EXHIBIT 4
================================================================================
BCAPB TRUST LLC 2007-AB1
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2007-AB1
TRUST AGREEMENT
among
BCAP LLC,
Depositor,
▇▇▇▇▇ FARGO BANK, N.A.,
Custodian
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
Dated July 1, 2007
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions......................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.....................................
Section 2.02 Acceptance by the Custodian of the Mortgage Loans................
Section 2.03 Execution and Delivery of Certificates...........................
Section 2.04 REMIC Matters....................................................
Section 2.05 Representations and Warranties of the Depositor..................
Section 2.06 Representations and Warranties of the Custodian..................
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Distribution Account and Excess Reserve Fund Account.............
Section 3.02 Investment of Funds in the Distribution Account..................
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution.......................................
Section 4.02 Monthly Statements to Certificateholders.........................
Section 4.03 Allocation of Applied Realized Loss Amounts......................
Section 4.04 Certain Matters Relating to the Determination of LIBOR...........
Section 4.05 Supplemental Interest Account and Posted Collateral
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
Section 6.01 Respective Liabilities of the Depositor..........................
Section 6.02 Merger or Consolidation of the Depositor.........................
Section 6.03 Limitation on Liability of the Depositor and Others..............
Section 6.04 Option to Purchase Defaulted Mortgage Loans......................
ARTICLE VII
SERVICER 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, THE CUSTODIAN, VARIOUS TAX MATTERS,
SERVICING REPORTS AND PERIODIC FILINGS
Section 8.01 Duties of the Trustee............................................
Section 8.02 [Reserved].......................................................
Section 8.03 Certain Matters Affecting the Trustee............................
Section 8.04 Trustee and Custodian Not Liable for Certificates or
Mortgage Loans..................................................
Section 8.05 Trustee May Own Certificates.....................................
Section 8.06 Trustee's and Custodian's Fees and Expenses......................
Section 8.07 Eligibility Requirements for the Trustee.........................
Section 8.08 Resignation and Removal of the Trustee...........................
Section 8.09 Successor Trustee................................................
Section 8.10 Merger or Consolidation of the Trustee...........................
Section 8.11 Appointment of Co-Trustee or Separate Trustee....................
Section 8.12 Tax Matters......................................................
Section 8.13 Annual Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants'
Attestation Report..............................................
Section 8.14 Periodic Filings.................................................
Section 8.15 Tax Classification of the Excess Reserve Fund Account,
the Supplemental Interest Account and the Interest Rate
Swap Agreement..................................................
Section 8.16 Subcontractors...................................................
Section 8.17 Custodial Responsibilities.......................................
Section 8.18 Limitations on 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 Limitation on Rights of Certificateholders.......................
Section 10.08 Certificates Nonassessable and Fully Paid........................
Section 10.09 Waiver of Jury Trial.............................................
Section 10.10 Regulation AB Compliance; Intent of the Parties;
Reasonableness..................................................
Section 10.11 Third Party Rights...............................................
SCHEDULES
---------
Schedule I Mortgage Loan Schedule
EXHIBITS
--------
EXHIBIT A Form of Class A and Class M Certificates
EXHIBIT B Form of Class R Certificates
EXHIBIT C Form of Class CE Certificates
EXHIBIT D Form of Request for Release
EXHIBIT E Form of Initial Certification of Custodian
EXHIBIT F Form of Document Certification and Exception Report
of Custodian
EXHIBIT G Form of Residual Transfer Affidavit
EXHIBIT H Form of Transferor Certificate
EXHIBIT I Form of Rule 144A Letter
EXHIBIT J Form of Certification to be Provided with Form 10-K
EXHIBIT K Form of Trustee Certification to be Provided to
Depositor
EXHIBIT L ▇▇▇▇▇ Fargo Sale and Servicing Agreement
EXHIBIT M ▇▇▇▇▇ Fargo Assignment Agreement
EXHIBIT N Interest Rate Swap Agreement
EXHIBIT O Servicing Criteria
EXHIBIT P Additional Form 10-D Disclosure
EXHIBIT Q Additional Form 10-K Disclosure
EXHIBIT R Form 8-K Disclosure Information
EXHIBIT S Additional Disclosure Notification
EXHIBIT T Representation Letter
THIS TRUST AGREEMENT, dated as of July 1, 2007 (this "Agreement"),
is hereby executed by and between BCAP LLC, a Delaware limited liability company
(the "Depositor"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as custodian (in such capacity, the "Custodian"), and DEUTSCHE BANK
NATIONAL TRUST COMPANY, a national banking association, as trustee (the
"Trustee").
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 four segregated asset pools within the
Trust Fund (exclusive of (i) the Interest Rate Swap Agreement, (ii) the
Supplemental Interest Account, (iii) the Excess Reserve Fund Account, (iv) the
right of the Offered Certificates to receive Basis Risk Carry Forward Amounts
subject to the obligation to pay Class IO Shortfalls be treated for federal
income tax purposes as comprising four REMICs (each, a "Trust REMIC" or, in the
alternative, Pooling Tier REMIC-1, Pooling Tier REMIC-2, the Lower Tier REMIC
and the Upper Tier REMIC, respectively).
Each Class of Certificates (other than the Class R Certificates),
other than the right of each Class of Offered Certificates to receive Basis Risk
Carry Forward Amounts and the obligation to pay Class IO Shortfalls, and the
right of the Class CE Certificates to receive payments from the Interest Rate
Swap Agreement, and the right to receive Class IO Shortfalls, represents
ownership of a regular interest in the Upper Tier 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 Startup Day for each Trust REMIC is the Closing Date. The latest possible
maturity date for each regular interest is the latest date referenced in Section
2.04.
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 relating to the Trust Fund (exclusive of (i) the
Interest Rate Swap Agreement, (ii) the Supplemental Interest Account, (iii) the
Excess Reserve Fund Account, and (iv) the right of the Offered Certificates to
receive Basis Risk Carry Forward Amounts and the obligation to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of Offered Certificates
represents beneficial ownership of a regular interest in the Upper Tier REMIC
and the right to receive Basis Risk Carry Forward Amounts, subject to the
obligation to pay Class IO Shortfalls, and the Class CE Certificates represent
beneficial ownership of two regular interests in the Upper Tier REMIC, the
Excess Reserve Fund Account, the Supplemental Interest Account and the Interest
Rate Swap Agreement, which portions of the Trust Fund shall be treated as a
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 PT-1-R Interest, is
hereby designated as a regular interest in Pooling Tier REMIC-1. Pooling Tier
REMIC-1 shall also issue the Class PT-1-R Interest. The Class PT-1-R Interest is
hereby designated as the sole Class of residual interest in Pooling Tier
REMIC-1.
Pooling Tier Pooling Tier Initial Pooling Tier
REMIC-1 REMIC-1 REMIC-1
Interest Interest Rate Principal Amount
-------------------- --------------------- ----------------------
Class PT-1-1 (1) $177,838,818.55
Class PT-1-2A (2) $4,948,231.79
Class PT-1-2B (3) $4,948,231.79
Class PT-1-3A (2) $5,322,962.04
Class PT-1-3B (3) $5,322,962.04
Class PT-1-4A (2) $5,681,144.84
Class PT-1-4B (3) $5,681,144.84
Class PT-1-5A (2) $6,021,960.19
Class PT-1-5B (3) $6,021,960.19
Class PT-1-6A (2) $6,342,766.29
Class PT-1-6B (3) $6,342,766.29
Class PT-1-7A (2) $6,643,076.72
Class PT-1-7B (3) $6,643,076.72
Class PT-1-8A (2) $6,822,337.02
Class PT-1-8B (3) $6,822,337.02
Class PT-1-9A (2) $6,635,124.26
Class PT-1-9B (3) $6,635,124.26
Class PT-1-10A (2) $6,453,029.07
Class PT-1-10B (3) $6,453,029.07
Class PT-1-11A (2) $6,275,911.99
Class PT-1-11B (3) $6,275,911.99
Class PT-1-12A (2) $6,103,637.32
Class PT-1-12B (3) $6,103,637.32
Class PT-1-13A (2) $5,936,073.05
Class PT-1-13B (3) $5,936,073.05
Class PT-1-14A (2) $5,773,090.76
Class PT-1-14B (3) $5,773,090.76
Class PT-1-15A (2) $5,614,565.54
Class PT-1-15B (3) $5,614,565.54
Class PT-1-16A (2) $5,460,375.86
Class PT-1-16B (3) $5,460,375.86
Class PT-1-17A (2) $5,310,403.52
Class PT-1-17B (3) $5,310,403.52
Class PT-1-18A (2) $5,164,533.50
Class PT-1-18B (3) $5,164,533.50
Class PT-1-19A (2) $5,022,653.94
Class PT-1-19B (3) $5,022,653.94
Class PT-1-20A (2) $4,884,656.00
Class PT-1-20B (3) $4,884,656.00
Class PT-1-21A (2) $4,750,433.83
Class PT-1-21B (3) $4,750,433.83
Class PT-1-22A (2) $4,619,884.43
Class PT-1-22B (3) $4,619,884.43
Class PT-1-23A (2) $4,492,907.61
Class PT-1-23B (3) $4,492,907.61
Class PT-1-24A (2) $4,369,405.93
Class PT-1-24B (3) $4,369,405.93
Class PT-1-25A (2) $4,249,284.57
Class PT-1-25B (3) $4,249,284.57
Class PT-1-26A (2) $4,132,451.32
Class PT-1-26B (3) $4,132,451.32
Class PT-1-27A (2) $4,018,816.45
Class PT-1-27B (3) $4,018,816.45
Class PT-1-28A (2) $3,908,292.70
Class PT-1-28B (3) $3,908,292.70
Class PT-1-29A (2) $3,800,795.15
Class PT-1-29B (3) $3,800,795.15
Class PT-1-30A (2) $3,696,241.24
Class PT-1-30B (3) $3,696,241.24
Class PT-1-31A (2) $3,518,953.10
Class PT-1-31B (3) $3,518,953.10
Class PT-1-32A (2) $560,364.99
Class PT-1-32B (3) $560,364.99
Class PT-1-33A (2) $2,691,148.29
Class PT-1-33B (3) $2,691,148.29
Class PT-1-34A (2) $2,617,022.46
Class PT-1-34B (3) $2,617,022.46
Class PT-1-35A (2) $2,544,928.59
Class PT-1-35B (3) $2,544,928.59
Class PT-1-36A (2) $2,474,811.18
Class PT-1-36B (3) $2,474,811.18
Class PT-1-37A (2) $2,406,616.25
Class PT-1-37B (3) $2,406,616.25
Class PT-1-38A (2) $894,525.45
Class PT-1-38B (3) $894,525.45
Class PT-1-39A (2) $644,319.52
Class PT-1-39B (3) $644,319.52
Class PT-1-40A (2) $626,557.46
Class PT-1-40B (3) $626,557.46
Class PT-1-41A (2) $609,282.60
Class PT-1-41B (3) $609,282.60
Class PT-1-42A (2) $592,481.63
Class PT-1-42B (3) $592,481.63
Class PT-1-43A (2) $576,141.59
Class PT-1-43B (3) $576,141.59
Class PT-1-44A (2) $560,249.90
Class PT-1-44B (3) $560,249.90
Class PT-1-45A (2) $544,794.27
Class PT-1-45B (3) $544,794.27
Class PT-1-46A (2) $529,762.83
Class PT-1-46B (3) $529,762.83
Class PT-1-47A (2) $515,143.94
Class PT-1-47B (3) $515,143.94
Class PT-1-48A (2) $500,926.34
Class PT-1-48B (3) $500,926.34
Class PT-1-49A (2) $487,099.07
Class PT-1-49B (3) $487,099.07
Class PT-1-50A (2) $474,140.31
Class PT-1-50B (3) $474,140.31
Class PT-1-51A (2) $461,858.48
Class PT-1-51B (3) $461,858.48
Class PT-1-52A (2) $449,077.84
Class PT-1-52B (3) $449,077.84
Class PT-1-53A (2) $436,648.74
Class PT-1-53B (3) $436,648.74
Class PT-1-54A (2) $424,561.57
Class PT-1-54B (3) $424,561.57
Class PT-1-55A (2) $412,806.95
Class PT-1-55B (3) $412,806.95
Class PT-1-56A (2) $401,375.78
Class PT-1-56B (3) $401,375.78
Class PT-1-57A (2) $390,259.20
Class PT-1-57B (3) $390,259.20
Class PT-1-58A (2) $379,448.58
Class PT-1-58B (3) $379,448.58
Class PT-1-59A (2) $368,935.56
Class PT-1-59B (3) $368,935.56
Class PT-1-60A (2) $358,711.96
Class PT-1-60B (3) $358,711.96
Class PT-1-61A (2) $348,769.87
Class PT-1-61B (3) $348,769.87
Class PT-1-62A (2) $339,101.57
Class PT-1-62B (3) $339,101.57
Class PT-1-63A (2) $329,699.55
Class PT-1-63B (3) $329,699.55
Class PT-1-64A (2) $320,556.52
Class PT-1-64B (3) $320,556.52
Class PT-1-65A (2) $311,665.37
Class PT-1-65B (3) $311,665.37
Class PT-1-66A (2) $303,019.21
Class PT-1-66B (3) $303,019.21
Class PT-1-67A (2) $294,611.30
Class PT-1-67B (3) $294,611.30
Class PT-1-68A (2) $286,435.12
Class PT-1-68B (3) $286,435.12
Class PT-1-69A (2) $278,484.33
Class PT-1-69B (3) $278,484.33
Class PT-1-70A (2) $270,752.72
Class PT-1-70B (3) $270,752.72
Class PT-1-71A (2) $263,234.29
Class PT-1-71B (3) $263,234.29
Class PT-1-72A (2) $255,923.20
Class PT-1-72B (3) $255,923.20
Class PT-1-73A (2) $248,813.74
Class PT-1-73B (3) $248,813.74
Class PT-1-74A (2) $241,900.40
Class PT-1-74B (3) $241,900.40
Class PT-1-75A (2) $235,177.80
Class PT-1-75B (3) $235,177.80
Class PT-1-76A (2) $228,640.68
Class PT-1-76B (3) $228,640.68
Class PT-1-77A (2) $222,283.97
Class PT-1-77B (3) $222,283.97
Class PT-1-78A (2) $216,102.72
Class PT-1-78B (3) $216,102.72
Class PT-1-79A (2) $210,092.09
Class PT-1-79B (3) $210,092.09
Class PT-1-80A (2) $204,247.42
Class PT-1-80B (3) $204,247.42
Class PT-1-81A (2) $198,564.13
Class PT-1-81B (3) $198,564.13
Class PT-1-82A (2) $193,037.81
Class PT-1-82B (3) $193,037.81
Class PT-1-83A (2) $187,664.14
Class PT-1-83B (3) $187,664.14
Class PT-1-84A (2) $182,438.92
Class PT-1-84B (3) $182,438.92
Class PT-1-85A (2) $177,358.08
Class PT-1-85B (3) $177,358.08
Class PT-1-86A (2) $172,417.65
Class PT-1-86B (3) $172,417.65
Class PT-1-87A (2) $182,840.01
Class PT-1-87B (3) $182,840.01
Class PT-1-88A (2) $202,294.90
Class PT-1-88B (3) $202,294.90
Class PT-1-89A (2) $196,656.05
Class PT-1-89B (3) $196,656.05
Class PT-1-90A (2) $191,173.14
Class PT-1-90B (3) $191,173.14
Class PT-1-91A (2) $185,841.87
Class PT-1-91B (3) $185,841.87
Class PT-1-92A (2) $180,658.07
Class PT-1-92B (3) $180,658.07
Class PT-1-93A (2) $175,617.70
Class PT-1-93B (3) $175,617.70
Class PT-1-94A (2) $170,716.81
Class PT-1-94B (3) $170,716.81
Class PT-1-95A (2) $165,951.55
Class PT-1-95B (3) $165,951.55
Class PT-1-96A (2) $161,318.20
Class PT-1-96B (3) $161,318.20
Class PT-1-97A (2) $156,813.14
Class PT-1-97B (3) $156,813.14
Class PT-1-98A (2) $152,432.82
Class PT-1-98B (3) $152,432.82
Class PT-1-99A (2) $148,173.81
Class PT-1-99B (3) $148,173.81
Class PT-1-100A (2) $144,032.79
Class PT-1-100B (3) $144,032.79
Class PT-1-101A (2) $140,006.49
Class PT-1-101B (3) $140,006.49
Class PT-1-102A (2) $136,091.77
Class PT-1-102B (3) $136,091.77
Class PT-1-103A (2) $132,285.54
Class PT-1-103B (3) $132,285.54
Class PT-1-104A (2) $128,584.83
Class PT-1-104B (3) $128,584.83
Class PT-1-105A (2) $124,986.72
Class PT-1-105B (3) $124,986.72
Class PT-1-106A (2) $121,488.39
Class PT-1-106B (3) $121,488.39
Class PT-1-107A (2) $118,087.09
Class PT-1-107B (3) $118,087.09
Class PT-1-108A (2) $114,780.15
Class PT-1-108B (3) $114,780.15
Class PT-1-109A (2) $111,564.96
Class PT-1-109B (3) $111,564.96
Class PT-1-110A (2) $108,439.01
Class PT-1-110B (3) $108,439.01
Class PT-1-111A (2) $105,534.76
Class PT-1-111B (3) $105,534.76
Class PT-1-112A (2) $102,573.50
Class PT-1-112B (3) $102,573.50
Class PT-1-113A (2) $99,694.51
Class PT-1-113B (3) $99,694.51
Class PT-1-114A (2) $96,895.54
Class PT-1-114B (3) $96,895.54
Class PT-1-115A (2) $94,174.37
Class PT-1-115B (3) $94,174.37
Class PT-1-116A (2) $91,528.87
Class PT-1-116B (3) $91,528.87
Class PT-1-117A (2) $88,956.92
Class PT-1-117B (3) $88,956.92
Class PT-1-118A (2) $86,456.52
Class PT-1-118B (3) $86,456.52
Class PT-1-119A (2) $84,025.68
Class PT-1-119B (3) $84,025.68
Class PT-1-120A (2) $81,662.48
Class PT-1-120B (3) $81,662.48
Class PT-1-121A (2) $79,365.05
Class PT-1-121B (3) $79,365.05
Class PT-1-122A (2) $77,131.59
Class PT-1-122B (3) $77,131.59
Class PT-1-123A (2) $74,960.30
Class PT-1-123B (3) $74,960.30
Class PT-1-124A (2) $72,849.51
Class PT-1-124B (3) $72,849.51
Class PT-1-125A (2) $70,797.50
Class PT-1-125B (3) $70,797.50
Class PT-1-126A (2) $68,802.66
Class PT-1-126B (3) $68,802.66
Class PT-1-127A (2) $66,863.43
Class PT-1-127B (3) $66,863.43
Class PT-1-128A (2) $64,978.25
Class PT-1-128B (3) $64,978.25
Class PT-1-129A (2) $63,145.64
Class PT-1-129B (3) $63,145.64
Class PT-1-130A (2) $61,364.12
Class PT-1-130B (3) $61,364.12
Class PT-1-131A (2) $59,632.31
Class PT-1-131B (3) $59,632.31
Class PT-1-132A (2) $57,948.81
Class PT-1-132B (3) $57,948.81
Class PT-1-133A (2) $56,312.30
Class PT-1-133B (3) $56,312.30
Class PT-1-134A (2) $54,721.47
Class PT-1-134B (3) $54,721.47
Class PT-1-135A (2) $53,175.06
Class PT-1-135B (3) $53,175.06
Class PT-1-136A (2) $51,671.83
Class PT-1-136B (3) $51,671.83
Class PT-1-137A (2) $50,210.60
Class PT-1-137B (3) $50,210.60
Class PT-1-138A (2) $48,790.20
Class PT-1-138B (3) $48,790.20
Class PT-1-139A (2) $47,409.49
Class PT-1-139B (3) $47,409.49
Class PT-1-140A (2) $46,067.39
Class PT-1-140B (3) $46,067.39
Class PT-1-141A (2) $44,762.81
Class PT-1-141B (3) $44,762.81
Class PT-1-142A (2) $43,494.72
Class PT-1-142B (3) $43,494.72
Class PT-1-143A (2) $42,262.10
Class PT-1-143B (3) $42,262.10
Class PT-1-144A (2) $9,950.17
Class PT-1-144B (3) $9,950.17
Class PT-1-R (4) (4)
------------
(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 Net 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 Net WAC Rate, subject to a maximum
rate of 11.02%.
