for property appraisals, credit
reports, surveys, title examinations and extracts, flood and tax
certifications, and home inspections), the cost of mortgage insurance or
credit-risk price adjustments, the costs of title, hazard, and flood
insurance policies, state and local transfer taxes or fees, escrow
deposits for the future payment of taxes and insurance premiums, and
other miscellaneous fees and charges that, in total, do not exceed 0.25%
of the principal amount of such Mortgage Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
(ppp) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed,
collected or to be collected in connection with the origination and
servicing of each Mortgage Loan, have been disclosed in writing to the
Mortgagor in accordance with applicable state and federal law and
regulation. This representation and warranty is a Deemed Material and
Adverse Representation;
(qqq) No Arbitration. No Mortgage Loan originated on or after
August 1, 2004 requires the related Mortgagor to submit to arbitration
to resolve any dispute arising out of or relating in any way to the
Mortgage Loan transaction. This representation and warranty is a Deemed
Material and Adverse Representation; and
(rrr) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property was the Mortgagor's principal residence
at the time of the origination of such Second Lien Loan. This
representation and warranty is a Deemed Material and Adverse
Representation.
"Transfer Date" shall have the following meaning:
The date on which the Purchaser, or its designee, shall receive the
transfer of servicing responsibilities and begin to perform the
servicing of the Mortgage Loans, and the Seller shall cease all
servicing responsibilities. Such date shall occur on the day
indicated by the Purchaser to the Seller in accordance with the
Interim Servicing Agreement.
SCHEDULE V
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of WMC as to WMC
-----------------------------------------------
WMC hereby makes the representations and warranties set forth in
this Schedule V to the Depositor, the Servicers and the Trustee as of the
Closing Date. Capitalized terms used but not otherwise defined shall have the
meaning ascribed thereto in the Agreement to which this Schedule is attached.
(a) Due Organization and Authority. WMC is a corporation, validly
existing, and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business
as now being conducted and is licensed, qualified and in good
standing in the states where the Mortgaged Properties are located
if the laws of such state require licensing or qualification in
order to conduct business of the type conducted by WMC. WMC has
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this
Agreement) by WMC and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement has been duly executed and delivered and constitutes the
valid, legal, binding and enforceable obligation of WMC, except as
enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the rights of creditors
and (ii) general principles of equity, whether enforcement is
sought in a proceeding in equity or at law. All requisite
corporate action has been taken by WMC to make this Agreement
valid and binding upon WMC in accordance with its terms;
(b) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by
WMC, the sale of the Mortgage Loans to the Sponsor, the
consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of WMC's charter, by-laws or other
organizational documents or any legal restriction or any agreement
or instrument to which WMC is now a party or by which it is bound,
or constitute a default or result in an acceleration under any of
the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which WMC or its property
is subject, or result in the creation or imposition of any lien,
charge or encumbrance that would have an adverse effect upon any
of its properties pursuant to the terms of any mortgage, contract,
deed of trust or other instrument, or impair the ability of the
Sponsor to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Sponsor to realize
the full amount of any insurance benefits accruing pursuant to
this Agreement;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to WMC's knowledge, threatened against
WMC, before any court, administrative agency or other tribunal
asserting the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the
aggregate, would likely result in any material adverse change in
the business, operations, financial condition, properties or
assets of WMC, or in any material impairment of the right or
ability of WMC to carry on its business substantially as now
conducted, or in any material liability on the part of WMC, or
which would draw into question the validity of this Agreement or
the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of WMC contemplated herein, or
which would be likely to impair materially the ability of WMC to
perform under the terms of this Agreement;
(d) No Consent Required. No consent, approval, authorization or order
is required for the transactions contemplated by this Agreement
from any court, governmental agency or body, or federal or state
regulatory authority having jurisdiction over WMC is required or,
if required, such consent, approval, authorization or order has
been or will, prior to the Closing Date, be obtained;
(e) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of
business of WMC, and the transfer, assignment and conveyance of
the Mortgage Notes and the Mortgages by WMC pursuant to this
Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction; and
(f) Ability to Perform; Solvency. WMC does not believe, nor does it
have any reason or cause to believe, that it cannot perform each
and every covenant contained in this Agreement. WMC is solvent and
the sale of the Mortgage Loans will not cause WMC to become
insolvent. The sale of the Mortgage Loans is not undertaken with
the intent to hinder, delay or defraud any of WMC's creditors.
SCHEDULE VI
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of Decision One
as to the Decision One Mortgage Loans
With respect to the Mortgage Loans for which Decision One is
specific as the Responsible Party on the Mortgage Loan Schedule, Decision One
hereby makes the following representations and warranties set forth in this
Schedule VI to the other parties to the Agreement to which this Schedule VI is
attached as of the Closing Date. Capitalized terms used but not otherwise
defined in the Agreement shall have the meanings ascribed thereto in the
Decision One Purchase Agreement.
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule as prepared by the Sponsor is complete, true and
correct as of the Closing Date;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan.
The first Monthly Payment shall be made with respect to the Mortgage
Loan on its related Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been
paid, or an escrow of funds has been established in an amount sufficient
to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the
day which precedes by one month the related Due Date of the first
installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written instrument
which has been recorded, if necessary to protect the interests of the
Purchaser, and which has been delivered to the Custodian or to such
other Person as the Purchaser shall designate in writing, and the terms
of which are reflected in the related Mortgage Loan Schedule. The
substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered
to the Custodian or to such other Person as the Purchaser shall
designate in writing and the terms of which are reflected in the related
Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto,
and no Mortgagor was a debtor in any state or Federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured
by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards, if any, as are usually and
customarily insured against by prudent mortgage lenders in the community
in which the related Mortgaged Property is located. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect
which policy conforms to the requirements usually and customarily
insured against by prudent mortgage lenders in the community in which
the related Mortgaged Property is located, as well as all additional
requirements set forth in Section 2.10 of the Interim Servicing
Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state
law or regulation, the Mortgagor has been given an opportunity to choose
the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium,
or any hazard insurance policy covering the common facilities of a
planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will
be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair
the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or
entity, and no such unlawful items have been received, retained or
realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to Prepayment Penalties, have been
complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements. This representation and warranty
is a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and
the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or
rescission. The Seller has not waived the performance by the Mortgagor
of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any
default resulting from any action or inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property
with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual residential condominium unit in a
condominium project, or an individual unit in a planned unit development
and that no residence or dwelling is a mobile home, provided, however,
that any condominium unit or planned unit development shall not fall
within any of the "Ineligible Projects" of part VIII, Section 102 of the
▇▇▇▇▇▇ ▇▇▇ Selling Guide and shall conform with the Underwriting
Guidelines. In the case of any Mortgaged Properties that are
Manufactured Homes (a "Manufactured Home Mortgage Loans"), (i) the
related manufactured dwelling is permanently affixed to the land, (ii)
the related manufactured dwelling and the related land are subject to a
Mortgage properly filed in the appropriate public recording office and
naming Seller as mortgagee, (iii) the applicable laws of the
jurisdiction in which the related Mortgaged Property is located will
deem the manufactured dwelling located on such Mortgaged Property to be
a part of the real property on which such dwelling is located, (iv) as
of the origination date of such Manufactured Home Mortgage Loan, the
related manufactured housing unit that secures such Mortgage Loan either
(x) was the principal residence of the Mortgagor or (y) was classified
as real property under applicable state law; and (v) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3)
of the Internal Revenue Code of 1986, as amended and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date
of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a
home office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair, maintenance and/or
household purposes. This representation and warranty is a Deemed
Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to a
First Lien Loan) or second lien (with respect to a Second Lien Loan) on
the Mortgaged Property, including all buildings and improvements on the
Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to
such buildings, and all additions, alterations and replacements made at
any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(A) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and
assessments not yet due and payable;
(C) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of the
date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (A) specifically referred to or otherwise
considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised
Value of the Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected first lien (with
respect to a First Lien Loan) or second lien (with respect to a Second
Lien Loan) and first priority (with respect to a First Lien Loan) or
second priority (with respect to a Second Lien Loan) security interest
on the property described therein and the Seller has full right to sell
and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in connection with a Mortgage Loan are genuine, and
each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note,
the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of
any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. The Seller has
reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm
the accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording
of the Mortgage were paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage
Note and upon the sale of the Mortgage Loans to the Purchaser,
the Seller will retain the Mortgage Files or any part thereof
with respect thereto not delivered to the Custodian, the
Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good, indefeasible and marketable title thereto,
and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest
or participation of, or agreement with, any other party, to sell
and assign each Mortgage Loan pursuant to this Agreement and
following the sale of each Mortgage Loan, the Purchaser will own
such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security
interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing
Date, the Seller will have no right to modify or alter the terms
of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any and
all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do
business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal
office in such state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a
CLTA lender's title insurance policy, or other generally
acceptable form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac and each such title insurance policy is issued by
a title insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or
second (with respect to a Second Lien Loan) priority lien of the
Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (A), (B) and
(C) of paragraph (j) of this Subsection 9.02, and in the case of
Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the
Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest
therein. The Seller, its successor and assigns, are the sole
insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full
force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would
impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have
been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would
permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived
any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such
liens) affecting the related Mortgaged Property which are or may
be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements
on adjoining properties encroach upon the Mortgaged Property. No
improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by a
mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National
Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or other similar
institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements
submitted for loan underwriting were not falsified and contain no
untrue statement of material fact required to be stated therein
or necessary to make the information and statements therein not
misleading. No Mortgage Loan contains terms or provisions which
would result in negative amortization. Principal payments on the
Mortgage Loan commenced no more than sixty days after funds were
disbursed in connection with the Mortgage Loan. The Mortgage
Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as
set forth on the related Mortgage Loan Schedule. The Mortgage
Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage
Loan is payable on the first day of each month. The Mortgage Loan
does not require a balloon payment on its stated maturity date,
unless otherwise specified in the related Mortgage Loan Schedule;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided
thereby, including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property
pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the
Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage, subject to applicable federal and state
laws and judicial precedent with respect to bankruptcy and right
of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with the Underwriting
Guidelines (a copy of which is attached to each related
Assignment and Conveyance Agreement). The Mortgage Note and
Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae and
the Seller has not made any representations to a Mortgagor that
are inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained
from the appropriate authorities. Unless otherwise specified on
the related Mortgage Loan Schedule, the Mortgagor represented at
the time of origination of the Mortgage Loan that the Mortgagor
would occupy the Mortgaged Property as the Mortgagor's primary
residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to in
paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable
law to serve as such, has been properly designated and currently
so serves and is named in the Mortgage, and no fees or expenses
are or will become payable by the Purchaser to the trustee under
the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan
have been delivered to the Custodian. The Seller is in possession
of a complete, true and accurate Mortgage File in compliance with
Exhibit A hereto, except for such documents the originals of
which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged Property
is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned
unit development project such Mortgage Loan was originated in
accordance with, and the Mortgaged Property meets the guidelines
set forth in the Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name
of MERS or its designee) with respect to each Mortgage Loan is in
recordable form and is acceptable for recording under the laws of
the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration
of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee
thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage Loan,
the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only
be assumed if the party assuming such Mortgage Loan meets certain
credit requirements, if any, stated in the Mortgage Loan
Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially paid with funds
deposited in any separate account established by the Seller, the
Mortgagor, or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other
similar provisions which may constitute a "buydown" provision.
The Mortgage Loan is not a graduated payment mortgage loan and
the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the related Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is
expressly insured as having first (with respect to a First Lien
Loan) or second (with respect to a Second Lien Loan) lien
priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other
title evidence acceptable under the Underwriting Guidelines. The
consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. There
is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended and
each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged
Property and the Seller has no knowledge of any such proceedings
in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate Adjustments.
The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all
respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects
legal and proper. With respect to escrow deposits and Escrow
Payments, all such payments are in the possession of, or under
the control of, the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law and
the provisions of the related Mortgage Note and Mortgage. An
escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges
or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage and Mortgage
Note on the related Interest Rate Adjustment Date. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to
be selected, and such selection did not conflict with the terms
of the related Mortgage Note. The Seller executed and delivered
any and all notices required under applicable law and the terms
of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has
been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible
Mortgage Loan;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or
has existed on or prior to the related Closing Date that has
resulted or will result in the exclusion from, denial of, or
defense to coverage under any applicable hazard insurance policy
or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the
availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured), irrespective of the
cause of such failure of coverage. In connection with the
placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Seller or by any
officer, director, or employee of the Seller or any designee of
the Seller or any corporation in which the Seller or any officer,
director, or employee had a financial interest at the time of
placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action or
proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an
issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property; and nothing
further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not notified
the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act or
other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage
Loan application by a Qualified Appraiser, accepted by the
Seller, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of
the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Title XI of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all
applicable law with respect to the making of the Mortgage Loans.
The Seller shall maintain such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to
adversely affect the value or the marketability of any Mortgaged
Property (except as may be expressly shown in the related
appraisal) or Mortgage Loan or to cause the Mortgage Loans to
prepay during any period materially faster or slower than similar
mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the related Closing Date
(whether or not known to the Seller on or prior to such date)
which has resulted or will result in an exclusion from, denial
of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the
timely payment of the full amount of the loss otherwise due
thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the
application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted
therewith to the insurer under such insurance policy, or for any
other reason under such coverage, but not including the failure
of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such
Mortgage was originated within such twelve month period) analyzed
the required Escrow Payments for each Mortgage and adjusted the
amount of such payments so that, assuming all required payments
are timely made, any deficiency will be eliminated on or before
the first anniversary of such analysis, or any overage will be
refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing
Practices;
(vv) Credit Information. As to each consumer report (as defined in the
Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by the Seller to the Purchaser, that Seller
has full right and authority and is not precluded by law or
contract from furnishing such information to the Purchaser and
the Purchaser is not precluded from furnishing the same to any
subsequent or good faith legitimate prospective purchaser of such
Mortgage. The Seller shall hold the Purchaser harmless from any
and all damages, losses, costs and expenses (including attorney's
fees) arising from disclosure of credit information in connection
with the Purchaser's good faith legitimate secondary marketing
operations and the purchase and sale of mortgages or Servicing
Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee
simple interest in the land; (2) the terms of such lease
expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor's consent and the
acquisition by the holder of the Mortgage of the rights of the
lessee upon foreclosure or assignment in lieu of foreclosure or
provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder
of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of
the lease in the event of damage or destruction as long as the
Mortgage is in existence, (c) prohibit the holder of the Mortgage
from being insured (or receiving proceeds of insurance) under the
hazard insurance policy or policies relating to the Mortgaged
Property or (d) permit any increase in rent other than
pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the
term of such lease does not terminate earlier than five years
after the maturity date of the Mortgage Note; and (6) the
Mortgaged Property is located in a jurisdiction in which the use
of leasehold estates in transferring ownership in residential
properties is a widely accepted practice;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is
identified on the related Mortgage Loan Schedule. With respect to
each Mortgage Loan that has a Prepayment Penalty feature, each
such Prepayment Penalty is enforceable, and each Prepayment
Penalty is permitted pursuant to federal, state and local law.
Each such Prepayment Penalty is in an amount not more than the
maximum amount permitted under applicable law and no such
Prepayment Penalty may be imposed for a term in excess of five
(5) years with respect to Mortgage Loans originated prior to
October 1, 2002. With respect to Mortgage Loans originated on or
after October 1, 2002, the duration of the Prepayment Penalty
period shall not exceed three (3) years from the date of the
Mortgage Note unless the Mortgage Loan was modified to reduce the
Prepayment Penalty period to no more than three (3) years from
the date of the related Mortgage Note and the Mortgagor was
notified in writing of such reduction in Prepayment Penalty
period. This representation and warranty is a Deemed Material and
Adverse Representation;
(yy) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is
governed by the Georgia Fair Lending Act. No Mortgage Loan is
covered by the Home Ownership and Equity Protection Act of 1994
and no Mortgage Loan is in violation of any comparable state or
local law. This representation and warranty is a Deemed Material
and Adverse Representation;
(zz) [Reserved];
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid in
full, life of loan, tax service contract issued by Fidelity
National Tax Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without
regard to the ability of the Mortgagor to repay and the extension
of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the
assignment to the Purchaser) have been recorded in the
appropriate jurisdictions wherein such recordation is necessary
to perfect the lien thereof as against creditors of the Seller,
or is in the process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days after the
related Closing Date, the Mortgagor has not filed and will not
file a bankruptcy petition or has not become the subject and will
not become the subject of involuntary bankruptcy proceedings or
has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed
in respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously been offered
for sale;
(ggg) ▇▇▇▇▇▇ ▇▇▇ Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending
eligibility for purchase requirements of ▇▇▇▇▇▇ Mae Guides. This
representation and warranty is a Deemed Material and Adverse
Representation;
(hhh) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the Originator which is
a higher cost product designed for less creditworthy mortgagors,
unless at the time of the Mortgage Loan's origination, such
Mortgagor did not qualify taking into account credit history and
debt-to-income ratios for a lower-cost credit product then
offered by the Originator. This representation and warranty is a
Deemed Material and Adverse Representation;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's
income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the
related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of
origination (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of
a premium upon a prepayment prior to maturity: (i) the Mortgage
Loan provides some benefit to the Mortgagor (e.g., a rate or fee
reduction) in exchange for accepting such Prepayment Penalty,
(ii) the Mortgage Loan's originator had a written policy of
offering the Mortgagor, or requiring third-party brokers to offer
the Mortgagor, the option of obtaining a mortgage loan that did
not require payment of such a premium, (iii) the prepayment
premium is disclosed to the related Mortgagor in the Mortgage
Loan documents pursuant to applicable state and federal law, and
(iv) notwithstanding any state or federal law to the contrary,
the Originator, as servicer, shall not impose such prepayment
premium in any instance when the mortgage debt is accelerated as
the result of the related Mortgagor's default in making the
Mortgage Loan payments. This representation and warranty is a
Deemed Material and Adverse Representation;
(kkk) Purchase of Insurance. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g., life, mortgage,
disability, property, accident, unemployment or health insurance
product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a
prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment, mortgage
or health insurance) in connection with the origination of the
Mortgage Loan. No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(lll) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance
with applicable state and federal law and regulation. This
representation and warranty is a Deemed Material and Adverse
Representation;
(mmm) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or
to be collected in connection with the origination and servicing
of each Mortgage Loan, have been disclosed in writing to the
Mortgagor in accordance with applicable state and federal law and
regulation. This representation and warranty is a Deemed Material
and Adverse Representation;
(nnn) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to
resolve any dispute arising out of or relating in any way to the
Mortgage Loan transaction. This representation and warranty is a
Deemed Material and Adverse Representation;
(ooo) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction
in which the Mortgaged Property is located, the original lender
has filed for record a request for notice of any action by the
related senior lienholder, and the Seller has notified the senior
lienholder in writing of the existence of the Second Lien Loan
and requested notification of any action to be taken against the
Mortgagor by the senior lienholder. Either (a) no consent for the
Second Lien Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in
the Mortgage File. This representation and warranty is a Deemed
Material and Adverse Representation;
(ppp) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full
force and effect, and there is no default, breach, violation or
event which would permit acceleration existing under such first
Mortgage or Mortgage Note, and no event which, with the passage
of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event
which would permit acceleration thereunder. This representation
and warranty is a Deemed Material and Adverse Representation;
(qqq) Right to Cure First Lien. With respect to each Second Lien Loan,
the related first lien Mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee
under the Mortgage Loan and allows such mortgagee to cure any
default under the related first lien Mortgage. This
representation and warranty is a Deemed Material and Adverse
Representation;
(rrr) No Failure to Cure Default. The Seller has not received a written
notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(sss) No Negative Amortization of Related First Lien Loan. With respect
to each Second Lien Loan, the related First Lien Loan does not
permit negative amortization. This representation and warranty is
a Deemed Material and Adverse Representation; and
(ttt) Principal Residence. With respect to each Second Lien Loan, the
related Mortgaged Property is the Mortgagor's principal
residence. This representation and warranty is a Deemed Material
and Adverse Representation.
SCHEDULE VII
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of LaSalle, as Custodian
LaSalle hereby makes the representations and warranties set forth
in this Schedule VII to the Trustee as of the Closing Date. Capitalized terms
used but not otherwise defined shall have the meaning ascribed thereto in the
Agreement to which this Schedule VII is attached.
(a) LaSalle is duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by LaSalle in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) LaSalle has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
action on the part of LaSalle the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes
a legal, valid and binding obligation of LaSalle, enforceable against
LaSalle in accordance with its terms, except that (i) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and
to the discretion of the court before which any proceeding therefor may
be brought.
(c) The execution and delivery of this Agreement by LaSalle, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of LaSalle and will not (i)
result in a material breach of any term or provision of the articles of
incorporation or by laws of LaSalle, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in
a material default under, the terms of any other material agreement or
instrument to which LaSalle is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or
regulation applicable to LaSalle of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
LaSalle; and LaSalle is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair LaSalle's ability to
perform or meet any of its obligations under this Agreement.
(d) No litigation is pending or, to the best of its knowledge,
threatened against LaSalle that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or the
ability of LaSalle to perform any of its obligations under this
Agreement in accordance with the terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by LaSalle of, or compliance by LaSalle with, this Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, LaSalle has
obtained the same.
SCHEDULE VIII
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates,
Series 2007-HE4
Representations and Warranties of Countrywide Servicing, as Servicer
Countrywide Servicing hereby makes the representations and
warranties set forth in this Schedule VIII to the Depositor and the Trustee as
of the Closing Date.
(i) Due Organization and Authority. The Servicer is validly
existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on
its business as now being conducted and is licensed, qualified and in
good standing in the states where the Mortgaged Property is located if
the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Servicer. The Seller has
the power and authority to execute and deliver this Pooling and
Servicing Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Pooling and Servicing
Agreement (including all instruments of transfer to be delivered
pursuant to this Pooling and Servicing Agreement) by the Servicer and
the consummation of the transactions contemplated hereby have been duly
and validly authorized; this Pooling and Servicing Agreement has been
duly executed and delivered and constitutes the valid, legal, binding
and enforceable obligation of the Servicer, except as enforceability may
be limited by (i) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors and (ii) general principles of
equity, whether enforcement is sought in a proceeding in equity or at
law. All requisite action has been taken by the Servicer to make this
Pooling and Servicing Agreement valid and binding upon the Servicer in
accordance with its terms;
(ii) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Pooling and
Servicing Agreement from any court, governmental agency or body, or
federal or state regulatory authority having jurisdiction over the
Servicer is required or, if required, such consent, approval,
authorization or order has been or will, prior to the related Closing
Date, be obtained;
(iii) Ordinary Course of Business. The consummation of the
transactions contemplated by this Pooling and Servicing Agreement are in
the ordinary course of business of the Servicer;
(iv) No Conflicts. Neither the execution and delivery of this
Pooling and Servicing Agreement by the Servicer, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Pooling and Servicing Agreement,
will conflict with or result in a breach of any of the terms, conditions
or provisions of the Servicer's partnership agreement or any legal
restriction or any agreement or instrument to which the Servicer is now
a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of
any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse
effect upon any of its properties pursuant to the terms of any mortgage,
contract, deed of trust or other instrument, or impair the ability of
the Trustee to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Trustee to realize the full
amount of any insurance benefits accruing pursuant to this Pooling and
Servicing Agreement;
(v) No Litigation Pending. There is no action, suit, proceeding
or investigation pending or, to best of knowledge of the Servicer,
threatened against the Servicer, before any court, administrative agency
or other tribunal asserting the invalidity of this Pooling and Servicing
Agreement, seeking to prevent the consummation of any of the
transactions contemplated by this Pooling and Servicing Agreement or
which, either in any one instance or in the aggregate, may reasonably
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on
its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage
Loans or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be
likely to impair materially the ability of the Servicer to perform under
the terms of this Pooling and Servicing Agreement;
(vi) Ability to Perform; Solvency. The Servicer does not believe,
nor does it have any reason or cause to believe, that it cannot perform
each and every covenant contained in this Pooling and Servicing
Agreement. The Servicer is solvent;
(vii) Servicer's Ability to Service. The Servicer is an approved
seller/servicer for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac in good standing and is a
mortgagee approved by the Secretary of HUD. No event has occurred,
including a change in insurance coverage, which would make the Servicer
unable to comply with ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD eligibility
requirements;
(viii) Reasonable Servicing Fee. The Servicer acknowledges and
agrees that the Servicing Fee represents reasonable compensation for
performing such services and that the entire Servicing Fee shall be
treated by the Servicer, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans
pursuant to this Pooling and Servicing Agreement;
(ix) No Untrue Information. Neither this Pooling and Servicing
Agreement nor any information, statement, tape, diskette, report, form,
or other document furnished or to be furnished pursuant to this Pooling
and Servicing Agreement or any Reconstitution Agreement or in connection
with the transactions contemplated hereby (including any Pass-Through
Transfer or Whole Loan Transfer) contains or will contain any untrue
statement of fact or omits or will omit to state a fact necessary to
make the statements contained herein or therein not misleading;
EXHIBIT A
[To be added to any Class A-1 Certificate while it remains a Private
Certificate: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[__]
A-2a-[__]
A-2b-[__]
A-2c-[__]
A-2d-[__]
M-1-[__]
M-2- [__]
M-3-[__]
M-4-[__]
M-5-[__]
M-6-[__]
B-1-[__]
B-2-[__]
B-3-[__]
Cut-off Date : March 1, 2007
First Distribution Date : April 26, 2007
Initial Certificate Balance of this
Certificate ("Denomination") : $[____________________]
Initial Certificate Balances of all
Certificates of this Class :
[A-1] $ 36,339,000
[A-2a] $ 267,710,000
[A-2b] $ 74,290,000
[A-2c] $ 116,150,000
[A-2d] $ 70,921,000
[M-1] $ 28,058,000
[M-2] $ 22,020,000
[M-3] $ 12,786,000
[M-4] $ 11,010,000
[M-5] $ 11,010,000
[M-6] $ 9,944,000
[B-1] $ 9,944,000
[B-2] $ 7,103,000
[B-3] $ 7,103,000
CUSIP : [A-1] 61753V AA0
[A-2a] 61753V ▇▇▇
[▇-▇▇] 61753V AC6
[A-2c] 61753V AD4
[A-2d] 61753V AE2
[M-1] 61753V AF9
[M-2] 61753V AG7
[M-3] 61753V AH5
[M-4] 61753V AJ1
[M-5] 61753V AK8
[M-6] 61753V ▇▇▇
[▇-▇] 61753V AM4
[B-2] 61753V AN2
[B-3] 61753V AP7
ISIN : [A-1] US61753VAA08
[A-2a] ▇▇▇▇▇▇▇▇▇▇▇▇
[▇-▇▇] US61753VAC63
[A-2c] US61753VAD47
[A-2d] US61753VAE20
[M-1] US61753VAF94
[M-2] US61753VAG77
[M-3] US61753VAH50
[M-4] US61753VAJ17
[M-5] US61753VAK89
[M-6] ▇▇▇▇▇▇▇▇▇▇▇▇
[▇-▇] ▇▇▇▇▇▇▇▇▇▇▇▇
[▇-▇] US61753VAN29
[B-3] US61753VAP76
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, Series 2007-HE4
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, ▇▇▇▇▇ Fargo Bank, National Association, as trustee, and
LaSalle Bank National Association, as custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
By: ___________________________________
Authenticated:
By ___________________________________________
Authorized Signatory of ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________ ,
______________________________________________________________________________ ,
for the account of ___________________________________________________________ ,
account number ______________, or, if mailed by check, to ____________________ .
______________________________________________________________________________ .
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE FORM
OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT
SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS P CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS P CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE
TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR
W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH
FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH
FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE
OF ANY CLASS P CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER AND THE CAP PROVIDER. EACH HOLDER OF A
CLASS P CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE TRUSTEE FORWARDING TO THE SWAP PROVIDER AND THE CAP PROVIDER
ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH
THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS P
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL
BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : P-1
Cut-off Date : March 1, 2007
First Distribution Date : April 26, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, Series 2007-HE4
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, Countrywide Home Loans Servicing LP, as a servicer, Decision One
Mortgage Company, LLC, as a responsible party, WMC Mortgage Corp., as a
responsible party, ▇▇▇▇▇ Fargo Bank, National Association, as trustee, and
LaSalle Bank National Association, as custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purposes, or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and any applicable state
securities laws or is made in accordance with the Securities Act and such laws.
In the event of any such transfer, the Trustee shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Pooling and Servicing Agreement) and deliver either (i) a Rule 144A Letter, in
either case substantially in the form attached to the Agreement, or (ii) a
written Opinion of Counsel to the Trustee that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act or is being made pursuant to the Securities
Act, which Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless
the Trustee shall have received a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By:__________________________________
Authenticated:
By ___________________________________________
Authorized Signatory of ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________ ,
______________________________________________________________________________ ,
for the account of ___________________________________________________________ ,
account number ______________, or, if mailed by check, to ____________________ .
______________________________________________________________________________ .
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : March 1, 2007
First Distribution Date : April 26, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, Series 2007-HE4
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, ▇▇▇▇▇ Fargo Bank, National Association, as trustee, and
LaSalle Bank National Association, as custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicers, the Depositor or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By:__________________________________
Authenticated:
By ___________________________________________
Authorized Signatory of ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________ ,
______________________________________________________________________________ ,
for the account of ___________________________________________________________ ,
account number ______________, or, if mailed by check, to ____________________ .
______________________________________________________________________________ .
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C-2
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : RX-1
Cut-off Date : March 1, 2007
First Distribution Date : April 26, 2007
Percentage Interest of this : 100%
Certificate ("Denomination")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, Series 2007-HE4
Class RX
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class RX Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Trustee or any other party to
the Agreement referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class RX Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc.,
as a servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, ▇▇▇▇▇ Fargo Bank, National Association, as trustee, and
LaSalle Bank National Association, as custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class RX
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class RX Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicers, the Depositor or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
Each Holder of this Class RX Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class RX Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class RX Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class RX Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class RX Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class RX Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class RX Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class RX Certificate, (C) not to cause income with respect to the Class RX
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class RX Certificate or to cause the Transfer of the Ownership Interest in this
Class RX Certificate to any other Person if it has actual knowledge that such
Person is a Non-Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class RX Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By:__________________________________
Authenticated:
By ___________________________________________
Authorized Signatory of ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________ ,
______________________________________________________________________________ ,
for the account of ___________________________________________________________ ,
account number ______________, or, if mailed by check, to ____________________ .
______________________________________________________________________________ .
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE FORM
OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND
WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICERS TO ANY OBLIGATION
IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
NO TRANSFER OF ANY CLASS X CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS X CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE
TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR
W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH
FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH
FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE
OF ANY CLASS X CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER AND THE CAP PROVIDER. EACH HOLDER OF A
CLASS X CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE
CONSENTED TO THE TRUSTEE FORWARDING TO THE SWAP PROVIDER AND THE CAP PROVIDER
ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED AND UPDATED IN ACCORDANCE WITH
THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS X
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL
BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : X-1
Cut-off Date : March 1, 2007
First Distribution Date : April 26, 2007
Percentage Interest of this
Certificate ("Denomination") : [___]%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, Series 2007-HE4
Class X
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Saxon Mortgage Services, Inc., as a
servicer, Countrywide Home Loans Servicing LP, as a servicer, WMC Mortgage
Corp., as a responsible party, Decision One Mortgage Company, LLC, as a
responsible party, ▇▇▇▇▇ Fargo Bank, National Association, as trustee, and
LaSalle Bank National Association, as custodian. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Certificate Balance or
Pass-Through Rate and will be entitled to distributions only to the extent set
forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the offices designated by the Trustee for such purposes
or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and any applicable state
securities laws or is made in accordance with the Securities Act and such laws.
In the event of any such transfer, the Trustee shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Pooling and Servicing Agreement) and deliver either (i) a Rule 144A Letter, in
either case substantially in the form attached to the Agreement, or (ii) a
written Opinion of Counsel to the Trustee that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act or is being made pursuant to the Securities
Act, which Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of the Trustee, the Servicers or the Trust Fund, addressed to
the Trustee, to the effect that the purchase or holding of such Certificate will
not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Depositor, the Trustee or the Servicers to any obligation in
addition to those expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By:__________________________________
Authenticated:
By ___________________________________________
Authorized Signatory of ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
Mortgage Pass-Through Certificates, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Trustee and their respective agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 5% of the Cut-off Date
Pool Principal Balance, Saxon Mortgage Services, Inc. or Countrywide Home Loans
Servicing LP, individually or together, will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________ ,
______________________________________________________________________________ ,
for the account of ___________________________________________________________ ,
account number ______________, or, if mailed by check, to ____________________ .
______________________________________________________________________________ .
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF [CUSTODIAN]/[TRUSTEE]
March 29, 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-HE4
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of March 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, Countrywide Home Loans
Servicing LP, as a Servicer, WMC Mortgage Corp., as a
Responsible Party, Decision One Mortgage Company, LLC, as a
Responsible Party, ▇▇▇▇▇ Fargo Bank, National Association, as
Trustee, and LaSalle Bank National Association, as Custodian,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE4
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), for each
Mortgage Loan listed in the Mortgage Loan Schedule for which the undersigned is
acting as [Custodian]/[Trustee] (other than any Mortgage Loan listed in the
attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in
the following form: "Pay to the order of ________, without
recourse"; and
(ii) except with respect to MERS Designated Mortgage
Loans, an executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The [Custodian]/[Trustee] has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The [Custodian]/[Trustee] makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectibility, insurability, effectiveness, suitability, perfection or
priority of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the [Custodian]/[Trustee] has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as Noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:__________________________________
Name:________________________________
Title:_______________________________
[▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Trustee]
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF [CUSTODIAN]/[TRUSTEE]
[date]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-HE4
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of March 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, Countrywide Home Loans
Servicing LP, as a Servicer, WMC Mortgage Corp., as a
Responsible Party, Decision One Mortgage Company, LLC, as a
Responsible Party, ▇▇▇▇▇ Fargo Bank, National Association, as
Trustee, and LaSalle Bank National Association, as Custodian,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE4
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
[Custodian]/[Trustee], hereby certifies that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form
provided in Section 2.01 of the Pooling and Servicing Agreement,
with all intervening endorsements showing a complete chain of
endorsement from the originator to the last endorsee.
(ii) The original or county certified recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage
Loans, an executed assignment of the Mortgage endorsed in blank,
which may be included in a blanket assignment or assignments in
the form provided in Section 2.01 of the Pooling and Servicing
Agreement; or, if the Responsible Party has certified that the
related Mortgage has not been returned from the applicable
recording office, a copy of the assignment of the Mortgage
(excluding information to be provided by the recording office).
(iv) Except with respect to MERS Designated Mortgage
Loans, the original or county certified recorded assignment or
assignments of the Mortgage showing a complete chain of
assignment from the originator to the last endorsee.
(v) The original or copy of lender's title policy, and
all riders thereto or any one of an original title binder, an
original preliminary title report or an original title
commitment;
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (7) and (9)
of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The [Custodian]/[Trustee] has made no independent examination of
any documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Pooling and Servicing Agreement. The
[Custodian]/[Trustee] makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness,
suitability, perfection or priority of any such Mortgage Loan. Notwithstanding
anything herein to the contrary, the [Custodian]/[Trustee] has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:____________________________________
Name:__________________________________
Title:_________________________________
[▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Trustee]
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE4,
Mortgage Pass-Through Certificates,
Series 2007-HE4
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
a. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class
[R][RX] Certificate (the "Residual Certificate") issued
pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by
and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor,
Saxon Mortgage Services, Inc., as a Servicer, Countrywide
Home Loans Servicing LP, as a Servicer, WMC Mortgage Corp.,
as a Responsible Party, Decision One Mortgage Company, LLC,
as a Responsible Party, ▇▇▇▇▇ Fargo Bank, National
Association, as Trustee (the "Trustee"), and LaSalle Bank
National Association, as Custodian (the "Custodian").
Capitalized terms used, but not defined herein shall have
the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee for the benefit of the
Depositor and the Trustee.
b. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The
Transferee is acquiring its Ownership Interest in the
Residual Certificate for its own account. The Transferee has
no knowledge that any such affidavit is false.
c. The Transferee has been advised of, and understands that (i)
a tax will be imposed on Transfers of the Residual
Certificate to Persons that are Non-Permitted Transferees;
(ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker,
nominee or middleman) for a Person that is a Non-Permitted
Transferee, on the agent; and (iii) the Person otherwise
liable for the tax shall be relieved of liability for the
tax if the subsequent Transferee furnished to such Person an
affidavit that such subsequent Transferee is a Permitted
Transferee and, at the time of Transfer, such Person does
not have actual knowledge that the affidavit is false.
d. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the
Residual Certificate if at any time during the taxable year
of the pass-through entity a Person that is a Non-Permitted
Transferee is the record holder of an interest in such
entity. The Transferee understands that such tax will not be
imposed for any period with respect to which the record
holder furnishes to the pass-through entity an affidavit
that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such
affidavit is false. (For this purpose, a "pass-through
entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership,
trust or estate, and certain cooperatives and, except as may
be provided in Treasury Regulations, persons holding
interests in pass-through entities as a nominee for another
Person.)
e. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal
consequences of the acquisition of an Ownership Interest in
the Residual Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The
Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Residual Certificate.