(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 Net WAC
Rate over (B) 11.02%.
(4) The Class PT-1-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the Trustee shall first pay from the
Trust Fund out of the Mortgage Loans and charge as an expense of Pooling Tier
REMIC-1 all expenses of the Trust relating to the Mortgage Loans for such
Distribution Date. Such expense shall be allocated in the same manner as
Realized Losses.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans for such Distribution Date shall be deemed to be distributed
to 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 Mortgage Loans (A) that reduce the
Class Certificate Balance of the LIBOR Certificates shall be allocated to the
outstanding Pooling Tier REMIC-1 Regular Interest (other than the Class PT-1-1
Interest) with the lowest numerical denomination such that, at all times, the
aggregate Pooling Tier REMIC-1 Principal Amount of such Pooling Tier REMIC-1
Regular Interests equals the aggregate Class Certificate Balance of the then
outstanding LIBOR Certificates, and (B) other than those described in (A) shall
be allocated to the Class PT-1-1 Interest until the Pooling Tier REMIC-1
Principal Amount of each such interest is reduced to zero, provided that, with
respect to Pooling Tier REMIC-1 Regular Interests with the same numerical
denomination, such Realized Losses and payments of principal shall be allocated
pro rata between such Pooling Tier REMIC-1 Regular Interests. On each
Distribution Date, Prepayment Premiums received during the related Principal
Prepayment Period shall be deemed distributed to the Class PT-1-1 Interest
(whether or not its Pooling Tier REMIC-1 Principal Amount has been 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 PT-2-R Interest, is
hereby designated as a regular interest in Pooling Tier REMIC-2. The Class
PT-2-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 Pooling Tier Corresponding
Pooling Tier Pooling Tier REMIC-2 Pooling Tier REMIC-1 Scheduled
REMIC-2 REMIC-2 Initial Principal REMIC-2 Regular Crossover
Interest Interest Rate Amount IO Interest Interest Distribution Date
------------------- ------------------- ------------------- --------------------- ---------------- -------------------
Class PT-2-1 (1) $177,838,818.55 N/A N/A N/A
Class PT-2-2A (2) $4,948,231.79 Class PT-2-IO-2 N/A N/A
Class PT-2-2B (3) $4,948,231.79 N/A N/A N/A
Class PT-2-3A (2) $5,322,962.04 Class PT-2-IO-3 N/A N/A
Class PT-2-3B (3) $5,322,962.04 N/A N/A N/A
Class PT-2-4A (2) $5,681,144.84 Class PT-2-IO-4 N/A N/A
Class PT-2-4B (3) $5,681,144.84 N/A N/A N/A
Class PT-2-5A (2) $6,021,960.19 Class PT-2-IO-5 N/A N/A
Class PT-2-5B (3) $6,021,960.19 N/A N/A N/A
Class PT-2-6A (2) $6,342,766.29 Class PT-2-IO-6 N/A N/A
Class PT-2-6B (3) $6,342,766.29 N/A N/A N/A
Class PT-2-7A (2) $6,643,076.72 Class PT-2-IO-7 N/A N/A
Class PT-2-7B (3) $6,643,076.72 N/A N/A N/A
Class PT-2-8A (2) $6,822,337.02 Class PT-2-IO-8 N/A N/A
Class PT-2-8B (3) $6,822,337.02 N/A N/A N/A
Class PT-2-9A (2) $6,635,124.26 Class PT-2-IO-9 N/A N/A
Class PT-2-9B (3) $6,635,124.26 N/A N/A N/A
Class PT-2-10A (2) $6,453,029.07 Class PT-2-IO-10 N/A N/A
Class PT-2-10B (3) $6,453,029.07 N/A N/A N/A
Class PT-2-11A (2) $6,275,911.99 Class PT-2-IO-11 N/A N/A
Class PT-2-11B (3) $6,275,911.99 N/A N/A N/A
Class PT-2-12A (2) $6,103,637.32 Class PT-2-IO-12 N/A N/A
Class PT-2-12B (3) $6,103,637.32 N/A N/A N/A
Class PT-2-13A (2) $5,936,073.05 Class PT-2-IO-13 N/A N/A
Class PT-2-13B (3) $5,936,073.05 N/A N/A N/A
Class PT-2-14A (2) $5,773,090.76 Class PT-2-IO-14 N/A N/A
Class PT-2-14B (3) $5,773,090.76 N/A N/A N/A
Class PT-2-15A (2) $5,614,565.54 Class PT-2-IO-15 N/A N/A
Class PT-2-15B (3) $5,614,565.54 N/A N/A N/A
Class PT-2-16A (2) $5,460,375.86 Class PT-2-IO-16 N/A N/A
Class PT-2-16B (3) $5,460,375.86 N/A N/A N/A
Class PT-2-17A (2) $5,310,403.52 Class PT-2-IO-17 N/A N/A
Class PT-2-17B (3) $5,310,403.52 N/A N/A N/A
Class PT-2-18A (2) $5,164,533.50 Class PT-2-IO-18 N/A N/A
Class PT-2-18B (3) $5,164,533.50 N/A N/A N/A
Class PT-2-19A (2) $5,022,653.94 Class PT-2-IO-19 N/A N/A
Class PT-2-19B (3) $5,022,653.94 N/A N/A N/A
Class PT-2-20A (2) $4,884,656.00 Class PT-2-IO-20 N/A N/A
Class PT-2-20B (3) $4,884,656.00 N/A N/A N/A
Class PT-2-21A (2) $4,750,433.83 Class PT-2-IO-21 N/A N/A
Class PT-2-21B (3) $4,750,433.83 N/A N/A N/A
Class PT-2-22A (2) $4,619,884.43 Class PT-2-IO-22 N/A N/A
Class PT-2-22B (3) $4,619,884.43 N/A N/A N/A
Class PT-2-23A (2) $4,492,907.61 Class PT-2-IO-23 N/A N/A
Class PT-2-23B (3) $4,492,907.61 N/A N/A N/A
Class PT-2-24A (2) $4,369,405.93 Class PT-2-IO-24 N/A N/A
Class PT-2-24B (3) $4,369,405.93 N/A N/A N/A
Class PT-2-25A (2) $4,249,284.57 Class PT-2-IO-25 N/A N/A
Class PT-2-25B (3) $4,249,284.57 N/A N/A N/A
Class PT-2-26A (2) $4,132,451.32 Class PT-2-IO-26 N/A N/A
Class PT-2-26B (3) $4,132,451.32 N/A N/A N/A
Class PT-2-27A (2) $4,018,816.45 Class PT-2-IO-27 N/A N/A
Class PT-2-27B (3) $4,018,816.45 N/A N/A N/A
Class PT-2-28A (2) $3,908,292.70 Class PT-2-IO-28 N/A N/A
Class PT-2-28B (3) $3,908,292.70 N/A N/A N/A
Class PT-2-29A (2) $3,800,795.15 Class PT-2-IO-29 N/A N/A
Class PT-2-29B (3) $3,800,795.15 N/A N/A N/A
Class PT-2-30A (2) $3,696,241.24 Class PT-2-IO-30 N/A N/A
Class PT-2-30B (3) $3,696,241.24 N/A N/A N/A
Class PT-2-31A (2) $3,518,953.10 Class PT-2-IO-31 N/A N/A
Class PT-2-31B (3) $3,518,953.10 N/A N/A N/A
Class PT-2-32A (2) $560,364.99 Class PT-2-IO-32 N/A N/A
Class PT-2-32B (3) $560,364.99 N/A N/A N/A
Class PT-2-33A (2) $2,691,148.29 Class PT-2-IO-33 N/A N/A
Class PT-2-33B (3) $2,691,148.29 N/A N/A N/A
Class PT-2-34A (2) $2,617,022.46 Class PT-2-IO-34 N/A N/A
Class PT-2-34B (3) $2,617,022.46 N/A N/A N/A
Class PT-2-35A (2) $2,544,928.59 Class PT-2-IO-35 N/A N/A
Class PT-2-35B (3) $2,544,928.59 N/A N/A N/A
Class PT-2-36A (2) $2,474,811.18 Class PT-2-IO-36 N/A N/A
Class PT-2-36B (3) $2,474,811.18 N/A N/A N/A
Class PT-2-37A (2) $2,406,616.25 Class PT-2-IO-37 N/A N/A
Class PT-2-37B (3) $2,406,616.25 N/A N/A N/A
Class PT-2-38A (2) $894,525.45 Class PT-2-IO-38 N/A N/A
Class PT-2-38B (3) $894,525.45 N/A N/A N/A
Class PT-2-39A (2) $644,319.52 Class PT-2-IO-39 N/A N/A
Class PT-2-39B (3) $644,319.52 N/A N/A N/A
Class PT-2-40A (2) $626,557.46 Class PT-2-IO-40 N/A N/A
Class PT-2-40B (3) $626,557.46 N/A N/A N/A
Class PT-2-41A (2) $609,282.60 Class PT-2-IO-41 N/A N/A
Class PT-2-41B (3) $609,282.60 N/A N/A N/A
Class PT-2-42A (2) $592,481.63 Class PT-2-IO-42 N/A N/A
Class PT-2-42B (3) $592,481.63 N/A N/A N/A
Class PT-2-43A (2) $576,141.59 Class PT-2-IO-43 N/A N/A
Class PT-2-43B (3) $576,141.59 N/A N/A N/A
Class PT-2-44A (2) $560,249.90 Class PT-2-IO-44 N/A N/A
Class PT-2-44B (3) $560,249.90 N/A N/A N/A
Class PT-2-45A (2) $544,794.27 Class PT-2-IO-45 N/A N/A
Class PT-2-45B (3) $544,794.27 N/A N/A N/A
Class PT-2-46A (2) $529,762.83 Class PT-2-IO-46 N/A N/A
Class PT-2-46B (3) $529,762.83 N/A N/A N/A
Class PT-2-47A (2) $515,143.94 Class PT-2-IO-47 N/A N/A
Class PT-2-47B (3) $515,143.94 N/A N/A N/A
Class PT-2-48A (2) $500,926.34 Class PT-2-IO-48 N/A N/A
Class PT-2-48B (3) $500,926.34 N/A N/A N/A
Class PT-2-49A (2) $487,099.07 Class PT-2-IO-49 N/A N/A
Class PT-2-49B (3) $487,099.07 N/A N/A N/A
Class PT-2-50A (2) $474,140.31 Class PT-2-IO-50 N/A N/A
Class PT-2-50B (3) $474,140.31 N/A N/A N/A
Class PT-2-51A (2) $461,858.48 Class PT-2-IO-51 N/A N/A
Class PT-2-51B (3) $461,858.48 N/A N/A N/A
Class PT-2-52A (2) $449,077.84 Class PT-2-IO-52 N/A N/A
Class PT-2-52B (3) $449,077.84 N/A N/A N/A
Class PT-2-53A (2) $436,648.74 Class PT-2-IO-53 N/A N/A
Class PT-2-53B (3) $436,648.74 N/A N/A N/A
Class PT-2-54A (2) $424,561.57 Class PT-2-IO-54 N/A N/A
Class PT-2-54B (3) $424,561.57 N/A N/A N/A
Class PT-2-55A (2) $412,806.95 Class PT-2-IO-55 N/A N/A
Class PT-2-55B (3) $412,806.95 N/A N/A N/A
Class PT-2-56A (2) $401,375.78 Class PT-2-IO-56 N/A N/A
Class PT-2-56B (3) $401,375.78 N/A N/A N/A
Class PT-2-57A (2) $390,259.20 Class PT-2-IO-57 N/A N/A
Class PT-2-57B (3) $390,259.20 N/A N/A N/A
Class PT-2-58A (2) $379,448.58 Class PT-2-IO-58 N/A N/A
Class PT-2-58B (3) $379,448.58 N/A N/A N/A
Class PT-2-59A (2) $368,935.56 Class PT-2-IO-59 N/A N/A
Class PT-2-59B (3) $368,935.56 N/A N/A N/A
Class PT-2-60A (2) $358,711.96 Class PT-2-IO-60 N/A N/A
Class PT-2-60B (3) $358,711.96 N/A N/A N/A
Class PT-2-61A (2) $348,769.87 Class PT-2-IO-61 N/A N/A
Class PT-2-61B (3) $348,769.87 N/A N/A N/A
Class PT-2-62A (2) $339,101.57 Class PT-2-IO-62 N/A N/A
Class PT-2-62B (3) $339,101.57 N/A N/A N/A
Class PT-2-63A (2) $329,699.55 Class PT-2-IO-63 N/A N/A
Class PT-2-63B (3) $329,699.55 N/A N/A N/A
Class PT-2-64A (2) $320,556.52 Class PT-2-IO-64 N/A N/A
Class PT-2-64B (3) $320,556.52 N/A N/A N/A
Class PT-2-65A (2) $311,665.37 Class PT-2-IO-65 N/A N/A
Class PT-2-65B (3) $311,665.37 N/A N/A N/A
Class PT-2-66A (2) $303,019.21 Class PT-2-IO-66 N/A N/A
Class PT-2-66B (3) $303,019.21 N/A N/A N/A
Class PT-2-67A (2) $294,611.30 Class PT-2-IO-67 N/A N/A
Class PT-2-67B (3) $294,611.30 N/A N/A N/A
Class PT-2-68A (2) $286,435.12 Class PT-2-IO-68 N/A N/A
Class PT-2-68B (3) $286,435.12 N/A N/A N/A
Class PT-2-69A (2) $278,484.33 Class PT-2-IO-69 N/A N/A
Class PT-2-69B (3) $278,484.33 N/A N/A N/A
Class PT-2-70A (2) $270,752.72 Class PT-2-IO-70 N/A N/A
Class PT-2-70B (3) $270,752.72 N/A N/A N/A
Class PT-2-71A (2) $263,234.29 Class PT-2-IO-71 N/A N/A
Class PT-2-71B (3) $263,234.29 N/A N/A N/A
Class PT-2-72A (2) $255,923.20 Class PT-2-IO-72 N/A N/A
Class PT-2-72B (3) $255,923.20 N/A N/A N/A
Class PT-2-73A (2) $248,813.74 Class PT-2-IO-73 N/A N/A
Class PT-2-73B (3) $248,813.74 N/A N/A N/A
Class PT-2-74A (2) $241,900.40 Class PT-2-IO-74 N/A N/A
Class PT-2-74B (3) $241,900.40 N/A N/A N/A
Class PT-2-75A (2) $235,177.80 Class PT-2-IO-75 N/A N/A
Class PT-2-75B (3) $235,177.80 N/A N/A N/A
Class PT-2-76A (2) $228,640.68 Class PT-2-IO-76 N/A N/A
Class PT-2-76B (3) $228,640.68 N/A N/A N/A
Class PT-2-77A (2) $222,283.97 Class PT-2-IO-77 N/A N/A
Class PT-2-77B (3) $222,283.97 N/A N/A N/A
Class PT-2-78A (2) $216,102.72 Class PT-2-IO-78 N/A N/A
Class PT-2-78B (3) $216,102.72 N/A N/A N/A
Class PT-2-79A (2) $210,092.09 Class PT-2-IO-79 N/A N/A
Class PT-2-79B (3) $210,092.09 N/A N/A N/A
Class PT-2-80A (2) $204,247.42 Class PT-2-IO-80 N/A N/A
Class PT-2-80B (3) $204,247.42 N/A N/A N/A
Class PT-2-81A (2) $198,564.13 Class PT-2-IO-81 N/A N/A
Class PT-2-81B (3) $198,564.13 N/A N/A N/A
Class PT-2-82A (2) $193,037.81 Class PT-2-IO-82 N/A N/A
Class PT-2-82B (3) $193,037.81 N/A N/A N/A
Class PT-2-83A (2) $187,664.14 Class PT-2-IO-83 N/A N/A
Class PT-2-83B (3) $187,664.14 N/A N/A N/A
Class PT-2-84A (2) $182,438.92 Class PT-2-IO-84 N/A N/A
Class PT-2-84B (3) $182,438.92 N/A N/A N/A
Class PT-2-85A (2) $177,358.08 Class PT-2-IO-85 N/A N/A
Class PT-2-85B (3) $177,358.08 N/A N/A N/A
Class PT-2-86A (2) $172,417.65 Class PT-2-IO-86 N/A N/A
Class PT-2-86B (3) $172,417.65 N/A N/A N/A
Class PT-2-87A (2) $182,840.01 Class PT-2-IO-87 N/A N/A
Class PT-2-87B (3) $182,840.01 N/A N/A N/A
Class PT-2-88A (2) $202,294.90 Class PT-2-IO-88 N/A N/A
Class PT-2-88B (3) $202,294.90 N/A N/A N/A
Class PT-2-89A (2) $196,656.05 Class PT-2-IO-89 N/A N/A
Class PT-2-89B (3) $196,656.05 N/A N/A N/A
Class PT-2-90A (2) $191,173.14 Class PT-2-IO-90 N/A N/A
Class PT-2-90B (3) $191,173.14 N/A N/A N/A
Class PT-2-91A (2) $185,841.87 Class PT-2-IO-91 N/A N/A
Class PT-2-91B (3) $185,841.87 N/A N/A N/A
Class PT-2-92A (2) $180,658.07 Class PT-2-IO-92 N/A N/A
Class PT-2-92B (3) $180,658.07 N/A N/A N/A
Class PT-2-93A (2) $175,617.70 Class PT-2-IO-93 N/A N/A
Class PT-2-93B (3) $175,617.70 N/A N/A N/A
Class PT-2-94A (2) $170,716.81 Class PT-2-IO-94 N/A N/A
Class PT-2-94B (3) $170,716.81 N/A N/A N/A
Class PT-2-95A (2) $165,951.55 Class PT-2-IO-95 N/A N/A
Class PT-2-95B (3) $165,951.55 N/A N/A N/A
Class PT-2-96A (2) $161,318.20 Class PT-2-IO-96 N/A N/A
Class PT-2-96B (3) $161,318.20 N/A N/A N/A
Class PT-2-97A (2) $156,813.14 Class PT-2-IO-97 N/A N/A
Class PT-2-97B (3) $156,813.14 N/A N/A N/A
Class PT-2-98A (2) $152,432.82 Class PT-2-IO-98 N/A N/A
Class PT-2-98B (3) $152,432.82 N/A N/A N/A
Class PT-2-99A (2) $148,173.81 Class PT-2-IO-99 N/A N/A
Class PT-2-99B (3) $148,173.81 N/A N/A N/A
Class PT-2-100A (2) $144,032.79 Class PT-2-IO-100 N/A N/A
Class PT-2-100B (3) $144,032.79 N/A N/A N/A
Class PT-2-101A (2) $140,006.49 Class PT-2-IO-101 N/A N/A
Class PT-2-101B (3) $140,006.49 N/A N/A N/A
Class PT-2-102A (2) $136,091.77 Class PT-2-IO-102 N/A N/A
Class PT-2-102B (3) $136,091.77 N/A N/A N/A
Class PT-2-103A (2) $132,285.54 Class PT-2-IO-103 N/A N/A
Class PT-2-103B (3) $132,285.54 N/A N/A N/A
Class PT-2-104A (2) $128,584.83 Class PT-2-IO-104 N/A N/A
Class PT-2-104B (3) $128,584.83 N/A N/A N/A
Class PT-2-105A (2) $124,986.72 Class PT-2-IO-105 N/A N/A
Class PT-2-105B (3) $124,986.72 N/A N/A N/A
Class PT-2-106A (2) $121,488.39 Class PT-2-IO-106 N/A N/A
Class PT-2-106B (3) $121,488.39 N/A N/A N/A
Class PT-2-107A (2) $118,087.09 Class PT-2-IO-107 N/A N/A
Class PT-2-107B (3) $118,087.09 N/A N/A N/A
Class PT-2-108A (2) $114,780.15 Class PT-2-IO-108 N/A N/A
Class PT-2-108B (3) $114,780.15 N/A N/A N/A
Class PT-2-109A (2) $111,564.96 Class PT-2-IO-109 N/A N/A
Class PT-2-109B (3) $111,564.96 N/A N/A N/A
Class PT-2-110A (2) $108,439.01 Class PT-2-IO-110 N/A N/A
Class PT-2-110B (3) $108,439.01 N/A N/A N/A
Class PT-2-111A (2) $105,534.76 Class PT-2-IO-111 N/A N/A
Class PT-2-111B (3) $105,534.76 N/A N/A N/A
Class PT-2-112A (2) $102,573.50 Class PT-2-IO-112 N/A N/A
Class PT-2-112B (3) $102,573.50 N/A N/A N/A
Class PT-2-113A (2) $99,694.51 Class PT-2-IO-113 N/A N/A
Class PT-2-113B (3) $99,694.51 N/A N/A N/A
Class PT-2-114A (2) $96,895.54 Class PT-2-IO-114 N/A N/A
Class PT-2-114B (3) $96,895.54 N/A N/A N/A
Class PT-2-115A (2) $94,174.37 Class PT-2-IO-115 N/A N/A
Class PT-2-115B (3) $94,174.37 N/A N/A N/A
Class PT-2-116A (2) $91,528.87 Class PT-2-IO-116 N/A N/A
Class PT-2-116B (3) $91,528.87 N/A N/A N/A
Class PT-2-117A (2) $88,956.92 Class PT-2-IO-117 N/A N/A
Class PT-2-117B (3) $88,956.92 N/A N/A N/A
Class PT-2-118A (2) $86,456.52 Class PT-2-IO-118 N/A N/A
Class PT-2-118B (3) $86,456.52 N/A N/A N/A
Class PT-2-119A (2) $84,025.68 Class PT-2-IO-119 N/A N/A
Class PT-2-119B (3) $84,025.68 N/A N/A N/A
Class PT-2-120A (2) $81,662.48 Class PT-2-IO-120 N/A N/A
Class PT-2-120B (3) $81,662.48 N/A N/A N/A
Class PT-2-121A (2) $79,365.05 Class PT-2-IO-121 N/A N/A
Class PT-2-121B (3) $79,365.05 N/A N/A N/A
Class PT-2-122A (2) $77,131.59 Class PT-2-IO-122 N/A N/A
Class PT-2-122B (3) $77,131.59 N/A N/A N/A
Class PT-2-123A (2) $74,960.30 Class PT-2-IO-123 N/A N/A
Class PT-2-123B (3) $74,960.30 N/A N/A N/A
Class PT-2-124A (2) $72,849.51 Class PT-2-IO-124 N/A N/A
Class PT-2-124B (3) $72,849.51 N/A N/A N/A
Class PT-2-125A (2) $70,797.50 Class PT-2-IO-125 N/A N/A
Class PT-2-125B (3) $70,797.50 N/A N/A N/A
Class PT-2-126A (2) $68,802.66 Class PT-2-IO-126 N/A N/A
Class PT-2-126B (3) $68,802.66 N/A N/A N/A
Class PT-2-127A (2) $66,863.43 Class PT-2-IO-127 N/A N/A
Class PT-2-127B (3) $66,863.43 N/A N/A N/A
Class PT-2-128A (2) $64,978.25 Class PT-2-IO-128 N/A N/A
Class PT-2-128B (3) $64,978.25 N/A N/A N/A
Class PT-2-129A (2) $63,145.64 Class PT-2-IO-129 N/A N/A
Class PT-2-129B (3) $63,145.64 N/A N/A N/A
Class PT-2-130A (2) $61,364.12 Class PT-2-IO-130 N/A N/A
Class PT-2-130B (3) $61,364.12 N/A N/A N/A
Class PT-2-131A (2) $59,632.31 Class PT-2-IO-131 N/A N/A
Class PT-2-131B (3) $59,632.31 N/A N/A N/A
Class PT-2-132A (2) $57,948.81 Class PT-2-IO-132 N/A N/A
Class PT-2-132B (3) $57,948.81 N/A N/A N/A
Class PT-2-133A (2) $56,312.30 Class PT-2-IO-133 N/A N/A
Class PT-2-133B (3) $56,312.30 N/A N/A N/A
Class PT-2-134A (2) $54,721.47 Class PT-2-IO-134 N/A N/A
Class PT-2-134B (3) $54,721.47 N/A N/A N/A
Class PT-2-135A (2) $53,175.06 Class PT-2-IO-135 N/A N/A
Class PT-2-135B (3) $53,175.06 N/A N/A N/A
Class PT-2-136A (2) $51,671.83 Class PT-2-IO-136 N/A N/A
Class PT-2-136B (3) $51,671.83 N/A N/A N/A
Class PT-2-137A (2) $50,210.60 Class PT-2-IO-137 N/A N/A
Class PT-2-137B (3) $50,210.60 N/A N/A N/A
Class PT-2-138A (2) $48,790.20 Class PT-2-IO-138 N/A N/A
Class PT-2-138B (3) $48,790.20 N/A N/A N/A
Class PT-2-139A (2) $47,409.49 Class PT-2-IO-139 N/A N/A
Class PT-2-139B (3) $47,409.49 N/A N/A N/A
Class PT-2-140A (2) $46,067.39 Class PT-2-IO-140 N/A N/A
Class PT-2-140B (3) $46,067.39 N/A N/A N/A
Class PT-2-141A (2) $44,762.81 Class PT-2-IO-141 N/A N/A
Class PT-2-141B (3) $44,762.81 N/A N/A N/A
Class PT-2-142A (2) $43,494.72 Class PT-2-IO-142 N/A N/A
Class PT-2-142B (3) $43,494.72 N/A N/A N/A
Class PT-2-143A (2) $42,262.10 Class PT-2-IO-143 N/A N/A
Class PT-2-143B (3) $42,262.10 N/A N/A N/A
Class PT-2-144A (2) $9,950.17 Class PT-2-IO-144 N/A N/A
Class PT-2-144B (3) $9,950.17 N/A N/A N/A
Class PT-2-IO-2 (4) (4) N/A Class PT-1-2A July 2007
Class PT-2-IO-3 (4) (4) N/A Class PT-1-3A August 2007
Class PT-2-IO-4 (4) (4) N/A Class PT-1-4A September 2007
Class PT-2-IO-5 (4) (4) N/A Class PT-1-5A October 2007
Class PT-2-IO-6 (4) (4) N/A Class PT-1-6A November 2007
Class PT-2-IO-7 (4) (4) N/A Class PT-1-7A December 2007
Class PT-2-IO-8 (4) (4) N/A Class PT-1-8A January 2008
Class PT-2-IO-9 (4) (4) N/A Class PT-1-9A February 2008
Class PT-2-IO-10 (4) (4) N/A Class PT-1-10A March 2008
Class PT-2-IO-11 (4) (4) N/A Class PT-1-11A April 2008
Class PT-2-IO-12 (4) (4) N/A Class PT-1-12A May 2008
Class PT-2-IO-13 (4) (4) N/A Class PT-1-13A June 2008
Class PT-2-IO-14 (4) (4) N/A Class PT-1-14A July 2008
Class PT-2-IO-15 (4) (4) N/A Class PT-1-15A August 2008
Class PT-2-IO-16 (4) (4) N/A Class PT-1-16A September 2008
Class PT-2-IO-17 (4) (4) N/A Class PT-1-17A October 2008
Class PT-2-IO-18 (4) (4) N/A Class PT-1-18A November 2008
Class PT-2-IO-19 (4) (4) N/A Class PT-1-19A December 2008
Class PT-2-IO-20 (4) (4) N/A Class PT-1-20A January 2009
Class PT-2-IO-21 (4) (4) N/A Class PT-1-21A February 2009
Class PT-2-IO-22 (4) (4) N/A Class PT-1-22A March 2009
Class PT-2-IO-23 (4) (4) N/A Class PT-1-23A April 2009
Class PT-2-IO-24 (4) (4) N/A Class PT-1-24A May 2009
Class PT-2-IO-25 (4) (4) N/A Class PT-1-25A June 2009
Class PT-2-IO-26 (4) (4) N/A Class PT-1-26A July 2009
Class PT-2-IO-27 (4) (4) N/A Class PT-1-27A August 2009
Class PT-2-IO-28 (4) (4) N/A Class PT-1-28A September 2009
Class PT-2-IO-29 (4) (4) N/A Class PT-1-29A October 2009
Class PT-2-IO-30 (4) (4) N/A Class PT-1-30A November 2009
Class PT-2-IO-31 (4) (4) N/A Class PT-1-31A December 2009
Class PT-2-IO-32 (4) (4) N/A Class PT-1-32A January 2010
Class PT-2-IO-33 (4) (4) N/A Class PT-1-33A September 2010
Class PT-2-IO-34 (4) (4) N/A Class PT-1-34A October 2010
Class PT-2-IO-35 (4) (4) N/A Class PT-1-35A November 2010
Class PT-2-IO-36 (4) (4) N/A Class PT-1-36A December 2010
Class PT-2-IO-37 (4) (4) N/A Class PT-1-37A January 2011
Class PT-2-IO-38 (4) (4) N/A Class PT-1-38A February 2011
Class PT-2-IO-39 (4) (4) N/A Class PT-1-39A March 2011
Class PT-2-IO-40 (4) (4) N/A Class PT-1-40A April 2011
Class PT-2-IO-41 (4) (4) N/A Class PT-1-41A May 2011
Class PT-2-IO-42 (4) (4) N/A Class PT-1-42A June 2011
Class PT-2-IO-43 (4) (4) N/A Class PT-1-43A July 2011
Class PT-2-IO-44 (4) (4) N/A Class PT-1-44A August 2011
Class PT-2-IO-45 (4) (4) N/A Class PT-1-45A September 2011
Class PT-2-IO-46 (4) (4) N/A Class PT-1-46A October 2011
Class PT-2-IO-47 (4) (4) N/A Class PT-1-47A November 2011
Class PT-2-IO-48 (4) (4) N/A Class PT-1-48A December 2011
Class PT-2-IO-49 (4) (4) N/A Class PT-1-49A January 2012
Class PT-2-IO-50 (4) (4) N/A Class PT-1-50A February 2012
Class PT-2-IO-51 (4) (4) N/A Class PT-1-51A March 2012
Class PT-2-IO-52 (4) (4) N/A Class PT-1-52A April 2012
Class PT-2-IO-53 (4) (4) N/A Class PT-1-53A May 2012
Class PT-2-IO-54 (4) (4) N/A Class PT-1-54A June 2012
Class PT-2-IO-55 (4) (4) N/A Class PT-1-55A July 2012
Class PT-2-IO-56 (4) (4) N/A Class PT-1-56A August 2012
Class PT-2-IO-57 (4) (4) N/A Class PT-1-57A September 2012
Class PT-2-IO-58 (4) (4) N/A Class PT-1-58A October 2012
Class PT-2-IO-59 (4) (4) N/A Class PT-1-59A November 2012
Class PT-2-IO-60 (4) (4) N/A Class PT-1-60A December 2012
Class PT-2-IO-61 (4) (4) N/A Class PT-1-61A January 2013
Class PT-2-IO-62 (4) (4) N/A Class PT-1-62A February 2013
Class PT-2-IO-63 (4) (4) N/A Class PT-1-63A March 2013
Class PT-2-IO-64 (4) (4) N/A Class PT-1-64A April 2013
Class PT-2-IO-65 (4) (4) N/A Class PT-1-65A May 2013
Class PT-2-IO-66 (4) (4) N/A Class PT-1-66A June 2013
Class PT-2-IO-67 (4) (4) N/A Class PT-1-67A July 2013
Class PT-2-IO-68 (4) (4) N/A Class PT-1-68A August 2013
Class PT-2-IO-69 (4) (4) N/A Class PT-1-69A September 2013
Class PT-2-IO-70 (4) (4) N/A Class PT-1-70A October 2013
Class PT-2-IO-71 (4) (4) N/A Class PT-1-71A November 2013
Class PT-2-IO-72 (4) (4) N/A Class PT-1-72A December 2013
Class PT-2-IO-73 (4) (4) N/A Class PT-1-73A January 2014
Class PT-2-IO-74 (4) (4) N/A Class PT-1-74A February 2014
Class PT-2-IO-75 (4) (4) N/A Class PT-1-75A March 2014
Class PT-2-IO-76 (4) (4) N/A Class PT-1-76A April 2014
Class PT-2-IO-77 (4) (4) N/A Class PT-1-77A May 2014
Class PT-2-IO-78 (4) (4) N/A Class PT-1-78A June 2014
Class PT-2-IO-79 (4) (4) N/A Class PT-1-79A July 2014
Class PT-2-IO-80 (4) (4) N/A Class PT-1-80A August 2014
Class PT-2-IO-81 (4) (4) N/A Class PT-1-81A September 2014
Class PT-2-IO-82 (4) (4) N/A Class PT-1-82A October 2014
Class PT-2-IO-83 (4) (4) N/A Class PT-1-83A November 2014
Class PT-2-IO-84 (4) (4) N/A Class PT-1-84A December 2014
Class PT-2-IO-85 (4) (4) N/A Class PT-1-85A January 2015
Class PT-2-IO-86 (4) (4) N/A Class PT-1-86A February 2015
Class PT-2-IO-87 (4) (4) N/A Class PT-1-87A March 2015
Class PT-2-IO-88 (4) (4) N/A Class PT-1-88A April 2015
Class PT-2-IO-89 (4) (4) N/A Class PT-1-89A May 2015
Class PT-2-IO-90 (4) (4) N/A Class PT-1-90A June 2015
Class PT-2-IO-91 (4) (4) N/A Class PT-1-91A July 2015
Class PT-2-IO-92 (4) (4) N/A Class PT-1-92A August 2015
Class PT-2-IO-93 (4) (4) N/A Class PT-1-93A September 2015
Class PT-2-IO-94 (4) (4) N/A Class PT-1-94A October 2015
Class PT-2-IO-95 (4) (4) N/A Class PT-1-95A November 2015
Class PT-2-IO-96 (4) (4) N/A Class PT-1-96A December 2015
Class PT-2-IO-97 (4) (4) N/A Class PT-1-97A January 2016
Class PT-2-IO-98 (4) (4) N/A Class PT-1-98A February 2016
Class PT-2-IO-99 (4) (4) N/A Class PT-1-99A March 2016
Class PT-2-IO-100 (4) (4) N/A Class PT-1-100A April 2016
Class PT-2-IO-101 (4) (4) N/A Class PT-1-101A May 2016
Class PT-2-IO-102 (4) (4) N/A Class PT-1-102A June 2016
Class PT-2-IO-103 (4) (4) N/A Class PT-1-103A July 2016
Class PT-2-IO-104 (4) (4) N/A Class PT-1-104A August 2016
Class PT-2-IO-105 (4) (4) N/A Class PT-1-105A September 2016
Class PT-2-IO-106 (4) (4) N/A Class PT-1-106A October 2016
Class PT-2-IO-107 (4) (4) N/A Class PT-1-107A November 2016
Class PT-2-IO-108 (4) (4) N/A Class PT-1-108A December 2016
Class PT-2-IO-109 (4) (4) N/A Class PT-1-109A January 2017
Class PT-2-IO-110 (4) (4) N/A Class PT-1-110A February 2017
Class PT-2-IO-111 (4) (4) N/A Class PT-1-111A March 2017
Class PT-2-IO-112 (4) (4) N/A Class PT-1-112A April 2017
Class PT-2-IO-113 (4) (4) N/A Class PT-1-113A May 2017
Class PT-2-IO-114 (4) (4) N/A Class PT-1-114A June 2017