The Transferee understands and agrees that any breach of any
of the representations included herein shall render the
Transfer to the Transferee contemplated hereby null and
void.
f. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its
Ownership Interest in the Residual Certificate, and in
connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the
Transferee will not Transfer its Ownership Interest or cause
any Ownership Interest to be Transferred to any Person that
the Transferee knows is a Non-Permitted Transferee. In
connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate
substantially in the form set forth as Exhibit H to the
Agreement (a "Transferor Certificate") to the effect that,
among other things, such Transferee has no actual knowledge
that the Person to which the Transfer is to be made is a
Non-Permitted Transferee.
g. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be
paid with respect to the Residual Certificate. The
Transferee has historically paid its debts as they have come
due and intends to pay its debts as they come due in the
future. The Transferee intends to pay all taxes due with
respect to the Residual Certificate as they become due.
h. The Transferee's taxpayer identification number is
__________.
i. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
j. The Transferee is aware that the Residual Certificate may be
a "noneconomic residual interest" within the meaning of
proposed Treasury regulations promulgated pursuant to the
Code and that the transferor of a noneconomic residual
interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no
significant purpose of the transfer was to impede the
assessment or collection of tax.
k. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an
applicable income tax treaty, of the Transferee or any other
U.S. Person.
l. Check the applicable paragraph:
[_] The present value of the anticipated tax liabilities
asociated with holding the Residual Certificate, as
applicable, does not exceed the sum of:
(i) the present value of any consideration given to the
Transferee to acquire such Residual Certificate;
(ii) the present value of the expected future distributions on
such Residual Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such Residual Certificate as the
related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed
to pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[_] The transfer of the Residual Certificate complies with
U.S. Treasury Regulations Sections 1.860E-1(c)(5) and (6)
and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Residual Certificate will only be
taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess
of $100 million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Residual Certificate only
to another "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), in a
transaction that satisfies the requirements of Sections
1.860E-1(c)(4)(i), (ii) and (iii) and Section
1.860E-1(c)(5) of the U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Residual Certificate based on reasonable
market assumptions (including, but not limited to,
borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax
rates and other factors specific to the Transferee) that
it has determined in good faith.
[_] None of the above.
m. The Transferee is not an employee benefit plan that is
subject to Title I of ERISA or a plan that is subject to
Section 4975 of the Code or a plan subject to any Federal,
state or local law that is substantially similar to Title
I of ERISA or Section 4975 of the Code, and the Transferee
is not acting on behalf of or investing plan assets of
such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of ______________ , 20__.
_____________________________________
Print Name of Transferee
By: ________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known
or proved to me to be the same person who executed the foregoing instrument and
to be the ___________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________, 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [__]
▇▇▇▇▇ Fargo Bank, National Association
as Trustee
▇▇▇▇▇ Fargo Center
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-HE4
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE4,
Mortgage Pass-Through Certificates, Series 2007-HE4, Class
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
---------------------------------
Print Name of Transferor
By:______________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [______]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.,
as Swap Provider and Cap Provider
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: NY ISD SPV Team
▇▇▇▇▇ Fargo Bank, National Association
as Trustee
▇▇▇▇▇ Fargo Center
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: MSAC 2007-HE4
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE4,
Mortgage Pass-Through Certificates, Series 2007-HE4, Class
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class ▇-▇, ▇▇▇▇▇ ▇-▇▇,
▇▇▇▇▇ ▇-▇▇, Class A-2c, Class A-2d, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 or Class B-3 Certificate or we are
not an employee benefit plan that is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan or
arrangement that is subject to Section 4975 of the Internal Revenue Code of
1986, as amended, or a plan subject to materially similar provisions of
applicable federal, state or local law, nor are we acting on behalf of any such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such acquisition or, with respect to a Class X Certificate, the purchaser
is an insurance company that is purchasing this certificate with funds contained
in an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
In connection with our purchase of the Certificates, we
acknowledge and agree that (i) none of you nor any of your affiliates is acting
as a fiduciary or financial or investment adviser for us; (ii) we are not
relying (for purposes of making any investment decision or otherwise) upon any
advice, counsel or representations (whether written or oral) of any of you or
your affiliates with respect to the Certificates; (iii) none of you nor any of
your affiliates has given to us (directly or indirectly through any other
person) any assurance, guarantee or representation whatsoever as to the expected
or projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2007-HE4 securities; and (vii) we
are familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2007-HE4 and the other material transaction documents related
thereto.
The Transferee's taxpayer identification number is __________.
The Transferee attaches hereto Forms W-8ECI, W-8BEN, W-8IMY (and all appropriate
attachments) or W-9. The Transferee hereby consents to the attached Forms being
provided to the Swap Provider and the Cap Provider.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other
----------------
than a bank, savings and loan association or
similar institution), Massachusetts or similar
business trust, partnership, or charitable
organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
----
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and
is supervised by the State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy
of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and
----------------
loan association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker dealer. The Buyer is a dealer registered
-------------
pursuant to Section 15 of the Securities Exchange
Act of 1934.
____ Insurance Company. The Buyer is an insurance
-----------------
company whose primary and predominant business
activity is the writing of insurance or the
reinsuring of risks underwritten by insurance
companies and which is subject to supervision by
the insurance commissioner or a similar official or
agency of a State, territory or the District of
Columbia.
____ State or Local Plan. The Buyer is a plan
-------------------
established and maintained by a State, its
political subdivisions, or any agency or
instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan
----------
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment
------------------
advisor registered under the Investment Advisors
Act of 1940.
____ Small Business Investment Company. Buyer is a small
---------------------------------
business investment company licensed by the U.S.
Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of
1958.
____ Business Development Company. Buyer is a business
----------------------------
development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940.
3. The term "Securities" as used herein does not include (i)
----------
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities,
the Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a reaffirmation
of this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
__________________________________
Print Name of Transferee
By: __________________________________
Name:
Title:
Date:_________________________________
------------------------------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____ The Buyer owned $____________ in securities (other
than the excluded securities referred to below) as
of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with
Rule 144A).
____ The Buyer is part of a Family of Investment
Companies which owned in the aggregate $________ in
securities (other than the excluded securities
referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
------------------------------
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "Securities" as used herein does not include (i)
----------
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
__________________________________
Print Name of Transferee
By: __________________________________
Name:
Title:
If an Adviser:
______________________________________
Print Name of Buyer
Date:_________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for [Trustee]/[Custodian])
To: [[Trustee]/[Custodian]]
Re: In connection with the administration of the Mortgage Loans
held by you as the [Trustee]/[Custodian] on behalf of the
Certificateholders, pursuant to the Pooling and Servicing
Agreement, dated as of March 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc., as Depositor, Saxon Mortgage Services,
Inc., as a Servicer, Countrywide Home Loans Servicing LP, as
a Servicer, WMC Mortgage Corp., as a Responsible Party,
Decision One Mortgage Company, LLC, as a Responsible Party,
▇▇▇▇▇ Fargo Bank, National Association, as Trustee, and
LaSalle Bank National Association, as Custodian, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2007-HE4, we request
the release, and acknowledge receipt, of the (Custodial
File/[specify documents]) for the Mortgage Loan described
-----------------------
below, for the reason indicated.
--------------------------------
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that all
amounts received in connection therewith have been credited to its
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Servicer hereby certifies that the
repurchase price has been credited to Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to its
Collection Account pursuant to the Pooling and Servicing
Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other
(explain).____________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the [Custodian]/[Trustee], please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SAXON MORTGAGE SERVICES, INC.,
as Servicer]
By: __________________________________
Name:
Title:
Date:
[COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer]
By: __________________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By: ___________________________________________
Name:
Title:
Date:
[▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Trustee]
By: ___________________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection by
the Sponsor and which shall be retained by the applicable Servicer or delivered
to and retained by the Trustee or Custodian, as applicable:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse"
and signed (which may be by facsimile signature) in the name of
the last endorsee by an authorized officer. To the extent that
there is no room on the face of the Mortgage Note for
endorsements, the endorsement may be contained on an allonge,
unless the Trustee or the Custodian, as applicable, is advised in
writing by the applicable Responsible Party (pursuant to the
applicable Purchase Agreement) that state law does not so allow;
(b) the original of any guaranty executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If,
in connection with any Mortgage Loan, the original Mortgage
cannot be delivered with evidence of recording thereon on or
prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded
Mortgage, the applicable Responsible Party shall deliver or cause
to be delivered to the Trustee or the Custodian, as applicable, a
photocopy of such Mortgage certified by the applicable
Responsible Party to be a true and complete copy of such Mortgage
and shall forward to the Trustee or the Custodian, as applicable,
such original recorded Mortgage within 14 days following the
applicable Responsible Party's receipt of such Mortgage from the
applicable public recording office; or in the case of a Mortgage
where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording;
(e) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank (except with respect to MERS Designated
Mortgage Loans);
(f) the originals of all intervening assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage
Loan) to the last endorsee with evidence of recording thereon or
a certified true copy of such intervening assignments of Mortgage
submitted for recording, or if any such intervening assignment
has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original
recorded assignments of Mortgage, the applicable Responsible
Party shall deliver or cause to be delivered a photocopy of such
intervening assignment, certified by the applicable Responsible
Party to be a true and complete copy of such intervening
assignment and shall forward to the Trustee or the Custodian, as
applicable, such original recorded intervening assignment within
14 days following the applicable Responsible Party's receipt of
such from the applicable public recording office; or in the case
of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the
case where an intervening assignment is lost after recordation in
a public recording office, a copy of such intervening assignment
certified by such public recording office to be a true and
complete copy of the original recorded intervening assignment;
(g) the original mortgagee title insurance policy or, in the event
such original title policy is unavailable, a certified true copy
of the related policy binder or commitment for title certified to
be true and complete by the title insurance company; and
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and amount of down
payment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
(p) Survey of the Mortgaged Property.
(q) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(t) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim
files, correspondence, current and historical computerized data files (which
include records of tax receipts and payment history from the date of
origination), and all other processing, underwriting and closing papers and
records which are customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
-----------------------
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE4, issued pursuant
to the Pooling and Servicing Agreement, dated as of March 1, 2007,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as Depositor, Saxon
Mortgage Services, Inc., as a Servicer, Countrywide Home Loans
Servicing LP, as a Servicer, WMC Mortgage Corp., as a Responsible
Party, Decision One Mortgage Company, LLC, as a Responsible Party,
▇▇▇▇▇ Fargo Bank, National Association, as Trustee, and LaSalle Bank
National Association, as Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust, Series 2007-HE4
I, [identify the certifying individual], certify that:
a. I have reviewed this annual report on Form 10-K ("Annual
Report"), and all reports on Form 10-D (collectively with this
Annual Report, the "Reports") required to be filed in respect
of period covered by this Annual Report, of the Trust;
b. Based on my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this Annual Report;
c. Based on my knowledge, all of the distribution, servicing and
other information required to be provided under Form 10-D for
the period covered by this Annual Report is included in the
Reports;
d. Based on my knowledge and the compliance statements required
in this Annual Report under Item 1123 of Regulation AB, and
except as disclosed in the Reports, the Servicers have
fulfilled their obligations under the Pooling and Servicing
Agreement in all material respects; and
e. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related
attestation reports on assessment of compliance with servicing
criteria required to be included in this Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act
Rules 13a-18 and 15d-18 have been included as an exhibit to
this Annual Report, except as otherwise disclosed in this
Annual Report. Any material instances of non-compliance
described in such reports have been disclosed in this Annual
Report.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee, the Servicers
and the Custodian.
Date: ________________________________
___________________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY THE TRUSTEE TO DEPOSITOR
------------------------------------
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2007-HE4,
issued pursuant to the Pooling and Servicing Agreement, dated
as of March 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
as Depositor, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, WMC
Mortgage Corp., as a Responsible Party, Decision One Mortgage
Company, LLC, as a Responsible Party, ▇▇▇▇▇ Fargo Bank,
National Association, as Trustee, and LaSalle Bank National
Association, as Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust, Series 2007-HE4
The Trustee hereby certifies to the Depositor, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
a. I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form
10-D required to be filed in respect of period covered by the
Annual Report (collectively with the Annual Report, the
"Reports"), of the Trust;
b. To my knowledge, the Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements
were made, not misleading with respect to the period covered
by the Annual Report, it being understood that the Trustee is
not responsible for verifying the accuracy or completeness of
information in the Reports (a) provided by Persons other than
the Trustee or any Subcontractor utilized by the Trustee or
(b) relating to Persons other than the Trustee or any
Subcontractor utilized by the Trustee as to which a
Responsible Officer of the Trustee does not have actual
knowledge;
c. To my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under
the Pooling and Servicing Agreement for inclusion in the
Reports is included in the Reports;
d. The report on assessment of compliance with servicing
criteria for asset-backed securities applicable to the
Trustee and each Subcontractor utilized by the Trustee and
their related attestation [report] on assessment of
compliance with servicing criteria applicable to it required
to be included in the Annual Report in accordance with Item
1122 of Regulation AB and Exchange Act Rules 13a-18 and
15d-18 has been included as an exhibit to the Annual Report.
Any material instances of non-compliance are described in
such report and have been disclosed in the Annual Report.
Date: _________________________________
___________________________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED
BY SAXON TO DEPOSITOR
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2007-HE4,
issued pursuant to the Pooling and Servicing Agreement, dated
as of March 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
as Depositor, Saxon Mortgage Services, Inc., as a Servicer,
Countrywide Home Loans Servicing LP, as a Servicer, WMC
Mortgage Corp., as a Responsible Party, Decision One Mortgage
Company, LLC, as a Responsible Party, ▇▇▇▇▇ Fargo Bank,
National Association, as Trustee, and LaSalle Bank National
Association, as Custodian, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
------------------
Trust, Series 2007-HE4
----------------------
Saxon certifies to the Depositor and the Trustee, and their
respective officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
a. [Saxon] has reviewed the servicer compliance statement of
[Saxon] and the compliance statements of each Subservicer, if any,
engaged by [Saxon] provided to the Depositor and the Trustee for the
Trust's fiscal year [___] in accordance with Item 1123 of Regulation AB
(each a "Compliance Statement"), the report on assessment of [Saxon]'s
--------------------
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria") and reports on assessment of
------------------
compliance with servicing criteria for asset-backed securities of
[Saxon] and of each Subservicer or Subcontractor, if any, engaged or
utilized by [Saxon] provided to the Depositor and the Trustee for the
Trust's fiscal year [___] in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act")
------------
and Item 1122 of Regulation AB (each a "Servicing Assessment"), the
--------------------
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and
Section 1122(b) of Regulation AB related to each Servicing Assessment
(each an "Attestation Report"), and all servicing reports, officer's
------------------
certificates and other information relating to the servicing of the
Mortgage Loans by [Saxon] during 200[_] that were delivered or caused to
be delivered by [Saxon] pursuant to the Agreement (collectively, the
"Servicing Information");
---------------------
b. Based on [Saxon]'s knowledge, the Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the
Servicing Information;
c. Based on [Saxon]'s knowledge, the servicing information
required to be provided to the Trustee by [Saxon] pursuant to the
Pooling and Servicing Agreement has been provided to the Trustee;
d. Based on [Saxon]'s knowledge and the compliance review
conducted in preparing Compliance Statement of [Saxon] and, if
applicable, reviewing each Compliance Statement of each Subservicer, if
any, engaged by [Saxon], and except as disclosed in such Compliance
Statement[(s)], [Saxon] [(directly and through its Subservicers, if
any)] has fulfilled its obligations under the Pooling and Servicing
Agreement in all material respects.
e. Each Servicing Assessment of [Saxon] and of each Subservicer
or Subcontractor, if any, engaged or utilized by [Saxon] and its related
Attestation Report required to be included in the Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18
and 15d-18 has been provided to the Depositor and the Trustee. Any
material instances of non-compliance are described in any such Servicing
Assessment or Attestation Report.
Date: _____________________________
By: _____________________________
Name: _____________________________
Title: _____________________________
EXHIBIT O
WMC PURCHASE AGREEMENT
================================================================================
FIFTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
Purchaser
WMC MORTGAGE CORP.,
Seller
---------------
Dated as of November 1, 2006
Subprime,
Fixed and Adjustable Rate, Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................
SECTION 2. AGREEMENT TO PURCHASE............................................
SECTION 3. MORTGAGE SCHEDULES...............................................
SECTION 4. PURCHASE PRICE...................................................
SECTION 5. EXAMINATION OF MORTGAGE FILES....................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..................................
SECTION 8. TRANSFER OF SERVICING............................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SELLER; REMEDIES FOR BREACH................................
SECTION 10. CLOSING..........................................................
SECTION 11. CLOSING DOCUMENTS................................................
SECTION 12. COSTS............................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION......................
SECTION 14. THE SELLER.......................................................
SECTION 15. FINANCIAL STATEMENTS.............................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...................
SECTION 17. NOTICES..........................................................
SECTION 18. SEVERABILITY CLAUSE..............................................
SECTION 19. COUNTERPARTS.....................................................
SECTION 20. GOVERNING LAW....................................................
SECTION 21. INTENTION OF THE PARTIES.........................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.........
SECTION 23. WAIVERS..........................................................
SECTION 24. EXHIBITS.........................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..................................
SECTION 26. REPRODUCTION OF DOCUMENTS........................................
SECTION 27. FURTHER AGREEMENTS...............................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE...........................
SECTION 29. NO SOLICITATION..................................................
SECTION 30. WAIVER OF TRIAL BY JURY..........................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS........
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
FIFTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
This FIFTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of November 1, 2006, by and
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation, having an
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"),
and WMC Mortgage Corp., a California corporation, having an office at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Fourth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of May 1, 2006 (the "Original Purchase Agreement"), pursuant to which
the Seller desires to sell, from time to time, to the Purchaser, and the
Purchaser desires to purchase, from time to time, from the Seller, certain first
and second lien, adjustable-rate and fixed-rate residential mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered in pools of whole loans (each, a "Mortgage Loan Package") on
various dates as provided herein (each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend and restate the Original Purchase Agreement to make certain modifications
as set forth herein and upon the execution and delivery of this Agreement by the
Purchaser and the Seller this Agreement shall supercede the Original Purchase
Agreement and supplant the Original Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Fifth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made, if any, for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made, if any, at the time of origination of such
refinanced Mortgage Loan, and (ii) with respect to any Second Lien Loan, the
value, determined pursuant to the Seller's Underwriting Guidelines, of the
related Mortgaged Property as of the origination of the Second Lien Loan.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Section 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 11.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Subsection 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," (excluding
New Jersey "Covered Home Loans" as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) a Mortgage Loan categorized as High Cost pursuant to Appendix E of Standard
& Poor's Glossary. For avoidance of doubt, the parties agree that this
definition shall apply to any law currently in effect regardless of whether such
law is presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan for the purpose of calculating the Mortgage
Interest Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property
and received on or after the applicable Cut-off Date.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
Liquidation Proceeds: Cash (other than Insurance Proceeds or
Condemnation Proceeds) received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual, (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS(R)
System, and (c) the Seller has designated or will designate the Custodian as the
Custodian on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest remitted to the Purchaser, which shall be equal to
the Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor's race
and/or ethnicity is (i) native American or Alaskan native, (ii) Asian/Pacific
islander, (iii) African American, (iv) white, (v) Hispanic or Latino, (vi) other
minority, (vii) not provided by the Mortgagor, (viii) not applicable (if the
Mortgagor is an entity) or (ix) unknown or missing; (5) a code indicating
whether the Mortgagor is self-employed; (6) a code indicating whether the
Mortgaged Property is owner-occupied; (7) the number and type of residential
units constituting the Mortgaged Property; (8) the original months to maturity
or the remaining months to maturity from the related Cut-off Date, in any case
based on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (9)
with respect to each First Lien Loan, the Loan-to-Value Ratio at origination,
and with respect to each Second Lien Loan, the CLTV at origination; (10) the
Mortgage Interest Rate as of the related Cut-off Date; (11) the date on which
the Monthly Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, such Due Date; (12) the stated
maturity date; (13) the first payment date; (14) the amount of the Monthly
Payment as of the related Cut-off Date; (15) the last payment date on which a
payment was actually applied to the outstanding principal balance; (16) the
original principal amount of the Mortgage Loan; (17) the principal balance of
the Mortgage Loan as of the close of business on the related Cut-off Date, after
deduction of payments of principal due and collected on or before the related
Cut-off Date; (18) delinquency status as of the related Cut-off Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Interest Rate Adjustment
Date; (20) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(21) with respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap
under the terms of the Mortgage Note; (22) with respect to each Adjustable Rate
Mortgage Loan, a code indicating the type of Index; (23) the product type of
Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage Loan, First or Second
Lien Loan) and with respect to each Second Lien Loan, the product type of the
related First Lien Loan; (24) a code indicating the purpose of the loan (i.e.,
purchase, rate and term refinance, equity take-out refinance); (25) a code
indicating the documentation style (i.e., full, alternative or reduced); (26)
asset verification (Y/N); (27) the loan credit classification (as described in
the Underwriting Guidelines); (28) whether such Mortgage Loan provides for a
Prepayment Penalty and, if applicable, the Prepayment Penalty period; (29) the
Mortgage Interest Rate as of origination; (30) the credit risk score (FICO
score); (31) the date of origination; (32) with respect to Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period; (33) [reserved];
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate floor; (35) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate Cap as of the first Interest Rate Adjustment Date; (36)
with respect to each Adjustable Rate Mortgage Loan, the Periodic Rate Cap
subsequent to the first Interest Rate Adjustment Date; (37) with respect to each
Adjustable Rate Mortgage Loan, a code indicating whether the Mortgage Loan
provides for negative amortization; (38) with respect to each Adjustable Rate
Mortgage Loan with negative amortization, the negative amortization limit; (39)
a code indicating whether the Mortgage Loan is a High Cost Loan; (40) a code
indicating whether the Mortgage Loan is a Balloon Mortgage Loan; (41) the Due
Date for the first Monthly Payment; (42) the original Monthly Payment due; (43)
a code indicating the PMI Policy provider and percentage of coverage, if
applicable; (44) Appraised Value; (45) appraisal type; (46) automated valuation
model (AVM); (47) appraisal date; (48) with respect to the related Mortgagor,
the debt-to-income ratio; (49) with respect to each MERS Designated Mortgage
Loan, the MERS Identification Number; (50) a code indicating whether the
Mortgage Loan was purchased from a correspondent; (51) a code indicating whether
the Mortgage Loan does not comply with Subsection 9.02 (ooo), (52) a code
indicating whether the Mortgage Loan is a Home Loan and (53) whether the
Mortgage Loan has Monthly Payments that are interest-only for a period of time,
and the interest-only period, if applicable (and with respect to each Second
Lien Loan, whether the related First Lien Loan has monthly payments that are
interest-only for a period of time, and the interest-only period, if
applicable). With respect to the Mortgage Loans in the aggregate, the Mortgage
Loan Schedule shall set forth the following information, as of the related
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average maturity
of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the applicable
Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in one
or more separate and complete tax parcels of real property improved by a
Residential Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation was not affected by the approval or disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser both
satisfied the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project, (iv) a one-family dwelling in
a planned unit development, or (v) a Manufactured Home, none of which is a
dwelling unit in a residential cooperative housing corporation or mobile home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Act of 1934, as
amended.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Interim Servicer under the Interim Servicing Agreement. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by this Agreement)
of such Monthly Payment collected by the Interim Servicer, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans (other than any payments or monies received
by Seller during any interim servicing period for servicing any Mortgage Loan);
(b) any payments to or monies received by the Seller for servicing the Mortgage
Loans; (c) any late fees, penalties or similar payments with respect to the
Mortgage Loans; (d) all agreements or documents creating, defining or evidencing
any such servicing rights to the extent they relate to such servicing rights and
all rights of the Seller thereunder; (e) Escrow Payments or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
by the Seller with respect thereto; (f) all accounts and other rights to payment
related to any of the property described in this paragraph; and (g) any and all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records, or other information pertaining to the
Mortgage Loans or pertaining to the past, present or prospective servicing of
the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Static Pool Information: As defined in Section 13.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the Stated Principal Balance. The
initial principal amount of the related Mortgage Loans shall be the aggregate
principal balance of the Mortgage Loans, so computed as of the related Cut-off
Date. If so provided in the related Purchase Price and Terms Agreement, portions
of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the Stated Principal
Balance of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans from the related
date on which interest was last paid through the day prior to the applicable
Closing Date, inclusive. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees during the period that the
Interim Servicer is servicing the Mortgage Loans (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan (except with respect to each MERS Designated Mortgage Loan),
or (b) make the related Mortgage File available to the Purchaser for examination
at such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole good
faith discretion, that any Mortgage Loans are unacceptable to the Purchaser for
any reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date and with the payment of the Purchase Price by the Purchaser,
shall execute and deliver an Assignment and Conveyance Agreement in the form
attached hereto as Exhibit G (the "Assignment and Conveyance Agreement"). The
Seller shall cause the Servicing File retained by the Interim Servicer pursuant
to this Agreement to be appropriately identified in the Seller's computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. The Seller shall cause the Interim
Servicer to release from its custody the contents of any Servicing File retained
by it only in accordance with this Agreement or the Interim Servicing Agreement,
except when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, beneficial ownership of each Mortgage and related
Mortgage Note shall be vested solely in the Purchaser or the appropriate
designee of the Purchaser, as the case may be. All rights arising out of the
Mortgage Loans including, but not limited to, all funds received by the Seller
or the Interim Servicer after the related Cut-off Date on or in connection with
a Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller or the Interim Servicer
in trust for the benefit of the Purchaser or the appropriate designee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
The Interim Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Interim Servicer shall maintain in its possession,
available for inspection by the Purchaser and in accordance with Accepted
Servicing Practices, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations,
including but not limited to documentation as to the method used in determining
the applicability of the provisions of the National Flood Insurance Act of 1968,
as amended, to the Mortgaged Property, documentation evidencing insurance
coverage and periodic inspection reports. To the extent that original documents
are not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds, documents maintained by the Seller or the Interim Servicer
may be in the form of microfilm or microfiche.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto with respect to each Mortgage Loan set
forth on the related Mortgage Loan Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered for the related Closing Date, as evidenced by
the Initial Certification of the Custodian. The Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Seller shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
provide the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within one hundred twenty days of its submission
for recordation.
In the event any document required to be delivered to the Custodian
pursuant to this Agreement including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 120 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating and
monitoring the overall quality of the Seller's loan production and the servicing
activities of the Interim Servicer. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser and
shall be entitled to a Servicing Fee with respect to such Mortgage Loans until
the applicable Transfer Date. The Interim Servicer shall conduct such servicing
in accordance with the Interim Servicing Agreement.
The Interim Servicer may enter into subservicing agreements with
subservicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Interim Servicer as
provided in the Interim Servicing Agreement. The Purchaser hereby acknowledges
that the Seller shall assign its obligation to service the Mortgage Loans for
the benefit of the Purchaser to its interim subservicer, which, on the date of
this Agreement, is either Option One Mortgage Corporation or ▇▇▇▇▇▇ Loan
Servicing, LP.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Interim Servicer to cease all servicing responsibilities related to,
the related Mortgage Loans subject to such Transfer Date. The Transfer Date
shall be the date determined in accordance with Section 6.02 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall cause the Interim
Servicer to mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall cause the Interim Servicer to provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Interim Servicer to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer's possession relating to
each related Mortgage Loan including the information enumerated in the Interim
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall cause the Interim Servicer to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall cause the
Interim Servicer to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer on the related Mortgage
Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Interim Servicer or
the Seller, as applicable, to the account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. The Seller shall assume full responsibility for the necessary
and appropriate legal application of such Monthly Payments received by the
Seller after the Transfer Date with respect to related Mortgage Loans then in
foreclosure or bankruptcy; provided, for purposes of this Agreement, necessary
and appropriate legal application of such Monthly Payments shall include, but
not be limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
cause the Interim Servicer to comply with the foregoing requirements with
respect to all Monthly Payments received by the Interim Servicer after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer Date
shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a shortage
in a Custodial Account or Escrow Account, the Seller shall be liable for the
amount of such shortage. The Seller shall reimburse the Purchaser for the amount
of such shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party shorted by
the improper payment application within five (5) Business Days after notice
thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or the
Purchaser Mortgage Loan identification number and an explanation of the
allocation of any such payments.
(i) [Reserved].
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments reasonably
required by the Purchaser. Any such monetary adjustments will be transferred
between the Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Interim Servicer
to file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties reasonably incurred by the Purchaser due to the Seller's failure to
comply with this paragraph.
(l) MERS. With respect to each MERS Designated Mortgage Loan, the
Seller shall, on or before the Transfer Date, designate, as directed by the
Purchaser, the Purchaser, or its designee, as the servicer on the MERS(R)
System. In addition, the Seller shall promptly take all other actions reasonably
requested by Purchaser with respect to MERS Designated Mortgage Loans and the
MERS(R) System to effectuate and evidence the transfer of servicing in
accordance with the terms of this Agreement and the Interim Servicing Agreement.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in the states where the Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Seller. The Seller has corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement has been duly executed and delivered and constitutes
the valid, legal, binding and enforceable obligation of the Seller, except as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors and (ii) general principles of equity,
whether enforcement is sought in a proceeding in equity or at law. All requisite
corporate action has been taken by the Seller to make this Agreement valid and
binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to Seller's knowledge, threatened against the Seller,
before any court, administrative agency or other tribunal asserting the
invalidity of this Agreement, seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or which, either in any one instance
or in the aggregate, would likely result in any material adverse change in the
business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws, regulations and executive orders
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); as and to the extent applicable to the Seller,
the Seller has established an anti-money laundering compliance program as
required by the Anti-Money Laundering Laws and has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan to the extent
required by and for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. Additionally, no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of Treasury (the "OFAC
Regulations") or in violation of the Executive Order or the OFAC Regulations;
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;;
(j) Selection Process. The Mortgage Loans were selected from among
the one- to four-family mortgage loans in the Seller's portfolio at the related
Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to this Agreement shall be delivered to
the Custodian all in compliance with the specific requirements hereunder. With
respect to each Mortgage Loan, the Seller will be in possession of a complete
Mortgage File in compliance with Exhibit A hereto, except for such documents as
will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) [Reserved];
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) [Reserved];
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish
(or cause to be furnished), in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis. Additionally, the Seller, as servicer, will transmit (or cause to
be transmitted) full-file credit reporting data for each Mortgage Loan pursuant
to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 95-19 and that for each Mortgage Loan, the
Seller, as servicer, agrees it shall report (or cause to be reported) one of the
following statuses each month as follows: new origination, current, delinquent
(30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent, exclusive
of any period of grace, at any time since the origination of the Mortgage Loan.
The first Monthly Payment shall be made with respect to the Mortgage Loan on its
related Due Date or within the grace period, all in accordance with the terms of
the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, subject to bankruptcy, equitable principles and laws affecting
creditor rights;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by an
insurer acceptable in accordance with Seller's Underwriting Guidelines against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is situated as well as all
additional requirements set forth in Section 2.10 of the Interim Servicing
Agreement. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Seller's Underwriting Guidelines as well
as all additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the originator and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor's cost
and expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering a condominium, or
any hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements to the
extent compliance therewith can be demonstrated and if required by applicable
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of one or more separate and complete tax parcels of real property
improved by a Residential Dwelling; provided, however, that any condominium unit
or planned unit development (other than a de minimis planned unit development)
shall conform with the Underwriting Guidelines. In the case of any Mortgaged
Properties that are Manufactured Homes (a "Manufactured Home Mortgage Loans"),
(i) the related manufactured dwelling is permanently affixed to the land, (ii)
the related manufactured dwelling and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming Seller as
mortgagee, (iii) the applicable laws of the jurisdiction in which the related
Mortgaged Property is located will deem the manufactured dwelling located on
such Mortgaged Property to be a part of the real property on which such dwelling
is located, (iv) as of the origination date of the related Mortgage Loan, the
related manufactured housing unit that secures such Mortgage Loan either (x) was
the principal residence of the Mortgagor or (y) was classified as real property
under applicable state law, and (v) such Manufactured Home Mortgage Loan is (x)
a qualified mortgage under Section 860G(a)(3) of the Internal Revenue Code of
1986, as amended and (y) secured by manufactured housing treated as a single
family residence under Section 25(e)(10) of the Code. No portion of the
Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are log
homes, mobile homes, geodesic domes or other unique property types. Clause (iv)
above is a Deemed Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting
and enforceable first lien (with respect to a First Lien Loan) or second lien
(with respect to a Second Lien Loan) on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to (collectively, the "Permitted Exceptions"):
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) and first priority (with
respect to a First Lien Loan) or second priority (with respect to a Second Lien
Loan) security interest on the property described therein and the Seller has
full right to sell and assign the same to the Purchaser subject to the Permitted
Exceptions;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties), subject to bankruptcy, equitable principles and laws affecting
creditor rights. All parties to the Mortgage Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. Notwithstanding the foregoing, but without
limiting the other representations and warranties set forth elsewhere in this
Agreement, if any error, omission or negligence in the origination of such
Mortgage Loan occurred despite Seller's conformance with its Underwriting
Guidelines (as in effect at the time such Mortgage Loan was made), then there
shall be a presumptive conclusion that there was no error, omission or
negligence. No fraud, misrepresentation, or similar occurrence or, to Seller's
knowledge, error, omission, or negligence with respect to a Mortgage Loan has
taken place on the part of any Person (other than Seller), including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. From
and after the related Closing Date, the Seller intends to relinquish all rights
to possess, control and monitor the Mortgage Loan. After the related Closing
Date, the Seller will have no right to modify or alter the terms of the sale of
the Mortgage Loan and the Seller will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located to the extent required to ensure
enforceability of the Mortgage Loan, and (2) either (i) organized under the laws
of such state, or (ii) qualified to do business in such state, or (iii) a
federal savings and loan association, a savings bank or a national bank having a
principal office in such state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV or a CLTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable pursuant to Seller's Underwriting Guidelines and each such title
insurance policy is issued by a title insurer acceptable to prudent lenders in
the secondary mortgage market and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring the originator, its successors
and assigns, as to the first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the Permitted Exceptions, and in
the case of Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Seller (or its predecessor in interest), its successors
and assigns, are the sole insureds of such lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. There is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority, except with respect to a Mortgage Loan purchased from a
correspondent as indicated on the Mortgage Loan Schedule. Principal payments on
the Mortgage Loan commenced no more than seventy days after funds were disbursed
in connection with the Mortgage Loan. The Mortgage Interest Rate as well as, in
the case of an Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the
Periodic Cap are as set forth on the related Mortgage Loan Schedule. Unless
specified on the related Mortgage Loan Schedule as an interest-only loan or a
Balloon Mortgage Loan, the Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization (or forty or fifty
years for Mortgage Loans identified on the Mortgage Loan Schedule as a Balloon
Mortgage Loan with a forty or fifty year amortization period). Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month and the Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines,
as may be amended from time to time by the Seller (a copy of which is attached
to each related Assignment and Conveyance Agreement). The Mortgage Note and
Mortgage are on forms acceptable to prudent mortgage lenders in the secondary
mortgage market and no representations have been made to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved].
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under this Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to each
Mortgage Loan is in recordable form and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or similar statutory provisions
in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder, and to the best of the Seller's knowledge, such provision is
enforceable subject to applicable bankruptcy, equitable principles and laws
affecting creditors' rights;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents do not allow an assumption of such Mortgage
Loan by any other party;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to prudent mortgage
lenders in the secondary market. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or, to Seller's knowledge, threatened for the
total or partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in at least the same condition or
better than its condition at the time of its appraisal. Since the time of its
appraisal, there have not been any condemnation proceedings with respect to the
Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Interim Servicer executed and delivered any and
all notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. To the best of the Seller's
knowledge, (i) there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and (ii) there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged Property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Seller's
Underwriting Guidelines and Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. The Seller (or its sub-servicer) has caused
to be fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis. This representation and warranty is a Deemed Material and Adverse
Representation;
(ss) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect to
each MERS Designated Mortgage Loan;
(tt) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder on
the MERS(R) System;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder. This representation and warranty is a
Deemed Material and Adverse Representation;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage.