Class PT-2-IO-115 (4) (4) N/A Class PT-1-115A July 2017
Class PT-2-IO-116 (4) (4) N/A Class PT-1-116A August 2017
Class PT-2-IO-117 (4) (4) N/A Class PT-1-117A September 2017
Class PT-2-IO-118 (4) (4) N/A Class PT-1-118A October 2017
Class PT-2-IO-119 (4) (4) N/A Class PT-1-119A November 2017
Class PT-2-IO-120 (4) (4) N/A Class PT-1-120A December 2017
Class PT-2-IO-121 (4) (4) N/A Class PT-1-121A January 2018
Class PT-2-IO-122 (4) (4) N/A Class PT-1-122A February 2018
Class PT-2-IO-123 (4) (4) N/A Class PT-1-123A March 2018
Class PT-2-IO-124 (4) (4) N/A Class PT-1-124A April 2018
Class PT-2-IO-125 (4) (4) N/A Class PT-1-125A May 2018
Class PT-2-IO-126 (4) (4) N/A Class PT-1-126A June 2018
Class PT-2-IO-127 (4) (4) N/A Class PT-1-127A July 2018
Class PT-2-IO-128 (4) (4) N/A Class PT-1-128A August 2018
Class PT-2-IO-129 (4) (4) N/A Class PT-1-129A September 2018
Class PT-2-IO-130 (4) (4) N/A Class PT-1-130A October 2018
Class PT-2-IO-131 (4) (4) N/A Class PT-1-131A November 2018
Class PT-2-IO-132 (4) (4) N/A Class PT-1-132A December 2018
Class PT-2-IO-133 (4) (4) N/A Class PT-1-133A January 2019
Class PT-2-IO-134 (4) (4) N/A Class PT-1-134A February 2019
Class PT-2-IO-135 (4) (4) N/A Class PT-1-135A March 2019
Class PT-2-IO-136 (4) (4) N/A Class PT-1-136A April 2019
Class PT-2-IO-137 (4) (4) N/A Class PT-1-137A May 2019
Class PT-2-IO-138 (4) (4) N/A Class PT-1-138A June 2019
Class PT-2-IO-139 (4) (4) N/A Class PT-1-139A July 2019
Class PT-2-IO-140 (4) (4) N/A Class PT-1-140A August 2019
Class PT-2-IO-141 (4) (4) N/A Class PT-1-141A September 2019
Class PT-2-IO-142 (4) (4) N/A Class PT-1-142A October 2019
Class PT-2-IO-143 (4) (4) N/A Class PT-1-143A November 2019
Class PT-2-IO-144 (4) (4) N/A Class PT-1-144A December 2019
Class PT-2-R (5) (5) 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 Net 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 Pooling Tier REMIC-1 Interest Rates on Pooling Tier REMIC-1
Regular Interests 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 Pooling
Tier REMIC-1 Interest Rates on Pooling Tier REMIC-1 Regular Interests 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 Pooling Tier REMIC-1 Interest Rates on Pooling Tier REMIC-1
Regular Interests and having a "B" in their Class designation.
(4) Each 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 Pooling Tier REMIC-1 Principal
Amount of the Corresponding Pooling Tier REMIC-1 Regular Interest. From
the Closing Date through and including the Corresponding Scheduled
Crossover Distribution Date, each 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) Pooling Tier REMIC-1 Interest Rate for the Corresponding Pooling Tier
REMIC-1 Regular Interest over (ii) Swap LIBOR. After the related
Corresponding Scheduled Crossover Distribution Date, Pooling Tier REMIC-2
IO Interest shall not accrue interest.
(5) The Class PT-2-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 for such Distribution Date shall be distributed to Pooling
Tier REMIC-2 Regular Interests at Pooling Tier REMIC-2 Interest Rates shown
above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Mortgage Loans (A) that reduce the
Class Certificate Balance of the LIBOR Certificates shall be allocated to the
then outstanding Pooling Tier REMIC-2 Regular Interest (other than the Class
PT-2-1 Interest) with the lowest numerical denomination such that, at all times,
the aggregate Pooling Tier REMIC-2 Principal Amount of such Pooling Tier REMIC-2
Regular Interests equals the aggregate Class Certificate Balance of the then
outstanding LIBOR Certificates, and (B) that reduce the Class Certificate
Balance of the Certificates other than the LIBOR Certificates shall be allocated
to the Class PT-2-1 Interest until the Pooling Tier REMIC-2 Principal Amount of
each such interest is reduced to zero, provided that, with respect to Pooling
Tier REMIC-2 Regular Interests 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. On each
Distribution Date, Prepayment Premiums received during the related Principal
Prepayment Period shall be deemed distributed to the Class PT-2-1 Interest
(whether or not its Pooling Tier REMIC-2 Principal Amount has been reduced to
zero).
Lower Tier REMIC
----------------
The Lower Tier REMIC shall issue the following interests, and each
such interest, other than the Class Interest, is hereby designated as a regular
interest in the Lower Tier REMIC. The Class 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.
Initial Corresponding
Lower Tier Lower Tier Lower Tier Upper Tier
REMIC REMIC REMIC REMIC
Class Designation Interest Rate Principal Amount Regular Interest
--------------------------- --------------------- ---------------------------------------------- ------------------
Class LT-A-1 (1) 1/2 Corresponding Upper Tier REMIC Regular A-1
Interest initial Class Certificate Balance
Class LT-A-2 (1) 1/2 Corresponding Upper Tier REMIC Regular A-2
Interest initial Class Certificate Balance
Class LT-A-3 (1) 1/2 Corresponding Upper Tier REMIC Regular A-3
Interest initial Class Certificate Balance
Class LT-A-4 (1) 1/2 Corresponding Upper Tier REMIC Regular A-4
Interest initial Class Certificate Balance
Class LT-A-5 (1) 1/2 Corresponding Upper Tier REMIC Regular A-5
Interest initial Class Certificate Balance
Class LT-M-1 (1) 1/2 Corresponding Upper Tier REMIC Regular M-1
Interest initial Class Certificate Balance
Class LT-M-2 (1) 1/2 Corresponding Upper Tier REMIC Regular M-2
Interest initial Class Certificate Balance
Class LT-M-3 (1) 1/2 Corresponding Upper Tier REMIC Regular M-3
Interest initial Class Certificate Balance
Class LT-M-4 (1) 1/2 Corresponding Upper Tier REMIC Regular M-4
Interest initial Class Certificate Balance
Class LT-M-5 (1) 1/2 Corresponding Upper Tier REMIC Regular M-5
Interest initial Class Certificate Balance
Class LT-M-6 (1) 1/2 Corresponding Upper Tier REMIC Regular M-6
Interest initial Class Certificate Balance
Class LT-M-7 (1) 1/2 Corresponding Upper Tier REMIC Regular M-7
Interest initial Class Certificate Balance
Class LT-M-8 (1) 1/2 Corresponding Upper Tier REMIC Regular M-8
Interest initial Class Certificate Balance
Class LT-M-9 (1) 1/2 Corresponding Upper Tier REMIC Regular M-9
Interest initial Class Certificate Balance
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2 N/A
Subordinated Amount, less the Initial
Lower-Tier Principal Amounts of the Class
LT-FX and Class LT-FL Interests
Class LT-FL (2) 0.001% aggregate Class Certificate N/A
Balance of LIBOR Certificates (4)
Class LT-FX (3) 0.001% Pool Stated Principal Balance less N/A
aggregate Class Certificate Balance of
LIBOR Certificates (4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the Lower Tier REMIC Net
WAC Rate.
(2) The interest rate with respect to any Distribution Date for the Class
LT-FL Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of Pooling
Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular Interests
(other than the Class PT-2-1 Interest and Pooling Tier REMIC-2 IO
Interests).
(3) The interest rate with respect to any Distribution Date for the Class
LT-FX Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to Pooling Tier REMIC-2 Interest
Rate of the Class PT-2-1 Interest.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of this
Lower-Tier Regular Interest 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 REMIC Principal Amount. On each Distribution Date, this
Lower Tier Regular Interest shall be entitled to receive all interest
distributable on 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-2, Class LT-A-3,
Class LT-A-4, Class LT-A-5, 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-M-7, Class LT-M-8 and Class LT-M-9
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 REMIC 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 REMIC
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower Tier REMIC Principal Amount of the Class LT-Accrual
Interest may 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 and all Subsequent
Recoveries allocable to principal shall be allocated (i) 50% to the Class
LT-Accrual Interest, Class LT-FL Interest and Class LT-FX 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 CE Interest that result in the reduction in the Subordinated Amount
shall be allocated to the Class LT-Accrual Interest (until paid in full).
Reductions to Lower Tier REMIC Principal Amounts as a result of Realized Losses
and increases in Lower Tier REMIC Principal Amounts as a result of Subsequent
Recoveries shall be applied so that after all distributions have been made on
each Distribution Date (i) the Lower Tier REMIC Principal Amount of each LT
Accretion Directed Class is equal to 50% of the Class Certificate Balance of its
Corresponding Class and (ii) the Class LT-Accrual Interest, Class LT-FL Interest
and Class LT-FX Interest (and further allocated among these Lower-Tier Regular
Interests in the manner described below) is equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Subordinated Amount. Any
increase in the Class Certificate Balance of a Class of Offered Certificates as
a result of a Subsequent Recovery shall increase the Lower Tier Principal Amount
of the Corresponding Class of 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. As among the Class LT-Accrual
Interest, Class LT-FL Interest and the Class LT-FX 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 shall be allocated (i) to the Class LT-FL Interest
so that its Lower-Tier Principal Amount (computed to at least eight decimal
places) is equal to 0.001% aggregate Class Certificate Balance of the LIBOR
Certificates, (ii) to the Class LT-FX Interest so that its Lower-Tier Principal
Amount (computed to at least eight decimal places) is equal to 0.001% of the
aggregate Stated Principal Balance of the Mortgage Loans minus the aggregate
Class Certificate Balance of LIBOR Certificates and (iii) the remainder to the
Class LT-Accrual Interest.
On each Distribution Date, Prepayment Premiums received during the
related Principal Prepayment Period shall be deemed distributed to the Class
LT-Accrual Interest (whether or not its Lower Tier REMIC Principal Amount has
been reduced to zero.
Upper Tier REMIC
----------------
The Upper Tier REMIC shall issue the following Classes of Upper Tier
REMIC Regular Interests and each such interest, other than the Class UT-R
Interest, is hereby designated as a regular interest in the Upper Tier REMIC.
The Class UT-R Interest is hereby designated as the sole Class of residual
interests in the Upper Tier REMIC and shall be represented by the Class R
Certificates.
Upper Tier Upper Tier Initial Upper Tier Corresponding
REMIC REMIC REMIC Class of
Class Designation Interest Rate Principal Amount Certificates
--------------------- ----------------- -------------------- ------------------
Class A-1 (1) $311,948,000.00 Class A-1
Class A-2 (1) $ 54,037,000.00 Class A-2
Class A-3 (1) $ 40,989,000.00 Class A-3
Class A-4 (1) $ 17,572,000.00 Class A-4
Class A-5 (1) $ 47,172,000.00 Class A-5
Class M-1 (1) $ 20,608,000.00 Class M-1
Class M-2 (1) $ 16,091,000.00 Class M-2
Class M-3 (1) $ 7,058,000.00 Class M-3
Class M-4 (1) $ 5,928,000.00 Class M-4
Class M-5 (1) $ 5,928,000.00 Class M-5
Class M-6 (1) $ 5,081,000.00 Class M-6
Class M-7 (1) $ 5,082,000.00 Class M-7
Class M-8 (1) $ 3,387,000.00 Class M-8
Class M-9 (1) $ 5,645,000.00 Class M-9
Class IO (2) (2)
Class CE (3) (3) Class CE (3)
Class UT-R (4) (4) Class R
------------
(1) 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 Net WAC Rate.