This representation and warranty is a Deemed Material and Adverse
Representation;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, such lease conforms to the requirements required by ▇▇▇▇▇▇ ▇▇▇ pursuant
to the ▇▇▇▇▇▇ Mae Guide;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. Each such Prepayment Penalty is in an amount not
more than the maximum amount permitted under applicable law and no such
Prepayment Penalty may be imposed for a term in excess of five (5) years with
respect to Mortgage Loans originated prior to October, 1, 2002. With respect to
Mortgage Loans originated on or after October 1, 2002, the duration of the
Prepayment Penalty period shall not exceed three (3) years from the date of the
Mortgage Note unless the Mortgage Loan was modified to reduce the Prepayment
Penalty period to no more than three (3) years from the date of the related
Mortgage Note and the Mortgagor was notified in writing of such reduction in
Prepayment Penalty period. The second and third sentences of this representation
and warranty are a Deemed Material and Adverse Representation;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(bbb) [Reserved];
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National Tax
Service, Land America Tax Services or another national company providing such
services, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not been previously
rejected by a third-party purchaser;
(iii) [Reserved];
(jjj) ▇▇▇▇▇▇ ▇▇▇ Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of ▇▇▇▇▇▇ Mae Guides. This representation and warranty is
a Deemed Material and Adverse Representation;
(kkk) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Seller which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into such facts as, without limitation, the Mortgage Loan's requirements and the
Mortgagor's credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Seller or any
Affiliate of the Seller. If, at the time of loan application, the Mortgagor may
have qualified for a lower-cost credit product then offered by any mortgage
lending Affiliate of the Seller, the Seller referred the related Mortgagor's
application to such Affiliate for underwriting consideration. For a Mortgagor
who seeks financing through a Mortgage Loan originator's higher-priced subprime
lending channel, the Mortgagor was directed towards or offered the Mortgage Loan
originator's standard mortgage line if the Mortgagor was able to qualify for one
of the standard products. This representation and warranty is a Deemed Material
and Adverse Representation;
(lll) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely on the extent of
the related Mortgagor's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology employed objective
criteria that related such facts as, without limitation, the Mortgagor's credit
history, income, assets or liabilities, to the proposed mortgage payment and,
based on such methodology, the Mortgage Loan's originator made a reasonable
determination that at the time of origination the Mortgagor had the ability to
make timely payments on the Mortgage Loan. Such underwriting methodology
confirmed that at the time of origination (application/approval) the related
Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(mmm) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a penalty upon
a prepayment prior to maturity: (i) the Mortgage Loan provides some benefit to
the Mortgagor (e.g., a rate or fee reduction) in exchange for accepting such
Prepayment Penalty, (ii) the Mortgage Loan's originator had a written policy of
offering the Mortgagor or requiring third-party brokers to offer the Mortgagor,
the option of obtaining a mortgage loan that did not require payment of such a
penalty and (iii) the Prepayment Penalty was adequately disclosed to the
Mortgagor in the mortgage loan documents pursuant to applicable state, local and
federal law. This representation and warranty is a Deemed Material and Adverse
Representation;
(nnn) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan. No proceeds
from any Mortgage Loan were used to purchase single premium credit insurance
policies as part of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed Material and Adverse
Representation;
(ooo) Points and Fees. Except as set forth on the related Mortgage
Loan Schedule, no Mortgagor was charged "points and fees" (whether or not
financed) in an amount greater than (i) $1,000, or (ii) 5% of the principal
amount of such Mortgage Loan, whichever is greater. For purposes of this
representation, such 5% limitation is calculated in accordance with ▇▇▇▇▇▇ Mae's
anti-predatory lending requirements as set forth in the ▇▇▇▇▇▇ Mae Guides and
"points and fees" (x) include origination, underwriting, broker and finder fees
and charges that the mortgagee imposed as a condition of making the Mortgage
Loan, whether they are paid to the mortgagee or a third party; and (y) exclude
bona fide discount points, fees paid for actual services rendered in connection
with the origination of the Mortgage Loan (such as attorneys' fees, notaries
fees and fees paid for property appraisals, credit reports, surveys, title
examinations and extracts, flood and tax certifications, and home inspections),
the cost of mortgage insurance or credit-risk price adjustments, the costs of
title, hazard, and flood insurance policies, state and local transfer taxes or
fees, escrow deposits for the future payment of taxes and insurance premiums,
and other miscellaneous fees and charges that, in total, do not exceed 0.25% of
the principal amount of such Mortgage Loan. This representation and warranty is
a Deemed Material and Adverse Representation;
(ppp) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(qqq) No Arbitration. No Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation; and
(rrr) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property is the Mortgagor's principal residence. This
representation and warranty is a Deemed Material and Adverse Representation.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser therein
(or which materially and adversely affects the value of the applicable Mortgage
Loan or the interest of the Purchaser therein in the case of a representation
and warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, the Seller shall
use commercially reasonable efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, (i) within sixty (60) days after the earlier
of either discovery by, or notice to, the Seller of any breach of the
representation and warranty set forth in clause (ccc) of Subsection 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii) any
breach of a Deemed Material and Adverse Representation shall automatically be
deemed to materially and adversely affect the value of the Mortgage Loans or the
interest of the Purchaser therein. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans affected by such breach shall,
at the Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and the
Seller discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either (a)
if the Interim Servicing Agreement has been entered into and is in effect,
deposit in the Custodial Account of the amount of the Repurchase Price for
distribution to the Purchaser on the next scheduled Remittance Date, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution or
(b) if the Interim Servicing Agreement has not been entered into or is no longer
in effect, by direct remittance of the Repurchase Price to the Purchaser or its
designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 with the Mortgage Note endorsed as required by Subsection 6.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall cause the Interim Servicer to remit directly to the
Purchaser, or its designee in accordance with the Purchaser's instructions the
Monthly Payment less the Servicing Fee due, if any, on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution shall be retained by the Seller. For the month of
substitution, distributions to the Purchaser shall include the Monthly Payment
due on any Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution. Accordingly, on the date of such substitution, the
Seller will deposit from its own funds into the Custodial Account an amount
equal to the amount of such shortfall plus one month's interest thereon at the
Mortgage Loan Remittance Rate.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 and in Subsection 14.01 constitute the sole remedies of the
Purchaser respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid within
sixty (60) days of the related Due Date (the "Breach Date"), the Seller, at the
Purchaser's option, shall repurchase such Mortgage Loan from the Purchaser at
the Repurchase Price. The Purchaser shall have one hundred eighty (180) days
following the Breach Date to notify the Seller and request a repurchase and the
Seller shall repurchase such delinquent Mortgage Loan within thirty (30) days of
such request unless the Seller can provide evidence reasonably acceptable to the
Purchaser in its good faith discretion that such delinquency was due to a
servicing error.
Notwithstanding the foregoing, the Purchaser may, in its sole
discretion, elect to submit for the Seller's consideration a revised Purchase
Price Percentage (as defined in the related Purchase Price and Terms Agreement)
(in each case, a "Revised Pricing Offer") with respect to any such Mortgage
Loan. Thereafter, the Seller shall accept or reject such Revised Pricing Offer.
In the event the Seller rejects a Revised Pricing Offer, the applicable Mortgage
Loan shall be repurchased pursuant to the previous paragraph. In the event the
Seller accepts a Revised Pricing Offer with respect to any such Mortgage Loan
(such loan, a "Repriced Mortgage Loan") the Seller shall refund to the Purchaser
an amount equal to (i) the product of (x) the difference between the original
related Purchase Price Percentage and (y) the applicable Revised Pricing Offer,
and (ii) the outstanding principal balance of such Repriced Mortgage Loan as of
the related Cut-off Date (such product, in each case, the "Repricing
Adjustment"), plus accrued interest on such Repricing Adjustment calculated at
the federal funds rate as of the related Closing Date. Such amount shall be paid
by the Seller to the Purchaser within thirty (30) days thereof.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without a prepayment penalty, in the event that any such Mortgage Loan prepays
in full during the first three months following the related Closing Date, the
Seller shall pay the Purchaser, within ten (10) Business Days of such prepayment
in full, an amount equal to the product of the applicable percentage of par as
stated in the related Purchase Price and Terms Agreement (subject to adjustment
as provided therein) and the Stated Principal Balance of such Mortgage Loan as
of the related Cut-off Date; provided, however, that the Purchaser must request
in writing that Seller pay such amount within six (6) months of the related
Closing Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit
by modem, a listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Interim Servicer under the Interim Servicing
Agreement (with respect to each Mortgage Loan for an interim period, as
specified therein) shall be true and correct as of the related Closing
Date and no event shall have occurred which, with notice or the passage of
time, would constitute a default under this Agreement or an Event of
Default under the Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to this Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) the Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) the related Mortgage Loan Schedule (one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
(4) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(5) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Seller, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(6) with respect to the initial Closing Date, an Opinion
of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of Counsel
of the Seller"); with respect to subsequent Closing Dates, an
Opinion of Counsel of the Seller upon request of the
Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(8) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(9) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
(10) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto;
(11) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance; and
(12) a MERS Report reflecting the Purchaser as Investor,
the Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller, on behalf of itself and the Interim Servicer, agrees to
execute in connection with any Agency Transfer, any and all pool purchase
contracts, and/or agreements reasonably acceptable to the Seller and the Interim
Servicer, if applicable, among the Purchaser, the Seller and/or the Interim
Servicer, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the case may be) and any servicer in
connection with a Whole Loan Transfer, a seller's warranties and servicing
agreement or a participation and servicing agreement in form and substance
reasonably acceptable to the parties, and in connection with a Securitization
Transfer, an Assignment and Recognition Agreement substantially in the form
attached hereto as Exhibit I (collectively, the agreements referred to herein as
designated, the "Reconstitution Agreements"), together with an opinion of
counsel with respect to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller, on behalf of itself and the
Interim Servicer, agrees:
(1) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due diligence procedures;
(2) to execute, deliver and perform all Reconstitution Agreements
reasonably required by the Purchaser (provided Seller and Interim Servicer, if
applicable, shall be given adequate time to review and negotiate in good faith
such agreements);
(3) to restate the representations and warranties set forth in
Subsections 9.01 and 9.02 as of the Reconstitution Date or make the
representations and warranties set forth in the related selling/servicing guide
of the servicer or issuer, as the case may be, or such representations or
warranties as may be required by any rating agency or prospective purchaser of
the related securities or such Mortgage Loans in connection with such
Reconstitution; provided, that the representations and warranties contained in
Subsection 9.02(m) shall be made as of the related Closing Date; and provided,
further, that the representation and warranty contained in Subsection 9.02(a)
(with respect to information regarding stated principal balances and due dates),
(b), the first sentence of (c), (d), (f) (other than the fifth and the seventh
sentences), the first sentence of (h), the first and last sentences of (p), the
first sentence of (q), (r), the first two sentences of (w), (x), (ff), (hh),
(ii) (other than the first and fourth sentences), (ll), (rr), (uu) and (ggg)
shall be made only as of the related Transfer Date. Notwithstanding the provisos
set forth in this clause (3), the Seller shall remain liable for any breaches
following the date of its restatement of the representations and warranties set
forth in Subsections 9.01 and 9.02 to the extent the actions of the Seller,
Interim Servicer or any of their Affiliates contributed to such breaches;
(4) to deliver to Purchaser and any prospective purchaser within
five (5) Business Days after written request by Purchaser or prospective
purchaser, information, in form and substance satisfactory to Purchaser
(provided with respect to (a) and (b) below only if the Mortgage Loans are 20%
or more of the pool of assets included in such Securitization Transfer) and such
prospective purchaser, with respect to each originator of the Mortgage Loans,
required by Item 1110 of Regulation AB, which as of the date hereof requires the
following information: (a) the originator's form of organization; and (b) to the
extent material in the good faith judgment of the Purchaser, a description of
the originator's origination program and how long the originator has been
engaged in originating residential mortgage loans, which description must
include a discussion of the originator's experience in originating mortgage
loans of the same type as the Mortgage Loans and, if material in the good faith
judgment of the Purchaser, information regarding the size and composition of the
originator's origination portfolio as well as information that may be material,
in the good faith judgment of the Purchaser, to an analysis of the performance
of the Mortgage Loans, such as the originators' credit-granting or underwriting
criteria for mortgage loans of the same type as the Mortgage Loans; and
(5) to deliver to the Purchaser and any prospective purchaser within
five (5) Business Days after written request by the Purchaser, static pool
information deliverable pursuant to Regulation AB relating to the mortgage loans
that were originated by the Seller, which are of the same type as the Mortgage
Loans, and (i) for the period during which such mortgage loans were serviced by
the Seller or its agent, or (ii) were previously securitized and publicly
offered by the Seller or its affiliate as the sponsor, or (iii) were included in
static pool information provided by the Seller in connection with a public
securitization of mortgage loans by the Seller or its affiliate, or (iv) such
information as provided to the Seller by any third party purchaser or servicer
(other than the Purchaser or a servicer designated by such Purchaser) together
with indemnification therefor (collectively, the "Static Pool Information").
Such Static Pool Information shall be prepared by the Seller in accordance with
the requirements of Regulation AB. To the extent that there is reasonably
available to the Seller Static Pool Information with respect to more than one
mortgage loan type, the Purchaser or any Depositor shall be entitled to specify
whether some or all of such information shall be provided pursuant to clause (5)
above. A vintage origination year represents mortgage loans originated during
the same year. Such Static Pool Information shall be for the prior five years or
for so long as the originator has been originating (in the case of data by
vintage origination year) or securitizing (in the case of data by prior
securitized pools) such mortgage loans, if originating for less than five years.
The Static Pool Information for each vintage origination year or prior
securitized pools, as applicable, shall be presented no less frequently than
quarterly increments, to the extent material in the good faith judgment of the
Purchaser, over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The content of such Static Pool
Information may be in the form customarily provided by the Seller, and need not
be customized for the Purchaser or any assignee or designee thereof. The Seller
and the Purchaser agree that either (i) the Seller shall provide all Static Pool
Information, as described above, or (ii) solely with respect to the period of
time prior to January 1, 2006, the Seller shall represent and warrant that it is
unable without unreasonable effort or expense to provide Static Pool
Information.
The Seller and the Interim Servicer shall provide to the Purchaser's
servicer or issuer, as the case may be, and any other participants or purchasers
in such Reconstitution: (i) any and all information and appropriate verification
of information which may be reasonably available to the Seller, the Interim
Servicer or their affiliates, whether through letters of its auditors and
counsel or otherwise, as the Purchaser or any such other participant shall
request; (ii) such additional representations, warranties, covenants, opinions
of counsel, letters from auditors, and certificates of public officials or
officers of the Seller or the Interim Servicer as are reasonably believed
necessary by the Purchaser or any such other participant; and (iii) to execute,
deliver and satisfy all conditions set forth in any indemnity agreement required
by the Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B as agreed upon by the parties thereto. Moreover, the Seller,
on behalf of itself and the Interim Servicer, agrees to cooperate with all
reasonable requests made by the Purchaser to effect such Reconstitution
Agreements. The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser participating in the Reconstitution and each Person who controls the
Purchaser or such affiliate and their respective present and former directors,
officers, employees and agents, and hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain arising out of or based upon any
untrue statement or alleged untrue statement of a material fact, or arising out
of or based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to, information provided by or on behalf of the Seller
regarding the Seller, the Seller's or other originator's Static Pool Information
or the unavailability of such Static Pool Information (based upon a breach of
the representation and warranty set forth in clause (ii) of the final sentence
of the previous paragraph), the Mortgage Loans or the Underwriting Guidelines
set forth in any offering document prepared in connection with any
Reconstitution. By way of clarification, an omission or alleged omission as
described in the prior sentence shall be construed solely by reference to the
information the Seller is indemnifying for as required to be provided pursuant
to Regulation AB under clauses (4) and (5) above (the "Indemnified Information")
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Indemnified Information or
any portion thereof is presented together with or separately from such other
information. For purposes of the indemnification set forth above, "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and any
and all Persons who previously were "Purchasers" under this Agreement.
With respect to those Mortgage Loans that were sold to the Purchaser
pursuant to this Agreement and subsequently subject to a Securitization
Transfer, the Purchaser shall within five (5) Business Days after written
request by the Seller (or such other time as is reasonably required by the
Purchaser, but in any event in a timely manner in order for the Seller to comply
with Regulation AB), cause the related servicer (or another party) to be
obligated to provide such information, in the form customarily provided by such
servicer or other party (which need not be customized for the Seller) with
respect to the Mortgage Loans, including, without limitation, providing to the
Seller static pool information deliverable pursuant to Regulation AB (such
information provided by the servicer or such other party, the "Loan Performance
Information").
The Purchaser shall indemnify the Seller, each Person who controls
the Seller, each affiliate of the Seller and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in the Loan Performance Information or (B)
the omission or alleged omission to state in the Loan Performance
Information a material fact required to be stated in the Loan
Performance Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, by way of clarification, that clause
(B) of this paragraph shall be construed solely by reference to the
Loan Performance Information and not to any other information
communicated in connection with a sale or purchase of securities,
without regard to whether the Loan Performance Information or any
portion thereof is presented together with or separately from such
other information; or
(ii) any failure by the Purchaser or by the related servicer
(or other party) to deliver any Loan Performance Information as
required above.
For purposes of all Regulation AB provisions above, the term
"Purchaser" shall refer to the Purchaser hereunder and its successors in
interest and assigns. In addition, any notice or request that must be "in
writing" or "written" may be made by electronic mail.
The Purchaser will reimburse to the Seller up to $15,000 of the
Seller's out-of-pocket expenses incurred in connection with a Securitization
Transfer.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the Interim
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Interim Servicer
to execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
indemnification obligation under this Subsection 14.01) and related costs,
judgments, and any other costs, fees and expenses that such parties may sustain
in any way related to the failure of the Seller to perform its duties and the
Interim Servicer to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representations, warranties and
covenants set forth in this Agreement (provided that such costs shall not
include any lost profits or special or consequential damages). Except as set
forth above, the Seller shall not be liable to any Person for any action taken
or omitted to be taken by it hereunder in good faith and believed by it to be
within the purview of this Agreement. For purposes of this paragraph "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and any
and all Persons who previously were "Purchasers" under this Agreement and
"Successor Servicer" shall mean any Person designated as the Successor Servicer
pursuant to this Agreement and any and all Persons who previously were
"Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
(c) The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its obligation
to sell or duty to service the Mortgage Loans in accordance with this Agreement
and which in its opinion may result in its incurring any expenses or liability;
provided, however, that the Seller may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Purchaser shall
be liable, and the Seller shall be entitled to reimbursement therefor from the
Purchaser upon written demand except when such expenses, costs and liabilities
are subject to the Seller's indemnification under Subsections 14.01(a) or
14.01(b).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
With a copy to:
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
(ii) if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld, conditioned or delayed. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or subsidiaries, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail (via electronic means or otherwise),
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that the
Seller, or any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29. In addition, the solicitation of any
Mortgagor under a Mortgage Loan for the purpose of offering, selling and/or
making other financial products, including, without limitation, credit cards and
personal loans, shall not constitute solicitation under this Section 29;
provided such solicitations may not involve products related to the Mortgaged
Property in whole or in part, without the prior written consent of the
Purchaser.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process. THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE
CAPITAL INC.
(Purchaser)
By:
-------------------------------------
Name:
Title:
WMC MORTGAGE CORP.
(Seller)
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
[4th A&R MLWPA 5.2206]
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Fifth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Seller that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law
or commonly required by private institutional mortgage investors in the
area where the Mortgaged Property is located or on direction of the
Purchaser as provided in this Agreement. If the Assignment of Mortgage is
to be recorded, the Mortgage shall be assigned to the Purchaser. If the
Assignment of Mortgage is not to be recorded, the Assignment of Mortgage
shall be delivered in blank. If the Mortgage Loan was acquired by the
Seller in a merger, the Assignment of Mortgage must be made by "[Seller],
successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another
name, the Assignment of Mortgage must be by "[Seller], formerly known as
[previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or MERS, with respect to each MERS Designated Mortgage Loan)
with evidence of recording thereon, or if any such intervening assignment
has not been returned from the applicable recording office or has been
lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered
to the Custodian, a photocopy of such intervening assignment, together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Seller (or certified by the title company,
escrow agent, or closing attorney) stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a true copy of the
related policy binder or commitment for title issued by the title
insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified by
the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 120 days of the related Closing Date, an Officer's Certificate which
shall (i) identify the recorded document, (ii) state that the recorded document
has not been delivered to the Custodian due solely to a delay caused by the
public recording office, (iii) state the amount of time generally required by
the applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document is
expected to be delivered to the Custodian; provided, however, that any recorded
document shall in no event be delivered later than one year following the
related Closing Date. An extension of the date specified in clause (iv) above
may be requested from the Purchaser, which consent shall not be unreasonably
withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and WMC Mortgage
Corp., a [______________] corporation (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party "The Mortgage Loan
Pool--Underwriting Guidelines" and (ii) regarding the Mortgage Loans, the
related mortgagors and/or the related Mortgaged Properties (but in the case of
this clause (ii), only to the extent any untrue statement or omission of a
material fact arose from or is based upon errors or omissions in the information
concerning the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties, as applicable, provided to the Depositor or any affiliate
by or on behalf of the Indemnifying Party), [and static pool information
regarding mortgage loans originated or acquired by the seller [and included in
the Prospectus Supplement, the Offering Circular or the Comp
Materials][incorporated by reference from the Seller's website at [________]].
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Private Placement Memorandum or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such loss, claim,
damage, penalty, fine, forfeiture, liability or action. [The Indemnifying
Party's liability under this Section 3.1 shall be in addition to any other
liability that the Indemnifying Party may otherwise have.]
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[--------------]
[--------------]
[--------------]
Attention:
Telephone:
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[--------------]
[--------------]
[--------------]
Attention:
Telephone:
In the case of the Indemnifying Party:
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Secondary Marketing
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
-------------------------------------
Name:
Title:
[UNDERWRITER]
By:
-------------------------------------
Name:
Title:
WMC MORTGAGE CORP.
By:
-------------------------------------
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], corporation organized under the
laws of the [state of ____________] [United States] (the "Company") and further
as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and
complete copy of the charter of the Company which is in full force
and effect on the date hereof.
(ii) Attached hereto as Exhibit 2 is a true, correct and
complete copy of the bylaws of the Company which are in effect on
the date hereof.
(iii) Attached hereto as Exhibit 3 is an original certificate
of good standing of the Company issued within ten days of the date
hereof, and no event has occurred since the date thereof which would
impair such standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors
of the Company authorizing the Company to execute and deliver (a)
the Fifth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of _______ __, 200_ (the "Purchase Agreement"),
by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the
"Purchaser") and the Company and (b) the Amended and Restated
Interim Servicing Agreement, dated as of _______ __, 200_ (the
"Interim Servicing Agreement"), by and between the Purchaser and
___________ (the "Interim Servicer"), and such resolutions are in
effect on the date hereof.
(v) Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Purchase Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the
charter or by-laws of the Company or, to the best of my knowledge,
the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is
subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the
Company which, in my judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted
or in any material liability on the part of the Company or which
would draw into question the validity of the Purchase Agreement, or
the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would
be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements
set forth above was, at the respective times of such signing and
delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the
office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their
genuine signatures.
(ix) The Company is duly authorized to engage in the
transactions described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
▇▇▇▇ ▇▇▇▇▇▇▇ Executive Vice President
-------------------- --------------------------------- -----------------------
▇▇▇▇ ▇▇▇▇▇▇ Executive Vice President
-------------------- --------------------------------- -----------------------
Executive Vice
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ President/CFO
-------------------- --------------------------------- -----------------------
Executive Vice
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ President/General Counsel
-------------------- --------------------------------- -----------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Senior Vice President
-------------------- --------------------------------- -----------------------
-------------------- --------------------------------- -----------------------
-------------------- --------------------------------- -----------------------
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
_____________________________
_____________________________
_____________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. under a Fifth Amended and Restated Mortgage
Loan Purchase and Warranties Agreement. The Company warrants that the mortgage
loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. are in addition to and
beyond any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc.
Very truly yours,
____________________________
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Fifth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __,
200_, and certifies that all notes, mortgages, assignments and other documents
in its possession relating to such Mortgage Loans have been delivered and
released to the Company or its designees, as of the date and time of the sale of
such Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. Such release shall
be effective automatically without any further action by any party upon payment
in one or more installments, in immediately available funds, of $_____________,
in accordance with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
________________________________
________________________________
________________________________
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_________________________________
By:______________________________
Title:________________________
Date:_________________________
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this __th day of ____, 200_, WMC Mortgage Corp. ("Seller"), as
the Seller under (i) that certain Purchase Price and Terms Agreement, dated as
of _____, 200_ (the "PPTA"), (ii) that certain Fifth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of November 1, 2006
(the "Purchase Agreement"), and (iii) that certain Amended and Restated Interim
Servicing Agreement, dated as of November 1, 2005 (the "Interim Servicing
Agreement" and, together with the PPTA and the Purchase Agreement, the
"Agreements") does hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital, Inc. ("Purchaser") as the Purchaser under the
Agreements without recourse, but subject to the terms of the Agreements, all
right, title and interest of, in and to the Mortgage Loans listed on the
Mortgage Loan Schedule attached hereto as Exhibit A (the "Mortgage Loans"),
together with the Mortgage Files and the related Servicing Rights and all rights
and obligations arising under the documents contained therein. Each Mortgage
Loan subject to the Agreements was underwritten in accordance with, and conforms
to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant to
Section 6 of the Purchase Agreement, the Seller has delivered to the Custodian
the documents for each Mortgage Loan as set forth in the Purchase Agreement. The
contents of each Servicing File required to be retained by WMC Mortgage Corp. or
its designee, as interim servicer ("Interim Servicer") to service the Mortgage
Loans pursuant to the Interim Servicing Agreement and thus not delivered to the
Purchaser are and shall be held in trust by the Interim Servicer in its capacity
as interim servicer for the benefit of the Purchaser as the owner thereof. The
Interim Servicer's possession of any portion of the Servicing File is at the
will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to the Interim Servicing Agreement, and such
retention and possession by the Interim Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage and the contents of
the Mortgage File and Servicing File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Seller or the Interim
Servicer shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in such
custodial capacity only.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing, the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
WMC MORTGAGE CORP.
By:_____________________________________
Name:________________________________
Title:_______________________________
Accepted and Agreed:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:____________________________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
[to be provided under separate cover by Purchaser as agreed to by Seller]
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
Exhibit 1
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Fifth Amended
and Restated Mortgage Loan Purchase Agreement (the "Purchase Agreement"), dated
as of [DATE], between the Assignor, as purchaser (the "Purchaser"), and the
Company, as seller, solely insofar as the Purchase Agreement relates to the
Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans to the
same extent as Assignor would have been able to enforce such obligations, and
(iv) all references to the Purchaser, the Custodian or the Bailee under the
Purchase Agreement insofar as they relate to the Mortgage Loans, shall be deemed
to refer to the Trust (including the Trustee and the Servicer acting on the
Trust's behalf). From the date hereof, neither the Company nor the Assignor
shall amend or agree to amend, modify, waiver, or otherwise alter any of the
terms or provisions of the Purchase Agreement which amendment, modification,
waiver or other alteration would in any way affect the Mortgage Loans or the
Company's performance under the Purchase Agreement with respect to the Mortgage
Loans without the prior written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or, to
the Company's knowledge, threatened against the Company, before any
court, administrative agency or other tribunal, which would draw
into question the validity of this Agreement or the Purchase
Agreement, or which, either in any one instance or in the aggregate,
would result in any material adverse change in the ability of the
Company to perform its obligations under this Agreement or the
Purchase Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that, other than ______, the representations and warranties set
forth in Section 9.02 of the Purchase Agreement are true and correct as of the
date hereof as if such representations and warranties were made on the date
hereof unless otherwise specifically stated in such representations and
warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
WMC MORTGAGE CORP.
By:_____________________________________
Name:________________________________
Its:_________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:_____________________________________
Name:________________________________
Its:_________________________________
ASSIGNEE
By:_____________________________________
Name:________________________________
Its:_________________________________
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT P
DECISION ONE PURCHASE AGREEMENT
================================================================================
FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
Purchaser
DECISION ONE MORTGAGE COMPANY, LLC,
Seller
----------
Dated as of May 1, 2006
Conventional,
Fixed and Adjustable Rate, Subprime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH..................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. CONFIDENTIALITY..............................................
SECTION 33. ENTIRE AGREEMENT.............................................
SECTION 34. COMPLIANCE WITH REGULATION AB................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of May 1, 2006, by and between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation, having an office
at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") and
Decision One Mortgage Company, LLC, a North Carolina limited liability company,
having an office at ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of February 1, 2006 (the "Original Purchase Agreement"), pursuant to
which the Seller desires to sell, from time to time, to the Purchaser, and the
Purchaser desires to purchase, from time to time, from the Seller, certain
conventional adjustable-rate and fixed-rate subprime residential first and
second lien mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date"); and
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend and restate the Original Purchase Agreement to make certain modifications
as set forth herein, and upon the execution and delivery of this Agreement by
the Purchaser and the Seller this Agreement shall supercede the Original
Purchase Agreement and supplant the Original Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Interim Servicing Agreement.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Fourth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser and without recourse except as
otherwise set forth herein.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of August 1,
2002, among the Seller, the Purchaser and the Custodian, which governs the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and or its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Subsection 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Seller, acting as interim servicer, a
copy of which is attached to the Interim Servicing Agreement as Exhibit 6.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13 hereof.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," (excluding
New Jersey "Covered Home Loans" as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) a Mortgage Loan categorized as High Cost pursuant to Appendix E of Standard
& Poor's Glossary. For avoidance of doubt, the parties agree that this
definition shall apply to any law regardless of whether such law is presently,
or in the future becomes, the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Seller, as interim servicer, providing for the Seller to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan Performance Information: As defined in Subsection 34.03(e).
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity based on original
amortization schedule; (8) with respect to each First Lien Loan, the
Loan-to-Value Ratio at origination, and with respect to each Second Lien Loan,
the CLTV at origination; (9) the Mortgage Interest Rate as of the related
Cut-off Date; (10) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (11) the stated maturity date; (12) the first payment date; (13)
the amount of the Monthly Payment as of the related Cut-off Date; (14) the last
payment date on which a payment was actually applied to the outstanding
principal balance; (15) the original principal amount of the Mortgage Loan; (16)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (17) delinquency status as of the related
Cut-off Date; (18) with respect to each Adjustable Rate Mortgage Loan, the
Interest Rate Adjustment Date; (19) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (20) with respect to each Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap under the terms of the Mortgage Note; (21)
with respect to each Adjustable Rate Mortgage Loan, a code indicating the type
of Index; (22) the type of Mortgage Loan (i.e., Fixed or Adjustable Rate
Mortgage Loan, First or Second Lien Loan); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e., full, alternative or
reduced); (25) the loan credit classification (as described in the Underwriting
Guidelines); (26) whether such Mortgage Loan provides for a Prepayment Penalty
and, if applicable, the Prepayment Penalty period; (27) the Mortgage Interest
Rate as of origination; (28) the credit risk score (FICO score); (29) the date
of origination; (30) with respect to Adjustable Rate Mortgage Loans, the
Mortgage Interest Rate adjustment period; (31) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (32) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(33) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (34) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (35) a code indicating whether the Mortgage
Loan is a Home Loan; (36) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; (37) the Due Date for the first Monthly Payment; (38) the
original Monthly Payment due; (39) Appraised Value; (40) with respect to the
related Mortgagor, the debt-to-income ratio; and (41) the MERS Identification
Number, if applicable. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related
to an Adjustable Rate Mortgage Loan which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Rate Cap for each Adjustable Rate Mortgage
Loan is the rate set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price Percentage: As defined in the related Purchase Price
and Terms Agreement.
Purchase Price and Terms Agreement: Those certain letter agreements
setting forth the general terms and conditions of the transactions consummated
herein and identifying the Mortgage Loans to be purchased from time to time
hereunder, by and between the Seller and the Purchaser.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, accepted by the Seller, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and such appraiser and the appraisal made by
such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization
Transaction.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: Decision One Mortgage Company, LLC, its successors in
interest and assigns.
Seller Information: As defined in Subsection 34.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Seller under the Interim Servicing Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such Monthly
Payment collected by the Seller, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller shall cease all servicing
responsibilities. Such date shall occur on the day indicated by the Purchaser to
the Seller in accordance with the Interim Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance Agreement, attached hereto as Exhibit G.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the related
Purchase Price Percentage (subject to adjustment as provided therein),
multiplied by the aggregate principal balance, as of the related Cut-off Date,
of the Mortgage Loans, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans, net of the
Servicing Fee Rate. The Purchase Price plus accrued interest as set forth in the
preceding paragraph shall be paid to the Seller by wire transfer of immediately
available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such related Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such related Cut-off date, but to be applied on a Due Date beyond the related
Cut-off Date shall not be applied to the principal balance as of the related
Cut-off Date. Such prepaid amounts shall be the property of the Purchaser. The
Seller shall deposit any such prepaid amounts into the Custodial Account, which
account is established for the benefit of the Purchaser for subsequent
remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser; provided, however, that
the Purchaser and the Seller shall agree in writing on the final pool of
Mortgage Loans to be purchased on a Closing Date pursuant to this Agreement The
Purchaser may, at its option and without notice to the Seller, purchase some or
all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. In addition, the Seller shall maintain
in its possession, available for inspection by the Purchaser, and shall deliver
to the Purchaser upon demand, evidence of compliance with all federal, state,
and local laws, rules and regulations in connection with the origination and
servicing of the Mortgage Loans to the extent required by law to be maintained.
The Seller shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement or the Interim Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller in trust for the benefit of the Purchaser or
the appropriate designee of the Purchaser, as the case may be, as the owner of
the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
ten (10) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan, as set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the Mortgage Loans, the Seller shall
reissue and deliver to the Purchaser or its designee said officer's certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
statistically verifies, on a regular basis, the existence and accuracy of the
legal documents, credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and monitoring the overall
quality of the Seller's loan production and the servicing activities of the
Seller. The program is to ensure that the Mortgage Loans are originated in
accordance with the Underwriting Guidelines, guard against dishonest,
fraudulent, or negligent acts, and guard against errors and omissions by
officers, employees, or other authorized persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the Purchaser as the
Investor and the Custodian as custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition, on or prior to the related
Closing Date, Seller shall provide the Custodian and the Purchaser with a MERS
Report listing the Purchaser as the Investor, the Custodian as custodian and no
Person as Interim Funder with respect to each MERS Designated Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement and the Interim Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Seller shall execute the Interim Servicing Agreement on the
initial Closing Date.
Pursuant to the Interim Servicing Agreement, the Seller shall begin
servicing the Mortgage Loans on behalf of the Purchaser and shall be entitled to
a Servicing Fee with respect to such Mortgage Loans from the related Closing
Date until the termination of the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the Mortgage Loans. The Transfer
Date shall be the date determined in accordance with Section 6.03 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the related Transfer Date, or as otherwise specified
below the Seller shall, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices within five (5) Business Days following the related
Transfer Date.
(b) [Reserved]
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
related Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied by the Seller to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail within one (1)
Business Day following the date of receipt. The Seller shall notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller forwards with its payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall assume full responsibility for the necessary and appropriate
legal application of such Monthly Payments received by the Seller after the
related Transfer Date with respect to related Mortgage Loans then in foreclosure
or bankruptcy; provided, for purposes of this Agreement, necessary and
appropriate legal application of such Monthly Payments shall include, but not be
limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
comply with the foregoing requirements with respect to all Monthly Payments
received by it after the related Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the related Transfer Date and discovered after
the related Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
related Transfer Date cannot be identified and said misapplied
payment has resulted in a shortage in a Custodial Account or Escrow
Account, the Seller shall be liable for the amount of such shortage.
The Seller shall reimburse the Purchaser for the amount of such
shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
related Transfer Date has created an improper Purchase Price as the
result of an inaccurate outstanding principal balance, a check shall
be issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books,
records and accounts of the Seller with respect to the related Mortgage Loans
shall be in accordance with all applicable Purchaser requirements as set forth
in this agreement.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed in accordance with applicable law
in relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph.
SECTION.9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of North Carolina and has all licenses necessary to carry
on its business as now being conducted and is licensed, qualified and in good
standing in the states where the related Mortgaged Property is located, if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Seller. The Seller has corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement and all agreements contemplated
hereby have been duly executed and delivered and constitute the valid, legal,
binding and enforceable obligations of the Seller, except as enforceability may
be limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the related Closing Date;
(h) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(i) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(j) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(k) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transaction or Whole Loan Transfer) contains or will contain
any untrue statement of fact or omits or will omit to state a fact necessary to
make the statements contained herein or therein not misleading;
(l) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws, regulations and executive orders
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. Additionally, no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of Treasury (the "OFAC
Regulations") or in violation of the Executive Order or the OFAC Regulations;
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(r) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards, if any, as are usually and customarily insured against
by prudent mortgage lenders in the community in which the related Mortgaged
Property is located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to the requirements usually and customarily
insured against by prudent mortgage lenders in the community in which the
related Mortgaged Property is located, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory, abusive and fair lending
laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to Prepayment Penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements. This
representation and warranty is a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual residential condominium unit in a condominium project, or an
individual unit in a planned unit development and that no residence or dwelling
is a mobile home, provided, however, that any condominium unit or planned unit
development shall not fall within any of the "Ineligible Projects" of part VIII,
Section 102 of the ▇▇▇▇▇▇ ▇▇▇ Selling Guide and shall conform with the
Underwriting Guidelines. In the case of any Mortgaged Properties that are
Manufactured Homes (a "Manufactured Home Mortgage Loans"), (i) the related
manufactured dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage properly
filed in the appropriate public recording office and naming Seller as mortgagee,
(iii) the applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such
Mortgaged Property to be a part of the real property on which such dwelling is
located, (iv) as of the origination date of the related Mortgage Loan, the
related manufactured housing unit that secures such Mortgage Loan either (x) was
the principal residence of the Mortgagor or (y) was classified as real property
under applicable state law; and (v) such Manufactured Home Mortgage Loan is (x)
a qualified mortgage under Section 860G(a)(3) of the Internal Revenue Code of
1986, as amended and (y) secured by manufactured housing treated as a single
family residence under Section 25(e)(10) of the Code. As of the date of
origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household purposes.