(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 all interest distributable on the Class LT-IO
Interest. This interest shall be beneficially owned by the holders of the
Class CE Certificates and shall be held as an asset of the Supplemental
Interest Account.
(3) The Class CE Interest has an initial principal balance of $18,360,203.31
but it will not accrue interest on such balance but will accrue interest
on a notional principal balance. As of any Distribution Date, the Class CE
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 CE Interest shall bear interest at a rate equal to the excess, if
any, of the Lower Tier REMIC Net WAC Rate over the product of (i) 2 and
(ii) the weighted average Lower Tier REMIC Interest Rate of the Lower Tier
Regular Interests (other than Class LT-IO Interest), where the Lower Tier
REMIC Interest Rate on the Class LT-Accrual 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 CE 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. The Class CE Interest shall also be entitled to receive
Prepayment Premiums, as further described in Section 4.01(a)
(4) 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 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.
Certificates
Class Class
Class Designation Pass-Through Rate Certificate Balance
--------------------- ----------------- ---------------------
Class A-1(5) (1) $311,948,000.00
Class A-2(5) (2) $ 54,037,000.00
Class A-3(5) (2) $ 40,989,000.00
Class A-4(5) (2) $ 17,572,000.00
Class A-5(5) (2) $ 47,172,000.00
Class M-1(5) (1) $ 20,608,000.00
Class M-2(5) (1) $ 16,091,000.00
Class M-3(5) (1) $ 7,058,000.00
Class M-4(5) (1) $ 5,928,000.00
Class M-5(5) (1) $ 5,928,000.00
Class M-6(5) (1) $ 5,081,000.00
Class M-7(5) (1) $ 5,082,000.00
Class M-8(5) (1) $ 3,387,000.00
Class M-9(5) (1) $ 5,645,000.00
Class CE (3) (3)
Class R (4) (4)
------------
(1) The Class A-1, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 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.
(2) The Class A-2, Class A-3, Class A-4 and Class A-5 Certificates will bear
interest during each Interest Accrual Period at a per annum rate equal to
the lesser of (i) the applicable Fixed Rate and (ii) the WAC Cap.
(3) The Class CE Certificates will represent beneficial ownership of the Class
CE Interest, the Class IO Interest, the right to receive Class IO
Shortfalls, amounts in the Supplemental Interest Account, subject to the
obligation to pay Net Swap Payments to the Swap Provider and Basis Risk
Carry Forward Amounts to the Offered Certificates. For federal income tax
purposes, the Trustee will treat a Class CE Certificate holder's
obligation to make payments to the Offered Certificates of Basis Risk
Carry Forward Amounts from the Excess Reserve Fund Account and, in the
case of the LIBOR Certificates, the Supplemental Interest Account and the
right to receive Class IO Shortfalls as payments made or received pursuant
to a notional principal contract between the Class CE Certificateholders
and the holder of each Class of Offered Certificates. Such rights of the
Class CE Certificateholders and Offered Certificateholders shall be
treated as held in a portion of the Trust Fund that is treated as a
grantor trust under subpart E, Part I of subchapter J of the Code. The
Class CE Certificates do not have a Class Certificate Balance.
(4) The Class R Certificates do not have a principal balance or an interest
rate. The Class R Certificates represent the residual interest in each
Trust REMIC.
(5) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier REMIC Regular Interest but also the
right to receive payments from the Excess Reserve Fund Account and, in the
case of the LIBOR Certificates, the Supplemental Interest Account in
respect of any Basis Risk Carry Forward Amounts. Each of these
Certificates will also be subject to the obligation to pay Class IO
Shortfalls as described in Section 8.01. For federal income tax purposes,
any amount distributed on the Offered Certificates on any such
Distribution Date in excess of the amount distributable on their
Corresponding Class of Upper Tier Regular Interest on such Distribution
Date shall be treated as having been paid from the Excess Reserve Fund
Account or, in the case of the LIBOR Certificates, the Supplemental
Interest 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
Certificates on such Distribution Date shall be treated as having been
paid to the Supplemental Interest Account, all pursuant to, and as further
provided in Section 8.15. For federal income tax purposes, the Trustee
will treat a Offered Certificateholder's right to receive payments from
the Excess Reserve Fund Account and, if applicable, the Supplemental
Interest Account subject to the obligation to pay Class IO Shortfalls to
the holder of the Class CE Certificates as payments made or received
pursuant to a notional principal contract between the Class CE
Certificateholders and each Class of Offered Certificates.
The minimum denomination for each Class of the Offered Certificates
will be $25,000 initial Certificate Balance, with integral multiples of $1 in
excess thereof except that one Certificate in each Class may be issued in a
different amount. The minimum denomination for the Class R Certificates will be
a 100% Percentage Interest in such Class and the Class CE Certificates will be a
1% Percentage Interest in such Class.
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-2, Class A-3, Class A-4 and
Class A-5 Certificates.
Class M Certificates Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and
Class M-9 Certificates.
ERISA-Restricted Certificates The Physical Certificates and any Certificate
with a rating below the lowest applicable
permitted rating under the Underwriters'
Exemption.
Certificates Class A, Class M, Class R and Class CE
Certificates.
Offered Certificates Class A and Class M Certificates.
Principal Certificates The Offered Certificates.
Subordinated Certificates Class M Certificates.
Physical Certificates The Class R and Class CE Certificates.
Private Certificates The Class R and Class CE Certificates.
Rating Agencies ▇▇▇▇▇'▇ and S&P.
Regular Certificates All Classes of Certificates other than the
Class R and Class CE Certificates.
Residual Certificates The Class R Certificates.
LIBOR Certificates Class A-1, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9 Certificates.
Fixed Certificates Class A-2, Class A-3, Class A-4, Class A-5
Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the ▇▇▇▇▇ Fargo Sale and
Servicing Agreement. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Account: Any of the Distribution Account, the Excess Reserve Fund
Account, the Investment Account, the Collection Account, the Supplemental
Interest Account or the Posted Collateral Account. Each Account shall be an
Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Offered Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class' share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.01.
Additional Disclosure Notification: As defined in Section 8.14(b).
Additional Form 10-D Disclosure: As defined in Section 8.14(b).
Additional Form 10-K Disclosure: As defined in Section 8.14(c).
Advance: Any Monthly Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Trust Agreement and all amendments or supplements
hereto.
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
Principal Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Assignment of Mortgage: An executed 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 Servicer on or prior to the related Determination Date,
together with any Monthly Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries
received by the Servicer on the Mortgage Loans during the related Principal
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
Servicer during the related Principal Prepayment Period together with all
Compensating Interest paid by the Servicer in connection therewith (excluding
any Prepayment Premiums); (iv) all Substitution Adjustment Amounts with respect
to substitutions of Mortgage Loans that occur on or prior to the related
Determination Date; (v) all amounts received with respect to such Distribution
Date as the Repurchase Price in respect of a Mortgage Loan repurchased on or
prior to the related Determination Date; and (vi) the proceeds received with
respect to the termination of the Trust pursuant to clause (a) of Section 9.01;
reduced by (y) amounts in reimbursement for Advances previously made with
respect to the Mortgage Loans and other amounts as to which the Servicer, the
Depositor, the Custodian or the Trustee are entitled to be paid or reimbursed
pursuant to this Agreement.
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 Carry Forward Amount: With respect to each Class of
Principal Certificates, as of any Distribution Date, the sum of (x) if on such
Distribution Date the Pass-Through Rate for any Class of Principal Certificates
is based upon the WAC Cap, the excess, if any, 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 the WAC Cap, over (ii) the Accrued Certificate Interest
Distribution Amount payable on such Class of Certificates at the WAC Cap for
such Distribution Date and (y) the portion of any such excess described in
clause (x) for such Class of Certificates from all previous Distribution Dates
not previously paid, together with interest thereon at a rate equal to the
applicable Pass-Through Rate for such Class of Certificates for such
Distribution Date, without giving effect to the WAC Cap.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class CE Distributable Amount (prior to any
reduction for (x) amounts paid from the Excess Reserve Fund Account to pay any
Basis Risk Carry Forward Amount or (y) any Defaulted Swap Termination Payment).
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 New
York or California, (b) the State in which the Servicer's servicing operations
are located or (c) any State in which the Trustee's Corporate Trust Office is
located, are authorized or obligated by law or executive order to be closed.
Certificate Balance: With respect to any Class of Principal
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 reduced by any Applied Realized Loss Amounts applicable to
such Class of Certificates; 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 Applied Realized Loss Amounts allocated
to such Class or Classes). The Class CE and Class R 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.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any Affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any Affiliate of the Depositor in
determining which Certificates are registered in the name of an Affiliate of the
Depositor.
Certificates: As specified in the Preliminary Statement.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Class Certificate Balances of all
Certificates of such Class as of such date.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (a) the aggregate Class Certificate
Balance of the Class A Certificates immediately prior to such Distribution Date
over (b) the lesser of (x) 67.10% of the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class CE Certificates: All Certificates bearing the Class
designation of "Class CE."
Class CE 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 CE Interest (as set forth in the Preliminary Statement) 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 CE Interest that is
distributable as a Subordination Reduction Amount, minus (iii) any Defaulted
Swap Termination Payment payable from Available Funds to the Swap Provider and
any amounts paid from the Excess Reserve Fund Account to pay Basis Risk Carry
Forward Amounts.
Class CE Interest: The Upper Tier REMIC Regular Interest represented
by the Class CE Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.15. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class CE 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 CE Interest (prior to
reduction for any Basis Risk Payments or Defaulted Swap Termination Payments) or
Class IO Interest on such Distribution Date, all as further provided in Section
8.15.
Class LT-R Interest: The sole Class of "residual interest" in the
Lower Tier REMIC evidenced by the Class R Certificates.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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) 74.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (b) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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) 80.10% 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 the Overcollateralization Floor.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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) 82.60% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (b) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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) 84.70% 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 the Overcollateralization Floor.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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) 86.80% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (b) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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) 88.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (b) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class M-7 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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 that
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 M-7
Certificates immediately prior to that Distribution Date over (ii) the lesser of
(a) 90.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
that Distribution Date and (b) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date over the
Overcollateralization Floor.
Class M-8 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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 that 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 M-7
Certificates (after taking into account the distribution of the Class M-7
Principal Distribution Amount for such Distribution Date) and (i) the Class
Certificate Balance of the Class M-8 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (a) 91.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date and (b) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for that Distribution Date over the Overcollateralization Floor.
Class M-9 Principal Distribution Amount: With respect to any
Distribution Date is the excess of, if any, (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 M-7
Certificates (after taking into account the distribution of the Class M-7
Principal Distribution Amount for such Distribution Date), (i) the Class
Certificate Balance of the Class M-8 Certificates (after taking into account the
distribution of the Class M-8 Principal Distribution Amount for such
Distribution Date) and (j) the Class Certificate Balance of the Class M-9
Certificates immediately prior to that Distribution Date over (ii) the lesser of
(a) 93.60% of the aggregate Stated Principal Balance of the Mortgage Loans for
that Distribution Date and (b) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date over the
Overcollateralization Floor.
Class PT-1-R Interest: The sole Class of "residual interest" in
Pooling Tier REMIC-1 as described in the Preliminary Statement and the related
footnote thereto.
Class PT-2-R Interest: The sole Class of "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 UT-R Interest: The sole Class of "residual interest" in the
Upper Tier REMIC evidenced by the Class R Certificates.
Closing Date: July 19, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The "Custodial Account" as defined in each
Servicing Agreement.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for such Distribution Date, with
respect to voluntary Principal Prepayments by the Mortgagor (excluding any
payments made upon liquidation of the Mortgage Loan).
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.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Trust Administration-BC0705, facsimile no. (714)
247-6478, and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Class: The Class of interests in the Lower Tier REMIC
or Upper Tier REMIC created under this Agreement that corresponds to the Class
of interests in the other such Trust REMIC, as applicable, or to a Class of
Certificates in the manner set out below:
Corresponding Corresponding
Lower Tier REMIC Upper Tier REMIC Corresponding
Regular Interest Regular Interest Class of Certificates
-------------------------- --------------------------- -------------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-A-3 Class A-3 Class A-3
Class LT-A-4 Class A-4 Class A-4
Class LT-A-5 Class A-5 Class A-5
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-M-7 Class M-7 Class M-7
Class LT-M-8 Class M-8 Class M-8
Class LT-M-9 Class M-9 Class M-9
Corresponding Pooling Tier REMIC-1 Regular Interest: As described in
the Preliminary Statement.
Corresponding Pooling Tier REMIC-2 IO Interest: As described in the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling Tier REMIC-2 IO Interest.
Cumulative Loss Percentages: 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 to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
Cumulative Loss Trigger Event: If, with respect to any Distribution
Date, the circumstances in which the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related Due Period
divided by the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date exceeds the applicable percentages described below with respect
to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
---------------------------------- ---------------------------------------------
July 2009 through June 2010 0.55% for the first month, plus an
additional 1/12th of 0.85% for each month
thereafter
July 2010 through June 2011 1.40% for the first month, plus an
additional 1/12th of 1.10% for each month
thereafter
July 2011 through June 2012 2.50% for the first month, plus an
additional 1/12th of 1.05% for each month
thereafter
July 2012 through June 2013 3.55% for the first month, plus an
additional 1/12th of 0.65% for each month
thereafter
July 2013 through June 2014 4.20% for the first month, plus an
additional 1/12th of 0.10% for each month
thereafter
July 2014 and thereafter 4.30% with respect to July 2014 and
thereafter
Custodial File: With respect to each Mortgage Loan, all Mortgage
Loan Documents which are delivered to, and received by, the Custodian or which
at any time comes into the possession of the Custodian.
Custodian: ▇▇▇▇▇ Fargo Bank, N.A., a national banking association,
and its successors in interest and, if any successor custodian is appointed
hereunder, such successor.
Custodian Fee: With respect to any Distribution Date (commencing
with the July 2007 Distribution Date), the amount charged by the Custodian to
the Trustee for custodial services with respect to the Mortgage Loans performed
by the Custodian during the preceding calendar month (commencing with the month
of July 2007), based on a custodial fee schedule furnished by the Custodian to
the Trustee.
Cut-off Date: June 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
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 that date, whether or not
received).
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.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust out of the Available Funds 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 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).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by the Original Loan Seller, the Purchasers or the Depositor in
accordance with the terms of the ▇▇▇▇▇ Fargo Sale and Servicing Agreement, the
Assignment Agreement, the Representation Letter or this Agreement, as
applicable, or which is, in the case of a substitution pursuant to the ▇▇▇▇▇
Fargo Sale and Servicing Agreement or the Assignment Agreement, replaced or to
be replaced with a substitute mortgage loan.
Delinquency 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, divided by (y) the aggregate unpaid principal balance
of the Mortgage Loans, as of the last day of the related Due Period, equals or
exceeds 36.50% of the prior period's Senior 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: BCAP LLC, a Delaware limited liability company, and its
successors in interest.
Depositor Float Period: With respect to any Distribution Date and
the related amounts in the Distribution Account, the period commencing on the
Servicer Remittance Date and ending prior to the third Business Day immediately
preceding such Distribution Date.
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, "R-1 (high)" by DBRS and "A-1" by Standard & Poor's.
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 the Servicer Remittance Date,
the Business Day immediately preceding such Servicer Remittance Date.
Disqualified Non-U.S. Person: With respect to a Residual
Certificate, (i) any Non-U.S. Person or agent thereof other than a Non-U.S.
Person that holds the Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Trustee with an effective IRS Form W-8ECI, or (ii) any domestic entity
classified as a partnership under the Code if any of its direct or indirect
partners (other than through a U.S. corporation) are (or are permitted to be
under the applicable partnership agreement) Disqualified Non-U.S. Persons,
unless such Person described in (i) or (ii) above has delivered to both the
transferor and the Trustee an opinion of a nationally recognized tax counsel to
the effect that the transfer of the Residual Certificate to it is in accordance
with the requirements of the Code and the regulations promulgated thereunder and
that such transfer of the Residual Certificate will not be disregarded for
federal income tax purposes.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.01(b) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates, Series 2007-AB1." Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Date: The 25th day of each month or, if such day is not
a Business Day, the immediately succeeding Business Day, commencing in July
2007.
Document Certification and Exception Report: The report attached to
Exhibit E 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
that Distribution Date occurs and ending on the first day of the calendar month
in which that 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 (provided, however, that following a
downgrade, withdrawal, or suspension of such Eligible Institution's Standard &
Poor's rating below the levels set forth in definition of "Eligible Institution"
with respect to any Eligible Account, the applicable Eligible Institution shall
either (x) obtain a guaranty from a guarantor which satisfies the Standard &
Poor's requirements set forth in such definition, or (y) transfer any such
Eligible Account to one or more segregated trust accounts in the trust
department of an institution which satisfies the definition of "Eligible
Institution", in either case, as promptly as practicable (and in any case within
not more than 60 calendar days with respect to the Excess Reserve Fund Account
or the Swap Account, or 30 calendar days with respect to each other Account)),
(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 at least "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 or "R-1" by DBRS (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to 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") 2007-5, 72 Fed. Reg. 13130 (2007) (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.
Event of Default: As defined in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.01(a) in the name of the
Trustee for the benefit of the Regular Certificateholders and designated
"Deutsche Bank National Trust Company in trust for registered holders of BCAPB
LLC Trust 2007-AB1, Mortgage Pass-Through Certificates, Series 2007-AB1." 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 for 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 Servicing Fee Rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
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 Overcollateralization Deficiency for such Distribution
Date.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, and its
successors in interest.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in March
2037.
Fixed Rate: With respect to each Class of Fixed Certificates and any
Distribution Date prior to the first Distribution Date after the Optional
Termination Date, the following percentages:
----------------------------------------
Class A-2 6.070%
----------------------------------------
Class A-3 6.330%
----------------------------------------
Class A-4 6.580%
----------------------------------------
Class A-5 6.260%
----------------------------------------
On the first Distribution Date after the Optional Termination Date,
the Fixed Rates for the Fixed Certificates shall increase to the rate set forth
below:
----------------------------------------
Class A-2 6.570%
----------------------------------------
Class A-3 6.830%
----------------------------------------
Class A-4 7.080%
----------------------------------------
Class A-5 6.760%
----------------------------------------
Force Majeure Event: As defined in Section 8.18(l).
Form 8-K Disclosure Information: As defined in Section 8.14(g).
▇▇▇▇▇▇▇ 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, and its successors in interest.
Gross Margin: The fixed percentage amount set forth in the related
Mortgage Note to be added to the applicable Index to determine the Mortgage
Rate.
Index: As to each Mortgage Loan, the index from time to time in
effect for the adjustment of the Mortgage Rate set forth as such in the related
Mortgage Note.
Initial Certification: As defined in Section 2.02.
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 LIBOR
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 and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). With respect to
each Class of Fixed Certificates and the Corresponding Class of Lower Tier
Regular Interests, the Class LT-Accrual Interest, Class LT-IO Interest, 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 LIBOR Certificates,
each Interest Accrual Period has the actual number of days in such month and
each year is assumed to have 360 days. For purposes of computing interest
accruals on each Class of Fixed Certificates, each Interest Accrual Period has
twelve months of 30 days each and each year is assumed to have 360 days.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of July 19, 2007, between the Swap Provider and the Trustee, a copy of
which is attached hereto as Exhibit N.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, that portion of Available Funds attributable to interest
received or advanced with respect to the Mortgage Loans, net of the fees payable
to the Servicer, with respect to such Distribution Date.
Investment Account: As defined in Section 3.02(a).
LIBOR: With respect to any Interest Accrual Period for the Offered
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one month U.S. dollar
deposits as such rate appears on 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 deposits of leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
Principal Prepayment Period preceding the month of such Distribution Date and as
to which the 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.
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, including any Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Principal Amount: As described in the Preliminary
Statement.
Lower Tier Regular Interest: Each of the Class LT-A-1, Class LT-A-2,
Class LT-A-3, Class LT-A-4, Class LT-A-5, 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-M-7, Class LT-M-8,
Class LT-M-9, Class LT-IO, Class LT-FL, Class LT-FX and Class LT-Accrual
Interests, as described in the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Lower Tier REMIC Interest Rate: As described in the Preliminary
Statement.
Lower Tier REMIC Net WAC Rate: A per annum variable rate equal to
the weighted average of Pooling Tier REMIC-2 Interest Rates of Pooling Tier
REMIC-2 Regular Interests (other than Pooling Tier REMIC-2 IO Interests).
Lower Tier REMIC Principal Amount: The principal balance of each
Lower Tier Regular Interest, determined as set forth in the Preliminary
Statement. The Lower Tier REMIC Principal Amount shall be computed to at least
eight (8) decimal places.
LT Accretion Directed Classes: As described in the Preliminary
Statement.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Advance: As defined in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.02.
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 Servicer, the Custodian
and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note, including all riders
thereto.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement, each Mortgage Loan originally sold
and subject to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement being identified on
the Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage File, the Custodial File, the Servicing File, the Scheduled Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition proceeds, Prepayment Premiums and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan.
Mortgage Loan Documents: The mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and Custodian and referred to on Schedule I, such schedule setting
forth the following information with respect to each Mortgage Loan as of the
Cut-off Date: (1) the Original Loan Seller's Mortgage Loan number; (2) the
address, city, state and zip code of the Mortgaged Property; (3) a code
indicating whether the Mortgagor is self-employed; (4) a code indicating whether
the Mortgaged Property is owner-occupied, investment property or a second home;
(5) a code indicating whether the Mortgaged Property is a single family
residence, two family residence, three-family residence, four family residence,
condominium, manufactured housing or planned unit development; (6) the purpose
of the Mortgage Loan; (7) the type of Mortgage Loan; (8) the Mortgage Interest
Rate at origination; (9) the current Mortgage Interest Rate; (10) the name of
the Servicer; (11) the Servicing Fee Rate; (12) the current Scheduled Payment;
(13) the original term to maturity; (14) the remaining term to maturity; (15)
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; (16) the loan-to-value ratio at origination; (17) the actual
principal balance of the Mortgage Loan as of the Cut-off Date; (18) social
security number of the Mortgagor; (19) a code indicating whether the Mortgaged
Property is a leasehold estate; (20) the Due Date of the Mortgage Loan; (21)
whether the Mortgage Loan is insured by a Primary Mortgage Insurance Policy and
the name of the insurer; (22) the certificate number of the Primary Mortgage
Insurance Policy; (23) the amount of coverage of the Primary Mortgage Insurance
Policy, and if it is a lender-paid Primary Mortgage Insurance Policy, the
premium rate; (24) the type of appraisal; (25) a code indicating whether the
Mortgage Loan is a MERS Mortgage Loan; (26) documentation type (including asset
and income type); (27) first payment date; (28) the schedule of the payment
delinquencies in the prior 12 months; (29) FICO score; (30) the Mortgagor's
name; (31) the stated maturity date; (32) the original principal amount of the
mortgage; (33) the "pay through" date or the date of the last payment made; and
(34) the Gross Margin of the Mortgage Loan. With respect to the Mortgage Loans
in the aggregate: (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; and (4) the weighted average
maturity of the Mortgage Loans.
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.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
NAS Principal Distribution Amount: For any Distribution Date, an
amount equal to the product of (1) a fraction, the numerator of which is the
Class Certificate Balance of the Class A-5 Certificates and the denominator of
which is the aggregate Class Certificate Balance of all of the Senior
Certificates, in each case immediately prior to such Distribution Date, (2) any
principal distributions allocable to the Senior Certificates for such
Distribution Date and (3) the applicable percentage for such Distribution Date
set forth in the following table:
Distribution Date Occurring %
-------------------------------- -------
July 2007 through June 2010..... 0%
July 2010 through June 2012..... 45%
July 2012 through June 2013..... 80%
July 2013 through June 2014..... 100%
After June 2014................. 300%
in each case, until the Class Certificate Balance of the Class A-5 Certificates
has been reduced to zero.
Net Monthly Excess Cash Flow: For any Distribution Date, the amount
remaining for distribution pursuant to Section 4.01(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Mortgage Interest Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Interest Rate less the applicable
Expense Fee Rate.
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 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), or any amount withdrawn from the applicable
reserve account referred to in the fourth full paragraph of Section 4.05 that is
required under that paragraph be treated as a Net Swap Receipt for purposes of
determining the distributions from the Supplemental Interest Account.
NIM Issuer: The entity established as the issuer of NIM Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class CE Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable Monthly Advance: Any Monthly 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 Servicer or any successor Servicer
including the Trustee as successor servicer, will not or, in the case of a
proposed Monthly 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 Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer or any successor
Servicer including the Trustee as successor servicer, 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.
Non-U.S. Person: A person that is not a U.S. Person.
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 the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President or
an Assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Servicer or the related
Original Loan Seller, and delivered to the Trustee, as required by the ▇▇▇▇▇
Fargo Sale and Servicing Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer, 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 the Servicer or
the Trustee of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer or the Trustee of the Mortgage Loans
or in an Affiliate of either and (iii) is not connected with the Servicer or
Trustee 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 10% or less of the Cut-off Date Pool
Principal Balance.
Original Loan Seller: ▇▇▇▇▇ Fargo, in its capacity as Seller under
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement.
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.
Overcollateralization Floor: An amount equal to 0.50% of the Cut-off
Date Pool Principal Balance.
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.
Pass-Through Margin: With respect to each Class of LIBOR
Certificates and any Distribution Date prior to the first Distribution Date
after the Optional Termination Date, the following percentages:
----------------------------------------
Class A-1 0.150%
----------------------------------------
Class M-1 0.550%
----------------------------------------
Class M-2 0.650%
----------------------------------------
Class M-3 0.850%
----------------------------------------
Class M-4 1.250%
----------------------------------------
Class M-5 1.500%
----------------------------------------
Class M-6 1.500%
----------------------------------------
Class M-7 1.500%
----------------------------------------
Class M-8 1.500%
----------------------------------------
Class M-9 1.500%
----------------------------------------
On the first Distribution Date after the Optional Termination Date,
the Pass-Through Margins for the LIBOR Certificates shall increase to the rate
set forth below:
----------------------------------------
Class A-1 0.300%
----------------------------------------
Class M-1 0.825%
----------------------------------------
Class M-2 0.975%
----------------------------------------
Class M-3 1.275%
----------------------------------------
Class M-4 1.875%
----------------------------------------
Class M-5 2.250%
----------------------------------------
Class M-6 2.250%
----------------------------------------
Class M-7 2.250%
----------------------------------------
Class M-8 2.250%
----------------------------------------
Class M-9 2.250%
----------------------------------------
Pass-Through Rate: For each Class of Certificates, the per annum
rate set forth or calculated in the manner described in the Preliminary
Statement.
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.
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 the 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
"F1+" by Fitch, "A-1+" by Standard & Poor's, "P-1" by Moody's and
"R-1" by DBRS (in each case, to the extent they are designated as
Rating Agencies in the Preliminary Statement);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities (which shall in no event have an original
maturity of more than 365 days) 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 Standard & Poor's and Moody's (in each case, to the
extent they are designated as Rating Agencies in the Preliminary
Statement), and by each other 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 Standard & Poor's and
Moody's (in each case, to the extent they are designated as Rating
Agencies in the Preliminary Statement), and by each other 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
managed or advised by the Depositor, the Trustee or an Affiliate
thereof, that have been rated "Aaa" by Moody's, "AAAm" or "AAAm-G"
by Standard & Poor's and, if rated by Fitch, at least "AAA" by Fitch
and "R-1" by DBRS (in each case, to the extent they are designated
as Rating Agencies in the Preliminary Statement); 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 each of 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 a
Disqualified Non-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, (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 REMIC-1: As described in the Preliminary Statement.
Pooling Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling Tier REMIC-1 Net WAC Rate: With respect to the Mortgage
Loans as of any Distribution Date, a per annum rate equal to (a) the weighted
average of the Adjusted Net Mortgage Interest Rates then in effect on the
beginning of the related Due Period on the Mortgage Loans multiplied by (b) 30
divided by the actual number of days in the related Interest Accrual Period.
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 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.
Posted Collateral Account: The separate Account created and
maintained by the Trustee pursuant to Section 4.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company for the benefit of the registered holders of BCAPB LLC Trust
2007-AB1 Mortgage Pass-Through Certificates, Series 2007-AB1." Funds in the
Posted Collateral Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement and under the Interest Rate
Swap Agreement.
Prepayment Interest Shortfall: With respect to any Servicer
Remittance Date, the sum of, for each Mortgage Loan that was, during the related
Principal Prepayment Period, the subject of a Principal Prepayment that was
applied by the Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding the Due Date in the succeeding Principal
Prepayment Period, an amount equal to the product of (a) the Mortgage Interest
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 related Principal Prepayment Period.
Prepayment Premium: Any prepayment premium, penalty or charge, if
any, required under the terms of the related Mortgage Note to be paid in
connection with a Principal Prepayment, to the extent permitted by law.
Principal Certificates: As specified in the Preliminary Statement.
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 in advance of its scheduled Due Date 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.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Prepayment Period: With respect to any Distribution Date,
the calendar month preceding the month in which that Distribution Date occurs.
Principal Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, the amount equal to the sum of the following amounts
(without duplication): (i) all scheduled payments of principal due on the Due
Date on such Mortgage Loans in the related Due Period and received on or prior
to the related Determination Date, together with any Monthly Advances in respect
thereof; (ii) all Condemnation Proceeds, Insurance Proceeds and Liquidation
Proceeds allocable to principal and received during the related Principal
Prepayment Period; (iii) all Principal Prepayments allocable to principal and
received during the related Principal Prepayment Period; (iv) all amounts
received with respect to such Distribution Date representing the portion of the
purchase price allocable to principal in connection with a purchase or
repurchase of a Deleted Mortgage Loan; (v) principal portion of all amounts
received with respect to such Distribution Date as a Substitution Adjustment
Amount and received in connection with the substitution of a Mortgage Loan; and
(vi) the allocable portion of the proceeds received with respect to the
termination of the Trust 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 July 18,
2007, relating to the Offered Certificates.
PTCE: As defined in Section 5.02(b).
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchaser: Barclays Bank PLC, a public limited company registered in
England and Wales, and its successors in interest.
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 and the Trustee.
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 Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of any 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 Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such 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.
REO Disposition: The final sale by the Servicer of any REO Property.
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: As defined in Section 4.05.
Reportable Event: As defined in Section 8.14(g).
Representation Letter: The Side Letter, dated as of July 19, 2007,
by and between Barclays Bank PLC and the Depositor, a copy of which is attached
hereto as Exhibit U.
Repurchase Price: With respect to any Mortgage Loan, 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 to the date of repurchase, (iii) all unreimbursed Servicing Advances
and (iv) all expenses incurred by the Trustee arising out of the Trustee's
enforcement of the applicable Person's repurchase obligation under the ▇▇▇▇▇
Fargo Sale and Servicing Agreement or under the Representation Letter.
Request for Release: The Request for Release submitted by the
Servicer to the Custodian, substantially in the form of Exhibit D.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate, or any other officer in the corporate trust department
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers who at such time shall be officers with
direct responsibility for the administration of this Agreement and also, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
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 for displaying comparable rates or prices).
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.14(c).
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act: means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the
rules and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
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.
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 for such 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, 32.90%.
Servicer: ▇▇▇▇▇ Fargo in its capacity as servicer under the ▇▇▇▇▇
Fargo Sale and Servicing Agreement and the related Assignment Agreement, or any
successor servicer appointed pursuant thereto.
Servicer Remittance Date: With respect to any Distribution Date, the
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately succeeding such 18th day) of the month in which such Distribution
Date occurs.
Servicing Advances: As defined in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit O
hereto.
Servicing Fee: As defined in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate for such Mortgage Loan specified on the Mortgage Loan Schedule.
Servicing File: The "Credit File" as defined in the ▇▇▇▇▇ Fargo Sale
and Servicing Agreement.
Servicing Function Participant: As defined in Section 8.13(a).
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: With respect to any Distribution
Date and each Mortgage Loan with respect to which any portion of a Scheduled
Payment is, as of the last day of the related Due Period, two months or more
delinquent (as calculated in accordance with the OTS method), each Mortgage Loan
in foreclosure, each REO Property relating to and each Mortgage Loan for which
the Mortgagor has filed for bankruptcy.
Specified Subordinated Amount: With respect to each Distribution
Date (i) prior to the Stepdown Date, an amount equal to 3.20% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, (ii) on
or after the Stepdown Date, if there is no Trigger Event in effect, the greater
of (a) 6.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
the related Distribution Date (after taking into account all principal received
on the Mortgage Loans that is distributed on such Distribution Date) and (b) the
Overcollateralization Floor and (iii) on or after the Stepdown Date, if a
Trigger Event is in effect, the Specified Subordinated Amount for the prior
Distribution Date. When the Class Certificate Balance of each Class of Offered
Certificates has been reduced to zero, the Specified Subordinated Amount will
thereafter equal zero.