This representation and warranty is a Deemed Material and Adverse
Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and each such title insurance policy is
issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
required to be stated therein or necessary to make the information and
statements therein not misleading. No Mortgage Loan contains terms or provisions
which would result in negative amortization. Principal payments on the Mortgage
Loan commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as
set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable in
equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. The Mortgage Loan does not require a
balloon payment on its stated maturity date, unless otherwise specified in the
related Mortgage Loan Schedule;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇
Mae and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements, if any, stated in
the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable under the Underwriting Guidelines. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the related Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable hazard
insurance policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, accepted by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property (except as may be expressly
shown in the related appraisal) or Mortgage Loan or to cause the Mortgage Loans
to prepay during any period materially faster or slower than similar mortgage
loans held by the Seller generally secured by properties in the same geographic
area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(vv) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or good faith legitimate prospective purchaser of
such Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's good faith
legitimate secondary marketing operations and the purchase and sale of mortgages
or Servicing Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
Prepayment Penalty feature, each such Prepayment Penalty is enforceable, and
each Prepayment Penalty is permitted pursuant to federal, state and local law.
Each such Prepayment Penalty is in an amount not more than the maximum amount
permitted under applicable law and no such Prepayment Penalty may be imposed for
a term in excess of five (5) years with respect to Mortgage Loans originated
prior to October, 1, 2002. With respect to Mortgage Loans originated on or after
October 1, 2002, the duration of the Prepayment Penalty period shall not exceed
three (3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in Prepayment Penalty period. This representation and
warranty is a Deemed Material and Adverse Representation;
(yy) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. This representation and warranty is a Deemed Material and Adverse
Representation;
(zz) [Reserved];
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National Tax
Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ggg) ▇▇▇▇▇▇ ▇▇▇ Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of ▇▇▇▇▇▇ Mae Guides. This representation and warranty is
a Deemed Material and Adverse Representation;
(hhh) Mortgagor Selection. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Seller which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into such facts as, without limitation, the Mortgage Loan's requirements and the
Mortgagor's credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Seller. For a
Mortgagor who seeks financing through a Mortgage Loan originator's higher-priced
subprime lending channel, the Mortgagor was directed towards or offered the
Mortgage Loan originator's standard mortgage line if the Mortgagor was able to
qualify for one of the standard products. This representation and warranty is a
Deemed Material and Adverse Representation;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely on the extent of
the related Mortgagor's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology employed objective
criteria that related such facts as, without limitation, the Mortgagor's credit
history, income, assets or liabilities, to the proposed mortgage payment and,
based on such methodology, the Mortgage Loan's originator made a reasonable
determination that at the time of origination the Mortgagor had the ability to
make timely payments on the Mortgage Loan. Such underwriting methodology
confirmed that at the time of origination (application/approval) the related
Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan.
This representation and warranty is a Deemed Material and Adverse
Representation;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a Prepayment
Penalty upon a prepayment prior to maturity: (i) the Mortgage Loan provides some
benefit to the Mortgagor (e.g., a rate or fee reduction) in exchange for
accepting such Prepayment Penalty, (ii) the Mortgage Loan's originator had a
written policy of offering the Mortgagor, or requiring third-party brokers to
offer the Mortgagor, the option of obtaining a mortgage loan that did not
require payment of such a penalty, (iii) the Prepayment Penalty was adequately
disclosed to the Mortgagor in the mortgage loan documents pursuant to applicable
state, local and federal law, and (iv) notwithstanding any state, local or
federal law to the contrary, the Seller shall not impose such Prepayment Penalty
in any instance when the mortgage debt is accelerated or paid off in connection
with the workout of a delinquent Mortgage Loan or as a result of the Mortgagor's
default in making the Mortgage Loan payments. This representation and warranty
is a Deemed Material and Adverse Representation;
(kkk) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life,
mortgage, disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan. No proceeds
from any Mortgage Loan were used to purchase single premium credit insurance
policies as part of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed Material and Adverse
Representation;
(lll) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. This representation and warranty is a
Deemed Material and Adverse Representation;
(mmm) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(nnn) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
This representation and warranty is a Deemed Material and Adverse
Representation;
(ooo) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. This
representation and warranty is a Deemed Material and Adverse Representation;
(ppp) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder. This representation and warranty is a
Deemed Material and Adverse Representation;
(qqq) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage.
This representation and warranty is a Deemed Material and Adverse
Representation;
(rrr) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(sss) No Negative Amortization of Related First Lien Loan. With
respect to each Second Lien Loan, the related First Lien Loan does not permit
negative amortization. This representation and warranty is a Deemed Material and
Adverse Representation; and
(ttt) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property is the Mortgagor's principal residence. This
representation and warranty is a Deemed Material and Adverse Representation.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, (i) within sixty (60) days after the earlier
of either discovery by, or notice to, the Seller of any breach of the
representation and warranty set forth in clause (aaa) of Subsection 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii) any
breach of a Deemed Material and Adverse Representation shall automatically be
deemed to materially and adversely affects the value of the Mortgage Loans or
the interest of the Purchaser therein. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01 which materially and
adversely affects the value of the Mortgage Loans as a whole or the interests of
the Purchaser therein, and such breach cannot be cured within 60 days of the
earlier of either discovery by or notice to the Seller of such breach, all of
the Mortgage Loans affected by such breach shall, at the Purchaser's option, be
repurchased by the Seller at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Subsection 9.02 (other than
the representation and warranty set forth in clause (aaa) of such Section or any
Deemed Material Breach Representation) and the Seller discovers or receives
notice of any such breach within 120 days of the related Closing Date, the
Seller shall, at the Purchaser's option and provided that the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as
provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than 120 days after the
related Closing Date. If the Seller has no Qualified Substitute Mortgage Loan,
it shall repurchase the deficient Mortgage Loan at the Repurchase Price. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Subsection 9.03 shall be accomplished by either (a) if the Interim
Servicing Agreement has been entered into and is in effect, deposit in the
Custodial Account of the amount of the Repurchase Price for distribution to the
Purchaser on the next scheduled Remittance Date, after deducting therefrom any
amount received in respect of such repurchased Mortgage Loan or Loans and being
held in the Custodial Account for future distribution or (b) if the Interim
Servicing Agreement has not been entered into or is no longer in effect, by
direct remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to
this Agreement. In connection with any such substitution, the Seller shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. The Seller shall effect such substitution
by delivering to the Custodian or to such other party as the Purchaser may
designate in writing for such Qualified Substitute Mortgage Loan the documents
required by Subsection 6.03 and the Custodial Agreement, with the Mortgage Note
endorsed as required by Subsection 6.03 and the Custodial Agreement. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans With First Payment
Defaults.
With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid by the
related Mortgagor to the Purchaser within thirty (30) days of such Due Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at a price equal to the related Purchase Price Percentage multiplied
by the then outstanding principal balance of such Mortgage Loan, plus accrued
and unpaid interest thereon from the date to which interest was last paid
through the day prior to the repurchase date at the applicable Mortgage Interest
Rate, plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan. Notwithstanding the foregoing, the Purchaser's right to request a
repurchase hereunder shall not commence until the date which is sixty (60) days
following the related Due Date (the "Breach Date"). The Purchaser shall have
ninety (90) days following the related Breach Date to notify the Seller and
request a repurchase and the Seller shall repurchase such Mortgage Loan within
forty-five (45) days of receipt of such notice. Notwithstanding the foregoing,
the Purchaser reserves the right to request a repurchase following such sixty
(60) day timeframe in the event of a NSF return. In addition, if any payment
referred to above is received by the Seller following the Transfer Date but such
payment is made within the allotted thirty (30) or sixty (60) day period, as
applicable, the Purchaser shall not have the option to request a repurchase.
Subsection 9.05 Premium Recapture
With respect to any Mortgage Loan without Prepayment Penalties that
prepays in full during the first three months following the Closing Date, the
Seller shall pay the Purchaser, within three (3) Business Days after such
prepayment in full, an amount equal to the excess of the Purchase Price
Percentage for such Mortgage Loan over par, multiplied by the outstanding
principal balance of such Mortgage Loan as of the related Cut-off Date. SECTION
10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit
by modem, a listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with respect to
each Mortgage Loan, for an interim period, as specified therein) shall be
true and correct as of the related Closing Date and no event shall have
occurred which, with notice or the passage of time, would constitute a
default under this Agreement or an Event of Default under the Interim
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the related Mortgage Loan Schedule, one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached the related Assignment and Conveyance as the Mortgage
Loan Schedule thereto;
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
4. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
5. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. Assignment and Conveyance Agreement in the form of Exhibit G
hereto, and all exhibits thereto;
10. with respect to each Closing Date, the Underwriting Guidelines
to be attached to the related Assignment and Conveyance; and
11. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each a "Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect a sale (each, a "Reconstitution") of some or all of the Mortgage Loans
then subject to this Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transaction, a pooling and servicing agreement
in form and substance reasonably acceptable to the Seller or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively the agreements referred to herein as designated, the
"Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements reasonably required by the Purchaser; and
(3) to restate the representations and warranties set forth in this Agreement
and the Interim Servicing Agreement as of the settlement or closing date in
connection with such Reconstitution that occurs on or prior to six (6) months
following the related Closing Date and in connection with any Reconstitution
thereafter, to restate the representations and warranties set forth in this
Agreement and the Interim Servicing Agreement as of the related Closing Date
(each, a "Reconstitution Date"), or make the representations and warranties set
forth in the related selling/servicing guide of the master servicer or issuer,
as the case may be, in connection with such Reconstitution. The Seller shall use
its reasonable best efforts to provide to such master servicer or issuer, as the
case may be, and any other participants in such Reconstitution: (i) any and all
information and appropriate verification of information which may be reasonably
available to the Seller or its affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably believed necessary
by the Purchaser or any such other participant, including, without limitation,
an Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate of the
Purchaser participating in the Reconstitution, each underwriter or placement
agent participating in the Reconstitution, and each Person who controls the
Purchaser, such Affiliate, underwriter or placement agent and their respective
present and former directors, officers, employees and agents, and hold each of
them harmless from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that each of them may sustain in any way
related to any information provided by or on behalf of the Seller regarding the
Seller, the Seller's servicing practices or performance, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document (including,
without limitation, structural term sheets, collateral term sheets and
computational materials) prepared in connection with any Reconstitution. For
purposes of the previous sentence, "Purchaser" shall mean the Person then acting
as the Purchaser under this Agreement and any and all Persons who previously
were "Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate
with all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
Notwithstanding the foregoing, the Seller shall not be obligated to
any greater extent under any Reconstitution Agreement than it is under this
Agreement. In addition, the Purchaser will reimburse to the Seller up to $10,000
of the Seller's out-of-pocket expenses incurred in connection with a
Securitization Transaction.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the prospective purchaser or
trustee, as applicable, upon the Seller's receipt thereof. Additionally, the
Seller shall prepare and execute, at the direction of the Purchaser, any note
endorsement (consistent with this Agreement) in connection with any and all
seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION.14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and its present and former
directors, officers, employees, and agents and any Successor Servicer and its
present and former directors, officers, employees, and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
Indemnification obligation under Subsection 14.01) and related costs, judgments,
and any other costs, fees and expenses that such parties may sustain in any way
related to the failure of the Seller to perform its duties and to service the
Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. For purposes of
this paragraph "Purchaser" shall mean the Person then acting as the Purchaser
under this Agreement and any and all Persons who previously were "Purchasers"
under this Agreement and "Successor Purchaser" shall mean any Person designated
as the Successor Servicer pursuant to this Agreement and any and all Persons who
previously were Successor Servicers pursuant to this Agreement. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written consent of the Purchaser, which consent shall not
be unreasonably withheld) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Purchaser
in respect of such claim. The Purchaser promptly shall reimburse the Seller for
all amounts advanced by it pursuant to the preceding sentence, except when the
claim is in any way related to the Seller's indemnification pursuant to Section
9, or is in any way related to the failure of the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a limited liability company under the laws of the state of its
incorporation except as permitted herein, and will obtain and preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a value or net worth of at least
$25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans is mandatory from and after the date of the execution of the Purchase
Price and Terms Agreement, it being specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver (i) each of the related Mortgage Loans or (ii) one or more Qualified
Substitute Mortgage Loans or (iii) one or more Mortgage Loans otherwise
reasonably acceptable to the Purchaser on or before the related Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing security
interest in each Mortgage Loan and each document and instrument evidencing each
such Mortgage Loan to secure the performance by the Seller of its obligations
under the related Purchase Price and Terms Agreement, and the Seller agrees that
it shall hold such Mortgage Loans in custody for the Purchaser subject to the
Purchaser's (i) right to reject any Mortgage Loan (or Qualified Substitute
Mortgage Loan) under the terms of this Agreement and to require another Mortgage
Loan (or Qualified Substitute Mortgage Loan) to be substituted therefor, and
(ii) obligation to pay the Purchase Price for the Mortgage Loans. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Decision One Mortgage Company, LLC
▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Parks ▇. ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇./▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
(ii) if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld. This Agreement may be
assigned, pledged or hypothecated by the Purchaser in whole or in part, and with
respect to one or more of the Mortgage Loans, without the consent of the Seller.
In the event the Purchaser assigns this Agreement, and the assignee assumes any
of the Purchaser's obligations hereunder, the Seller acknowledges and agrees to
look solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability to
the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not cause any action to be taken by any of its affiliates, and that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
the borrower or obligor under any Mortgage Loan for any purpose whatsoever,
including to refinance a Mortgage Loan, in whole or in part, without (i) the
prior written consent of the Purchaser; or (ii) written notice from the related
borrower or obligor under a Mortgage Loan of such party's intention to refinance
such Mortgage Loan. It is understood and agreed that all rights and benefits
relating to the specific solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the Closing Date and the Seller
shall take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that the Seller, or any of its respective
affiliates:
(1) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(2) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO ▇▇▇ IN ANY OTHER JURISDICTION.
SECTION 32. Confidentiality. Each of the Purchaser and the Seller
shall employ proper procedures and standards designed to maintain the
confidential nature of the terms of this Agreement, except to the extent: (a)
the disclosure of which is reasonably believed by such party to be required in
connection with regulatory requirements or other legal requirements relating to
its affairs; (b) disclosed to any one or more of such party's employees,
officers, directors, agents, attorneys or accountants who would have access to
the contents of this Agreement and such data and information in the normal
course of the performance of such Person's duties for such party, to the extent
such party has procedures in effect to inform such Person of the confidential
nature thereof; (c) that is disclosed in a prospectus, prospectus supplement or
private placement memorandum relating to a securitization of the Mortgage Loans
by the Purchaser (or an affiliate assignee thereof) or to any Person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement; and
(d) that is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
Notwithstanding any other express or implied agreement to the
contrary, each of the Purchaser and the Seller agree and acknowledge that each
of them and each of their employees, representatives, and other agents may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to any of them
relating to such tax treatment and tax structure, except to the extent that
confidentiality is reasonably necessary to comply with U.S. federal or state
securities laws. For purposes of this paragraph, the terms "tax treatment" and
"tax structure" have the meanings specified in Treasury Regulation section
1.6011-4(c).
SECTION 33. Entire Agreement.
This Agreement constitutes the entire agreement and understanding
relating to the subject matter hereof between the parties hereto and any prior
oral or written agreements between them shall be deemed to have merged herewith.
SECTION 34. Compliance with Regulation AB.
Subsection 34.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 34 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with reasonable requests made by the
Purchaser or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate
reasonably and in good faith with the Purchaser to deliver to the Purchaser
(including any of its assignees or designees) and any Depositor, any and all
statements, reports, certifications, records and any other information necessary
to permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Seller, any
Third-Party Originator and the Mortgage Loans, or the servicing of the Mortgage
Loans, necessary in order to effect such compliance.
Subsection 34.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 34.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Seller; (ii) the Interim Servicer has
not been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Interim Servicer as servicer has been disclosed or reported by the
Seller; (iv) no material changes to the Interim Servicer's policies or
procedures with respect to the servicing function it will perform under the
Interim Servicing Agreement and any Reconstitution Agreement for mortgage loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v) there
are no aspects of the Interim Servicer's financial condition that could have a
material adverse effect on the performance by the Interim Servicer of its
servicing obligations under the Interim Servicing Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator; and (vii) there are no
affiliations, relationships or transactions relating to the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 34.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 34.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1110, 1117 and 1119 of Regulation
AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating
residential mortgage loans, which description shall include a
discussion of the originator's experience in originating
mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the
originator's origination portfolio; and information that may
be material, in the good faith judgment of the Purchaser or
any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s) as
the Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Seller and each Third-Party Originator; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Notwithstanding the foregoing, the
Static Pool Information required to be provided under this Subsection 34.03(b)
initially shall relate to the Mortgage Loans sold and purchased hereunder;
provided however, the Purchaser and the Seller agree that if the Purchaser
determines in its sole discretion due to changes in the interpretations of the
requirements of Regulation AB or market practice in complying with Regulation AB
that this limitation shall cause the Purchaser to be unable to comply with
Regulation AB or is not consistent with market practices with respect to static
pool disclosure under Regulation AB, then the Seller shall provide all Static
Pool Information regardless of whether the related Mortgage Loans were sold and
purchased by the Purchaser hereunder. The Seller shall provide all Static Pool
Information in a timely manner in order to allow the Purchaser to comply with
its obligations under Regulation AB. Such Static Pool Information shall be
prepared in form and substance reasonably satisfactory to the Purchaser and the
Seller by the Seller (or Third-Party Originator) on the basis of its reasonable,
good faith interpretation of the requirements of Item 1105(a)(1)-(3) of
Regulation AB. To the extent that there is reasonably available to the Seller
(or Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant to
this paragraph. Such Static Pool Information for each vintage origination year
or prior securitized pool, as applicable, shall be presented in increments no
less frequently than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the date of the
prospectus or other offering document in which the Static Pool Information is to
be included or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Seller's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be for
the benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
Notwithstanding the foregoing, the Static Pool Information required
to be provided under this Subsection 34.03(b) initially shall relate to the
Mortgage Loans sold and purchased hereunder; provided however, the Purchaser and
the Seller agree that if the Purchaser determines due to changes in the
interpretations of the requirements of Regulation AB or market practice in
complying with Regulation AB that this limitation shall cause the Purchaser to
be unable to comply with Regulation AB or is not consistent with market
practices with respect to static pool disclosure under Regulation AB, then the
Purchaser and the Seller shall negotiate in good faith to amend this provision
to reflect a reasonable, good faith interpretation of the requirements of
Regulation AB or market practice.
(c) [Reserved]
(d) Upon a request by the Purchaser or any Depositor, for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any Depositor
in writing of (A) any material litigation or governmental proceedings pending
against the Seller or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
(e) With respect to those Mortgage Loans that were sold to the
Purchaser pursuant to this Agreement and subsequently subject to a
Securitization Transfer, the Purchaser shall, to the extent consistent with
then-current industry practice, cause the servicer (or another party) to be
obligated to provide information, in the form customarily provided by such
servicer or other party (which need not be customized for the Seller) with
respect to the Mortgage Loans reasonably necessary for the Seller to comply with
its obligations under Regulation AB, including, without limitation, providing to
the Seller Static Pool Information, as set forth in Item 1105(a)(2) and (3) of
Regulation AB (such information provided by the servicer or such other party,
the "Loan Performance Information").
Subsection 34.04 Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, the Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction; each
broker dealer acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of each
of the foregoing and of the Depositor, and shall hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' letter or other material provided
under this Section 34 by or on behalf of the Seller, or
provided in written or electronic form under this Section 34
by or on behalf of any Third-Party Originator (collectively,
the "Seller Information"), or (B) the omission or alleged
omission to state in the Seller Information a material fact
required to be stated in the Seller Information or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Seller
Information and not to any other information communicated in
connection with a sale or purchase of securities, without
regard to whether the Seller Information or any portion
thereof is presented together with or separately from such
other information;
(ii) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants'
letter or other material when and as required under this
Section 34; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 34.02(a) or in a writing furnished
pursuant to Subsection 34.02(b) and made as of a date prior to
the closing date of the related Securitization Transaction, to
the extent that such breach is not cured by such closing date,
or any breach by the Seller of a representation or warranty in
a writing furnished pursuant to Subsection 34.02(b) to the
extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Seller or
any Third-Party Originator.
(b) Any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Section 34, or any breach by the Seller
of a representation or warranty set forth in Subsection 34.02(a) or in a writing
furnished pursuant to Subsection 34.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
34.02(b) to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Seller under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the Interim Servicing
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Interim Servicer; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
(c) The Purchaser shall indemnify the Seller, each affiliate of the
Seller and the respective present and former directors, officers, employees and
agents of each of the foregoing, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in the Loan Performance Information or
(B) the omission or alleged omission to state in the Loan
Performance Information a material fact required to be stated
in the Loan Performance Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way
of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Loan Performance
Information and not to any other information communicated in
connection with a sale or purchase of securities, without
regard to whether the Loan Performance Information or any
portion thereof is presented together with or separately from
such other information; or
(ii) any failure by the Purchaser or by the related servicer to
deliver any Loan Performance Information as required under
Subsection 34.03(e).
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:
Title:
DECISION ONE MORTGAGE COMPANY, LLC
(Seller)
By:____________________________________
Name:
Title:
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon.;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Loans). The Assignment of Mortgage shall be delivered in blank. If
the Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[Seller], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee with evidence of recording thereon;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage.
Notwithstanding the foregoing, in connection with any item described
above in clauses (c), (d), (f) or (g), if the Seller cannot deliver or cause to
be delivered the original of any such item with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public recording
office where such item has been delivered for recordation or because such item
has been lost or because such public recording office retains the original
recorded item (each such item, a "Delayed Document"), the Seller shall deliver
or cause to be delivered to the Custodian, (i) in the case of a delay caused by
the public recording office, a photocopy of such Delayed Document, together with
an Officer's Certificate of the Seller (or certified by the title company,
escrow agent, or closing attorney) to the effect that such copy is a true and
correct copy of the Delayed Document that has been dispatched to the appropriate
public recording office for recordation (and the original recorded Delayed
Document or a copy of such Delayed Document certified by such public recording
office to be a true and complete copy of the original recorded Delayed Document
will be promptly delivered to the Custodian upon receipt thereof by the Seller);
or (ii) in the case of a Delayed Document where a public recording office
retains the original recorded Delayed Document or in the case where a Delayed
Document is lost after recordation in a public recording office, a copy of such
Delayed Document certified by such public recording office to be a true and
complete copy of the original recorded Delayed Document; provided however in
connection with clauses (f) and (g), the Seller may deliver or cause to be
delivered to the Custodian in the case of a delay caused by the public recording
office, a photocopy of such Delayed Document certified by the Seller to be true
and correct, with the original recorded Delayed Document to be provided to the
Custodian within 180 days of the related Closing Date.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document is
expected to be delivered to the Custodian. An extension of the date specified in
(iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), [______________], a
[______________] (the "Initial Purchaser") and [______________], a
[______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
ABS Informational and Computational Material means any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act and
the 1934 Act, as may be amended from time to time.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Free Writing Prospectus: Any written communication that constitutes
a "free writing prospectus," as defined in Rule 405 under the 1933 Act.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: [(A)] All information in the
Prospectus Supplement, the Offering Circular or any Free Writing Prospectus or
any amendment or supplement thereto (i) contained under the headings
"Summary--Relevant Parties--Responsible Party [and Servicer,"] "The Mortgage
Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii) regarding the
Mortgage Loans, the related mortgagors and/or the related Mortgaged Properties
(but in the case of this clause (ii), only to the extent any untrue statement or
omission arose from or is based upon errors or omissions in the information
concerning the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties, as applicable, provided to the Depositor or any affiliate
by or on behalf of the Indemnifying Party) [and (B) static pool information
regarding mortgage loans originated or acquired by the Seller [and included in
the Prospectus Supplement, the Offering Circular, the ABS Informational and
Computational Materials or the Free Writing Prospectus or any amendment or
supplement thereto][incorporated by reference from the website located at
___________]].
Offering Circular: The offering circular, dated [_______], 200___,
relating to the private offering of the Privately Offered Certificates,
including any structural term sheets, collateral terms sheets and computational
materials used in connection with such offering.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates, including any structural term sheets, collateral terms sheets and
computational materials used in connection with such offering.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Purchase Agreement: The Purchase Agreement, dated ___________, 200_,
between the Depositor and the Initial Purchaser, relating to the sale of the
Privately Offered Certificates.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, between the Depositor and the Underwriter, relating to the
sale of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor, the Underwriter and the Initial Purchaser and their respective
affiliates, and their respective present and former directors, officers,
employees, agents and each Person, if any, that controls the Depositor, the
Underwriter or such affiliate, within the meaning of either the 1933 Act or the
1934 Act (collectively, the "Indemnified Parties"), against any and all losses,
claims, damages, penalties, fines, forfeitures or liabilities, joint or several,
to which each such Indemnified Party may become subject, under the 1933 Act, the
1934 Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus Supplement, the Offering
Circular, the ABS Informational and Computational Materials, any Free Writing
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission relates to information set forth in the Indemnifying Party Information,
and the Indemnifying Party shall in each case reimburse each Indemnified Party
for any legal or other costs, fees, or expenses reasonably incurred and as
incurred by such Indemnified Party in connection with investigating or defending
any such loss, claim, damage, penalty, fine, forfeiture, liability or action.
The Indemnifying Party's liability under this Section 3.1 shall be in addition
to any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[______________]
[______________]
[______________]
Attention:
Telephone:
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[______________]
[______________]
[______________]
Attention:
Telephone:
In the case of the Indemnifying Party:
[______________]
[______________]
[______________]
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:____________________________________
Name:
Title:
[UNDERWRITER]
By:____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By:____________________________________
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
DECISION ONE MORTGAGE COMPANY, LLC
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, hereby certify that I am a duly appointed, qualified
and acting Assistant Secretary of DECISION ONE MORTGAGE COMPANY, LLC, a North
Carolina Limited Liability Company (the "Company"), and hereby further certify
to the following
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of the
Integrated Limited Liability Company Operating Agreement of the Company
which is in full force and effect on the date hereof and which has been in
effect without amendment, waiver, rescission or modification since March
4, 1996 and restated as of Restated as of August 31, 1999.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
bylaws of the Company which are in effect on the date hereof and which
have been in effect without amendment, waiver rescission or modification
since March 4, 1996.
3. Attached hereto as Exhibit 3 is a certificate of existence of the Company
issued State of North Carolina Department of The Secretary of State on
[_____________], and no event has occurred since the date thereof which
would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy of the
resolutions adopted by the Managers of the Limited Liability Company on
[_____________], which have not been rescinded or modified.
5. Each person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2006,
by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. ("MS
Capital"), (b) the Amended and Restated Interim Servicing Agreement, dated
as of November 1, 2005, by and between the Company and MS Capital and (c)
the Custodial Agreement, dated as of October 1, 2004, by and among MS
Capital, the Company and Deutsche Bank Trust Company Americas, as
Custodian, and (d) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
6. To my knowledge, neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, the Interim Servicing
Agreement and the Custodial Agreement referred to above conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter
IN WITNESS WHEREOF, the undersigned has executed this Certificate on this
the 28th day of November 2005.
_________________________________
▇. ▇.▇▇▇▇▇
Assistant Secretary
EXHIBIT 1
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
DECISION ONE MORTGAGE COMPANY, LLC
EXHIBIT 2
BYLAWS
DECISION ONE MORTGAGE COMPANY, LLC
EXHIBIT 3
CERTIFICATE OF GOOD STANDING - NORTH CAROLINA
DECISION ONE MORTGAGE COMPANY, LLC
EXHIBIT 4
DECISION ONE MORTGAGE COMPANY, LLC
"WHEREAS, the Company desires to sell or securitize pools of
Mortgage Loans held for sale;
WHEREAS, in order to effect such sales and securitizations, the
Company must enter into Mortgage Loan Purchase Agreements, Interim Servicing
Agreements, Custodial Agreements and related and similar agreements;
NOW, THEREFORE, BE IT RESOLVED, that the Company is hereby
authorized to enter into (a) Mortgage Loan Purchase Agreements, (b) Interim
Servicing Agreements and (c) Custodial Agreements and related and similar
agreements.
RESOLVED FURTHER, that each of the President, and each Senior Vice
President, Vice President, Secretary and Assistant Secretary of the Company is
hereby authorized, for and on behalf of the Company, to execute and deliver each
of the foregoing agreements, as well as such other agreements, instruments and
certificates, and to take such other action, as any of them may deem necessary
or advisable to carry out the purpose of the foregoing resolutions.
BE IT FURTHER RESOLVED, that the Company is authorized to enter into
the Fourth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of May 1, 2006, and the Amended and Restated Interim Servicing
Agreement, dated as of November 1, 2005, with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL
INC. ("MS Capital"), and the Custodial Agreement, dated as of October 1, 2004,
among MS Capital, the Company and Deutsche Bank Trust Company Americas, as
Custodian, as well as such other agreements, instruments and certificates as any
of them may deem necessary or advisable in connection therewith, for the purpose
of selling mortgage loans to MS Capital from time to time and servicing such
mortgage loans on an interim basis."
EXHIBIT 5
LIST OF OFFICERS AS ADOPTED [_____________]
DECISION ONE MORTGAGE COMPANY, LLC
Manager ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President & Assistant Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President of Finance, CFO, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Treasurer & Secretary
Senior Vice President & Assistant Secretary Parkes ▇. ▇▇▇▇▇▇, ▇▇.
Vice President & Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President & Controller ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Assistant Vice President ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Vice President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇▇▇▇ Kourney
Assistant Vice President and Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇▇ ▇.▇▇▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Vice President and Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Assistant Vice President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Principal ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Secretary Sterlita ▇. ▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇
Assistant Secretary ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇▇▇. ▇. ▇▇▇▇
Assistant Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Fourth Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
(the "Purchaser"), dated as of May 1, 2006 (the "Purchase Agreement") which sale
is in the form of whole loans, serviced pursuant to an Amended and Restated
Interim Servicing Agreement, dated as of November 1, 2005, between the Purchaser
and ________________________ (the "Interim Servicer") (the "Servicing
Agreement", and collectively with the Purchase Agreement, the "Agreements").
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Servicing Agreement; (iii) the form of Assignment of
Mortgage;
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to transact business in, and is in
good standing under, the laws of [the state of incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions
of the Agreements.
(iii) Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
(vi) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vii) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
(viii) There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
_____________________________
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. under a Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement. The Company warrants that the
mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc.
Very truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:______________________________
Name:___________________________
Title:____________________________
Date:____________________________
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
Upon receipt of the sum of $_____________ in immediately available funds, the
financial institution named below hereby relinquishes any and all right, title
and interest it may have in all Mortgage Loans to be purchased by to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Mortgage Capital Inc. from the Company named below pursuant
to that certain Fourth Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of ______ __, 200_, and certifies that all notes,
mortgages, assignments and other documents in its possession relating to such
Mortgage Loans have been delivered and released to the Company named below or
its designees, as of the date and time of the sale of such Mortgage Loans to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_____________________________
By:__________________________
Title:_________________________
Date:_________________________
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Fourth Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of _________, ____ (the "Purchase Agreement"), does hereby sell,
transfer, assign, set over and convey to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital, Inc.
("Purchaser") as the Purchaser under the Agreements (as defined below) without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A (the "Mortgage Loans"), together with the Mortgage
Files and the related Servicing Rights and all rights and obligations arising
under the documents contained therein. Each Mortgage Loan subject to the
Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Seller has delivered to the Custodian the documents
for each Mortgage Loan to be purchased as set forth in the Purchase Agreement.
The ownership of each Mortgage Note, Mortgage and the contents of the Mortgage
File and Servicing File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in a custodial capacity only. The PPTA and the Purchase
Agreement shall collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
Accepted and Agreed:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:________________________________________________________________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a FICO Score of less than ___; or (4) a debt-to-income ratio of more than
___%. Each Mortgage Loan has a Mortgage Interest Rate of at least ___% per annum
and an outstanding principal balance of less than $______. Each Adjustable Rate
Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Fourth Amended
and Restated Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), dated as of May 1, 2006, between the Assignor, as purchaser (the
"Purchaser"), and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.02
of the Purchase Agreement are true and correct as of the date hereof as if such
representations and warranties were made on the date hereof unless otherwise
specifically stated in such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By: __________________________________
Name:__________________________________
Its:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: __________________________________
Name:__________________________________
Its:
[__________________________]
By: __________________________________
Name:__________________________________
Its:
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT Q
[Reserved]
U
EXHIBIT R
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
[Saxon Mortgage Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
[Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ▇▇▇▇▇ Fargo Bank, National
Association, a national banking association organized and existing under the
laws of the United States, and having its principal place of business at ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: MSAC 2007-HE4, as
Trustee (the "Trustee"), pursuant to that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE4 Pooling and Servicing Agreement, dated as of March 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the "Depositor"), Saxon
Mortgage Services, Inc., as a servicer ("Saxon"), Countrywide Home Loans
Servicing LP ("Countrywide Servicing"), as a servicer, Decision One Mortgage
Company, LLC, as a responsible party ("Decision One"), WMC Mortgage Corp., as a
responsible party ("WMC"), LaSalle Bank National Association, as custodian (the
"Custodian") and the Trustee, hereby constitutes and appoints [Saxon]
[Countrywide Servicing] by and through [Saxon] [Countrywide Servicing]'s
officers, the Trustee's true and lawful Attorney in fact, in the Trustee's name,
place and stead and for the Trustee's benefit, in connection with all mortgage
loans serviced by [Saxon] [Countrywide Servicing] pursuant to the Agreement
solely for the purpose of performing such acts and executing such documents in
the name of the Trustee necessary and appropriate to effectuate the following
enumerated transactions in respect of any of the mortgages or deeds of trust
(the "Mortgages" and the "Deeds of Trust" respectively) and promissory notes
secured thereby (the "Mortgage Notes") for which the undersigned is acting as
Trustee for various certificateholders (whether the undersigned is named therein
as mortgagee or beneficiary or has become mortgagee by virtue of endorsement of
the Mortgage Note secured by any such Mortgage or Deed of Trust) and for which
[Saxon] [Countrywide Servicing] is acting as servicer. This Appointment shall
apply only to the following enumerated transactions and nothing herein or in the
Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose
of correcting the Mortgage or Deed of Trust to conform same to
the original intent of the parties thereto or to correct title
errors discovered after such title insurance was issued; provided
that (i) said modification or re-recording, in either instance,
does not adversely affect the lien of the Mortgage or Deed of
Trust as insured and (ii) otherwise conforms to the provisions of
the Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to
an easement in favor of a public utility company of a government
agency or unit with powers of eminent domain; this section shall
include, without limitation, the execution of partial
satisfactions/releases, partial reconveyances or the execution or
requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real
estate owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or
full conveyance upon payment and discharge of all sums secured
thereby, including, without limitation, cancellation of the
related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment
and discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the
assignment of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation
or rescission of any such foreclosure, including, without
limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of
Trust, in accordance with state law and the Deed of
Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary
under the terms of the Mortgage, Deed of Trust or state
law to expeditiously complete said transactions in
paragraphs 8.a. through 8.e. above.
9. With respect to the sale of property acquired through a
foreclosure or deed-in lieu of foreclosure, including, without
limitation, the execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
▇. ▇▇▇▇▇/warranty/quit claim deeds or any other deed causing
the transfer of title of the property to a party
contracted to purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established
for repairs to the mortgaged property or reserves for replacement
of personal property.
The undersigned gives said Attorney-in-fact full power and
authority to execute such instruments and to do and perform all and every act
and thing necessary and proper to carry into effect the power or powers granted
by or under this Limited Power of Attorney as fully as the undersigned might or
could do, and hereby does ratify and confirm to all that said Attorney-in-fact
shall be effective as of March 29, 2007.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by [Saxon] [Countrywide Servicing] to the Trustee under
the Agreement, or (ii) be construed to grant [Saxon] [Countrywide Servicing] the
power to initiate or defend any suit, litigation or proceeding in the name of
the Trustee except as specifically provided for herein. If [Saxon] [Countrywide
Servicing] receives any notice of suit, litigation or proceeding in the name of
the Trustee, then [Saxon] [Countrywide Servicing] shall promptly forward a copy
of same to the Trustee.
This limited power of attorney is not intended to extend the
powers granted to [Saxon] [Countrywide Servicing] under the Agreement or to
allow [Saxon] [Countrywide Servicing] to take any action with respect to
Mortgages, Deeds of Trust or Mortgage Notes not authorized by the Agreement.
[Saxon] [Countrywide Servicing] hereby agrees to indemnify and
hold the Trustee and its directors, officers, employees and agents harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever incurred by reason or result of or in connection with the
exercise by [Saxon] [Countrywide Servicing] of the powers granted to it
hereunder. The foregoing indemnity shall survive the termination of this Limited
Power of Attorney and the Agreement or the earlier resignation or removal of the
Trustee under the Agreement.
This Limited Power of Attorney is entered into and shall be
governed by the laws of the State of New York, without regard to conflicts of
law principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, ▇▇▇▇▇ Fargo Bank, National Association, as
Trustee has caused its corporate seal to be hereto affixed and these presents to
be signed and acknowledged in its name and behalf by a duly elected and
authorized signatory this ___________ day of ____________.
▇▇▇▇▇ Fargo Bank, National Association,
as Trustee
By: ____________________________________
Name:
Title:
Acknowledged and Agreed
[Saxon Mortgage Services, Inc.]
[Countrywide Home Loans Servicing LP]
By: ___________________________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared
________________________________ of ▇▇▇▇▇ Fargo Bank, National Association, as
Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4, personally known
to me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
_________________________________________
Notary Public, State of California
EXHIBIT S
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Trustee], [the Custodian],
[each Servicer], [each Subservicer] and [each Subcontractor] shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria":
-----------------------------
-----------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING
CRITERIA
-----------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------
General Servicing Considerations
-----------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any Trustee/Servicer
performance or other triggers and events of default in
accordance with the transaction agreements.
-----------------------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to Trustee/Servicer
third parties, policies and procedures are instituted
to monitor the third party's performance and
compliance with such servicing activities.
-----------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to N/A
maintain a back-up servicer for the mortgage loans are
maintained.
-----------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in Servicer
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
-----------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the Servicer
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 on behalf of an Servicer/Trustee
obligor or to an investor are made only by authorized
personnel.
-----------------------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, Servicer
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 transaction, such as cash Servicer/Trustee
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained
(e.g., with respect to commingling of cash) as set
forth in the transaction agreements.
-----------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally Servicer/Trustee
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 to prevent Servicer/Trustee
unauthorized access.
-----------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for Servicer/Trustee
all asset-backed securities related bank accounts,
including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number
of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person
who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
-----------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with Trustee/Servicer
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
-----------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in Trustee/Servicer
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within Trustee/Servicer
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 investor reports Trustee/Servicer
agree with cancelled checks, or other form of payment,
or custodial bank statements.
-----------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is Custodian/Trustee/
maintained as required by the transaction agreements Servicer
or related mortgage loan documents.
-----------------------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as Trustee/Custodian/
required by the transaction agreements Servicer
-----------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset Trustee/Servicer
pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction
agreements.
-----------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, Servicer
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor records
maintained no more than two business days after
receipt, or such other number of days specified in the
transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance
with the related mortgage loan documents.
-----------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans Servicer
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 status of an Servicer
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
-----------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance Servicer
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 efforts are maintained Servicer
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for Servicer
mortgage loans with variable rates are computed based
on the related mortgage loan documents.
-----------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such Servicer
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents,
on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of
days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or Servicer
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 connection with any Servicer
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 obligor are posted Servicer
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 uncollectible accounts Servicer
are recognized and recorded in accordance with the
transaction agreements.
-----------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified Trustee
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the
transaction agreements.
-----------------------------------------------------------------------------------------------
EXHIBIT T
Additional Form 10-D Disclosure
Item on Form 10-D Party Responsible
---------------------------------------------- ---------------------------------
Item 1: Distribution and Pool Performance
Information
Information included in the Monthly Statement Servicers
Trustee
Any information required by Item 1121 of Depositor
Regulation AB which is NOT included on the
Monthly Statement
Item 2: Legal Proceedings
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any
proceedings known to be contemplated by
governmental authorities:
o Issuing Entity (Trust Fund) Trustee and Servicers
o Sponsor Depositor
o Depositor Depositor
o Trustee Trustee
o Custodian Custodian
o Responsible Party Responsible Parties
o Any Item 1110(b) of Regulation AB Depositor
Originator
o Any Item 1108(a)(2) of Regulation AB Servicers
Servicer (other than the Trustee)
o Any other party contemplated by Item Depositor
1100(d)(1)of Regulation AB
Item 3: Sale of Securities and Use of Depositor
Proceeds
Information from Item 2(a) of Part II of
Form 10-Q:
With respect to any sale of securities by
the Sponsor, Depositor or Issuing Entity,
that are backed by the same asset pool or
are otherwise issued by the Issuing Entity,
whether or not registered, provide the sales
and use of proceeds information in Item 701
of Regulation S-K. Pricing information can
be omitted if securities were not registered.
Item 4: Defaults Upon Senior Securities Trustee
Information from Item 3 of Part II of Form
10-Q:
Report the occurrence of any Event of
Default (after expiration of any grace
period and provision of any required notice)
Item 5: Submission of Matters to a Vote of Depositor or the party to this
Security Holders Agreement submitting such matter to
a vote of Certificateholders
Information from Item 4 of Part II of Form
10-Q
Item 6: Significant Obligors of Pool Assets N/A
Item 1112(b) of Regulation AB -- Significant
Obligor Financial Information*
* This information need only be reported on
the Form 10-D for the distribution period in
which updated information is required
pursuant to the Item.
Item 7: Significant Enhancement Provider
Information
Item 1115(b) of Regulation AB -- Derivative
Counterparty Financial Information*
o Determining current maximum probable Depositor
exposure
o Determining current significance percentage Depositor
o Requesting required financial information Depositor
(including any required accountants'
consent to the use thereof) or effecting
incorporation by reference
* This information need only be reported on
the Form 10-D for the distribution period in
which updated information is required
pursuant to the Items.
Item 8: Other Information Any party to the Agreement
responsible for the applicable Form
8-K disclosure item
Disclose any information required to be
reported on Form 8-K during the period
covered by the Form 10-D but not reported
Item 9: Exhibits
Monthly Statement to Certificateholders Trustee
Exhibits required by Item 601 of Regulation Depositor
S-K, such as material agreements
-----------------------------------------------------------------------------------
EXHIBIT U
Additional Form 10-K Disclosure
Item on Form 10-K Party Responsible
-----------------------------------------------------------------------------------------------
Item 9B: Other Information Any party to this Agreement responsible
for disclosure items on Form 8-K
Disclose any information required to be reported on
Form 8-K during the fourth quarter covered by the
Form 10-K but not reported
Item 15: Exhibits, Financial Statement Schedules Trustee
Depositor
Item 1115(b) of Regulation AB: Derivative
Counterparty Financial Information
o Determining current maximum probably exposure Depositor
o Determining current significance percentage Depositor
o Requesting required financial information Depositor
(including any required accountants' consent to
the use thereof) or effecting incorporation by
reference
* This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Items.
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is
material to Certificateholders, including any
proceedings known to be contemplated by governmental
authorities:
o Issuing Entity (Trust Fund) Trustee, Servicers and Depositor
o Sponsor Depositor
o Depositor Depositor
o Trustee Trustee
o Custodian Custodian
o Responsible Party Responsible Parties
o Any Item 1110(b) of Regulation AB Originator Depositor
o Any Item 1108(a)(2) of Regulation AB Servicer Servicers
(other than the Trustee)
o Any other party contemplated by Item 1100(d)(1) of Depositor
Regulation AB
Item 1119 of Regulation AB: Affiliations and
Relationships
Whether (a) the Sponsor, Depositor or Issuing Entity Depositor as to the parties in (a)
is an affiliate of the following parties, and (b) to
the extent known and material, any of the following
parties are affiliated with one another:
o Trustee Trustee
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
o Any Item 1115 of Regulation AB Derivate
Counterparty Provider Depositor
o Any other Item 1101(d)(1) of Regulation AB
material party Depositor
Whether there are any "outside the ordinary course Depositor
business arrangements" other than would be obtained
in an arm's length transaction between (a) the
Sponsor, Depositor or Issuing Entity on the one
hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently
or within the past two years and that are material
to a Certificateholder's understanding of the
Certificates:
o Trustee
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
o Any Responsible Party Responsible Parties
o Any Item 1110 of Regulation AB Originator Depositor
o Any Item 1115 of Regulation AB Derivate
Counterparty Provider Depositor
o Any other Item 1101(d)(1) of Regulation AB
material party Depositor
Whether there are any specific relationships
Depositor
involving the transaction or the pool assets between
(a) the Sponsor, Depositor or Issuing Entity on the
one hand, and (b) any of the following parties (or
their affiliates) on the other hand, that exist
currently or within the past two years and that are
material:
o Trustee
o Any other Item 1108(a)(3) of Regulation AB servicer Servicers
o Any Responsible Party Responsible Parties
o Any Item 1110 of Regulation AB Originator Depositor
o Any Item 1115 of Regulation AB Derivate
Counterparty Provider Depositor
o Any other Item 1101(d)(1) of Regulation AB
material party Depositor
-----------------------------------------------------------------------------------------------
EXHIBIT V
Form 8-K Disclosure Information
Item on Form 8-K Party Responsible
-----------------------------------------------------------------------------------------------
Item 1.01 - Entry into a Material Definitive The party to this Agreement entering
Agreement into such material definitive agreement.
Disclosure is required regarding entry into or
amendment of any definitive agreement that is
material to the securitization, even if depositor is
not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
Item 1.02 - Termination of a Material Definitive The party to this Agreement requesting
Agreement termination of a material definitive
agreement.
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance
with its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Item 1.03 - Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
o Issuing Entity (Trust Fund) Trustee/Servicers
Depositor
o Sponsor Depositor
o Depositor Servicers
o Affiliated Servicer Servicers
o Other Servicer servicing 20% or more of the pool
assets at the time of the report Servicers
o Other material servicers Trustee
o Trustee Depositor
o Derivative Counterparty Custodian
o Custodian Depositor
o Any other party contemplated by Item 1100(d)(1) of
Regulation AB
Depositor
Item 2.04 - Triggering Events that Accelerate or Trustee
Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
Includes an early amortization, performance trigger
or other event, including event of default, that
would materially alter the payment
priority/distribution of cash flows/amortization
schedule
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
monthly statements to the certificateholders.
Item 3.03 - Material Modification to Rights of The party requesting such modification
Security Holders
Disclosure is required of any material modification
to documents defining the rights of
Certificateholders, including the Pooling and
Servicing Agreement.
Item 5.03 - Amendments of Articles of Incorporation Depositor
or Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to the
governing documents of the issuing entity."
Item 6.01 - ABS Informational and Computational Depositor
Material
Item 6.02 - Change of Servicer or Trustee Servicers/Trustee
Requires disclosure of any removal, replacement,
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10% or
more of pool assets at time of report, other
material servicers or trustee.
Reg AB disclosure about any new servicer or master successor Servicers
servicer is also required.
Reg AB disclosure about any new Trustee is also successor Trustee
required.
Depositor/Trustee
Item 6.03 - Change in Credit Enhancement or External
Support
Covers termination of any enhancement in manner
other than by its terms, the addition of an
enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as
well as derivatives.
Reg AB disclosure about any new enhancement provider Depositor
is also required.
Item 6.04 - Failure to Make a Required Distribution Trustee
Item 6.05 - Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or
more at the time of issuance of the securities from
the description in the final prospectus, provide
updated Reg AB disclosure about the actual asset
pool.
If there are any new servicers or originators Depositor
required to be disclosed under Regulation AB as a
result of the foregoing, provide the information
called for in Items 1108 and 1110 of Regulation AB
respectively.
Item 7.01 - Regulation FD Disclosure Depositor
Item 8.01 - Other Events Depositor
Any event, with respect to which information is not
otherwise called for in Form 8-K, that the
registrant deems of importance to certificateholders.
Item 9.01 - Financial Statements and Exhibits The party to this Agreement responsible
for reporting/disclosing the financial
statement or exhibit.
-----------------------------------------------------------------------------------------------
EXHIBIT W
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of February 28, 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES and ▇▇▇▇▇ FARGO BANK, NATIONAL
INC. ASSOCIATION, not individually,
but solely as Trustee for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:
Interpretation
1. Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master
Agreement.
2. Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the
Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purposes of the
relevant Transaction.
3. Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single
agreement between the parties (collectively referred to as this
"Agreement"), and the parties would not otherwise enter into any
Transactions.
Obligations
1. General Conditions.
(a) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(b) Payments under this Agreement will be made on the due date for value on
that date in the place of the account specified in the relevant Confirmation or
otherwise pursuant to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such delivery will be made for
receipt on the due date in the manner customary for the relevant obligation
unless otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(c) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of Default
with respect to the other party has occurred and is continuing, (2) the
condition precedent that no Early Termination Date in respect of the relevant
Transaction has occurred or been effectively designated and (3) each other
applicable condition precedent specified in this Agreement.
(d) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(e) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(f) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to
be deducted or withheld (including the full amount required to
be deducted or withheld from any additional amount paid by X to
Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that
the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal
the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to
pay any additional amount to Y to the extent that it would not
be required to be paid but for:--
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y pursuant
to Section 3(f) to be accurate and true unless such
failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to
this Agreement) or (II) a Change in Tax Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(g) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
o-f the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
2. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
lull force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
3. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to
be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or an Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
4. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
or to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure
is not remedied on or before the thirtieth day after notice of such
failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to
be complied with or performed by it in accordance with any
Credit Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its
terms) prior to the satisfaction of all obligations of such
party under each Transaction to which such Credit Support
Document relates without the written consent of the other party;
or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights,
or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted
or presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous
effect to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any
of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit Support
Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or
pursuant to an agreement reasonably satisfactory to the other
party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to perform, any contingent or other obligation which the party
(or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
5. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right
to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-Defaulting Party's Loss in respect of
this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it
is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's
Loss in respect of this Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will
pay the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss applies and
fewer than all the Transactions are being terminated, Loss shall
be calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be payable
equal to (I) the sum of (a) one-half of the difference
between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement Amount
of the party with the lower Settlement Amount ("Y") and
(b) the Termination Currency Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency
Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss
in respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of
that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks and except as
otherwise provided in this Agreement neither party will be entitled to
recover any additional damages as a consequence of such losses.
6. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
7. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
8. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire Agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which
in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
9. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
10. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
11. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
12. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the
State of New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
13. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the ease of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except so as to avoid duplication, if Section 6(e)(i)(l) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with a respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such determination as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) its relation to any payment, from or through which such
payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either ease) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
INC. not individually, but solely as Trustee
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- --------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
Date: March 29, 2007 Date: March 29, 2007
SCHEDULE
TO THE
1992 ISDA MASTER AGREEMENT
dated as of March 29, 2007
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
a Delaware corporation
("Party A")
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
a national banking association, not individually,
but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4
(the "Trust"),
Mortgage Pass-Through Certificates, Series 2007-HE4
("Party B")
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the
purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
and in relation to Party B for the purpose of:
Section 5(a)(v), None Specified
Section 5(a)(vi), None Specified
Section 5(a)(vii), None Specified
Section 5(b)(iv), None Specified
(b) Events of Default. Notwithstanding anything in this Agreement
to the contrary, the following Events of Default shall apply
to the specified party:
Party A Party B
------- -------
(i) Section 5(a)(i), Failure to Pay Applicable Applicable
or Deliver
(ii) Section 5(a)(ii), Breach of Applicable Not
Agreement Applicable
(iii) Section 5(a)(iii), Credit Applicable Applicable
Support Default
(iv) Section 5(a)(iv), Applicable Not
Misrepresentation Applicable
(v) Section 5(a)(v), Default Under Not Not
Specified Transaction Applicable Applicable
(vi) Section 5(a)(vi), Cross Default Applicable Not
Applicable
(vii) Section 5(a)(vii), Bankruptcy Applicable Applicable
(viii) Section 5(a)(viii), Merger Applicable Applicable
Without Assumption
provided, however, that with respect to:
(i) Section 5(a)(iii)(1) (Credit Support Default), as it
applies to Party B only, shall be deleted in its
entirety and replaced with the following: "Failure by
Party B to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with Paragraph 3(b) of the Credit Support
Annex if such failure is continuing after any applicable
grace period has elapsed."
(ii) Section 5(a)(vi) (Cross Default), "Threshold Amount"
means, with respect to Party A, 3% of its Credit Support
Provider's (or the applicable Relevant Entity's)
shareholder's equity (as detailed in its Credit Support
Provider's or the Relevant Entity's most recent
financial statements).
(iii) Section 5(a)(vii) (Bankruptcy), (i) clause (2) and (9)
shall not be applicable to Party B; (ii) clause (4)
shall not be applicable to Party B if the proceeding or
petition is instituted or presented by Party A or any of
its Affiliates and is in breach of Party A's agreement
set forth in Part 5(j) of this Schedule; (iii) the
appointment of a trustee or other secured party by Party
B or the Certificateholders for the purpose of holding
all or a substantial portion of the assets of Party B
for the benefit of the Certificateholders or Party A
does not qualify as the appointment of a trustee,
custodian or similar official under clause (6); (iv) a
security interest granted by Party B to a trustee,
collateral agent, custodian or other secured party, as
applicable (the "Secured Party"), pursuant to an
indenture, trust agreement, pooling and servicing
agreement or other customary securitization transaction
document (the "Security Agreement"), in property of
Party B (the "Securitization Collateral") supporting a
rated securitization transaction (the "Securitization"),
and the rights of the Secured Party in and to the
Securitization Collateral for the benefit of the
investors in the Securitization and/or Party A, is not
intended to constitute and shall not be treated as a
secured party taking possession of the assets of Party B
for purposes of clause (7); (v) the words "seeks or"
shall be deleted from clause (6); and (vi) clause (8)
shall not apply to Party B to the extent that clause (8)
relates to clauses of Section 5(a)(vii) that are not
applicable to Party B as a result of the modifications
set forth herein. Notwithstanding the foregoing, for the
avoidance of doubt, the deletion of clause (9) is not
intended to render clauses (1) through (8) inapplicable
on the basis that Party B did not actively contest or
oppose any of the acts referred to in such clauses or,
in the case of clause (4), if a proceeding or petition
referred to therein is instituted or presented against
Party B, on the basis that Party B consented to or
acquiesced in a judgment of bankruptcy or insolvency or
the entry of an order for relief or the making of an
order for its winding up or liquidation as a result of
such proceeding or petition.
(c) Termination Events. Notwithstanding anything in this Agreement
to the contrary, the following Termination Events shall apply
to the specified party:
Party A Party B
------- -------
(i) Section 5(b)(i), Illegality Applicable Applicable
(ii) Section 5(b)(ii), Tax Event Applicable Applicable
(iii) Section 5(b)(iii), Tax Event Upon Applicable Applicable
Merger
(iv) Section 5(b)(iv), Credit Event Not Not
Upon Merger Applicable Applicable
(v) Section 5(b)(v), Additional Applicable Applicable
Termination Event (as set (as set forth
forth in in Part 1(g)
Part 1(g) below)
below)
provided, however, that with respect to Section 5(b)(iii),
Party A shall not be entitled to designate an Early
Termination Date by reason of a Tax Event Upon Merger in
respect of which it is the Affected Party.
(d) The "Automatic Early Termination" provisions of Section 6(a)
will not apply to Party A and will not apply to Party B.
(e) The "Transfer to Avoid Termination Event" provisions of
6(b)(ii) will apply, provided that the words "or if a Tax
Event Upon Merger occurs and the Burdened Party is the
Affected Party," shall be deleted.
(f) Payments on Early Termination.
(i) For the purpose of Section 6(e), "Market Quotation"
and "Second Method" will apply.
(ii) Where an Early Termination Date is designated as a
result of an Event of Default with respect to which
Party A is the Defaulting Party or a Termination
Event under Section 5(b)(iii), Section 5(b)(iv) or
Section 5(b)(v) with respect to which Party A is the
sole Affected Party, paragraphs (1) through (8) below
shall apply:
(1) The definition of "Market Quotation" shall
be deleted in its entirety and replaced with
the following:
"`Market Quotation' means, with respect to
one or more Terminated Transactions, a Firm
Offer which is (1) made by an Eligible
Replacement, (2) for an amount, if any, that
would be paid to Party B (expressed as a
negative number) or by Party B (expressed as
a positive number) in consideration of an
agreement between Party B and an Eligible
Replacement to enter into a transaction (the
"Replacement Transaction") that would have
the effect of preserving for such party the
economic equivalent of any payment or
delivery (whether the underlying obligation
was absolute or contingent and assuming the
satisfaction of each applicable condition
precedent) by the parties under Section
2(a)(i) in respect of such Terminated
Transactions or group of Terminated
Transactions that would, but for the
occurrence of the relevant Early Termination
Date, have been required after that date,
(3) made on the basis that Unpaid Amounts in
respect of the Terminated Transaction or
group of Transactions are to be excluded
but, without limitation, any payment or
delivery that would, but for the relevant
Early Termination Date, have been required
(assuming satisfaction of each applicable
condition precedent) after that Early
Termination Date is to be included and (4)
made in respect of a Replacement Transaction
with terms substantially the same as those
of this Agreement (save for the exclusion of
provisions relating to Transactions that are
not Terminated Transactions). Party A and
Party B will request each Eligible
Replacement to provide a Firm Offer to the
extent reasonably practicable as of the same
day and time (without regard to different
time zones). If no Firm Offers are provided,
it will be deemed that the Market Quotation
in respect of such Terminated Transaction or
group of Terminated Transactions cannot be
determined.
(2) The definition of "Settlement Amount" shall
be deleted in its entirety and replaced with
the following:
"Settlement Amount" means, with respect to
any Early Termination Date, an amount (as
determined by Party B in accordance with
clauses (a) and (b) below; provided,
however, if Party B fails to make such
determination promptly, Party A shall have
the right to make such determination) equal
to:
(a) the Termination Currency
Equivalent of the amount (whether positive
or negative) for each Terminated Transaction
or group of Terminated Transactions for
which a Market Quotation is determined. If
more than one Market Quotation is capable of
becoming legally binding upon acceptance,
Party B shall accept the Market Quotation
that constitutes (1) the highest Market
Quotation in the case of a payment by an
Eligible Replacement to Party B or (2) the
lowest Market Quotation in the case of a
payment by Party B to an Eligible
Replacement; provided, however, if Party B
fails to make such determination promptly,
Party A shall have the right to make such
determination. If only one Market Quotation
is provided, Party B shall accept the single
Market Quotation. Party B shall be obligated
to accept the Market Quotation immediately
upon determination so as to become legally
binding; or
(b) Party B's Loss (whether
positive or negative and without reference
to any Unpaid Amounts) for each Terminated
Transaction or group of Terminated
Transactions for which a Market Quotation
cannot be determined.
(3) For the purpose of paragraph (4) of the
definition of Market Quotation, Party B
shall make reasonable efforts to determine,
acting in a commercially reasonable manner,
whether a Firm Offer is made in respect of a
Replacement Transaction with terms
substantially the same as those of this
Agreement (save for the exclusion of
provisions relating to Transactions that are
not Terminated Transactions); provided,
however, if Party B fails to make such
determination promptly, Party A shall have
the right to make such determination.
(4) Party B undertakes to use its reasonable
efforts to obtain at least one Market
Quotation on or before the later of (a) the
Early Termination Date or (b) 10 Business
Days following the designation of the Early
Termination Date (the "Latest Settlement
Amount Determination Day").
(5) Party B will be deemed to have discharged
its obligations under (4) above if it
requests Party A to obtain Market
Quotations, where such request is made in
writing within two Business Days after the
day on which the Early Termination Date is
designated.
(6) If Party B requests Party A in writing to
obtain Market Quotations, Party A shall use
its reasonable efforts to do so before the
Latest Settlement Amount Determination Day.
(7) Party A shall have the right to obtain
Market Quotations, without prior request by
Party B, before the Latest Settlement Amount
Determination Day.
(8) If the Settlement Amount is a negative
number, Section 6(e)(i)(3) of this Agreement
shall be deleted in its entirety and
replaced with the following:
"Second Method and Market Quotation. If
Second Method and Market Quotation apply,
(1) Party B shall pay to Party A an amount
equal to the absolute value of the
Settlement Amount in respect of the
Terminated Transactions, (2) Party B shall
pay to Party A the Termination Currency
Equivalent of the Unpaid Amounts owing to
Party A and (3) Party A shall pay to Party B
the Termination Currency Equivalent of the
Unpaid Amounts owing to Party B, provided
that, (i) the amounts payable under (2) and
(3) shall be subject to netting in
accordance with Section 2(c) of this
Agreement and (ii) notwithstanding any other
provision of this Agreement, any amount
payable by Party A under (3) due to a
failure by Party A to make, when due, any
payment under this Agreement, shall not be
netted against any amount payable by Party B
under (1)."
(g) "Termination Currency" means U.S. Dollars.
(h) Additional Termination Event.
(A) The following Additional Termination Event will apply
to Party A, with Party A as the sole Affected Party
and all Transaction as Affected Transactions.
(i) Party A fails to comply with the Rating
Agency Downgrade provisions as set forth in
Part 5(f) below; or
(ii) A Firm Offer is accepted by Party B pursuant
to Part 5(f)(ii)(2)(B) following a ▇▇▇▇▇'▇
Second Tier Downgrade Event.
(B) The following Additional Termination Events will
apply to Party B, with Party B as the sole Affected
Party and all Transaction as Affected Transactions.
(i) Upon any amendment, supplement, modification
or waiver of any provision of the PSA (as
defined below) without the consent of Party
A that materially and adversely affects the
rights or interests of Party A.
(ii) The Servicer exercises its option to
purchase the Mortgage Loans pursuant to
Section 9.01 of the PSA.
(iii) Upon the irrevocable direction to dissolve
or otherwise terminate the Trust following
which all assets of the Trust will be
liquidated and the proceeds of such
liquidation distributed to the
Certificateholders.
Part 2. Tax Representations.
Party A and Party B Payer Tax Representations.
(i) For the purpose of Section 3(e), each of Party A and Party
B makes the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of
any Relevant Jurisdiction to make any deduction or withholding
for or on account of any Tax from any payment (other than
interest under Section 2(e), 6(d)(ii), or 6(e) of this
Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on (i)
the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement, and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement,
and (iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement, provided that it
shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(ii) For the purposes of Section 3(f), Party A makes the
following representation:
Party A is a U.S. corporation organized under the laws of
Delaware.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the
following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party
required to
deliver
document Form/Document/Certificate Date by which to be delivered
------------ --------------------------- -----------------------------------
Party A A correct, complete and (i) Upon entering into this
duly executed IRS Form W-9. Agreement, (ii) promptly upon
reasonable demand by Party B, and
(iii) promptly upon learning that
any such Form previously provided
by Party A has become obsolete or
incorrect.
Party B (i) A correct, complete and (a) With respect to (i), the
duly executed IRS Form W-9 Trustee shall apply for the
(or any successor thereto) employer identification number
that eliminates U.S. of the Trust promptly upon
federal withholding and entering into this Agreement and
backup withholding tax on deliver the related correct,
payments under this complete and duly executed IRS
Agreement, (ii) if Form W-9 promptly upon receipt,
requested by Party A, a and in any event, no later than
correct, complete and duly the first Payment Date of this
executed Form W-8IMY, and Transaction; (b) in the case of
(iii) a complete and a W-8ECI, W-8IMY, and W-8BEN
executed IRS Form W-9, that does not include a U.S.
W-8BEN, W-8ECI, or W-8IMY taxpayer identification number
(with attachments) (as in line 6, before December 31 of
appropriate) from each each third succeeding calendar
Certificateholder that is year, (c) promptly upon
not an "exempt recipient" reasonable demand by Party A,
as that term is defined in and (d) promptly upon actual
Treasury regulations knowledge that any such Form
section 1.6049-4(c)(ii), previously provided by Party B
that eliminates U.S. has become obsolete or incorrect.
federal withholding and
backup withholding tax on
payments under this
Agreement.
(b) Other documents to be delivered are:-
Party Covered by
required to Section
deliver Date by which to be 3(d)
document Form/Document/Certificate delivered Representation
------------ --------------------------- -------------------- --------------
Party A Either (1) a signature The earlier of the Yes
and booklet containing fifth Business Day
Party B secretary's certificate and after the Trade
resolutions ("authorizing Date of the first
resolutions") authorizing Transaction or upon
the party to enter into execution of this
derivatives transactions of Agreement and as
the type contemplated by deemed necessary
the parties or (2) a for any further
secretary's certificate, documentation.
authorizing resolutions and
incumbency certificate, in
either case, for such party
and any Credit Support
Provider of such party
reasonably satisfactory in
form and substance to the
other party.
Party B An executed copy of the Upon execution of Yes
Pooling and Servicing this Agreement.
Agreement ("PSA"), dated as
of March 1, 2007, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as Depositor,
Countrywide Home Loans
Servicing LP, as Servicer,
Saxon Mortgage Services,
Inc., as Servicer, ▇▇▇▇▇
Fargo Bank, National
Association, as Trustee and
Custodian, LaSalle Bank
National Association, as
Custodian, and Decision One
Mortgage Company, LLC and
WMC Mortgage Corp., as
Responsible Parties.
Party A A duly executed copy of the As soon as No
and Credit Support Document practicable after
Party B specified in Part 4 of this the execution of
Schedule. this Agreement.
Party A An opinion of counsel As soon as No
and Party B reasonably satisfactory in practicable after
form and substance to the the execution of
other party. this Agreement.
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):-
(i) Address for notices or communications to Party A:-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
Transaction Management Group
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: CHIEF LEGAL OFFICER
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
(ii) Address for notices or communications to Party B:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager - MSAC 2007-HE4
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) Notices. Section 12(a) is amended by adding in the third line
thereof after the phrase "messaging system" and before the ")"
the words, "; provided, however, any such notice or other
communication may be given by facsimile transmission if telex
is unavailable, no telex number is supplied to the party
providing notice, or if answer back confirmation is not
received from the party to whom the telex is sent."
(c) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(d) Offices. The provisions of Section 10(a) will not apply to
Party A and to Party B.
(e) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(f) "Calculation Agent" means Party A.
(g) "Credit Support Document" means (a) with respect to Party A,
(1) the Credit Support Annex between Party A and Party B dated
as of the date hereof (the "Credit Support Annex") and (2) the
guarantee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and (b) with respect to Party B,
the Credit Support Annex.
(h) Credit Support Provider means in relation to Party A: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, a Delaware corporation.
Credit Support Provider means in relation to Party B: None
(i) Governing Law; Jurisdiction. This Agreement, each Credit
Support Document and each Confirmation will be governed by and
construed in accordance with the laws of the State of New York
without regard to conflict of law provisions thereof other
than New York General Obligations Law Sections 5-1401 and
5-1402. Section 13(b) is amended by: (1) deleting "non-" from
the second line of clause (i); and (2) deleting the final
paragraph.
(j) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial
by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
(k) Netting of Payments. Clause (ii) of Section 2(c) will apply to
any amounts payable with respect to Transactions from the date
of this Agreement.
(l) "Affiliate". Party A and Party B shall be deemed not to have
any Affiliates for purposes of this Agreement, including for
purposes of Section 6(b)(ii). For the avoidance of doubt, with
respect to Party A, such definition shall be understood to
exclude ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Derivative Products Inc.
(m) Additional Definitions. All capitalized terms used but not
otherwise defined in this Agreement shall have the meanings
given thereto in the PSA.
Part 5. Other Provisions
(a) Additional Representations.
(i) The introductory clause of Section 3 of this
Agreement is hereby amended to read in its entirety
as follows:
"Each party represents to the other party (which
representations will be deemed to be repeated by each
party on each date on which a Transaction is entered
into and, in the case of the representations in
Section 3(f) and Section 3(g)(4), at all times until
the termination of this Agreement) that:--"
(ii) Section 3 of this Agreement is hereby amended by
adding at the end thereof the following subsection
(g):
"(g) Relationship Between Parties.
(1) Nonreliance. It is not relying on any statement
or representation of the other party regarding a Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in
respect of that Transaction.
(2) Evaluation and Understanding.
(i) Non-Reliance. In the case of Party A, it
is acting for its own account, and in the case of
Party B, the Trustee is acting on behalf of the
Trust. It has made its own independent decisions to
enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such
advisers as it has deemed necessary and, with respect
to Party B, as directed under the PSA. It is not
relying on any communication (written or oral) of the
other party as investment advice or as a
recommendation to enter into that Transaction; it
being understood that information and explanations
related to the terms and conditions of a Transaction
shall not be considered investment advice or a
recommendation to enter into that Transaction. No
communication (written or oral) received from the
other party shall be deemed to be an assurance or
guarantee as to the expected results of that
Transaction.
(ii) Assessment and Understanding. It is
capable of assessing the merits of and understanding
(on its own behalf or through independent
professional advice), and understands and accepts,
the terms, conditions and risks of that Transaction.
It is also capable of assuming, and assumes, the
risks of that Transaction.
(iii) Status of Parties. The other party is
not acting as a fiduciary for or an adviser to it in
respect of that Transaction.
(3) Purpose. It is an "eligible swap participant" as
such term is defined in Section 35.1(b)(2) of the regulations
(17 C.F.R 35) promulgated under, and an "eligible contract
participant" as defined in Section 1a(12) of, the Commodity
Exchange Act, as amended, and it is entering into the
Transaction for the purposes of managing its borrowings or
investments, hedging its underlying assets or liabilities or
in connection with a line of business.
(4) ERISA Representation.
(i) Party A represents and warrants at all times
hereunder that it is not a pension plan or employee
benefit plan and that it is not using assets of any such
plan or assets deemed to be assets of such a plan in
connection with any Transaction under this Agreement,
and
(ii) Party B represents and warrants at all times
hereunder that (x) it is not a pension plan or employee
benefit plan, and (y) (1) that it is not acting on
behalf of any such plan or using assets of any such plan
or assets deemed to be assets of any such plan in
connection with any Transaction under this Agreement or
(2) any pension plan or employee benefits plan subject
to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any
person who is acting on behalf of such a plan, or using
assets of such plan or assets deemed to be "plan assets"
of such plan for purposes of ERISA or the Code, who
purchases a certificate issued by the Trust while this
Agreement is in existence (i) shall represent or shall
be deemed to represent that the purchase and holding of
such certificate is in reliance on at least one of the
Prohibited Transaction Class Exemptions of ▇▇-▇▇, ▇▇-▇,
▇▇-▇▇, ▇▇-▇▇ ▇▇ ▇▇-▇▇ ▇▇ (▇▇) shall provide an opinion
of counsel which states that such purchase and holding
is permissible under applicable law and will not result
in a prohibited transaction under ERISA or Section 4975
of the Code."
(b) Set-off. Subject to Section 2(c), Paragraphs 8(a) and 8(b) of
the Credit Support Annex and Part 1(f)(ii)(8) hereof,
notwithstanding any other provision of this Agreement or any
other existing or future agreement, each party irrevocably
waives any and all rights it may have to set off, net, recoup
or otherwise withhold, suspend or condition payment or
performance of any obligation between it and the other party
hereunder against any obligation between it and the other
party under any other agreements. Section 6(e) is hereby
amended by the deletion of the following sentence at the end
of the first paragraph thereof: "The amount, if any, payable
in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off."
(c) Confirmations. Party A will deliver to Party B a Confirmation
relating to each Transaction.
(d) Form of Agreement. The parties hereby agree that the text of
the body of this Agreement is intended to be the printed form
of 1992 ISDA Master Agreement (Multicurrency--Cross Border) as
published and copyrighted by the International Swaps and
Derivatives Association, Inc.
(e) Transfer, Termination, Amendment and Assignment.
(i) This Agreement may not be amended unless prior
written notice is given to Moody's and Rating Agency
Confirmation from S&P is obtained.
(ii) Notwithstanding any other provision of this
Agreement, no Early Termination Date shall be
effectively designated by Party B (other than an
Early Termination Date designated under Part
5(f)(ii)(3)) unless Moody's has been given prior
written notice of such designation.
(iii) Party B may, with the prior written consent of Party
A and subject prior written notice to Moody's and
Rating Agency Confirmation from S&P, assign, novate
or transfer its rights and obligations under the
Agreement to a third party. Notwithstanding Section 7
of this Agreement, Party A may, at its own discretion
and at its own expense, subject to giving reasonable
notice of transfer to Moody's and subject to Rating
Agency Confirmation with respect to S&P, assign,
novate or transfer its rights and obligations under
this Agreement (including any Transactions hereunder)
to any third party including, without limitation,
another of Party A's offices, branches or affiliates
(the "Transferee"), provided that:
(1) such third party agrees to be bound by,
inter alia, the payment, transfer and collateral
terms of this Agreement (including any Transactions
hereunder) and substantially all other terms as the
party which it replaces;
(2) such third party is an Eligible
Replacement;
(3) a Termination Event or an Event of
Default does not occur under this Agreement as a
result of such transfer;
(4) if the Transferee is domiciled in a
different jurisdiction from both Party A and Party B,
the rating of the Certificates assigned by S&P are
not adversely affected;
(5) as of the date of the transfer the
Transferee will not, as a result of such transfer, be
required to withhold or deduct on account of tax
under this Agreement; and
(6) as of the date of such transfer, neither
the Transferee nor Party B will be required to
withhold or deduct any increased amount on account of
any Taxes under this Agreement as a result of such
transfer, unless, as of the date of such transfer,
(x) Party B is entitled to additional amounts under
Section 2(d)(i)(4) on account of any such Taxes
required to be deducted or withheld by the Transferee
and (y) Party B is not required to pay Transferee
additional amounts under Section 2(d)(i)(4) on
account of any such Taxes required to be deducted or
withheld by Party B.