Sponsor: Barclays Bank PLC, a public limited company registered in
England and Wales and regulated by the United Kingdom's Financial Services
Authority.
Standard & Poor's or S&P: 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 - BCAPB LLC Trust 2007-AB1,
or such other address as Standard & Poor's may hereafter furnish to the
Depositor, the Servicer and the Trustee.
Startup Day: As defined in Section 2.04.
Stated Principal Balance: As to each Mortgage Loan and as of any
Determination Date, (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, 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 or advanced prior to
the related Servicer Remittance Date and any unscheduled principal payments and
other unscheduled principal collections received during the related Principal
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
Principal Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in July 2010 and (b) the Distribution Date immediately
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 Balance of the Mortgage
Loans for the applicable Distribution Date but prior to any applications of
Principal Distribution Amount 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 or the Trustee 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.
Subordinated Amount: As of 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 Class Certificate Balances of the Principal
Certificates as of such Distribution Date (after giving effect to the payment of
the Principal Remittance Amount on such Certificates on that Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
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 Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
Subservicer: Any Person that services Mortgage Loans on behalf of
the 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 the Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Substitution Adjustment Amount: With respect to ▇▇▇▇▇ Fargo Sale and
Servicing Agreement or with respect to a Mortgage Loan substituted by the
Purchaser, an amount of cash received from the Original Loan Seller in
connection with a substitution for a Deleted Mortgage Loan.
Supplemental Interest Account: The separate account created pursuant
to Section 4.05 of this Agreement consisting of (i) the Interest Rate Swap
Agreement, (ii) the Class IO Interest, and (iii) the right to receive Class IO
Shortfalls, subject to the obligation to pay amounts specified in Section 4.05.
The Account is created and maintained by the Trustee for the benefit of the
Certificateholders and designated "Deutsche Bank National Trust Company in the
name of registered holders of BCAPB LLC Trust 2007-AB1 Mortgage Pass-Through
Certificates, Series 2007-AB1."
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 Rate Swap Agreement), (ii) two, and (iii) the quotient of (a) the
actual number of days in the Interest Accrual Period for the Offered
Certificates divided by (b) 30.
Swap Provider: Barclays Bank PLC, a bank authorized and regulated by
the United Kingdom's Financial Services Authority and a member of the London
Stock Exchange, 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).
Tax Matters Person: The Holder of the Class R Certificate is
designated as "tax matters person" of Pooling Tier REMIC-1, Pooling Tier
REMIC-2, the Lower Tier REMIC and the Upper Tier REMIC, in the manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
10-K Filing Deadline: As defined in Section 8.14(c).
Termination Price: As defined in Section 9.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected (prior to the Servicer
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees) over (ii) the sum of (A) the interest
payable to the Principal Certificates on such Distribution Date pursuant to
Section 4.01(a)(i), (B) any Net Swap Payments payable 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 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 interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Excess Reserve Fund Account, Supplemental Interest Account, Collection Account,
Posted Collateral Account and 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 rights of the Depositor under
the Interest Rate Swap Agreement; (v) the rights of the Trust under the
Assignment Agreements, the ▇▇▇▇▇ Fargo Sale and Servicing Agreement; (vi) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing;
and (vii) the Representation Letter.
Trust REMIC: Any of Pooling Tier REMIC-1, Pooling Tier REMIC-2, the
Lower Tier REMIC or the Upper Tier REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Float Period: With respect to any Distribution Date and the
related amounts in the Distribution Account, the period commencing on the third
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002),
or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg. 14979, or
any successor exemption.
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 prior Distribution Dates 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
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 Certificates in respect of any Unpaid Realized Loss Amount will not be
applied to reduce the Class Certificate Balance of such Class.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Net WAC Rate: For any Distribution Date, the
weighted average of the Lower Tier REMIC Interest Rate of the Lower Tier Regular
Interests (other than the Class LT-IO Interest), weighted on the basis of the
Lower Tier REMIC Principal Amounts.
Upper Tier REMIC Regular Interest: As described in the Preliminary
Statement.
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 CE
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 R
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), and (c) the remaining Voting Rights shall be allocated among Holders
of the remaining Classes of Certificates in proportion to the Class Certificate
Balances of their respective Certificates on such date.
WAC Cap: As of any Distribution Date, a per annum rate equal to (i)
the weighted average of the Net Mortgage Interest Rates then in effect on the
beginning of the related Due Period on the Mortgage Loans minus, with respect to
the LIBOR Certificates only, the product of (A) the Net Swap Payment plus any
Swap Termination Payment (other than a Defaulted Swap Termination Payment),
payable to the Swap Provider from Available Funds, if any, expressed as a
percentage equal to a fraction, the numerator of which is equal to the Net Swap
Payment plus any Swap Termination Payment payable to the Swap Provider (other
than a Defaulted Swap Termination Payment) from Available Funds and the
denominator of which is equal to the aggregate Class Certificate Balance of the
LIBOR Certificates at the beginning of that Due Period and (B) 12 multiplied by
(ii) with respect to the LIBOR Certificates, 30 divided by the actual number of
days in the related Interest Accrual Period and, with respect to the Fixed
Certificates, 1.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, N.A., a national banking association,
and its successors in interest.
▇▇▇▇▇ Fargo Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of the Closing Date, among ▇▇▇▇▇ Fargo Bank,
N.A., the Trustee and the Depositor, relating to the Mortgage Loans, a copy of
which is attached hereto as Exhibit ▇.
▇▇▇▇▇ Fargo Sale and Servicing Agreement: The Seller's Warranties
and Servicing Agreement, dated as of February 1, 2007, by and between the
Depositor and ▇▇▇▇▇ Fargo, a copy of which is attached hereto as Exhibit L.
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.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Custodian for
the benefit of the Certificateholders the following documents or instruments
with respect to each applicable Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(ii) the original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Mortgage Loan;
(iii) the related original Mortgage and evidence of its recording
or, in certain limited circumstances, a certified copy of the mortgage
with evidence of recording;
(iv) except with respect to a MERS Loan, originals of any
intervening Mortgage assignment or certified copies in either case
evidencing recording; provided, that the assignment may be in the form of
a blanket assignment or assignments, a copy of which with evidence of
recording shall be acceptable;
(v) originals of all assumption or modification agreements or
certified copies thereof, in either case with evidence of recording
thereon;
(vi) an original or copy of a title insurance policy or evidence of
title;
(vii) to the extent applicable, an original power of attorney; and
(viii) a security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage, if any.
The Depositor shall deliver to the Custodian the applicable recorded
document promptly upon receipt from the respective recording office but in no
event later than 120 days from the Closing Date.
From time to time, pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement, the Original Loan Seller may forward to the Custodian additional
original documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan, in accordance with the terms of
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement. All such mortgage documents held
by the Custodian as to each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to the
Custodian Assignments of Mortgages (except in the case of MERS Loans), in blank,
for each applicable Mortgage Loan. On the Closing Date, the Original Loan Seller
will submit the Assignments of Mortgage for recordation, at the Original Loan
Seller's expense, pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within the time period and in the manner specified in the ▇▇▇▇▇
Fargo Sale and Servicing Agreement, the Trustee, upon written notice from the
Custodian of such failure, shall take or cause to be taken such remedial actions
under the ▇▇▇▇▇ Fargo Sale and Servicing Agreement against the Original Loan
Seller as may be permitted to be taken thereunder, including, without
limitation, if applicable, the repurchase by the Original Loan Seller of such
Mortgage Loan. The foregoing repurchase remedy shall not apply in the event that
the Original Loan Seller 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 the Original Loan Seller 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 the Original Loan Seller,
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 Original Loan Seller shall be deemed to have been satisfied upon delivery by
the Original Loan Seller to the Custodian prior to the Closing Date of a copy of
such Mortgage or assignment, as the case may be, certified (such certification
to be an original thereof) by the public recording office to be a true and
complete copy of the recorded original thereof.
(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 "BCAPB LLC Trust 2007-AB1"
and Deutsche Bank National Trust Company is hereby appointed as Trustee in
accordance with the provisions of this Agreement.
(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 Interest Rate Swap
Agreement) pursuant to Section 2.01(a). The Trustee on behalf of the Trust is
hereby authorized to enter into the Interest Rate Swap Agreement.
(e) If at any time the Trustee has received written notice of a
breach under the Representation Letter or the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement, as applicable, the Trustee shall enforce the rights of the Trust
under such agreement with respect to such breach.
Section 2.02 Acceptance by the Custodian of the Mortgage Loans. The
Custodian shall acknowledge on the Closing Date receipt by the Custodian 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, for the benefit of all
present and future Certificateholders in accordance with this Trust Agreement.
The Custodian acknowledges that it will maintain possession of the related
Mortgage Notes in California, Minnesota or Salt Lake City, Utah.
Prior to and as a condition to the Closing Date, the Custodian shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor and the Trustee an Initial Certification, or as the Depositor agrees
to, on the Closing Date, certifying receipt of a Mortgage Note and Assignment of
Mortgage for each Mortgage Loan. The Custodian shall not be responsible to
verify the validity, sufficiency or genuineness of any document in any Custodial
File.
The Custodian shall deliver to the Trustee, the Depositor, the
Servicer and the Original Loan Seller a Document Certification and Exception
Report, in the form annexed hereto as Exhibit F, within 90 days after the
Closing Date 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 required to be delivered
to 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), (8), (32) and (34) of the Mortgage Loan Schedule
respecting such Mortgage Loan is correct; and each Mortgage Note has been
endorsed as provided in Section 2.01 of this Agreement.
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 Servicer shall promptly deliver to the Custodian, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Custodial File as come into the possession of such
Servicer from time to time.
The Trustee shall enforce the obligation of the Original Loan Seller
to cure or repurchase Mortgage Loans that do not conform to the requirements of
Sections 2.01 and 2.02 as determined in the Custodian's review as required
herein by notifying the Original Loan Seller to correct or cure such default. If
the Original Loan Seller fails or is unable to correct or cure the defect or
breach within the period set forth in the applicable agreement, the Trustee
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 party to correct or cure, the
Trustee, upon receipt of written notice from the Custodian, shall notify the
Depositor and the Depositor will cause the Original Loan Seller to repurchase
the Mortgage Loan. The Trustee shall enforce the obligation of the Original Loan
Seller under the ▇▇▇▇▇ Fargo Sale and Servicing Agreement to cure or repurchase
Mortgage Loans for which there is a defect or a breach of a representation or
warranty thereunder of which a Responsible Officer of the Trustee has received
written notice, by notifying the applicable party to correct or cure such
default. If, within ten (10) Business Days of receipt of such notice by such
party, such 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, on behalf of the Trust, against the Servicer,
the Original Loan Seller and the Purchaser, as applicable, under this Agreement,
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement or the ▇▇▇▇▇ Fargo Sale and
Servicing Agreement, as the case may be, if the Trustee has received written
notice from the Depositor directing the Trustee to pursue such remedies. The
Trustee will be reimbursed by the Trust for all costs and expenses incurred by
it in enforcing such legal remedies.
In the event that a Mortgage Loan shall have been repurchased
pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement or the Representation
Letter, a Request for Release substantially in form and substance of Exhibit D
hereto, shall be delivered to the Custodian and the Custodian shall release
within two Business Days the related Custodial File to such Person as directed
in writing by the Servicer or the Depositor.
Upon the payment in full of any Mortgage Loan, or upon the receipt
by the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will notify the Trustee and the
Custodian in the manner specified in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement and shall request delivery to it of the Custodial File by submitting a
Request for Release, which Request for Release may be in an electronic format in
a form acceptable to the Custodian. Upon receipt of such certification and
Request for Release, the Custodian shall promptly release the related Custodial
File to the Servicer within two (2) Business Days.
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 Custodian shall, upon
request of the Servicer and delivery to, and receipt by, the Custodian of a
Request for Release in the manner specified in the ▇▇▇▇▇ Fargo Sale and
Servicing Agreement which Request for Release may be in an electronic format in
a form acceptable to the Custodian, release the related Custodial File to the
Servicer within three (3) Business Days from the receipt of the applicable
Request for Release, and the Trustee shall, at the direction of such Servicer
(which may be by a Request for Release), execute such documents as shall be
necessary to the prosecution of any such proceedings.
Section 2.03 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Trustee 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 2.04 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC Provisions shall
be the Closing Date. The "latest possible maturity date" of the regular
interests in each Trust REMIC is the Distribution Date occurring in March 2037,
which is the Distribution Date in the month following the month in which the
latest maturity date of any Mortgage Loan occurs.
Amounts distributable to the Class CE Certificates (prior to any
reduction for any Basis Risk Payment, Net Swap Payment or Swap Termination
Payment), exclusive of any amounts received from the Swap Provider, shall be
deemed paid from the Upper Tier REMIC in respect of the Class CE Interest and
the Class IO Interest to the Holders of the Class CE Certificates prior to
distribution of any Basis Risk Payments to the Offered Certificates or Swap
Termination Payment to the Swap Provider.
For federal income tax purposes, any amount distributed on the
Offered Certificates on any Distribution Date in excess of the amount
distributable on their Corresponding Class of Upper Tier Regular Interest on
such Distribution Date shall be treated as having been paid from the Excess
Reserve Fund Account or the Supplemental Interest Account, as applicable, and
any amount distributable on such Corresponding Class of Upper Tier Regular
Interest on such Distribution Date in excess of the amount distributable on the
Corresponding Class of Offered Certificates on such Distribution Date shall be
treated as having been paid to the Supplemental Interest Account as a Class IO
Shortfall, all pursuant to and as further provided in Section 8.15.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Custodian and the
Trustee that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the power and authority to convey the Mortgage
Loans and to execute, deliver and perform, and to enter into and consummate
transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite company 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 received or obtained 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 certificate of formation or limited liability company
agreement 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 would 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 2.05 shall survive delivery of the
respective Custodial Files to the Custodian, and shall inure to the benefit of
the Trustee on behalf of the Certificateholders.
Section 2.06 Representations and Warranties of the Custodian. The
Custodian hereby represents and warrants to the Depositor and the Trustee, as of
the Closing Date:
(a) The Custodian 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 the Custodian 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) The Custodian 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 the Custodian 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 the Custodian, enforceable against the Custodian 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 the Custodian,
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 the Custodian and will not result in a
material breach of any term or provision of the articles of association or
bylaws of the Custodian.
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Distribution Account and Excess Reserve Fund Account.
(a) The Trustee shall establish and maintain the Excess Reserve Fund Account, on
behalf of the Class CE Certificateholders, to receive any Basis Risk Payment and
to secure their limited recourse obligation to pay to the Offered
Certificateholders any Basis Risk Carry Forward Amounts (prior to using any Net
Swap Receipts). For the avoidance of doubt, any Basis Risk Carry Forward Amounts
shall be paid to the Principal Certificates first from the Excess Reserve Fund
Account and then from the Supplemental Interest Account. On each Distribution
Date, the Trustee shall deposit the amount of any Basis Risk Payment received by
it for such date into the Excess Reserve Fund Account. The Excess Reserve Fund
Account shall be a non-interest bearing account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of Principal Certificates, the Trustee
shall (1) withdraw from the Distribution Account, to the extent of funds
available therefor in the Distribution Account, and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.01(a)(iii)(C), the lesser of (x)
the Class CE Distributable Amount (without regard to the reduction in clause
(iii) of the definition thereof with respect to any Basis Risk Carry Forward
Amount or any Defaulted Swap Termination Payment) (to the extent remaining after
the distributions specified in Sections 4.01(a)(iii)(A)-(B)) and (y) the
aggregate Basis Risk Carry Forward Amounts of the Principal Certificates for
such Distribution Date and (2) withdraw from the Excess Reserve Fund Account
amounts necessary to pay to such Class or Classes of Principal Certificates the
related Basis Risk Carry Forward Amount. Such payments shall be allocated to
those Classes based upon the amount of Basis Risk Carry Forward Amount owed to
each such Class and shall be paid in the priority set forth in Section
4.01(a)(iii)(D).
The Trustee shall account for the Excess Reserve Fund Account as
assets of a grantor trust under subpart E, Part I of subchapter J of the Code
and not as an asset of any Trust REMIC created pursuant to this Agreement. The
beneficial owners of the Excess Reserve Fund Account are the Class CE
Certificateholders. For all federal income 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 CE Certificateholders in respect of
the Class CE Interest and then contributed by the Class CE Certificateholders to
the Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Trustee to
the Principal Certificateholders pursuant to Section 4.01(a)(iii)(D) from the
Excess Reserve Fund Account shall be accounted for by the Trustee, for federal
income tax purposes, as amounts paid first to the Holders of the Class CE
Certificates (in respect of the Class CE Interest or the Class IO Interest,
respectively) and then to the respective Class or Classes of Principal
Certificates. In addition, the Trustee shall account for the Principal
Certificateholders' rights to receive payments of Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account (along with payments, in the case
of the LIBOR Certificates, of Basis Risk Carry Forward Amounts from the
Supplemental Interest Account) and obligation to pay Class IO Shortfalls to the
Supplemental Interest Account as rights and obligations in a limited recourse
notional principal contract between the Class CE Certificateholders and the
Holders of each such Class. Funds in the Excess Reserve Fund Account shall
remain uninvested.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any distributions from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.01(a).