Following such transfer, all references
herein to Party A shall be deemed to be
references to the Transferee.
(f) Rating Agency Downgrade.
(i) Moody's First Tier Downgrade. In the event the
Relevant Entity is downgraded below the Moody's First
Tier Required Swap Counterparty Ratings (a "Moody's
First Tier Downgrade Event") then, within 30 Business
Days after the occurrence of such Moody's First Tier
Downgrade Event, Party A shall, at its option and at
its own expense, either:
(A) cause an Eligible Replacement to replace
Party A as party to this Agreement; provided
that if such Eligible Replacement or its
Credit Support Provider, as applicable, is
rated below the Moody's First Tier Required
Swap Counterparty Rating, such Eligible
Replacement shall immediately Transfer
Eligible Credit Support to Party B pursuant
to the Credit Support Annex;
(B) obtain an Eligible Guarantee in respect of
Party A's obligations under this Agreement
that is provided by an entity with the
Moody's First Tier Required Swap
Counterparty Rating; or
(C) Transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex.
(ii) Moody's Second Tier Downgrade. (1) In the event that
no Relevant Entity has the Moody's Second Tier
Required Swap Counterparty Rating (a "Moody's Second
Tier Downgrade Event") then, Party A shall, at its
option and at its own expense, use commercially
reasonable efforts to as soon as reasonably
practicable either:
(A) cause an Eligible Replacement to replace
Party A as party to this Agreement; or
(B) obtain an Eligible Guarantee in respect of
Party A's obligations under this Agreement
that is provided by an entity with the
Moody's Second Tier Required Swap
Counterparty Rating.
(2) If no Eligible Replacement or Eligible Guarantee
has been effected in accordance with Part
5(f)(ii)(1)(A) or (B) above within 30 Business Days
of such Moody's Second Tier Downgrade Event then:
(A) Party A shall Transfer Eligible Credit
Support to Party B pursuant to the Credit
Support Annex until such replacement or
Eligible Guarantee takes effect or, if
sooner, no Moody's Second Tier Downgrade
Event is occurring; and
(B) without prejudice to Party A's right to
continue to seek an Eligible Replacement or
an Eligible Guarantee pursuant to Part
5(f)(ii)(1)(A) and (B), Party B shall also
have the right (but not the obligation) on
any Business Day thereafter to obtain Firm
Offers (such day a "Firm Offer Solicitation
Date") by giving Party A written notice of
its intention to seek Firm Offers no later
than 12:00 p.m., New York time, on the
Business Day prior to the Firm Offer
Solicitation Date. Such notice shall
indicate the day and time as of which each
Eligible Replacement will be requested to
provide its Firm Offer; provided that
Eligible Replacements shall not provide Firm
Offers prior to 12:00 p.m. New York time, on
the Firm Offer Solicitation Date. Party B
shall undertake to use reasonable efforts to
seek at least 5 Firm Offers and Party B
shall request each entity providing a Firm
Offer to do so to the extent reasonably
practicable as of the same day and time
(without regard to different time zones). If
more than one Firm Offer remains capable of
becoming legally binding upon acceptance,
Party B shall accept the Firm Offer that
constitutes (1) the highest Firm Offer in
the case of a payment by an Eligible
Replacement to Party B or (2) the lowest
Firm Offer in the case of a payment by Party
B to an Eligible Replacement; provided,
however, if Party B fails to make such
determination promptly, Party A shall have
the right to make such determination. If
only one Firm Offer is provided, Party B
shall accept the single Firm Offer. Party B
shall be obligated to accept the Firm Offer
upon determination; provided however, prior
to accepting such Firm Offer, Party B shall
(1) on a day that is a Business Day, provide
Party A with at least 24 hours prior written
notice of its intent to accept such Firm
Offer (which acceptance, in all cases, shall
be on a Business Day) and (2) confirm that
Party A has not identified an Eligible
Replacement. If at anytime prior to Party
B's acceptance of a Firm Offer, Party A has
identified an Eligible Replacement then, in
its sole discretion, Party A may transfer
its rights and obligations under this
Agreement to such Eligible Replacement and
an Early Termination Date will not occur. If
a Firm Offer is accepted by Party B, then,
notwithstanding Section 6 of the ISDA Master
Agreement, an Early Termination Date in
respect of all outstanding Transactions will
occur immediately upon such acceptance by
Party B and the Settlement Amount will equal
the Firm Offer so accepted by Party B.
(3) Notwithstanding Part 5(f)(ii)(1) and (2) above,
an Additional Termination Event under this Part
5(f)(ii) shall only occur with Party A as the sole
Affected Party if:
(A) a Moody's Second Tier Downgrade Event has
occurred and has been continuing for 30 or
more Business Days; and
(B) at least one Eligible Replacement has made a
Firm Offer in accordance with Part
5(f)(ii)(2)(B) above which remains capable
of becoming legally binding upon acceptance
by the offeree.
(iii) S&P First Tier Downgrade. In the event the Relevant
Entity is downgraded below the S&P First Tier
Required Swap Counterparty Rating (an "S&P First Tier
Downgrade Event") then, within 30 calendar days after
the occurrence of such S&P First Tier Downgrade
Event, Party A shall, subject to Rating Agency
Confirmation, at its option and at its own expense,
either:
(A) cause an Eligible Replacement to replace
Party A as party to this Agreement; provided
that if such Eligible Replacement or its
Credit Support Provider, as applicable, is
rated below the S&P First Tier Required Swap
Counterparty Rating, such Eligible
Replacement shall immediately Transfer
Eligible Credit Support to Party B pursuant
to the Credit Support Annex;
(B) obtain an Eligible Guarantee in respect of
Party A's obligations under this Agreement
that is provided by an entity with the S&P
First Tier Required Swap Counterparty
Rating;
(C) transfer Eligible Credit Support to Party B
pursuant to the Credit Support Annex; or
(D) take other steps, if any, to enable Party B
to remedy a downgrade by S&P below the S&P
First Tier Required Swap Counterparty
Rating.
(iv) S&P Second Tier Downgrade. (1) In the event that no
Relevant Entity has the S&P Second Tier Required Swap
Counterparty Rating (an "S&P Second Tier Downgrade
Event") then, within 10 calendar days after such S&P
Second Tier Downgrade Event, Party A shall, subject
to Rating Agency Confirmation, at its option and at
its own expense, use commercially reasonable efforts
to as soon as reasonably practicable either:
(A) cause an Eligible Replacement to replace
Party A as party to this Agreement; provided
that if such Eligible Replacement or its
Credit Support Provider, as applicable, is
rated below the S&P First Tier Required Swap
Counterparty Rating, such Eligible
Replacement shall immediately Transfer
Eligible Credit Support to Party B pursuant
to the Credit Support Annex; or
(B) obtain an Eligible Guarantee in respect of
Party A's obligations under this Agreement
that is provided by an entity with the S&P
First Tier Required Swap Counterparty
Rating.
(2) Pending compliance with Part 5(f)(iv)(1)(A) or
(B) Party A shall Transfer Eligible Credit Support to
Party B pursuant to the Credit Support Annex
immediately upon the occurrence of an S&P Second Tier
Downgrade Event.
(v) Failure to act in accordance with this Part 5(f),
including any failure by Party A to comply with or
perform any obligation to be complied with or
performed by Party A under the Credit Support Annex,
shall constitute an Additional Termination Event with
Party A as the sole Affected Party; provided that,
failure by Party A to Transfer Eligible Credit
Support to Party B in accordance with Part
5(f)(ii)(2) above shall constitute an Event of
Default under Section 5(a)(iii)("Credit Support
Default") if such failure is not remedied on or
before the third Business Day after notice of such
failure is given to Party A.
(vi) For purposes of this Part 5(f), but subject to Part
5(f)(ii)(3), Party A shall be responsible for (1)
posting collateral in accordance with such Credit
Support Annex at its own cost; and (2) any cost
incurred by it in complying with its obligations.
(g) Rating Agency Downgrade Definitions.
(i) For purposes of this Agreement,
"Eligible Guarantee" means an unconditional and
irrevocable guarantee, letter of credit or other
arrangement that is provided by a party as principal
obligor rather than surety and is directly
enforceable by Party B.
"Eligible Replacement" means an entity (1) with the
Moody's First Tier Required Swap Counterparty Ratings
and/or the Moody's Second Tier Required Swap
Counterparty Ratings or whose present and future
obligations owing to Party B are supported pursuant
to an Eligible Guarantee provided by a party with the
Moody's First Tier Required Swap Counterparty Ratings
and/or the Moody's Second Tier Required Swap
Counterparty Ratings, and (2) with the S&P First Tier
Required Swap Counterparty Ratings and/or the S&P
Second Tier Required Swap Counterparty Ratings or
whose present and future obligations owing to Party B
are supported pursuant to an Eligible Guarantee
provided by a party with the S&P First Tier Required
Swap Counterparty Ratings; provided that no entity
shall be an Eligible Replacement unless (A) a legal
opinion confirms that none of such Eligible
Replacement's payments to Party B under this
Agreement will be subject to deduction or withholding
for or on account of any Tax or (B) notwithstanding
the definition of "Indemnifiable Tax" in Section 14
of this Agreement, all Taxes in relation to payments
by such Eligible Replacement shall be Indemnifiable
Taxes unless such Taxes (x) are assessed directly
against Party B and not by deduction or withholding
by such Eligible Replacement or (y) arise as a result
of a Change in Tax Law (in which case such Tax shall
be an Indemnifiable Tax only if such Tax satisfies
the definition of Indemnifiable Tax provided in
Section 14).
"Firm Offer" means an offer which, when made, was
capable of becoming legally binding upon acceptance.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc. and
any successor to its rating business.
"Moody's First Tier Required Swap Counterparty
Rating" means (i) if such counterparty or entity has
only Long-Term Rating by Moody's, a Long-Term Rating
of at least "A1" by Moody's or (ii) if such
counterparty or entity has both a Long-Term Rating
and a Short-Term Rating by Moody's, a Long-Term
Rating of at least "A2" by Moody's and a Short-Term
Rating of at least "P-1" by Moody's.
"Moody's Second Tier Required Swap Counterparty
Rating" means (i) if such counterparty or entity has
only a Long-Term Rating by Moody's, a Long-Term
Rating of at least "A3" by Moody's or (ii) if such
counterparty or entity has both a Long-Term Rating
and a Short-Term Rating by Moody's, a Long-Term
Rating of at least "A3" by Moody's and a Short-Term
Rating of at least "P-2" by ▇▇▇▇▇'▇.
"Rating Agencies" means Moody's and S&P.
"Rating Agency Confirmation" means, with respect to
any particular proposed act or omission to act
hereunder, that the party acting or failing to act
must consult with S&P and receive from S&P a prior
written confirmation that the proposed action or
inaction would not cause a downgrade or withdrawal of
the then current rating of the Certificates; provided
that S&P is then providing a rating of the
Certificates.
"Relevant Entity" means Party A, Party A's Credit
Support Provider and any principal obligor under an
Eligible Guarantee in respect of Party A's
obligations under this Agreement.
"S&P" means Standard and Poor's Ratings Services, a
division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any
successor to its rating business.
"S&P First Tier Required Swap Counterparty Rating"
means (i) a Short-Term Rating of at least "A-1" by
S&P or (ii) if such counterparty or entity does not
have a Short-Term Rating by S&P, a Long-Term Rating
of at least "A+" by S&P.
"S&P Second Tier Required Swap Counterparty Rating"
means a Short-Term Rating of at least "A-3" by S&P
and a Long-Term Rating of at least "BBB-" by S&P.
(h) Severability. If any term, provision, covenant, or condition
of this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed
with the invalid or unenforceable portion eliminated, so long
as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to
the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the
respective benefits or expectations of the parties; provided,
however, that nothing in this provision shall adversely affect
the rights of each party under this Agreement; and provided
further that this severability provision shall not be
applicable if any provision of Section 1, 2, 5, 6, or 13 (or
any definition or provision in Section 14 to the extent it
relates to, or is used in or connection with any such Section)
shall be so held to be invalid or unenforceable. The parties
shall endeavor to engage in good faith negotiations to replace
any invalid or unenforceable term, provision, covenant or
condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as
close as possible to that of the invalid or unenforceable
term, provision, covenant or condition.
(i) Consent to Recording. Each party hereto consents to the
monitoring or recording, at any time and from time to time, by
the other party of any and all communications between trading
and marketing personnel of the parties, waives any further
notice of such monitoring or recording, and agrees to notify
its officers and employees of such monitoring or recording.
(j) Proceedings. Party A shall not institute against or cause any
other person to institute against, or join any other person in
instituting against, the Trust or ▇▇▇▇▇ Fargo Bank, National
Association, not individually, but solely as Trustee, any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any
federal or state bankruptcy or similar law for a period of one
year and one day (or, if longer, the applicable preference
period) following payment in full of the Certificates;
provided, however, that this shall not restrict or prohibit
Party A from joining in any bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceedings
or other analogous proceedings under applicable laws.
(k) Regulation AB. Upon request by the Depositor, Party A may, at
its option, but is not required to, (A) (a) provide the
financial information required by Item 1115(b)(1) or (b)(2) of
Regulation AB (as specified by the Depositor to Party A) with
respect to Party A (or any guarantor of Party A if providing
the financial data of a guarantor is permitted under
Regulation AB) and any affiliated entities providing
derivative instruments to Party B (the "Company Financial
Information"), in a form appropriate for use in the Exchange
Act Reports and in an ▇▇▇▇▇-compatible form; (b) if
applicable, cause its accountants to issue their consent to
filing or incorporation by reference of such financial
statements in the Exchange Act Reports of Party B and (c)
within 5 Business Days of the release of any updated financial
information, provide current Company Financial Information as
required under Item 1115(b) of Regulation AB to the Depositor
in an ▇▇▇▇▇-compatible form and, if applicable, cause its
accountants to issue their consent to filing or incorporation
by reference of such financial statements in the Exchange Act
Reports of Party B or (B) assign this Agreement at its own
cost to another entity that has agreed to take the actions
described in clause (A) of this sentence with respect to
itself (and which has the Required Swap Counterparty Rating
and the assignment to which would satisfy the Rating Agency
Condition). For the avoidance of doubt, Party A is not
required to take any action pursuant to this paragraph and the
failure of Party A to take any such action will not constitute
an Event of Default under this Agreement.
As used in this Agreement the following words shall have the
following meanings:
"Commission" shall mean the Securities and Exchange
Commission.
"Depositor" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
"▇▇▇▇▇" shall mean the Commission's Electronic Data Gathering,
Analysis and Retrieval system.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended and the rules and regulations promulgated
thereunder
"Exchange Act Reports" shall mean all Distribution Reports on
Form 10-D, Current Reports on Form 8-K and Annual Reports on
Form 10-K that are to be filed with respect to Party B
pursuant to the Exchange Act.
"Regulation AB" shall mean the Asset Backed Securities
Regulation AB, 17 C.F.R. ss.ss.229.1100-229.1123, as such may
be amended from time to time, and subject to such
clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may
be provided by the Commission or its staff from time to time.
(l) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Agreement is executed by
▇▇▇▇▇ Fargo Bank, National Association (i) this Agreement is
executed and delivered by ▇▇▇▇▇ Fargo Bank, National
Association not in its individual capacity but solely as
Trustee under the PSA in the exercise of the powers and
authority conferred and vested in it as trustee thereunder,
(ii) each of the representations, undertakings and agreements
herein made on behalf of Party B is made and intended not as
personal representations of the Trustee but is made and
intended for the purpose of binding only the Trust, and (iii)
under no circumstances shall ▇▇▇▇▇ Fargo Bank, National
Association in its individual capacity be personally liable
for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under
this Agreement.
(m) "Indemnifiable Tax" Notwithstanding the definition of
"Indemnifiable Tax" in Section 14 of this Agreement, in
relation to payments by Party A, no Tax shall be an
Indemnifiable Tax.
(n) If Party A consolidates or amalgamates with, merges with or
into, or transfers all or substantially all its assets to,
another entity, where such action does not constitute an event
described in Section 5(a)(viii), Party A shall either (A)
provide a legal opinion that none of Party A's payments to
Party B under this Agreement will be subject to deduction or
withholding for or on account of any Tax or (B)
notwithstanding the definition of "Indemnifiable Tax" in
Section 14 of this Agreement, all Taxes in relation to
payments by Party A shall be Indemnifiable Taxes unless such
Taxes (x) are assessed directly against Party B and not by
deduction or withholding by such Eligible Replacement or (y)
arise as a result of a Change in Tax Law (in which case such
Tax shall be an Indemnifiable Tax only if such Tax satisfies
the definition of Indemnifiable Tax provided in Section 14).
IN WITNESS WHEREOF, the parties have executed this Schedule by their
duly authorized officers as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC. ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Trustee for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- --------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
Date: March 29, 2007 Date: March 29, 2007
EXHIBIT A
(Bilateral Form) (ISDA Agreements Subject to New York Law Only)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of March 29, 2007
between
▇▇▇▇▇ FARGO BANK, NATIONAL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC. and ASSOCIATION, not individually,
but solely as Trustee for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
("Party A") ("Party B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows:--
Paragraph 1. Interpretation
(a) Definitions and Inconsistency. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) Secured Party and Pledgor. All references in this Annex to the "Secured
Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
Paragraph 2. Security Interest
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
Paragraph 3. Credit Support Obligations
(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified
in Paragraph 13, the "Delivery Amount" applicable to the Pledgor for any
Valuation Date will equal the amount by which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit
Support held by the Secured Party.
(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds Secured Party's Minimum Transfer Amount, then
the Secured Party will Transfer to the Pledgor Posted Credit Support specified
by the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to Paragraph
13). Unless otherwise specified in Paragraph 13, the "Return Amount" applicable
to the Secured Party for any Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support
held by the Secured Party
exceeds
(ii) the Credit Support Amount.
"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions
(a) Conditions Precedent. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified
Condition has occurred and is continuing with respect to the other party;
and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the other party.
(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, then the relevant Transfer will be
made not later than the close of business on the second Local Business Day
thereafter.
(c) Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
(d) Substitutions.
(i) Unless otherwise specified in Paragraph 13, upon notice to the
Secured Party specifying the items of Posted Credit Support to be
exchanged, the Pledgor may, on any Local Business Day, Transfer to the
Secured Party substitute Eligible Credit Support (the "Substitute Credit
Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to
the Pledgor the items of Posted Credit Support specified by the Pledgor in
its notice not later than the Local Business Day following the date on
which the Secured Party receives the Substitute Credit Support, unless
otherwise specified in Paragraph 13 (the "Substitution Date"); provided
that the Secured Party will only be obligated to Transfer Posted Credit
Support with a Value as of the date of Transfer of that Posted Credit
Support equal to the Value as of that date of the Substitute Credit
Support.
Paragraph 5. Dispute Resolution
If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in case of
(I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to
Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the
other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:
(i) In the case of a dispute involving a Delivery Amount or Return
Amount, unless otherwise specified in Paragraph 13, the Valuation Agent
will recalculate the Exposure and the Value as of the Recalculation Date
by:
(A) utilizing any calculations of Exposure for the
Transactions (or Swap Transactions) that the parties have agreed are
not in dispute;
(B) calculating the Exposure for the Transactions (or Swap
Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of calculating
Market Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not available for a
particular Transaction (or Swap Transaction), then fewer than four
quotations may be used for that Transaction (or Swap Transaction);
and if no quotations are available for a particular Transaction (or
Swap Transaction), then the Valuation Agent's original calculations
will be used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for
calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, the Valuation Agent will
recalculate the Value as of the date of Transfer pursuant to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
Paragraph 6. Holding and Using Posted Collateral
(a) Care of Posted Collateral. Without limiting the Secured Party's rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
(b) Eligibility to Hold Posted Collateral; Custodians.
(i) General. Subject to the satisfaction of any conditions specified
in Paragraph 13 for holding Posted Collateral, the Secured Party will be
entitled to hold Posted Collateral or to appoint an agent (a "Custodian")
to hold Posted Collateral for the Secured Party. Upon notice by the
Secured Party to the Pledgor of the appointment of a Custodian, the
Pledgor's obligations to make any Transfer will be discharged by making
the Transfer to that Custodian. The holding of Posted Collateral by a
Custodian will be deemed to be the holding of that Posted Collateral by
the Secured Party for which the Custodian is acting.
(ii) Failure to Satisfy Conditions. If the Secured Party or its
Custodian fails to satisfy any conditions for holding Posted Collateral,
then upon a demand made by the Pledgor, the Secured Party will, not later
than five Local Business Days after the demand, Transfer or cause its
Custodian to Transfer all Posted Collateral held by it to a Custodian that
satisfies those conditions or to the Secured Party if it satisfies those
conditions.
(iii) Liability. The Secured Party will be liable for the acts or
omissions of its Custodian to the same extent that the Secured Party would
be liable hereunder for its own acts or omissions.
(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under Paragraphs 3,
4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an
Affected Party with respect to a Specified Condition and no Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party
will, notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds, free from any claim or right of any nature whatsoever
of the Pledgor, including any equity or right of redemption by the
Pledgor; and
(ii) register any Posted Collateral in the name of the Secured
Party, its Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) Distributions and Interest Amount.
(i) Distributions. Subject to Paragraph 4(a), if the Secured Party
receives or is deemed to receive Distributions on a Local Business Day, it
will Transfer to the Pledgor not later than the following Local Business
Day any Distributions it receives or is deemed to receive to the extent
that a Delivery Amount would not be created or increased by that Transfer,
as calculated by the Valuation Agent (and the date of calculation will be
deemed to be a Valuation Date for this purpose).
(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and
subject to Paragraph 4(a), in lieu of any interest, dividends or other
amounts paid or deemed to have been paid with respect to Posted Collateral
in the form of Cash (all of which may be retained by the Secured Party),
the Secured Party will Transfer to the Pledgor at the times specified in
Paragraph 13 the Interest Amount to the extent that a Delivery Amount
would not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose). The Interest Amount or portion thereof
not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.
Paragraph 7. Events of Default
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when
due, any Transfer of Eligible Collateral, Posted Collateral or the
Interest Amount, as applicable, required to be made by it and that failure
continues for two Local Business Days after notice of that failure is
given to that party;
(ii) that party fails to comply with any restriction or prohibition
specified in this Annex with respect to any of the rights specified in
Paragraph 6(c) and that failure continues for five Local Business Days
after notice of that failure is given to that party; or
(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii) and
that failure continues for 30 days after notice of that failure is given
to that party.
Paragraph 8. Certain Rights and Remedies
(a) Secured Party's Rights and Remedies. If at any time (1) an Event of Default
or Specified Condition with respect to the Pledgor has occurred and is
continuing or (2) an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under
applicable law with respect to Posted Collateral held by the Secured
Party;
(ii) any other rights and remedies available to the Secured Party
under the terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with
respect to any Obligations against any Posted Collateral or the Cash
equivalent of any Posted Collateral held by the Secured Party (or any
obligation of the Secured Party to Transfer that Posted Collateral); and
(iv) the right to liquidate any Posted Collateral held by the
Secured Party through one or more public or private sales or other
dispositions with such notice, if any, as may be required under applicable
law, free from any claim or right of any nature whatsoever of the Pledgor,
including any equity or right of redemption by the Pledgor (with the
Secured Party having the right to purchase any or all of the Posted
Collateral to be sold) and to apply the proceeds (or the Cash equivalent
thereof) from the liquidation of the Posted Collateral to any amounts
payable by the Pledgor with respect to any Obligations in that order as
the Secured Party may elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) Pledgor's Rights and Remedies. If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a
Pledgor under applicable law with respect to Posted Collateral held by the
Secured Party;
(ii) the Pledgor may exercise any other rights and remedies
available to the Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to Transfer
all Posted Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount is
not so Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to
any Obligations against any Posted Collateral or the Cash equivalent
of any Posted Collateral held by the Secured Party (or any
obligation of the Secured Party to Transfer that Posted Collateral);
and
(B) to the extent that the Pledgor does not Set-off under
(iv)(A) above, withhold payment of any remaining amounts payable by
the Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.
(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation,
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) Final Returns. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.
Paragraph 9. Representations
Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any
Eligible Collateral it Transfers as the Pledgor and has taken all
necessary actions to authorize the granting of that security interest and
lien;
(ii) it is the sole owner of or otherwise has the right to Transfer
all Eligible Collateral it Transfers to the Secured Party hereunder, free
and clear of any security interest, lien, encumbrance or other
restrictions other than the security interest and lien granted under
Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured
Party under the terms of this Annex, the Secured Party will have a valid
and perfected first priority security interest therein (assuming that any
central clearing corporation or any third-party financial intermediary or
other entity not within the control of the Pledgor involved in the
Transfer of that Eligible Collateral gives the notices and takes the
action required of it under applicable law for perfection of that
interest); and
(iv) the performance by it of its obligations under this Annex will
not result in the creation of any security interest, lien or other
encumbrance on any Posted Collateral other than the security interest and
lien granted under Paragraph 2.
Paragraph 10. Expenses
(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit Support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party's rights under
Paragraph 6(c).
(c) Liquidation/Application of Posted Credit Support. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.
Paragraph 11. Miscellaneous
(a) Default Interest. A Secured Party that fails to make, when due, any Transfer
of Posted Collateral or the Interest Amount will be obliged to pay the Pledgor
(to the extent permitted under applicable law) an amount equal to interest at
the Default Rate multiplied by the Value of the items of property that were
required to be Transferred, from (and including) the date that the Posted
Collateral or Interest Amount was required to be Transferred to (but excluding)
the date of Transfer of that Posted Collateral or Interest Amount. This interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.
(b) Further Assurances. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.
(c) Further Protection. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph 6(c).
(d) Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) Demands and Notices. All demands and notices made by a party under this
Annex will be made as specified in the Notices Section of this Agreement, except
as otherwise provided in Paragraph 13.
(f) Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
Paragraph 12. Definitions
As used in this Annex:--
"Cash" means the lawful currency of the United States of America.
"Credit Support Amount" has the meaning specified in Paragraph 3.
"Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13.
"Delivery Amount" has the meaning specified in Paragraph 3(a).
"Disputing Party" has the meaning specified in Paragraph 5.
"Distributions" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"Eligible Collateral" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Eligible Credit Support" means Eligible Collateral and Other Eligible Support.
"Exposure" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").
"Independent Amount" means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.
"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of Cash on that day; multiplied by
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"Interest Rate" means the rate specified in Paragraph 13.
"Local Business Day", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"Notification Time" has the meaning specified in Paragraph 13.
"Obligations" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"Other Eligible Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Other Posted Support" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"Pledgor" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"Posted Collateral" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
"Posted Credit Support" means Posted Collateral and Other Posted Support.
"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"Resolution Time" has the meaning specified in Paragraph 13.
"Return Amount" has the meaning specified in Paragraph 3(b).
"Secured Party" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"Specified Condition" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i).
"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
"Threshold" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
"Transfer" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into
one or more bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical form
to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any
other documents necessary to constitute a legally valid transfer to the
recipient;
(iii) in the case of securities that can be paid or delivered by
book-entry, the giving of written instructions to the relevant depository
institution or other entity specified by the recipient, together with a
written copy thereof to the recipient, sufficient if complied with to
result in a legally effective transfer of the relevant interest to the
recipient; and
(iv) in the case of Other Eligible Support or Other Posted Support,
as specified in Paragraph 13.
"Valuation Agent" has the meaning specified in Paragraph 13.
"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"Valuation Percentage" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"Valuation Time" has the meaning specified in Paragraph 13.
"Value" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified
as Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified
in Paragraph 13.
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations with respect
to Party A and Party B: None.
(b) Credit Support Obligations.
(i) "Delivery Amount" and "Return Amount" each has the meaning
specified in Paragraph 3; provided that, in the event that
Party A elects or is required to post collateral pursuant to a
ratings downgrade by S&P and ▇▇▇▇▇'▇, (1) the Delivery Amount
shall be calculated by reference to the requirements set forth
by the rating agency that would result in Party A transferring
the greater amount of Eligible Credit Support and (2) the
Return Amount shall be calculated by reference to the
requirements set forth by the rating agency that would result
in Party B transferring the least amount of Posted Credit
Support. "Credit Support Amount" has the meaning specified
below:
(A) in the event Party A elects or is required to post
collateral pursuant to Part 5(f)(iii) or (iv) of the
Schedule due to a ratings downgrade or withdrawal by
S&P, "Credit Support Amount" shall have the meaning
specified in Table 1 attached hereto; and
(B) in the event Party A elects to post collateral
pursuant to Part 5(f)(i) of the Schedule due to a
ratings downgrade by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First
Tier Required Swap Counterparty Rating, "Credit
Support Amount" shall have the meaning specified in
Table 2A or Table 2B, as applicable, attached hereto;
and
(C) in the event Party A is required to post collateral
pursuant to Part 5(f)(ii) of the Schedule due to a
ratings downgrade or withdrawal by ▇▇▇▇▇'▇ below the
▇▇▇▇▇'▇ Second Tier Required Swap Counterparty
Rating, "Credit Support Amount" shall have the
meaning specified in Table 3A or 3B, as applicable,
attached hereto.
In the event Party A or its Credit Support Provider does not
have a Long-Term Rating of at least "BBB+" from S&P, the
Valuation Agent shall verify its calculation of the Secured
Party's Exposure on a quarterly basis by seeking two
quotations from Reference Market-makers. If two Reference
Market-makers are not available to provide a quotation, then
fewer than two Reference Market-makers may be used for such
purpose. If no Reference Market-makers are available, then the
Valuation Agent's estimates at mid-market will be used. The
Valuation Agent may not obtain the quotations referred to
above from the same person in excess of four times during any
12 month period. Where more than one quotation is obtained,
the quotation representing the greatest amount of Exposure
shall be used by the Valuation Agent. In the event the
verification procedures set forth above indicate that there is
a deficiency in the amount of Eligible Collateral that has
been Transferred to the Secured Party, the Pledgor shall
Transfer the amount of Eligible Collateral necessary to cure
such deficiency to the Secured Party within three Local
Business Days. The Valuation Agent shall provide to S&P its
calculations of the Secured Party's Exposure for that
Valuation Date. The Valuation Agent shall also provide to S&P
any external marks received pursuant to this paragraph.
(ii) Eligible Collateral.
(A) In the event Party A elects or is required to post
collateral pursuant to Part 5(f) of the Schedule due
to a ratings downgrade or withdrawal by S&P, the
items specified in Table 4 attached hereto will
qualify as "Eligible Collateral" for Party A.
(B) In the event Party A elects to post collateral
pursuant to Part 5(f)(i) of the Schedule due to a
ratings downgrade by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First
Tier Required Swap Counterparty Rating, the items
specified in Table 5 attached hereto will qualify as
"Eligible Collateral" for Party A.
(C) In the event Party A is required to post collateral
pursuant to Part 5(f)(ii) of the Schedule due to a
ratings downgrade or withdrawal by ▇▇▇▇▇'▇ below the
▇▇▇▇▇'▇ Second Tier Required Swap Counterparty
Rating, the items specified in Table 6 attached
hereto will qualify as "Eligible Collateral" for
Party A.
(iii) Other Eligible Support: Not applicable.
(iv) Thresholds.
(A) "Independent Amount" means, with respect to Party A,
not applicable in the event Party A elects or is
required to post collateral pursuant to Part 5(f) of
the Schedule due to a ratings downgrade or withdrawal
by S&P or ▇▇▇▇▇'▇.
"Independent Amount" means, with respect to Party B,
zero.
(B) "Threshold" means with, respect to Party A, not
applicable in the event Party A elects or is required
to post collateral pursuant to Part 5(f) of the
Schedule due to a ratings downgrade or withdrawal by
S&P or ▇▇▇▇▇'▇.
"Threshold" means with respect to Party B: Infinite.
"Minimum Transfer Amount" means with respect to Party
A: USD 50,000; and with respect to Party B: USD
50,000; provided, however, that if such party is a
Defaulting Party at the time, "Minimum Transfer
Amount" shall mean zero with respect to such party.
(C) Rounding. The Delivery Amount will be rounded up to
the nearest multiple of $1000 and the Return Amount
will be rounded down to the nearest multiple of
$1000.
(v) "Exposure" has the meaning specified in Paragraph 12, except
that after the word "Agreement" in the fourth line thereof the
words "(assuming, for this purpose only, that Part 1(f)(ii) of
the Schedule is deleted)" shall be inserted.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A.
(ii) "Valuation Date" means (A) each and every Wednesday commencing
on the first such date following the date hereof or if any
Wednesday is not a Local Business Day, the next succeeding
Local Business Day and (B) any other Local Business Day on
which notice is made before 12:00 noon, New York time on the
immediately preceding Local Business Day.
(iii) "Valuation Time" means the close of business in New York on
the New York Banking Day before the Valuation Date or date of
calculation, as applicable, or any time on the Valuation Date
or date of calculation, as applicable; provided that the
calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.
(v) The Valuation Agent's calculations pursuant to the terms
hereof shall be made in accordance with standard market
practice, using commonly accepted third party sources that
comply with S&P's criteria (e.g. Bloomberg, Bridge Information
Services, Reuters and Telerate).
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the
party specified (that party being the Affected Party of the Termination
Event occurs with respect to that party): Not Applicable.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph
4(d)(ii).
(ii) Consent. The Pledgor need not obtain the Secured Party's
consent for any substitution pursuant to Paragraph 4(d).
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice of the
dispute is given under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the
Value of Posted Credit Support or of any Transfer of Eligible
Credit Support or Posted Credit Support, as the case may be,
will be calculated by the Valuation Agent in accordance with
standard market practice using third party sources (such as,
by way of example only, Bloomberg or Reuters) where available.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodian.
Party B and its Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(A) Party B is not a Defaulting Party.
(B) Posted Collateral may be held only in the following
jurisdictions: the United States of America.
(C) Party B's Custodian (or its parent) shall have a Long
Term Rating by S&P of at least "A" and a Short Term
Rating by S&P of at least "A-1" by S&P.
Initially, the Custodian for Party B is the Trustee.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)
will apply.
(h) Distributions and Interest Amount.
(i) "Interest Rate". The "Interest Rate" shall be the rate
actually earned by Party B on Posted Collateral in the form of
Cash.
(ii) Transfer of Interest Amount. The Transfer of the Interest
Amount will be made on the last Local Business Day of each
calendar month and on any Local Business Day that Posted
Collateral in the form of Cash is Transferred to the Pledgor
pursuant to Paragraph 3(b).
(iii) Alternative to Interest Amount. The provisions of Paragraph
6(d)(ii) will apply.
(i) Additional Representation(s). None.
(j) Other Eligible Support and Other Posted Support. "Value" and "Transfer"
with respect to Other Eligible Support and Other Posted Support each
means: Not applicable.
(k) Demands and Notices.
(i) All demands, specifications and notices to Party A under this
Annex will be made to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: FID Collateral Manager
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
and all demands, specifications and notices to Party B under this Annex
will be to:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager - MSAC 2007-HE4
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
; provided that any demand, specification or notice may be made by
telephone ("Telephone Notice") between employees of each party if such
Telephone Notice is confirmed by a subsequent written instruction
(which may be delivered via facsimile or email) by the close of
business on the same day that such Telephone Notice is given.
(ii) Demand for Collateral. Without prejudice to any provision of
this Agreement, if a Delivery Amount for a Valuation Date
equals or exceeds the Pledgor's Minimum Transfer Amount, then
the Pledgor will, without prior demand by the Secured Party,
Transfer to the Secured Party Eligible Credit Support in
accordance with Paragraph 3(a).
(l) Addresses for Transfers.
Party A:
Cash: CITIBANK, New York
ABA No.: 021 000 089
Account No.: 4072 - 4601
Treasury Securities
and Agency Notes: Bank of New York, New York
/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
ABA No.: ▇▇▇▇▇▇▇▇▇
Other Forms of Eligible Collateral: As provided by Party A.
Party B:
Cash: ▇▇▇▇▇ Fargo Bank, N.A.
ABA No.: 121 000 248
Account No.: ▇▇▇▇▇▇▇▇▇▇
Account Name: SAS Clearing
FFC: 50996501, MSAC 2007-HE4
(m) Other Provisions.
(i) Notwithstanding any other provision in this Agreement to the
contrary, no full or partial failure to exercise and no delay
in exercising, on the part of Party A or Party B, any right,
remedy, power or privilege permitted hereunder shall operate
in any way as a waiver thereof by such party, including
without limitation any failure to exercise or any delay in
exercising to any or to the full extent of such party's rights
with respect to transfer timing pursuant to Paragraph 4(b),
regardless of the frequency of such failure or delay.
(ii) In all cases, in order to facilitate calculation of the
Delivery Amount and the Return Amount for a particular
Valuation Date in accordance with Paragraph 3 of this Annex:
(A) Eligible Collateral;
(B) Exposure; and
(C) Posted Collateral
shall each be expressed in US Dollars. If any of these items
are expressed in a currency other than US Dollars, then they
shall be converted into US Dollar amounts at the spot exchange
rate determined by the Valuation Agent on that Valuation Date.
(iii) Form of Annex. The parties hereby agree that the text of the
body of this Annex is intended to be the printed form of 1994
ISDA Credit Support Annex (Bilateral Form - ISDA Agreements
Subject to New York Law Only version) as published and
copyrighted by the International Swaps and Derivatives
Association, Inc.
(n) Agreement as to Single Secured Party and Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to
this Annex, Paragraph 1(b) or Paragraph 2 or the definitions of
Paragraph 12, (a) the term "Secured Party" as used in this Annex shall
mean only Party B, (b) the term "Pledgor" as used in this Annex shall
mean only Party A, (c) only Party A makes the pledge and grant in
Paragraph 2, the acknowledgement in the final sentence of Paragraph
8(a) and the representations in paragraph 9 and (d) only Party A will
be required to make Transfers of Eligible Credit Support hereunder.
(o) Events of Default. Paragraph 7(ii) and (iii) will not apply to Party B.
(p) Expenses. For the avoidance of doubt, Party A shall be responsible for
posting collateral in accordance with this Credit Support Annex at its
own cost and any cost incurred by it in complying with its obligations
hereunder.
(q) Additional Definitions
"Agency Notes" means U.S. Dollar-denominated fixed rate,
non-amortising, non-mortgage-backed, senior debt securities of fixed
maturity, rated Aaa by ▇▇▇▇▇'▇ and AAA by S&P issued by any of the
Federal Home Loan Banks (including their consolidated obligations
issued through the Office of Finance of the Federal Home Loan Bank
System), the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation or the Federal Farm Credit Bank.
"Commercial Paper" means U.S. Dollar-denominated, coupon-bearing,
commercial paper issued by a corporation, finance company, partnership
or limited liability company.
"Treasury Securities" means U.S. Dollar-denominated, coupon-bearing,
senior debt securities of the United States of America issued by the
U.S. Treasury Department and backed by the full faith and credit of the
United States of America.
(r) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Annex is executed by ▇▇▇▇▇ Fargo Bank,
National Association (i) this Annex is executed and delivered by ▇▇▇▇▇
Fargo Bank, National Association not in its individual capacity but
solely as Trustee under the PSA in the exercise of the powers and
authority conferred and invested in it as Trustee thereunder, (ii) each
of the representations, undertakings and agreements herein made on
behalf of the Trust is made and intended not as personal
representations of the Trustee but is made and intended for the purpose
of binding only the Trust, and (iii) under no circumstances shall ▇▇▇▇▇
Fargo Bank, National Association in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Annex.
IN WITNESS WHEREOF, the parties have executed this Credit Support
Annex by their duly authorized officers as of the date hereof.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Date: March 29, 2007
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Trustee for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Date: March 29, 2007
TABLE 1
CREDIT SUPPORT AMOUNT
DOWNGRADE BY S&P
In the event Party A elects or is required to post collateral pursuant to Part
5(f) of the Schedule due to a ratings downgrade or withdrawal by S&P:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to the greater of (1) the sum of (a) the MTM and (b) the Volatility Buffer
multiplied by the Notional Amount * 10 and (2) zero.
"MTM" means the Secured Party's Exposure for that Valuation Date.
"Volatility Buffer" means (a) if, on the date of determination, Party A has a
short-term credit rating of "A-2" by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 3.25%, (b) if, on the date of
determination, Party A has a short-term credit rating of "A-2" by S&P and the
Termination Date of the Transaction will occur in less than 10 years but more
than 5 years, 4.00%, (c) if, on the date of determination, Party A has a
short-term credit rating of "A-3" by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 4.00%, (d) if, on the date of
determination, Party A has a short-term credit rating of "A-3" by S&P and the
Termination Date of the Transaction will occur in less than 10 years but more
than 5 years, 5.00%, (e) if, on the date of determination, Party A has a
long-term credit rating of "BB+" or lower by S&P and the Termination Date of the
Transaction will occur in less than 5 years, 4.50%, or (f) if, on the date of
determination, Party A has a long-term credit rating of "BB+" or lower by S&P
and the Termination Date of the Transaction will occur in less than 10 years but
more than 5 years, 6.75%.
TABLE 2A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A elects to post collateral pursuant to Part 5(f)(i) of the
Schedule due to a ratings downgrade by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ First Tier
Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to either:
(A) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the lesser of
(x) 25 multiplied by DV01 and (y) 4% multiplied by the Notional Amount * 10; or
(B) The greater of (1) zero and (2) the sum of (a) the MTM and (b) the Notional
Amount * 10 multiplied by the amount specified in Table 2B attached hereto.
Party A shall, in its sole discretion, have the option to determine the Credit
Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith and
in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 2B
Weighted
Average
Life of Hedge
in Years
-------------
1 0.25%
2 0.50%
3 0.70%
4 1.00%
5 1.20%
6 1.40%
7 1.60%
8 1.80%
9 2.00%
10 2.20%
11 2.30%
12 2.50%
13 2.70%
14 2.80%
15 3.00%
16 3.20%
17 3.30%
18 3.50%
19 3.60%
20 3.70%
21 3.90%
22 4.00%
23 4.00%
24 4.00%
25 4.00%
26 4.00%
27 4.00%
28 4.00%
29 4.00%
30 4.00%
TABLE 3A
CREDIT SUPPORT AMOUNT
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
In the event Party A is required to post collateral pursuant to Part 5(f)(ii) of
the Schedule due to a ratings downgrade by ▇▇▇▇▇'▇ below the ▇▇▇▇▇'▇ Second Tier
Required Swap Counterparty Rating:
"Credit Support Amount" means, with respect to a Valuation Date, an amount equal
to either:
(A) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the lesser of (x) 60 multiplied by DV01 and (y) 9% multiplied by the
Notional Amount * 10; or
(B) The greatest of (1) zero, (2) the amount payable by Party A in respect of
the next Floating Rate Payer Payment Date, and (3) the sum of (a) the MTM and
(b) the Notional Amount * 10 multiplied by the amount specified in Table 3B
attached hereto.
Party A shall, in its sole discretion, have the option to determine the Credit
Support Amount based upon either (A) or (B) above.
"DV01" means an estimate (as determined by the Valuation Agent in good faith and
in a commercially reasonable manner) of the change in the Secured Party's
Exposure resulting from a one basis point change in the swap curve.
"MTM" means the Secured Party's Exposure for that Valuation Date.
TABLE 3B
Weighted
Average
Life of Hedge
in Years
-------------
1 0.60%
2 1.20%
3 1.70%
4 2.30%
5 2.80%
6 3.30%
7 3.80%
8 4.30%
9 4.80%
10 5.30%
11 5.60%
12 6.00%
13 6.40%
14 6.80%
15 7.20%
16 7.60%
17 7.90%
18 8.30%
19 8.60%
20 9.00%
21 9.00%
22 9.00%
23 9.00%
24 9.00%
25 9.00%
26 9.00%
27 9.00%
28 9.00%
29 9.00%
30 9.00%
TABLE 4
ELIGIBLE COLLATERAL
S&P
Valuation
Eligible Collateral Party A Percentage
--------------------------------- --------- --------------
(A) Cash X 100.0%
(B) Treasury Securities with a X 98.5%
remaining maturity of 52
weeks or less
(C) Treasury Securities with a X 93.6%
remaining maturity of more than 52
weeks but no more than 5 years
(D) Treasury Securities with a X 89.9%
remaining maturity of more than 5
years but no more than 10 years
(E) Treasury Securities with a X 83.9%
remaining maturity of more than 10
years but no more than 30 years
(F) Agency Notes with a remaining X 81.3%
maturity of no more than 15 years
(G) Agency Notes with a remaining X 74.8%
maturity of more than 15 years
but no more than 30 years
(H) Commercial Paper rated "A-1+" by X 98.0%
S&P and "P-1" by ▇▇▇▇▇'▇, with a
remaining maturity of 180 days
or less
(I) Commercial Paper rated "A-1" by X 97.0%
S&P and P-1 by ▇▇▇▇▇'▇, with a
remaining maturity of 180 days or
less
(J) Commercial Paper rated "A-1" by X 94.0%
S&P and "P-1" by ▇▇▇▇▇'▇, with a
remaining maturity of more than
180 days or but no more than 360
days
Notwithstanding the above, Commercial Paper will qualify as Eligible Collateral
for Party A only if the aggregate amount of Commercial Paper Transferred as
Eligible Collateral under this Annex constitutes the obligations of 10 or more
issuers.
TABLE 5
ELIGIBLE COLLATERAL
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ FIRST TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
------------------- --------------------
U.S. Dollar Cash 100%
EURO Cash 97%
Sterling Cash 97%
Fixed-Rate Negotiable Treasury Debt Issued by
The U.S. Treasury Department with Remaining
Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate Negotiable Treasury Debt issued
by The U.S. Treasury Department
All Maturities 100%
Fixed-Rate U.S. Agency Debentures with
Remaining Maturity
< 1 Year 100%
1 to 2 Years 100%
2 to 3 Years 100%
3 to 5 Years 100%
5 to 7 Years 100%
7 to 10 Years 100%
10 to 20 Years 100%
> 20 Years 100%
Floating-Rate U.S. Agency Debentures -
All Maturities 100%
Fixed-Rate Euro-Zone Government Bonds Rated
Aa3 or Above with Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate Euro-Zone Government Bonds
Rated Aa3 or Above
All Maturities 97%
Fixed-Rate United Kingdom Gilts with
Remaining Maturity
< 1 Year 97%
1 to 2 Years 97%
2 to 3 Years 97%
3 to 5 Years 97%
5 to 7 Years 97%
7 to 10 Years 97%
10 to 20 Years 97%
> 20 Years 97%
Floating-Rate United Kingdom Gilts
All Maturities 97%
TABLE 6
ELIGIBLE COLLATERAL
DOWNGRADE BY ▇▇▇▇▇'▇ BELOW ▇▇▇▇▇'▇ SECOND TIER REQUIRED
SWAP COUNTERPARTY RATING
Eligible Collateral Valuation Percentage
------------------- --------------------
U.S. Dollar Cash 100%
EURO Cash 93%
Sterling Cash 94%
Fixed-Rate Negotiable Treasury Debt Issued by
The U.S. Treasury Department with Remaining
Maturity
< 1 Year 100%
1 to 2 Years 99%
2 to 3 Years 98%
3 to 5 Years 97%
5 to 7 Years 95%
7 to 10 Years 94%
10 to 20 Years 89%
> 20 Years 87%
Floating-Rate Negotiable Treasury Debt issued
by The U.S. Treasury Department
All Maturities 99%
Fixed-Rate U.S. Agency Debentures with
Remaining Maturity
< 1 Year 99%
1 to 2 Years 98%
2 to 3 Years 97%
3 to 5 Years 96%
5 to 7 Years 94%
7 to 10 Years 93%
10 to 20 Years 88%
> 20 Years 86%
Floating-Rate U.S. Agency Debentures -
All Maturities 98%
Fixed-Rate Euro-Zone Government Bonds Rated
Aa3 or Above with Remaining Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 89%
5 to 7 Years 87%
7 to 10 Years 86%
10 to 20 Years 82%
> 20 Years 80%
Floating-Rate Euro-Zone Government Bonds Rated
Aa3 or Above
All Maturities 92%
Fixed-Rate United Kingdom Gilts with Remaining
Maturity
< 1 Year 93%
1 to 2 Years 92%
2 to 3 Years 91%
3 to 5 Years 90%
5 to 7 Years 89%
7 to 10 Years 88%
10 to 20 Years 84%
> 20 Years 82%
Floating-Rate United Kingdom Gilts
All Maturities 93%
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
--------------------------------------------------------------------------------
DATE: March 29, 2007
TO: ▇▇▇▇▇ Fargo Bank, National Association, not individually,
but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust 2007-HE4, Mortgage Pass-Through Certificates,
Series 2007-HE4
ATTENTION: Client Manager - MSAC 2007-HE4
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: New York Derivative Client Services Group
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: AACKZ
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
("Party A") and ▇▇▇▇▇ Fargo Bank, National Association, not individually, but
solely as Trustee (the "Trustee") under the Pooling and Servicing Agreement,
dated and effective as of March 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as Depositor, Countrywide Home Loans Servicing LP, as Servicer, Saxon
Mortgage Services, Inc., as Servicer, ▇▇▇▇▇ Fargo Bank, National Association, as
Trustee and Custodian, LaSalle Bank National Association, as Custodian, and
Decision One Mortgage Company, LLC and WMC Mortgage Corp., as Responsible
Parties (the "PSA") for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4,
Mortgage Pass-Through Certificates, Series 2007-HE4 ("Party B").
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of March 29, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:............................. With respect to any
Calculation Period, the
notional amount set forth for
such Calculation Period in
Schedule I attached hereto.
Trade Date:.................................. March 16, 2007
Effective Date:.............................. February 25, 2008
Termination Date:............................ February 25, 2013, which for
the purpose of the final Fixed
Rate Payer Calculation Period
is subject to No Adjustment,
and for the purpose of the
final Floating Rate Payer
Calculation Period is subject
to adjustment in accordance
with the Following Business
Day Convention.
Fixed Amounts:
Fixed Rate Payer:................... Party B
Fixed Rate Payer Payment Dates:..... The 24th calendar day of each
month during the Term of this
Transaction, commencing March
24, 2008, subject to
adjustment in accordance with
the Preceding Business Day
Convention.
Fixed Rate Payer Period End
Dates:............................ The 25th calendar day of each
month during the Term of this
Transaction, commencing March
25, 2008, subject to No
Adjustment.
Fixed Rate:......................... 4.75%
Fixed Amount:....................... To be determined in accordance
with the following formula:
10 * Fixed Rate * Notional
Amount * Fixed Rate Day Count
Fraction.
Fixed Rate Day Count Fraction:...... 30/360
Floating Amounts:
Floating Rate Payer:................ Party A
Floating Rate Payer Payment
Dates:............................ The 24th calendar day of each
month during the Term of this
Transaction, commencing March
24, 2008, subject to
adjustment in accordance with
the Preceding Business Day
Convention.
Floating Rate Payer Period End
Dates:............................ The 25th calendar day of each
month during the Term of this
Transaction, commencing March
25, 2008, subject to
adjustment in accordance with
the Following Business Day
Convention.
Floating Rate Option:............... USD-LIBOR-BBA
Floating Amount:.................... To be determined in accordance
with the following formula:
10 * Floating Rate * Notional
Amount * Floating Rate Day
Count Fraction.
Designated Maturity:................ One month
Floating Rate Day Count Fraction:... Actual/360
Reset Dates:........................ The first day of each
Calculation Period.
Compounding:........................ Inapplicable
Business Days:............................... New York and Los Angeles
2. Account Details and Settlement Information:
Payments to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
Payments to Party B:
▇▇▇▇▇ Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: ▇▇▇▇▇▇▇▇▇▇
Acct Name: SAS Clearing
Ref: FFC: 50996501, MSAC 2007-HE4 (swap)
3. Trustee Capacity. It is expressly understood and agreed by the parties hereto
that insofar as this Confirmation is executed by ▇▇▇▇▇ Fargo Bank, National
Association (i) this Confirmation is executed and delivered by ▇▇▇▇▇ Fargo
Bank, National Association not in its individual capacity but solely as
Trustee of the Trust under the PSA in the exercise of the powers and
authority conferred and invested in it as Trustee thereunder, (ii) each of
the representations, undertakings and agreements herein made on behalf of
Party B is made and intended not as personal representations of the Trustee
but is made and intended for the purpose of binding only the Trust, and (iii)
under no circumstances shall ▇▇▇▇▇ Fargo Bank, National Association in its
individual capacity be personally liable for the payment of any indebtedness
or expenses or be personally liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken under
this Confirmation.
[GRAPHIC OMITTED]
--------------------------------------------------------------------------------
We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not individually, but solely as
Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust 2007-HE4, Mortgage
Pass-Through Certificates, Series
2007-HE4
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
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SCHEDULE I
Calculation
Line Period Notional Amount ($) Multiplier
-------- --------------------------------- ---------------------- ------------
1 Effective Date 3/25/2008 40,613,905.64 10
2 3/25/2008 4/25/2008 38,884,626.40 10
3 4/25/2008 5/25/2008 37,224,798.45 10
4 5/25/2008 6/25/2008 35,634,623.55 10
5 6/25/2008 7/25/2008 34,114,467.61 10
6 7/25/2008 8/25/2008 32,659,613.37 10
7 8/25/2008 9/25/2008 31,264,766.61 10
8 9/25/2008 10/25/2008 29,932,283.07 10
9 10/25/2008 11/25/2008 28,652,861.73 10
10 11/25/2008 12/25/2008 22,595,085.38 10
11 12/25/2008 1/25/2009 20,249,601.70 10
12 1/25/2009 2/25/2009 19,403,177.32 10
13 2/25/2009 3/25/2009 18,589,949.28 10
14 3/25/2009 4/25/2009 17,813,518.86 10
15 4/25/2009 5/25/2009 17,065,619.27 10
16 5/25/2009 6/25/2009 11,446,356.38 10
17 6/25/2009 7/25/2009 9,568,898.42 10
18 7/25/2009 8/25/2009 9,187,608.87 10
19 8/25/2009 9/25/2009 8,820,264.67 10
20 9/25/2009 10/25/2009 8,469,155.16 10
21 10/25/2009 11/25/2009 8,122,012.96 10
22 11/25/2009 12/25/2009 4,846,381.05 10
23 12/25/2009 1/25/2010 3,804,210.52 10
24 1/25/2010 2/25/2010 3,671,043.75 10
25 2/25/2010 3/25/2010 3,542,510.63 10
26 3/25/2010 4/25/2010 3,418,450.86 10
27 4/25/2010 5/25/2010 3,290,825.18 10
28 5/25/2010 6/25/2010 3,021,054.06 10
29 6/25/2010 7/25/2010 2,858,366.46 10
30 7/25/2010 8/25/2010 2,760,219.90 10
31 8/25/2010 9/25/2010 2,665,400.02 10
32 9/25/2010 10/25/2010 2,573,795.79 10
33 10/25/2010 11/25/2010 2,480,804.77 10
34 11/25/2010 12/25/2010 2,307,336.19 10
35 12/25/2010 1/25/2011 2,195,581.80 10
36 1/25/2011 2/25/2011 2,121,224.41 10
37 2/25/2011 3/25/2011 2,049,338.13 10
38 3/25/2011 4/25/2011 1,979,842.83 10
39 4/25/2011 5/25/2011 1,912,660.86 10
40 5/25/2011 6/25/2011 1,847,717.03 10
41 6/25/2011 7/25/2011 1,784,938.49 10
42 7/25/2011 8/25/2011 1,724,254.72 10
43 8/25/2011 9/25/2011 1,665,597.40 10
44 9/25/2011 10/25/2011 1,608,900.36 10
45 10/25/2011 11/25/2011 1,553,316.72 10
46 11/25/2011 12/25/2011 1,429,889.49 10
47 12/25/2011 1/25/2012 1,381,565.40 10
48 1/25/2012 2/25/2012 1,335,148.33 10
49 2/25/2012 3/25/2012 1,290,253.86 10
50 3/25/2012 4/25/2012 1,246,833.61 10
I-1
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
--------------------------------------------------------------------------------
Calculation
Line Period Notional Amount ($) Multiplier
-------- --------------------------------- ---------------------- ------------
51 4/25/2012 5/25/2012 1,204,046.12 10
52 5/25/2012 6/25/2012 1,092,033.81 10
53 6/25/2012 7/25/2012 1,055,667.80 10
54 7/25/2012 8/25/2012 1,020,789.13 10
55 8/25/2012 9/25/2012 987,025.59 10
56 9/25/2012 10/25/2012 954,343.16 10
57 10/25/2012 11/25/2012 922,255.13 10
58 11/25/2012 12/25/2012 850,934.64 10
59 12/25/2012 1/25/2013 822,957.58 10
60 1/25/2013 Termination Date 796,044.32 10
I-2
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
March 29, 2007
▇▇▇▇▇ Fargo Bank, National Association,
not individually, but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Trust 2007-HE4 (the "Trust"), Mortgage Pass-Through Certificates
Series 2007-HE4
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In consideration of that certain ISDA Master Agreement dated as of
March 29, 2007 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
corporation (hereinafter "MSCS") and ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust
2007-HE4 (the "Trust"), Mortgage Pass-Through Certificates Series 2007-HE4
(hereinafter "Counterparty") (such ISDA Master Agreement, together with each
Confirmation exchanged between the parties pursuant thereto, hereinafter the
"Agreement"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Delaware corporation (hereinafter "MS"), hereby
irrevocably and unconditionally guarantees to Counterparty, with effect from the
date of the Agreement, the due and punctual payment of all amounts payable by
MSCS under the Agreement when the same shall become due and payable, whether on
Scheduled Payment Dates, upon demand, upon declaration of termination or
otherwise, in accordance with the terms of the Agreement and giving effect to
any applicable grace period. Upon failure of MSCS punctually to pay any such
amounts, and upon written demand by Counterparty to MS at its address set forth
in the signature block of this Guarantee (or to such other address as MS may
specify in writing), MS agrees to pay or cause to be paid such amounts; provided
that delay by Counterparty in giving such demand shall in no event affect MS's
obligations under this Guarantee.
MS hereby agrees that its obligations hereunder shall be
unconditional and will not be discharged except by complete payment of the
amounts payable under the Agreement, irrespective of any claim as to the
Agreement's validity, regularity or enforceability or the lack of authority of
MSCS to execute or deliver the Agreement; or any change in or amendment to the
Agreement; or any waiver or consent by Counterparty with respect to any
provisions thereof; or the absence of any action to enforce the Agreement or the
recovery of any judgment against MSCS or of any action to enforce a judgment
against MSCS under the Agreement; or any similar circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor
generally. MS hereby waives diligence, presentment, demand on MSCS for payment
or otherwise (except as provided hereinabove), filing of claims, requirement of
a prior proceeding against MSCS and protest or notice, except as provided for in
the Agreement with respect to amounts payable by MSCS. If at any time payment
under the Agreement is rescinded or must be otherwise restored or returned by
Counterparty upon the insolvency, bankruptcy or reorganization of MSCS or MS or
otherwise, MS's obligations hereunder with respect to such payment shall be
reinstated upon such restoration or return being made by Counterparty.
MS represents to Counterparty as of the date hereof, which
representations will be deemed to be repeated by MS on each date on which a
Transaction is entered into, that:
(1) it is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full power and legal right to execute
and deliver this Guarantee and to perform the provisions of this Guarantee on
its part to be performed;
(2) its execution, delivery and performance of this Guarantee have
been and remain duly authorized by all necessary corporate action and do not
contravene any provision of its certificate of incorporation or by-laws or any
law, regulation or contractual restriction binding on it or its assets;
(3) all consents, authorizations, approvals and clearances
(including, without limitation, any necessary exchange control approval) and
notifications, reports and registrations requisite for its due execution,
delivery and performance of this Guarantee have been obtained from or, as the
case may be, filed with the relevant governmental authorities having
jurisdiction and remain in full force and effect and all conditions thereof have
been duly complied with and no other action by, and no notice to or filing with,
any governmental authority having jurisdiction is required for such execution,
delivery or performance; and
(4) this Guarantee is its legal, valid and binding obligation
enforceable against it in accordance with its terms except as enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights or by general equity
principles.
By accepting this Guarantee and entering into the Agreement
Counterparty agrees that MS shall be subrogated to all rights of Counterparty
against MSCS in respect of any amounts paid by MS pursuant to this Guarantee,
provided that MS shall be entitled to enforce or to receive any payment arising
out of or based upon such right of subrogation only to the extent that it has
paid all amounts payable by MSCS under the Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York. All capitalized terms not otherwise defined
herein shall have the respective meanings assigned to them in the Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SECRETARY'S CERTIFICATE
-----------------------
I, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a duly elected and acting Assistant Secretary of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a corporation organized and existing under the laws of the State
of Delaware (the "Corporation"), certify that (i) ▇▇▇▇▇ ▇. ▇▇▇▇ is the duly
elected Treasurer and ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is a duly elected Assistant Treasurer
of the Corporation; (ii) pursuant to Section 7.01 of the Bylaws of the
Corporation and resolutions adopted by a Unanimous Consent of Directors in Lieu
of a Meeting, dated as of May 31, 1997, both of which are attached as an
exhibit, the Treasurer and the Assistant Treasurers are authorized to enter into
agreements and other instruments on behalf of the Corporation; and (iii) the
signatures of ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ appearing below are copies
of their genuine signatures:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------- --------------------------------------
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal
of the Corporation as of the 29th day of January, 2007.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary
[SEAL]
EXHIBIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------
Section 7.01 of the Bylaws
--------------------------
SECTION 7.01. Contracts. Except as otherwise required by law, the
Amended and Restated Certificate of Incorporation or these Amended and Restated
Bylaws, any contracts or other instruments may be executed and delivered in the
name and on the behalf of the Corporation by such officer or officers of the
Corporation as the Board of Directors may from time to time direct. Such
authority may be general or confined to specific instances as the Board may
determine. Subject to the control and direction of the Board of Directors, the
Chairman of the Board, the President, the Chief Financial Officer, the Chief
Risk Officer, the Chief Legal Officer and the Treasurer may enter into, execute,
deliver and amend bonds, promissory notes, contracts, agreements, deeds, leases,
guarantees, loans, commitments, obligations, liabilities and other instruments
to be made or executed for or on behalf of the Corporation. Subject to any
restrictions imposed by the Board of Directors, such officers of the Corporation
may delegate such powers to others under his or her jurisdiction, it being
understood, however, that any such delegation of power shall not relieve such
officer of responsibility with respect to the exercise of such delegated power.
Resolution adopted by a Unanimous Consent of
Directors in Lieu of a Meeting, dated as of May 31, 1997
--------------------------------------------------------
RESOLVED FURTHER, that the Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of the
Corporation and shall be authorized to deposit all such funds in the
name of the Corporation in banks or other depositories. In addition,
the Treasurer shall perform all other necessary acts and duties in
connection with the financial affairs of the Corporation, shall
generally perform all duties appertaining to the office of treasurer
of a corporation and shall perform such other duties and have such
other powers as may be prescribed by the Board, subject to the
supervision of the Chief Financial Officer; and
RESOLVED FURTHER, that the Assistant Treasurer, if any, or, if
there shall be more than one, the Assistant Treasurers, shall, under
the supervision of the Treasurer, perform the duties and exercise
the powers of an assistant treasurer and, in the absence or
disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. In addition, each Assistant Treasurer is
authorized to enter into, execute, deliver and amend on behalf of
the Corporation any and all letters of credit, uncommitted
short-term credit obligations and short-term promissory notes (as
defined by generally accepted accounting principles), such
authorization to cease automatically upon termination of employment
with the Corporation.
EXHIBIT X
FORM OF SERVICER REPORTS
Exhibit 1: Standard File Layout - Overlay
-------------------------------------------------------------------------------------------------------
Column Name DESCRIPTION Decimal Comment Max Size
-------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each Text up to 10 10
loan by the originator. digits
SER_INVESTOR_NBR A value assigned by the Servicer to Text up to 20
define a group of loans. digits 20
SERVICER_LOAN_NBR A unique number assigned to a loan by Text up to 10
the Servicer. This may be different digits 10
than the LOAN_NBR.
BORR_NEXT The date at the end of processing MM/DD/YYYY 10
_PAY_DUE_DATE cycle that the Borrower's next
payment is due to the Servicer, as
reported by Servicer.
NOTE_INT_RATE The loan interest rate as reported by 4 Max length of 6 6
the Servicer.
ACTL_END _PRIN_BAL The Borrower's actual principal 2 No commas(,) or 11
balance at the end of the processing dollar signs ($)
cycle.
SCHED_END_PRIN_BAL The scheduled principal balance due 2 No commas(,) or 11
to the investors at the end of a dollar signs ($)
processing cycle.
ACTL_BEG _PRIN_BAL The Borrower's actual principal 2 No commas(,) or 11
balance at the beginning of the dollar signs ($)
processing cycle.
SCHED_BEG_PRIN_BAL The scheduled outstanding principal 2 No commas(,) or 11
amount due at the beginning of the dollar signs ($)
cycle date to be passed through to
the investors.
SCHED_PAY_AMT The scheduled monthly principal and 2 No commas(,) or 11
scheduled interest payment that a dollar signs ($)
Borrower is expected to pay; P&I constant.
SCHED_PRIN_ AMT The scheduled principal amount as 2 No commas(,) or 11
reported by the Servicer for the dollar signs ($)
current cycle.
SERV_CURT _AMT_1 The first curtailment amount to be 2 No commas(,) or 11
applied. dollar signs ($)
SERV_CURT _AMT_2 The second curtailment amount to be 2 No commas(,) or 11
applied. dollar signs ($)
SERV_CURT _AMT_3 The third curtailment amount to be 2 No commas(,) or 11
applied. dollar signs ($)
The standard FNMA numeric code used Action Code Key: 2
ACTION_CODE to indicate the default/delinquent 15=Bankruptcy,
status of a particular loan. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇,
63= Substitution,
65=Repurchase;
PIF_AMT The loan "paid in full" amount as 2 No commas(,) or 11
reported by the Servicer. dollar signs ($)
PIF_DATE The paid in full date as reported by MM/DD/YYYY 10
the Servicer.
SCHED_GROSS_ The amount of interest due on the 2 No commas(,) or 11
INTEREST_AMT outstanding scheduled principal dollar signs ($)
balance in the current cycle.
LOAN_FEE_AMT The monthly loan fee amount 2 No commas(,) or 11
expressed in dollars and cents. dollar signs ($)
SERV_FEE_RATE The Servicer's fee rate for a loan as 4 Max length of 6 6
reported by the Servicer.
CR_LOSS_AMT The amount of loss that is 2 No commas(,) or 11
classified as a credit. dollar signs ($)
FRAUD_LOSS_AMT The amount of loss that is 2 No commas(,) or 11
attributable to a fraud claim. dollar signs ($)
BANKRUPTCY_LOSS_AMT The amount of loss due to 2 No commas(,) or 11
bankruptcy. dollar signs ($)
SPH_LOSS_AMT The amount of loss that is 2 No commas(,) or 11
classified as a special hazard. dollar signs ($)
-------------------------------------------------------------------------------------------------------
Exhibit 1: Standard File Layout - Trustee
--------------------------------------------------------------------------------------------------------------
Column Name DESCRIPTION Decimal Comment Max Size
--------------------------------------------------------------------------------------------------------------
MOD_DATE The effective payment date MM/DD/YYYY 10
of the modification for the
loan.
MOD_TYPE The modification type. Varchar - value can be 30
alpha or numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding 2 No commas(,) or dollar 11
principal and interest signs ($)
advances made by the
Servicer.
PREPAY_PENALTY_ AMT The penalty amount received 2 No commas(,) or dollar 11
when a Borrower prepays on signs ($)
his loan as reported by the
Servicer.
PREPAY_PENALTY_ WAIVED The prepayment penalty 2 No commas(,) or dollar 11
amount for the loan waived signs ($)
by the Servicer.
BREACH_FLAG Flag to indicate if the Y = Breach 1
repurchase of a loan is due N=NO Breach
to a breach of Leave blank if N/A
Representations and
Warranties
--------------------------------------------------------------------------------------------------------------
Exhibit 2: Monthly Summary Report by Single Investor
MONTHLY SUMMARY REPORT
For Month Ended: mm/dd/yyyy Servicer Name ___________________
___________________________
Prepared by: _____________________________ Investor Nbr _____________________
Section 1. Remittances and Ending Balances - Required Data
------------------------------------------------------------------------------------
Beginning Ending Total Monthly Total Ending Total Monthly
Unpaid Principal
Loan Count Loan Count Remittance Amount Principal Balance Balance
------------------------------------------------------------------------------------
0 0 $0.00 $0.00 $0.00
------------------------------------------------------------------------------------
Principal Calculation
---------------------
1. Monthly Principal Due + $0.00
-------------
2. Current Curtailments + $0.00
-------------
3. Liquidations + $0.00
-------------
4. Other (attach explanation) + $0.00
-------------
5. Principal Due $0.00
-------------
6. Interest (reported "gross") + $0.00
-------------
7. Interest Adjustments on Curtailments + $0.00
-------------
8. Servicing Fees - $0.00
-------------
9. Other Interest (attach explanation) + $0.00
-------------
10. Interest Due (need to subtract ser fee) $0.00
-------------
Remittance Calculation
----------------------
11. Total Principal and Interest Due (lines 5+10) + $0.00
-------------
12. Reimbursement of Non-Recoverable Advances - $0.00
-------------
13. Total Realized gains + $0.00
-------------
14. Total Realized Losses - $0.00
-------------
15. Total Prepayment Penalties + $0.00
-------------
16. Total Non-Supported Compensating Interest - $0.00
-------------
17. Other (attach explanation) $0.00
-------------
18. Net Funds Due on or before Remittance Date $ $0.00
=============
Section 2. Delinquency Reporting
-----------------------------------------------------------------------------------------------------
Installments Delinquent
-----------------------------------------------------------------------------------------------------
Real Total
Total No. Total No. In Estate Dollar
of of 30- 60- 90 or more Foreclosur Owned Amount of
Loans Delinquencies Days Days Days (Optional) (Optional) Delinquencies
-----------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 $0.00
-----------------------------------------------------------------------------------------------------
Section 3. REG AB Summary Reporting - REPORT ALL APPLICABLE FIELDS
----------------------------------------------------------------------------
REG ▇▇ ▇▇▇▇▇▇ LOAN COUNT BALANCE
----------------------------------------------------------------------------
PREPAYMENT PENALTY AMT 0 $0.00
----------------------------------------------------------------------------
PREPAYMENT PENALTY AMT WAIVED 0 $0.00
----------------------------------------------------------------------------
DELINQUENCY P&I AMOUNT 0 $0.00
----------------------------------------------------------------------------
EXHIBIT Y
[Reserved]
EXHIBIT Z
[Reserved]
EXHIBIT AA
FORM OF ADDITIONAL DISCLOSURE NOTIFICATION
**SEND VIA EMAIL TO ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ AND VIA OVERNIGHT MAIL
TO THE ADDRESS IMMEDIATELY BELOW
▇▇▇▇▇ Fargo Bank, National Association, as Trustee
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn.: Corporate Trust Services - MSAC 2007-HE4 - SEC REPORT PROCESSING
**Additional Form [10-D] [10-K] [8-K] Disclosure** Required
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 8.12 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of March 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as depositor, Countrywide Home Loans Servicing LP, as a servicer, Saxon
Mortgage Services, as a servicer, WMC Mortgage Corp., as a responsible party,
Decision One Mortgage Company, LLC, as a responsible party, ▇▇▇▇▇ Fargo Bank,
National Association, as trustee, and LaSalle Bank National Association, as
custodian, the undersigned, as [_________________________] hereby notifies you
that certain events have come to our attention that we are required to report to
you for disclosure on Form [10-D] [10-K] [8-K].
Description of additional Form [10-D] [10-K] [8-K] Disclosure:
List of any attachments hereto to be included in the Additional Form [10-D]
[10-K] [8-K] Disclosure:
Each of the attachments hereto is being transmitted to the Trustee in an
▇▇▇▇▇-compatible format.
Any inquiries related to this notification should be directed to
[_________________] phone number [___________________]; email address
[______________________].
[NAME OF PARTY],
As [Role]
By: _____________________________
Name:
EXHIBIT BB
COUNTRYWIDE AMENDMENT REGULATION AB
Capitalized terms used in this Exhibit BB but not defined in this
Exhibit BB shall have the meanings given to such terms in this Agreement, except
the term "Mortgage Loan" shall mean the "Countrywide Serviced Mortgage Loans" as
defined in this Agreement.
AMENDMENT REG AB
TO THE MORTGAGE LOAN SALE AND SERVICING AGREEMENT
This is Amendment Reg AB ("Amendment Reg AB"), dated as of January 26, 2006, by
and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the "Purchaser"), Countrywide
Home Loans, Inc. (the "Seller") and Countrywide Home Loans Servicing LP (the
"Servicer", and collectively with the Seller, the "Company") to (i) that certain
Second Amended and Restated Mortgage Sale and Servicing Agreement, dated as of
September 1, 2005, by and among the Seller, the Servicer and the Purchaser, and
(ii) that certain Mortgage Sale and Servicing Agreement, dated as of October 1,
2005, by and among the Seller, the Servicer and the Purchaser (collectively, as
amended, modified or supplemented, the "Existing Agreements").
W I T N E S S E T H
WHEREAS, the Company and the Purchaser have agreed, subject to the
terms and conditions of this Amendment Reg AB that the Existing Agreements be
amended to reflect agreed upon revisions to the terms of the Existing Agreement.
Accordingly, the Company and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that each Existing Agreement is hereby amended as follows:
1. Capitalized terms used herein but not otherwise defined shall
have the meanings set forth in the Existing Agreements. Each Existing Agreement
is hereby amended by adding the following definitions in their proper
alphabetical order:
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 2(g)(i)(A)(1).
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were either (x) originated pursuant to an agreement between the
Company and such Person that contemplated that such Person would underwrite
mortgage loans from time to time, for sale to the Company, in accordance with
underwriting guidelines designated by the Company ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines or (y)
individually re-underwritten by the Company to the Designated Guidelines at the
time such Mortgage Loans were acquired by the Company; (ii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Company; and (iii) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that either Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Company or the Mortgage Loans purchased by the Company substantially
comply with the Designated Guidelines.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: An agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties in connection with a
Reconstitution with respect to any or all of the Mortgage Loans serviced under
the Agreement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction subject to Regulation AB
involving either (1) a sale or other transfer of some or all of the Mortgage
Loans directly or indirectly to an issuing entity in connection with an issuance
of publicly offered, rated mortgage-backed securities or (2) an issuance of
publicly offered, rated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans.
Servicer: As defined in Section 2(c)(iii).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1105.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer, or any special servicer engaged at the request
of a Depositor, Purchaser or investor in a Securitization Transaction, nor any
"back-up servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
2. The Purchaser and the Company agree that each Existing Agreement is
hereby amended by adding the following provisions:
(a) Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose of
Article 2 of this Agreement is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. Neither the Purchaser nor any Depositor shall exercise its
right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder. The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, and agrees to negotiate in
good faith with the Purchaser or any Depositor with regard to any reasonable
requests for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary to permit the Purchaser or such Depositor to comply with
the provisions of Regulation AB, together with such disclosures relating to the
Company, and any parties or items identified in writing by the Purchaser,
including, any Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans necessary in order to effect such
compliance.
The Purchaser agrees that it will cooperate with the Company and
provide sufficient and timely notice of any information requirements pertaining
to a Securitization Transaction. The Purchaser will make all reasonable efforts
to contain requests for information, reports or any other materials to items
required for compliance with Regulation AB, and shall not request information
which is not required for such compliance.
(b) Additional Representations and Warranties of the Company.
(i) The Company shall be deemed to represent to the Purchaser
and to any Depositor, as of the date on which information is first
provided to the Purchaser or any Depositor under Section 2(c) that,
except as disclosed in writing to the Purchaser or such Depositor prior
to such date: (i) the Company is not aware and has not received notice
that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or
failure to act of the Company; (ii) the Company has not been terminated
as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential
mortgage loans involving the Company as servicer has been disclosed or
reported by the Company; (iv) no material changes to the Company's
policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for
mortgage loans of a type similar to the Mortgage Loans have occurred
during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Company's
financial condition that could have a material adverse effect on the
performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material
legal or governmental proceedings pending (or known to be contemplated)
against the Company, any Subservicer or any Third-Party Originator; and
(vii) there are no affiliations, relationships or transactions relating
to the Company, any Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and any party thereto
identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(ii) If so requested by the Purchaser or any Depositor on any
date following the date on which information is first provided to the
Purchaser or any Depositor under Section 2(c), the Company shall,
within ten Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph
(i) of this Section or, if any such representation and warranty is not
accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
(c) Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall (1)
within ten Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing reasonably
required for compliance with Regulation AB, the information and materials
specified in paragraphs (i), (ii), (iii) and (vi) of this Section 2(c), and (2)
as promptly as practicable following notice to or discovery by the Company,
provide to the Purchaser and any Depositor (as required by Regulation AB) the
information specified in paragraph (iv) of this Section.
(i) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding (x) the Company, as
originator of the Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), or (y) as
applicable, each Third-Party Originator, and (z) as applicable, each
Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105 (subject to paragraph (b) below), 1110, 1117 and 1119
of Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) to the extent material, a description of the
originator's origination program and how long the originator
has been engaged in originating residential mortgage loans,
which description shall include a discussion of the
originator's experience in originating mortgage loans of a
similar type as the Mortgage Loans; if material, information
regarding the size and composition of the originator's
origination portfolio; and information that may be material to
an analysis of the performance of the Mortgage Loans,
including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage
Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a brief description of any material legal or
governmental proceedings pending (or known to be contemplated
by a governmental authority) against the Company, each
Third-Party Originator, if applicable, and each Subservicer;
and
(D) a description of any affiliation or relationship
between the Company, each Third-Party Originator, if
applicable, each Subservicer and any of the following parties
to a Securitization Transaction, as such parties are
identified to the Company by the Purchaser or any Depositor in
writing within ten days in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support
provider; and
(9) any other material transaction
party.
(ii) If so requested by the Purchaser or any Depositor, and if
required by Regulation AB, the Company shall provide (or, as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as
provided below) originated by (a) the Company, if the Company is an
originator of Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), and/or (b) as
applicable, each Third-Party Originator. Such Static Pool Information
shall be prepared by the Company (or, if applicable, the Third-Party
Originator) on the basis of its reasonable, good faith interpretation
of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent that there is reasonably available to the Company (or
Third-Party Originator, as applicable) Static Pool Information with
respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content
of such Static Pool Information may be in the form customarily provided
by the Company, and need not be customized for the Purchaser or any
Depositor. Such Static Pool Information for each vintage origination
year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the
mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a
date no later than 135 days prior to the date of the prospectus or
other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information
shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format
(pdf) file, or other such electronic format mutually agreed upon by the
Purchaser and the Company.
Promptly following notice or discovery of a material error (as
determined in the judgment of the Company) in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an
omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static
Pool Information to the Purchaser or any Depositor, as applicable, in
the same format in which Static Pool Information was previously
provided to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to
this Agreement), agreed-upon procedures letters of certified public
accountants pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1,
2006 or, in the case of Static Pool Information with respect to the
Company's or, if applicable, Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the
Purchaser or such Depositor shall reasonably request. Such statements
and letters shall be addressed to and be for the benefit of such
parties as the Purchaser or such Depositor shall designate, which shall
be limited to any Sponsor, any Depositor, any broker dealer acting as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction or any other party that is reasonably and
customarily entitled to receive such statements and letters in a
Securitization Transaction. Any such statement or letter may take the
form of a standard, generally applicable document accompanied by a
reliance letter authorizing reliance by the addressees designated by
the Purchaser or such Depositor.
(iii) If reasonably requested by the Purchaser or any
Depositor, the Company shall provide such information regarding the
Company, as servicer of the Mortgage Loans, and each Subservicer (each
of the Company and each Subservicer, for purposes of this paragraph, a
"Servicer"), as is reasonably requested for the purpose of compliance
with Items 1108 of Regulation AB. Such information shall include, at a
minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general discussion of
the Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Servicer's
experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution
Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage
loans of a type similar to the Mortgage Loans and information
on factors related to the Servicer that may be material, in
the reasonable determination of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or
experienced an early amortization or other
performance triggering event because of servicing
during the three-year period immediately preceding
the related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous
disclosure of material noncompliance with the
applicable servicing criteria with respect to other
securitizations of residential mortgage loans
involving the Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Servicer has been terminated
as servicer in a residential mortgage loan
securitization, either due to a servicing default or
to application of a servicing performance test or
trigger; and
(5) such other information as the Purchaser
or any Depositor may reasonably request for the
purpose of compliance with Item 1108(b)(2) of
Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Servicer's policies or
procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreements
for mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material risk that an
adverse financial event or circumstance involving the Servicer
could have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(E) information regarding advances made by the
Servicer on the Mortgage Loans and the Servicer's overall
servicing portfolio of residential mortgage loans for the
three-year period immediately preceding the related
Securitization Transaction, which may be limited to a
statement by an authorized officer of the Servicer to the
effect that the Servicer has made all advances required to be
made on residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate,
information regarding the percentage and type of advances not
made as required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique factors
involved in servicing loans of a similar type as the Mortgage
Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries,
such as through liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts; and
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect
of any grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to
delinquency and loss experience.
(iv) For the purpose of satisfying its reporting obligation
under the Exchange Act with respect to any class of asset-backed
securities, the Company shall (or shall cause each Subservicer and, if
applicable, any Third-Party Originator to) (a) provide prompt notice to
the Purchaser, any Master Servicer and any Depositor in writing of (1)
any merger, consolidation or sale of substantially all of the assets of
the Company, (2) the Company's entry into an agreement with a
Subservicer to perform or assist in the performance of any of the
Company's obligations under the Agreement or any Reconstitution
Agreement, (3) any Event of Default under the terms of the Agreement or
any Reconstitution Agreement, and (4) any material litigation or
governmental proceedings involving the Company, any Subservicer or any
Third Party Originator.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or subservicer under this Agreement or any
applicable Reconstitution Agreement related thereto by any Person (i)
into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the
Company or any Subservicer, the Company shall provide to the Purchaser
and any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the
Purchaser and any Depositor of such succession or appointment and (y)
in writing, all information reasonably requested by the Purchaser or
any Depositor in order to comply with its reporting obligation under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(vi) If reasonably requested by the Purchaser or the Master
Servicer, the Company shall provide to the Purchaser or the Master
Servicer, evidence of the authorization of the person signing any
certification or statement.
(vii) The Company shall provide to the Purchaser and any
Depositor a description of any affiliation or relationship required to
be disclosed under Item 1119 of Regulation AB between the Company and
any of the parties listed in Items 1119(a)(1)-(6) of Regulation AB that
develops following the closing date of a Securitization Transaction
(other than an affiliation or relationship that the Purchaser, the
Depositor or any issuing entity has with any of such parties listed in
Items 1119(a)(1)-(6) of Regulation AB) no later than 15 calendar days
prior to the date the Depositor is required to file its Form 10-K
disclosing such affiliation or relationship. For purposes of the
foregoing, the Company (1) shall be entitled to assume that the parties
to the Securitization Transaction with whom affiliations or relations
must be disclosed are the same as on the closing date if it provides a
written request (which may be by e-mail) to the Depositor or Master
Servicer, as applicable, requesting such confirmation and either
obtains such confirmation or receives no response within three (3)
Business Days, (2) shall not be obligated to disclose any affiliations
or relationships that may develop after the closing date for the
Securitization Transaction with any parties not identified to the
Company pursuant to clause (D) of paragraph (i) of this Section 2(c),
and (3) shall be entitled to rely upon any written identification of
parties provided by the Depositor, the Purchaser or any master
servicer.
(viii) Not later than ten days prior to the deadline for the
filing of any distribution report on Form 10-D in respect of any
Securitization Transaction that includes any of the Mortgage Loans
serviced by the Company or any Subservicer, the Company or such
Subservicer, as applicable, shall, to the extent the Company or such
Subservicer has knowledge, provide to the party responsible for filing
such report (including, if applicable, the Master Servicer) notice of
the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to
be included in the related distribution report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(a) any material modifications, extensions or waivers of
Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have cumulatively become material over time
(Item 1121(a)(11) of Regulation AB;
(b) material breaches of Mortgage Loan representations or
warranties or transaction covenants under the applicable Existing
Agreement, as amended herein (Item 1121(a)(12) of Regulation AB); and
(c) information regarding any Mortgage Loan changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or
selection of pool assets (Item 1121(a)(14) of Regulation AB).
(d) Servicer Compliance Statement.
On or before March 5 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, to the effect that (i) a review of the
Company's servicing activities during the immediately preceding calendar year
(or applicable portion thereof) and of its performance under the servicing
provisions of this Agreement and any applicable Reconstitution Agreement during
such period has been made under such officer's supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Company has fulfilled all
of its servicing obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar year
(or applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
(e) Report on Assessment of Compliance and Attestation.
(i) On or before March 5 of each calendar year, commencing in
2007, the Company shall:
(A) deliver to the Purchaser and any Depositor a
report regarding the Company's assessment of compliance with
the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of
the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Purchaser and such Depositor and
signed by an authorized officer of the Company, and shall
address each of the Servicing Criteria specified on Exhibit A
hereto (wherein "Investor" shall mean the master servicer);
(B) deliver to the Purchaser and any Depositor a
report of a registered public accounting firm that attests to,
and reports on, the assessment of compliance made by the
Company and delivered pursuant to the preceding paragraph.
Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act;
(C) cause each Subservicer and each Subcontractor
determined by the Company pursuant to Section 2(f)(ii) to be
"participating in the servicing function" within the meaning
of Item 1122 of Regulation AB (each, a "Participating
Entity"), to deliver to the Purchaser and any Depositor an
assessment of compliance and accountants' attestation as and
when provided in paragraphs (i) and (ii) of this Section 2(e);
and
(D) deliver to the Purchaser, Depositor or any other
Person that will be responsible for signing the certification
(a "Sarbanes Certification") required by Rules 13a-14(d) and
15d-14(d) under the Exchange Act (pursuant to Section 302 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a
certification, signed by an appropriate officer of the
Company, in the form attached hereto as Exhibit B; provided
that such certification delivered by the Company may not be
filed as an exhibit to, or included in, any filing with the
Commission.
The Company acknowledges that the party identified in clause (i)(D)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
(ii) Each assessment of compliance provided by a Subservicer
pursuant to Section 2(e)(i)(A) shall address each of the Servicing
Criteria specified on Exhibit A hereto or, in the case of a Subservicer
subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Participating
Entity pursuant to Section 2(e)(i)(C) need not address any elements of
the Servicing Criteria other than those specified by the Company
pursuant to Section 2(f).
(f) Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any related Reconstitution Agreement unless the Company
complies with the provisions of paragraph (i) of this Subsection (f). The
Company shall not hire or otherwise utilize the services of any Subcontractor,
and shall not permit any Subservicer to hire or otherwise utilize the services
of any Subcontractor, to fulfill any of the obligations of the Company as
servicer under this Agreement or any related Reconstitution Agreement unless the
Company complies with the provisions of paragraph (ii) of this Subsection (f).
(i) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subservicer. If required by Regulation AB, the Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit
of the Purchaser and any Depositor to comply with the provisions of
this Section and with Sections 2(b), 2(c)(iii), 2(c)(v), 2(d), and 2(e)
of this Agreement , and to provide the information required with
respect to such Subservicer under Section 2(c)(iv) of this Agreement.
The Company shall be responsible for obtaining from each Subservicer
and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under
Section 2(d), any assessment of compliance and attestation required to
be delivered by such Subservicer under Section 2(e) and any
certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2(e)
as and when required to be delivered.
(ii) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. If required by Regulation AB, the Company shall after
engagement of such Subcontractor, promptly provide a written
description of the role and function of each Subcontractor utilized by
the Company or any Subservicer, specifying (A) the identity of each
such Subcontractor, (B) which (if any) of such Subcontractors are
Participating Entities, and (C) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by
each Participating Entity identified pursuant to clause (B) of this
paragraph.
The Company shall cause any such Participating Entity used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Section 2(e) of this Agreement. The
Company shall be responsible for obtaining from each Participating Entity and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Participating Entity under Section
2(e), in each case as and when required to be delivered.
(g) Indemnification; Remedies.
(i) The Company shall indemnify the Purchaser and the
Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each
Person responsible for the execution or filing of any report required
to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each Person who controls any of such
parties (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act); and the respective present and former
directors, officers and employees of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(A) (1) any untrue statement of a material fact
contained or alleged to be contained in any information,
report, certification or other material provided in written or
electronic form under this Amendment Reg AB by or on behalf of
the Company, or provided under this Amendment Reg AB by or on
behalf of any Subservicer, Participating Entity or, if
applicable, Third-Party Originator (collectively, the "Company
Information"), or (2) the omission or alleged omission to
state in the Company Information a material fact required to
be stated in the Company Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way
of clarification, that clause (2) of this paragraph shall be
construed solely by reference to the Company Information and
not to any other information communicated in connection with a
sale or purchase of securities, without regard to whether the
Company Information or any portion thereof is presented
together with or separately from such other information;
(B) any failure by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator to deliver
any information, report, certification, accountants' letter or
other material when and as required under this Amendment Reg
AB, including any failure by the Company to identify pursuant
to Section 2(f)(ii) any Participating Entity;
(C) any breach by the Company of a representation or
warranty set forth in Section 2(b)(i) or in a writing
furnished pursuant to Section 2(b)(ii) and made as of a date
prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to
Section 2(b)(ii) to the extent made as of a date subsequent to
such closing date.
If the indemnification provided for in this Section 2(g)(i) is
unavailable or insufficient to hold harmless the indemnified parties
set forth in this Section 2(g)(i) above, then the Company agrees that
it shall contribute to the amount paid or payable by such indemnified
party as a result of any claims, losses, damages or liabilities
incurred by such indemnified party in such proportion as is appropriate
to reflect the relative fault of such indemnified party on the one hand
and the Company on the other.
In the case of any failure of performance described in clause (i)(B) of
this Section, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the execution
or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all
costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other
material not delivered as required by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator.
(ii) (A) Any failure by the Company to deliver or, if required
by Regulation AB, any Subservicer, any Participating Entity or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and
as required under this Amendment Reg AB, which continues
unremedied for three Business Days after receipt by the
Company and by the applicable Subservicer, Subcontractor, or
Third-Party Originator, so long as their addresses for notices
has been provided, in writing, previously to the Purchaser or
the Depositor, of written notice of such failure from the
Purchaser or Depositor shall, except as provided in clause (B)
of this paragraph, constitute an Event of Default with respect
to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement
related thereto without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement
related thereto to the contrary) of any compensation to the
Company; provided, however it is understood that the Company
shall remain entitled to receive reimbursement for all
unreimbursed Monthly Advances and Servicing Advances made by
the Company under this Agreement and/or any applicable
Reconstitution Agreement. Notwithstanding anything to the
contrary set forth herein, to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or
obligations following termination of the Company as servicer,
such provision shall be given effect.
(B) Any failure by the Company, or, if required under
Regulation AB, any Subservicer or any Participating Entity to
deliver any information, report, certification or accountants'
letter when and as required under Section 2(d) or 2(e),
including any failure by the Company to identify a
Participating Entity, which continues unremedied for ten
calendar days after the date on which such information,
report, certification or accountants' letter was required to
be delivered shall constitute an Event of Default with respect
to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company as servicer under
this Agreement and/or any applicable Reconstitution Agreement
without payment (notwithstanding anything in this Agreement to
the contrary) of any compensation to the Company; provided,
however it is understood that the Company shall remain
entitled to receive reimbursement for all unreimbursed Monthly
Advances and Servicing Advances made by the Company under this
Agreement and/or any applicable Reconstitution Agreement.
Notwithstanding anything to the contrary set forth herein, to
the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following
termination of the Company as servicer, such provision shall
be given effect.
(C) The Company shall promptly reimburse the
Purchaser (or any affected designee of the Purchaser, such as
a master servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor as such are incurred, in
connection with the termination of the Company as servicer and
the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit
whatever rights the Company, the Purchaser or any Depositor
may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific
performance or injunctive relief.
(iii) The indemnification and contribution obligations set
forth in this Section 2(g) shall survive the termination of
this Agreement or the termination of any party to this
Agreement.
3. Notwithstanding any other provision of this Amendment Reg AB, the
Company shall seek the consent of the Purchaser for the utilization of all
Subservicers and Participating Entities, when required by and in accordance with
the terms of the applicable Existing Agreement.
4. Each Existing Agreement is hereby amended by adding the Exhibit
attached hereto as Exhibit A to the end thereto. References in this Amendment
Reg AB to "this Agreement" or words of similar import (including indirect
references to the Agreement) shall be deemed to be references to the applicable
Existing Agreement as amended by this Amendment Reg AB. Except as expressly
amended and modified by this Amendment Reg AB, each Existing Agreement shall
continue to be, and shall remain, in full force and effect in accordance with
its terms. In the event of a conflict between this Amendment Reg AB and any
other document or agreement, including without limitation the applicable
Existing Agreement, this Amendment Reg AB shall control.
5. This Amendment Reg AB may be executed in one or more counterparts
and by different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement. This Amendment Reg AB
will become effective as of the date first mentioned above. This Amendment Reg
AB shall bind and inure to the benefit of and be enforceable by the Company and
the Purchaser and the respective permitted successors and assigns of the Company
and the successors and assigns of the Purchaser.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:___________________________________
Name:_________________________________
Title:
COUNTRYWIDE HOME LOANS, INC.
By:___________________________________
Name:_________________________________
Title:
COUNTRYWIDE HOME LOANS SERVICING LP
By:___________________________________
Name:_________________________________
Title:
Signature page to Amendment Reg AB
EXHIBIT A
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
Applicable Servicing
Servicing Criteria Criteria
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Reference Criteria
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General Servicing Considerations Policies
-----------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements. X
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If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities. X
-----------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
-----------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction X
1122(d)(1)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days following
receipt, or such other number of days specified in the
1122(d)(2)(i) transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or to X
1122(d)(2)(ii) an investor are made only by authorized personnel.
-----------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for
such advances, are made, reviewed and approved as specified
1122(d)(2)(iii) in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with X
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the X
1122(d)(2)(v) Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent unauthorized X
1122(d)(2)(vi) access.
-----------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff date, or such other
number of days specified in the transaction agreements;
(C) reviewed and approved by someone other than the person who
prepared the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved within 90 X
calendar days of their original identification, or such other
1122(d)(2)(vii) number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid X
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
-----------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X
1122(d)(3)(iii) days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X
1122(d)(3)(iv) statements.
-----------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as required X
1122(d)(4)(i) by the transaction agreements or related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements X
-----------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage X
1122(d)(4)(iv) loan documents.
-----------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance. X
-----------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi) the transaction agreements and related pool asset documents. X
-----------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements X
1122(d)(4)(vii) established by the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency X
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
1122(d)(4)(ix) the related mortgage loan documents. X
-----------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 X
calendar days of full repayment of the related mortgage loans, or
1122(d)(4)(x) such other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such X
1122(d)(4)(xi) other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with
any payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the obligor,
unless the late payment was due to the obligor's error or
1122(d)(4)(xii) omission. X
-----------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction X
1122(d)(4)(xiii) agreements.
-----------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements. X
-----------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
EXHIBIT B
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES]
I, ________________________________, the _______________________ of
Countrywide Home Loans, Inc., certify to [the Purchaser], [the Depositor],
[Master Servicer], [Securities Administrator] or [Trustee], and its officers,
with the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[_] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities Administrator]
or [Trustee] pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on my knowledge, the Company Servicing Information,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements
were made, not misleading with respect to the period of time covered by
the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the Agreement
has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] or [Trustee];
(4) I am responsible for reviewing the activities performed by
the Company as servicer under the Agreement, and based on my knowledge
and the compliance review conducted in preparing the Compliance
Statement and except as disclosed in the Compliance Statement, the
Servicing Assessment or the Attestation Report, the Company has
fulfilled its obligations under the Agreement; and
[Intentionally Left Blank]
(5) The Compliance Statement required to be delivered by the
Company pursuant to this Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by each
Subservicer and Participating Entity pursuant to the Agreement, have
been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:
By:________________________________
Name:______________________________
Title:_____________________________
EXHIBIT CC
REPRESENTATIONS AND WARRANTIES AGREEMENT
This REPRESENTATIONS AND WARRANTIES AGREEMENT (this "Agreement"),
dated as of March 29, 2007 (the "Closing Date"), is between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MORTGAGE CAPITAL INC. (the "Sponsor") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
(the "Depositor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sponsor acquired certain mortgage loans (the "Mortgage
Loans") set forth on the mortgage loan schedule attached hereto as Schedule I
(the "Mortgage Loan Schedule") from various mortgage loan sellers pursuant to
certain purchase agreements;
WHEREAS, pursuant to that certain ▇▇▇▇ of sale, dated as of the
Closing Date, between the Sponsor and the Depositor, the Mortgage Loans are to
be transferred by the Sponsor to the Depositor;
WHEREAS, pursuant to that certain Pooling and Servicing Agreement,
dated as of March 1, 2007 (the "Pooling and Servicing Agreement"), among the
Depositor, Countrywide Home Loans Servicing LP, as a servicer ("Countrywide
Servicing"), Saxon Mortgage Services, Inc., as a servicer (together with
Countrywide Servicing, the "Servicers"), WMC Mortgage Corp., as a responsible
party ("WMC"), Decision One Mortgage Company, LLC, as a responsible party
("Decision One", and together with WMC, the "Responsible Parties" and each a
"Responsible Party"), ▇▇▇▇▇ Fargo Bank, National Association, as trustee (the
"Trustee"), and LaSalle Bank National Association, as custodian (the
"Custodian"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4 (the "Trust")
shall issue its Mortgage Pass-Through Certificates, Series 2007-HE4 (the
"Certificates"), representing beneficial ownership interest in a trust, the
assets of which include, but are not limited to, the Mortgage Loans transferred
by the Depositor to the Trust pursuant to the Pooling and Servicing Agreement;
WHEREAS, in connection with the sale of the Mortgage Loans by the
Sponsor to the Depositor, the Sponsor shall make various representations and
warranties to the Depositor regarding the Mortgage Loans;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Defined Terms.
Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement.
Section 2. Representations and Warranties of the Sponsor.
The Sponsor represents and warrants to the Depositor as of the date
hereof that:
(a) Each loan at the time it was made complied in all material
respects with applicable local, state and federal laws, including, but not
limited to, all applicable laws relating to prepayment penalties and predatory
and abusive lending.
(b) No Mortgage Loan is a "High Cost Loan" or "Covered Loan", as
applicable (as such terms are defined in the then current Standard & Poor's
LEVELS(R) Glossary Appendix E).
(c) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
Section 3. Assignment and Assumption of EPD Provision.
(a) The Sponsor hereby assigns, conveys, transfers and sets over
to the Depositor all of the Sponsor's right, title and interest (except as
otherwise set forth in Section 3(b) below) in, to and under the Sponsor's rights
to require any Responsible Party to repurchase a Mortgage Loan as a result of a
scheduled payment of principal and interest not being made during the period of
time specified in the early payment default provision (the "EPD Provision")
specified on Schedule II attached hereto in the related letter agreement or in
the related mortgage loan purchase and warranties agreement, as applicable,
listed on Schedule II attached hereto (each a "Purchase Price and Terms
Agreement"), each between the Sponsor and the applicable Responsible Party, but
only to the extent such provision relates to any Mortgage Loans that are the
subject of this Agreement.
(b) Notwithstanding the foregoing set forth in Section 3(a), the
Sponsor specifically reserves and does not assign to the Depositor any and all
right, title and interest in, to and under the right to receive as part of the
repurchase price for any such Mortgage Loan repurchased pursuant to any EPD
Provision the excess (the "Repurchase Premium") of the Purchase Price Percentage
(as defined in the applicable Purchase Price and Terms Agreement) over 100%
multiplied by the unpaid principal balance of such Mortgage Loan. In the event
any Mortgage Loan is required to be repurchased by the applicable Responsible
Party pursuant to the provisions of the applicable Purchase Price and Terms
Agreement specified in Section 3(a) above, the Depositor shall require the
applicable Responsible Party to repurchase such Mortgage Loan at the Repurchase
Price (as defined in such Purchase Price and Terms Agreement), and the Depositor
shall cause the applicable Responsible Party to pay such Repurchase Premium to
the Sponsor or its designee as instructed by the Sponsor.
Section 4. Remedies for Breach of Representations and Warranties of
the Sponsor; the Repurchase Price.
(a) Within ninety (90) days of the earlier of either discovery by
or notice to the Sponsor of any breach of a representation or warranty set forth
in Section 2 of this Agreement that materially and adversely affects the value
of any Mortgage Loan or the interest of the Trustee or the holders of the
Certificates therein, the Sponsor shall use its best efforts to promptly cure
such breach in all material respects and, if such breach cannot be remedied, the
Sponsor shall repurchase such Mortgage Loan at a repurchase price (the
"Repurchase Price") equal to the sum of: (i) the unpaid principal balance of
such Mortgage Loan as of the date of repurchase, (ii) interest on such unpaid
principal balance of such Mortgage Loan at the mortgage interest rate of such
Mortgage Loan from the last date through which interest has been paid and
distributed to the Trustee to the date of repurchase, (iii) all unreimbursed
Servicing Advances (as defined in the Pooling and Servicing Agreement), (iv) all
costs and expenses incurred by the Trustee arising out of or based upon such
breach, including without limitation, costs and expenses relating to the
Trustee's enforcement of the repurchase obligation of the Sponsor under this
Agreement, and (v) any costs and damages incurred by the Trust in connection
with any violation by such Mortgage Loan of any predatory lending law or abusive
lending law. Any repurchase of a Mortgage Loan pursuant to the foregoing
provisions of this Section 3 shall be accomplished by direct remittance of the
Repurchase Price to the Depositor or its designee in accordance with the
Depositor's instructions.
(b) At the time of repurchase, the Depositor and the Sponsor
shall arrange for the reassignment of the repurchased Mortgage Loan to the
Sponsor and the delivery to the Sponsor of any documents held by the Trustee or
the Custodian of such Mortgage Loan, as the case may be, relating to the
repurchased Mortgage Loan. In the event of a repurchase, the Sponsor shall,
simultaneously with such reassignment, give written notice to the Depositor that
such repurchase has taken place and amend the Mortgage Loan Schedule to reflect
the withdrawal of the repurchased Mortgage Loan from this Agreement.
(c) Any cause of action against the Sponsor relating to or
arising out of the breach of any representations and warranties made in Section
2 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Depositor or notice thereof by the Sponsor to the Depositor, (ii) failure by the
Sponsor to cure such breach, repurchase such Mortgage Loan as specified above,
and (iii) demand upon the Sponsor by the Depositor for compliance with this
Agreement.
(d) It is understood and agreed that the obligation of the
Sponsor set forth in Section 4(a) to repurchase for a Mortgage Loan in breach of
a representation or warranty contained in Section 2 constitutes the sole remedy
of the Depositor or any other person or entity with respect to such breach.
(e) The representations and warranties of the Sponsor set forth
in Section 2 shall inure to the benefit of the Depositor and its successors and
assigns until all amounts payable to the holders of the Certificates under the
Pooling and Servicing Agreement have been paid in full.
Section 5. Obligations of the Sponsor with Respect to Decision One
Mortgage Loans.
Within 90 days of the earlier of discovery by the Sponsor or receipt
of notice by the Sponsor of the breach of a representation and warranty set
forth in Schedule VI to the Pooling and Servicing Agreement (with respect to the
Decision One Mortgage Loans) that (1) materially and adversely affects the
interests of the Certificateholders in any Decision One Mortgage Loan and (2)
has not been cured, repurchased or substituted for by Decision One in accordance
with the terms of the Pooling and Servicing Agreement, (i) the Sponsor shall,
within the time period permitted therefor under the Pooling and Servicing
Agreement, take such action described in Section 2.03(g) of the Pooling and
Servicing Agreement in respect of such Decision One Mortgage Loan, as if the
Sponsor were Decision One, and (ii) unless such breach is cured, LaSalle shall
promptly deliver to the Sponsor or its designee the related Mortgage File in
accordance with the applicable Servicer's direction in a Request for Release
and, upon the Sponsor's request and repurchase, the Trustee shall assign to the
Sponsor all of its rights with respect to Decision One's breach under the
Pooling and Servicing Agreement, which assignment shall be evidenced by a
writing prepared by the Sponsor and executed by the Trustee in favor of the
Sponsor. Any obligation of the Sponsor under this Section 5 shall terminate upon
receipt by the Trustee of a confirmation from each Rating Agency that such
termination will not cause a downgrade, qualification or withdrawal of the
rating then assigned to any Class of Certificates by any Rating Agency.
Section 6. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
Section 7. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO CONFLICTS OF LAWS
PRINCIPLES.
Section 8. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 9. Captions.
The captions in this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
Section 10. Successors and Assigns.
This Agreement shall inure to the benefit of the parties hereto and
their respective successors and assigns. Any entity into which the Sponsor or
the Depositor may be merged or consolidated shall, without the requirement for
any further writing, be deemed the Sponsor or the Depositor, respectively,
hereunder.
Section 11. Amendments
This Agreement may be amended from time to time by the parties
hereto.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
By:
-------------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
----------------------
(Delivered to the Custodian and the Trustee and not attached to the Pooling
and Servicing Agreement)
SCHEDULE II
List of Purchase Price and Terms Agreements and EPD Provisions
--------------------------------------------------------------
Purchase Price and Terms Agreements EPD Provision
--------------------------------------------- ------------------------------
1. Purchase Price and Terms Agreement, dated Third full paragraph of
as of September 28, 2006, between Section 6 (titled "Purchase
Decision One and the Sponsor. Agreements; Interim Servicing
Agreements").
2. Purchase Price and Terms Agreement, dated The first paragraph of Section
as of September 19, 2006 and the Fifth 9.04 of the Fifth Amended and
Amended and Restated Mortgage Loan Restated Mortgage Loan
Purchase and Warranties Agreement, dated Purchase and Warranties
as of November 1, 2006, each between WMC Agreement (titled "Repurchase
and the Sponsor. of Mortgage Loans with First
Payment Default").
EXHIBIT DD
INTEREST RATE CAP AGREEMENT
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
--------------------------------------------------------------------------------
DATE: March 29, 2007
TO: ▇▇▇▇▇ Fargo Bank, National Association, not
individually, but solely as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. Trust 2007-HE4, Mortgage Pass-Through
Certificates, Series 2007-HE4
ATTENTION: Client Manager - MSAC 2007-HE4
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: New York Derivative Client Services Group
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: HR94K
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into on the Trade Date
specified below (the "Transaction") between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
("Party A") and ▇▇▇▇▇ Fargo Bank, National Association, not individually, but
solely as Trustee (the "Trustee") under the Pooling and Servicing Agreement,
dated and effective as of March 1, 2007, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as Depositor, Countrywide Home Loans Servicing LP, as Servicer, Saxon
Mortgage Services, Inc., as Servicer, ▇▇▇▇▇ Fargo Bank, National Association, as
Trustee and Custodian, LaSalle Bank National Association, as Custodian, and
Decision One Mortgage Company, LLC and WMC Mortgage Corp., as Responsible
Parties (the "PSA") for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2007-HE4,
Mortgage Pass-Through Certificates, Series 2007-HE4 ("Party B").
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms capitalized but not defined in this Confirmation (including
the Definitions) have the meanings attributed to them in the PSA.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of March 29, 2007, as amended and supplemented from time to time (the
"Agreement"), between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:................... With respect to any Calculation
Period, the notional amount set forth
for such Calculation Period in
Schedule I attached hereto.
Trade Date:........................ March 16, 2007
Effective Date:.................... ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ Date:.................. February 25, 2008
Fixed Amounts:
Fixed Rate Payer:............ Party B
Fixed Rate Payer Payment
Dates:..................... March 29, 2007
Fixed Amount:................ None
Floating Amounts:
Floating Rate Payer:......... Party A
Cap Rate:.................... 7.00%
Floating Rate Payer
Payment Dates:............. Early Payment--For each Calculation
Period, the first Business Day prior
to each Floating Rate Payer Period End
Date.
Floating Rate Payer
Period End Dates:.......... The 25th calendar day of each month
during the Term of this Transaction,
commencing April 25, 2007, subject to
adjustment in accordance with the
Business Day Convention.
Floating Rate Option:........ USD-LIBOR-BBA
Floating Amount:............. To be determined in accordance with
the following formula:
10 * Floating Rate * Notional
Amount * Floating Rate Day Count
Fraction.
Designated Maturity:......... One month
Floating Rate Day
Count Fraction:............ Actual/360
Reset Dates:................. The first day of each Calculation
Period.
Compounding:................. Inapplicable
Business Days:..................... New York and Los Angeles
Business Day Convention:........... Following
2. Account Details and Settlement Information:
Payment to Party A:
Citibank, New York
ABA No.: 021 000 089
Account No.: 4072-4601
Account Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc.
Payments to Party B:
▇▇▇▇▇ Fargo Bank ,National Association
ABA No.: 121 000 248
Account No: ▇▇▇▇▇▇▇▇▇▇
Acct Name: SAS Clearing
Ref: FFC: 50996501, ▇▇▇▇ ▇▇▇▇-▇▇▇ (▇▇▇)
3. Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed by ▇▇▇▇▇ Fargo
Bank, National Association (i) this Confirmation is executed and
delivered by ▇▇▇▇▇ Fargo Bank, National Association not in its
individual capacity but solely as Trustee of the Trust under the PSA in
the exercise of the powers and authority conferred and invested in it
as trustee thereunder, (ii) each of the representations, undertakings
and agreements herein made on behalf of Party B is made and intended
not as personal representations of the Trustee but is made and intended
for the purpose of binding only the Trust, and (iii) under no
circumstances shall ▇▇▇▇▇ Fargo Bank, National Association in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken under this Confirmation.
4. Modifications to the Agreement. For purposes of this Transaction only, the
Agreement is modified as follows: Part 1(f)(ii), Part 1(h)(A) and Part
5(f) of the Schedule to the ISDA Master Agreement are hereby deleted in
their entirety.
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
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We are very pleased to have entered into this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the Trade Date.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not individually, but solely as
Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc. Trust 2007-HE4, Mortgage
Pass-Through Certificates, Series
2007-HE4
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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SCHEDULE I
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Notional
Line Calculation Period Amount ($) Multiplier
---- --------------------------------- ------------- ----------
1 Effective Date 4/25/2007 63,928,786.65 10
2 4/25/2007 5/25/2007 61,428,875.12 10
3 5/25/2007 6/25/2007 59,013,467.88 10
4 6/25/2007 7/25/2007 56,684,205.60 10
5 7/25/2007 8/25/2007 54,433,995.30 10
6 8/25/2007 9/25/2007 52,259,099.44 10
7 9/25/2007 10/25/2007 50,156,064.77 10
8 10/25/2007 11/25/2007 48,121,711.67 10
9 11/25/200 12/25/2007 46,150,162.07 10
10 12/25/2007 1/25/2008 44,244,804.17 10
11 1/25/2008 Termination Date 42,400,119.23 10