(b) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders, which shall be a non-interest
bearing trust account. The Trustee shall, promptly upon receipt on the Business
Day received, deposit in the Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to the applicable Servicing Agreement; and
(ii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement, and the
Servicer pursuant to an Officer's Certificate directs the Trustee in writing to
withdraw such amount from the Distribution Account, the Trustee shall return
such funds to the Servicer. 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 4.01.
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Servicer.
The Trustee may invest the funds in the Distribution Account in one
or more Permitted Investments in accordance with Section 3.02. 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.
Section 3.02 Investment of Funds in the Distribution Account. (a)
The Trustee may (but shall not be obligated to) invest funds in the Distribution
Account during the Trustee Float Period (for purposes of this Section 3.02, such
Account is 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 or maturing on such Distribution Date, in the case of an investment
that is an obligation of the Trustee, 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. All such Permitted Investments shall be held
to maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee. The Trustee shall be entitled
to sole possession over each such investment, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee. In the event amounts on
deposit in an Investment Account are at any time invested in a Permitted
Investment payable on demand, 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 the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee during the Trustee
Float Period shall be subject to the Trustee's withdrawal in the manner set
forth in Section 8.06.
(c) 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. Notwithstanding the foregoing, the Trustee shall be
liable to the Trust for any such loss on any funds it has invested under this
Section 3.02 only during the Trustee Float Period, and the Trustee shall deposit
funds in the amount of such loss in the Distribution Account promptly after such
loss is incurred.
(d) The Trustee or its Affiliates are 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 is not payable or reimbursable under Section 8.06
of this Agreement.
(e) In order to comply with its duties under the USA Patriot Act of
2001 and other laws, rules and regulations applicable to banking institutions,
including those related 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.
(f) On or prior to each Distribution Date, the Custodian shall
deliver an invoice to the Trustee (which may be provided electronically),
setting forth the amount of the Custodian Fee for the related Distribution Date.
The Trustee shall remit the Custodian Fee to the Custodian payable out of the
compensation payable hereunder to the Trustee.
(g) In consideration for ongoing obligations hereunder with respect
to the Trust Fund, the Depositor may (but shall not be obligated to) direct the
Trustee, in writing, to invest funds from Mortgage Loans in the Distribution
Account during the Depositor Float Period, in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand
or maturing on the third Business Day immediately preceding such Distribution
Date, in the case of an investment that is an obligation of the Depositor 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. If
the Depositor does not direct the Trustee to invest the funds from the Mortgage
Loans in the Distribution Account, then the funds will remain uninvested. All
such Permitted Investments shall be held to maturity, unless payable on demand.
Any investment of funds in an Investment Account during the Depositor Float
Period shall be made in the name of the Depositor. The Depositor shall be
entitled to sole possession over each such investment during the Depositor Float
Period, and any certificate or other instrument evidencing any such investment
shall be delivered directly to the Depositor or its agent, together with any
document of transfer necessary to transfer title to such investment to the
Depositor. In the event amounts on deposit in the Distribution Account during
the Depositor Float Period are at any time invested in a Permitted Investment
payable on demand, the Depositor 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 the Distribution Account.
(h) The Depositor shall be liable to the Trust for any such loss on
any funds it has invested under this Section 3.02, and the Depositor shall remit
such funds to the Trustee promptly after such loss is incurred for deposit in
the Distribution Account. In no event shall the Trustee have any liability or
responsibility for the selection of investments and any losses incurred thereon,
and shall have no obligation to invest or reinvest any funds in the absence of
timely written direction.
(i) Interest earned on investments of funds in the Distribution
Account with respect to funds on deposit during the Depositor Float Period shall
be held for the Depositor with the Trustee until the interest may be distributed
directly to the Depositor on the Distribution Date in the month following the
applicable Depositor Float Period.
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) On each Distribution
Date, the Trustee will make the disbursements and transfers from amounts then on
deposit in the Distribution Account in the following order of priority and to
the extent of the Available Funds remaining and, on such Distribution Date,
shall make distributions on the Certificates in accordance with such allocation:
(i) holders of each Class of Principal Certificates and to the
Supplemental Interest Account in the following order of priority:
(A) from the Interest Remittance Amount, to the Supplemental
Interest Account, the sum of (x) all Net Swap Payments and (y) any
Swap Termination Payment owed to the Swap Provider (to the extent
not previously received by the Swap Provider as a Replacement Swap
Provider Payment) other than a Defaulted Swap Termination Payment,
if any;
(B) to the Holders of the Class I-A Certificates on a pro rata
basis, any related Accrued Certificate Interest and any Unpaid
Interest Amounts for each such Class, as applicable, on such
Distribution Date;
(C) from any remaining Interest Remittance Amount, 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 Amount, 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 Amount, 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 Amount, 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 Amount, 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 Amount, 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 Amount, to the
Class M-7 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amount, to the
Class M-8 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(K) from any remaining Interest Remittance Amount, to the
Class M-9 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) prior to the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the
Supplemental Interest Account and to the Holders of the related Class or
Classes of Principal Certificates then entitled to distributions of
principal, from Available Funds remaining 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 extent unpaid after the distributions
pursuant to clause (i)(A) above, to the Supplemental Interest
Account, the sum of (x) all Net Swap Payments and (y) any Swap
Termination Payment (to the extent not previously received by
the Swap Provider as a Replacement Swap Provider Payment),
other than a Defaulted Swap Termination Payment, owed to the
Swap Provider, if any;
(2) (a) to the Class A Certificates, allocated as
described in Section 4.01(c), until the respective Class
Certificate Balances thereof are reduced to zero; and
(3) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, and
Class M-9 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
Supplemental Interest Account and to the Holders of the related
Class or Classes of Principal Certificates then entitled to
distribution of principal, from Available Funds 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 amounts and order of priority:
(1) to the extent unpaid after the distributions
pursuant to clause (i)(A) above, to the Supplemental Interest
Account, the sum of (x) all Net Swap Payments and (y) any Swap
Termination Payment (to the extent not previously received by
the Swap Provider as a Replacement Swap Provider Payment),
other than a Defaulted Swap Termination Payment, owed to the
Swap Provider, if any;
(2) to the Class A Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and (y) the Class A Principal
Distribution Amount, allocated among those classes as
described below under Section 4.01(c), until their respective
Class Certificate Balances are reduced to zero;
(3) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the amounts distributed to the
Class A Certificateholders in clause (ii)(B)(2) above and (y)
the Class M-1 Principal Distribution Amount until their Class
Certificate Balance has been reduced to zero;
(4) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the amounts distributed to the
Class A Certificateholders in clause (ii)(B)(2) above and to
the Class M-1 Certificateholders in clause (ii)(B)(3) above
and (y) the Class M-2 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to zero;
(5) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the amounts distributed to the
Class A Certificateholders in clause (ii)(B)(2) above, to the
Class M-1 Certificateholders in clause (ii)(B)(3) above and to
the Class M-2 Certificateholders in clause (ii)(B)(4) above
and (y) the Class M-3 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to zero;
(6) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the amounts distributed to the
Class A Certificateholders in clause (ii)(B)(2) above, to the
Class M-1 Certificateholders in clause (ii)(B)(3) above, to
the Class M-2 Certificateholders in clause (ii)(B)(4) above
and to the Class M-3 Certificateholders in clause (ii)(B)(5)
above and (y) the Class M-4 Principal Distribution Amount,
until their Class Certificate Balance has been reduced to
zero;
(7) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the amounts distributed to the
Class A Certificateholders in clause (ii)(B)(2) above, to the
Class M-1 Certificateholders in clause (ii)(B)(3) above, to
the Class M-2 Certificateholders in clause (ii)(B)(4) above,
to the Class M-3 Certificateholders in clause (ii)(B)(5) above
and to the Class M-4 Certificateholders in clause (ii)(B)(6)
above and (y) the Class M-5 Principal Distribution Amount,
until their Class Certificate Balance has been reduced to
zero;
(8) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the amounts distributed to the
Class A Certificateholders in clause (ii)(B)(2) above, to the
Class M-1 Certificateholders in clause (ii)(B)(3) above, to
the Class M-2 Certificateholders in clause (ii)(B)(4) above,
to the Class M-3 Certificateholders in clause (ii)(B)(5)
above, to the Class M-4 Certificateholders in clause
(ii)(B)(6) above and to the Class M-5 Certificateholders in
clause (ii)(B)(7) above and (y) the Class M-6 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(9) to the Class M-7 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Supplemental Interest Account in
clause (ii)(B)(1) above and the Class A Certificateholders in
clause (ii)(B)(2) above, to the Class M-1 Certificateholders
in clause (ii)(B)(3) above, to the Class M-2
Certificateholders in clause (ii)(B)(4) above, to the Class
M-3 Certificateholders in clause (ii)(B)(5) above, to the
Class M-4 Certificateholders in clause (ii)(B)(6) above, to
the Class M-5 Certificateholders in clause (ii)(B)(7) above
and to the Class M-6 Certificateholders in clause (ii)(B)(8)
above and (y) the Class M-7 Principal Distribution Amount,
until their Class Certificate Balance has been reduced to
zero;
(10) to the Class M-8 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amounts distributed to the Supplemental Interest Account
in clause (ii)(B)(1) above and the Class A Certificateholders
in clause (ii)(B)(2) above, to the Class M-1
Certificateholders in clause (ii)(B)(3) above, to the Class
M-2 Certificateholders in clause (ii)(B)(4) above, to the
Class M-3 Certificateholders in clause (ii)(B)(5) above, to
the Class M-4 Certificateholders in clause (ii)(B)(6) above,
to the Class M-5 Certificateholders in clause (ii)(B)(7)
above, to the Class M-6 Certificateholders in clause
(ii)(B)(8) above and to the Class M-7 Certificateholders in
clause (ii)(B)(9) above and (y) the Class M-8 Principal
Distribution Amount, until their Class Certificate Balance has
been reduced to zero; and
(11) to the Class M-9 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii)
the amounts distributed to the Supplemental Interest Account
in clause (ii)(B)(1) above and the Class A Certificateholders
in clause (ii)(B)(2) above, to the Class M-1
Certificateholders in clause (ii)(B)(3) above, to the Class
M-2 Certificateholders in clause (ii)(B)(4) above, to the
Class M-3 Certificateholders in clause (ii)(B)(5) above, to
the Class M-4 Certificateholders in clause (ii)(B)(6) above,
to the Class M-5 Certificateholders in clause (ii)(B)(7)
above, to the Class M-6 Certificateholders in clause
(ii)(B)(8) above, to the Class M-7 Certificateholders in
clause (ii)(B)(9) above and to the Class M-8
Certificateholders in clause (ii)(B)(10) above and (y) the
Class M-9 Principal Distribution Amount, until their Class
Certificate Balance has been reduced to zero; and
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, amounts on deposit
in the Excess Reserve Fund Account, shall be distributed in the following
order of priority:
(A) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
Class M-9 Certificates, in that order, any Unpaid Interest Amount
for each such Class;
(B) sequentially, to the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
Class M-9 Certificates, in that order, any Unpaid Realized Loss
Amount for each such Class;
(C) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment (without regard to any Net Swap Receipts) for
such Distribution Date;
(D) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date, an amount equal to any
remaining unpaid Basis Risk Carry Forward Amount with respect to the
Principal Certificates for that Distribution Date, first,
concurrently to the Class A Certificates, pro rata, based on their
respective Class Certificate Balances immediately prior to that
Distribution Date, up to their respective unpaid remaining Basis
Risk Carry Forward Amounts (provided that, if for any Distribution
Date, after the allocation of the remaining unpaid Basis Risk Carry
Forward Amounts to the Class A Certificates, the remaining unpaid
Basis Risk Carry Forward Amounts for any of the Class A Certificates
is reduced to zero, any amount of remaining unpaid Basis Risk Carry
Forward Amounts that would have been allocated to that Class A
Certificate for that Distribution Date will instead be allocated,
pro rata, based on their respective remaining unpaid Basis Risk
Carry Forward Amounts, to the other Class A Certificates to the
extent the other Class A Certificates have any remaining unpaid
Basis Risk Carry Forward Amounts), and, second, sequentially to the
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8 and Class M-9 Certificates, in that order, in
each case up to their respective unpaid remaining Basis Risk Carry
Forward Amounts;
(E) to the Supplemental Interest Account, the amount of any
Defaulted Swap Termination Payment owed to the Swap Provider;
(F) to the Class CE Certificates, the remainder of the Class
CE Distributable Amount not distributed pursuant to Sections
4.01(a)(iii)(A)-(E); and
(G) to the Class R Certificates, any remaining amount, in
respect of each Trust REMIC.
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, then such shortfall will be allocated to the Holders of such Classes,
with interest thereon, on future Distribution Dates, as an Unpaid Interest
Amount, subject to the priorities described above.
On each Distribution Date, prior to the distribution on any other
Class of Certificates, the Trustee is required to distribute to the Holders of
the Class CE Certificates all amounts representing Prepayment Premiums in
respect of the Mortgage Loans received during the related Principal Prepayment
Period.
In addition, notwithstanding the foregoing, on any Distribution Date
after the Distribution Date on which the Class Certificate Balance of a Class of
Offered Certificates has been reduced to zero, that Class of Certificates will
be retired and will no longer be entitled to distributions, including
distributions in respect of Unpaid Interest Amounts, unpaid remaining Basis Risk
Carry Forward Amounts or Unpaid Realized Loss Amounts for the Principal
Certificates.
(b) On any Distribution Date, any Relief Act Interest Shortfalls for
such Distribution Date and Net Prepayment Interest Shortfalls for such
Distribution Date shall be allocated by the Trustee as a reduction in the
following order:
(i) First, to the portion of the Class CE Distributable Amount
allocable to interest; and
(ii) Second, pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A and Class M Certificates,
based on the amount of interest to which such Classes would otherwise be
entitled.
(c) Any principal distributions allocated to the Senior Certificates
are required to be distributed in the following order of priority:
(i) to the Class A-5 Certificates, the NAS Principal Distribution
Amount, until its Class Certificate Balance is reduced to zero;
(ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4
and Class A-5 Certificates (without regard to the NAS Principal
Distribution Amount), until their respective Class Certificate Balances
are reduced to zero (notwithstanding the foregoing, if the aggregate Class
Certificate Balance of the Senior Certificates exceeds the aggregate
Stated Principal Balance of the Mortgage Loans, principal distributions
will be allocated concurrently, pro rata, to the Class A-1, Class A-2,
Class A-3, Class A-4 and Class A-5 Certificates without regard to the NAS
Principal Distribution Amount).
On or after the Distribution Date on which the Class Certificate Balances of the
Subordinated Certificates and the Subordinated Amount have been reduced to zero,
any principal distributions to the Senior Certificates are required to be
allocated pro rata, based on Class Certificate Balances prior to distributions
made on that Distribution Date.
Section 4.02 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor and each Rating Agency a
statement based in part on information provided by the Servicer 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 (and the calculation
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 Carry Forward Amount
for each Class of Certificates, the amount of such Basis Risk Carry
Forward Amount covered by withdrawals from the Excess Reserve Fund Account
or the Supplemental Interest Account on such Distribution Date;
(vi) the aggregate amount of any Principal Prepayments and
repurchase proceeds included in the distributions to Certificateholders;
(vii) 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 Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account or the Supplemental Interest
Account;
(viii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date and the aggregate amount of all Advances recovered
during the related Due Period;
(ix) the Pool Stated Principal Balance for the related Distribution
Date;
(x) the amount of the Expense Fees paid to or retained by the
Servicer or the Trustee with respect to such Distribution Date, in each
case, identifying the general purpose of such fees;
(xi) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(xii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicer (and the Trustee as successor servicer and any other successor
servicer, if applicable) as outstanding as of the close of business on the
Determination Date immediately preceding such Distribution Date;
(xiii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent (as
calculated in accordance with the OTS method) 31 to 60 days, 61 to 90
days, 91 or more days, and in such other periods and for such times as
required by Regulation AB, (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;
(xiv) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month (as
calculated in accordance with the OTS method);
(xv) 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 outstanding principal balance of such Mortgage
Loans as of the close of business on the Determination Date preceding such
Distribution Date of the REO Properties;
(xvi) the total number and outstanding principal balance of any REO
Properties (and market value, if available) as of the close of business on
the Determination Date preceding such Distribution Date;
(xvii) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event);
(xviii) the amount on deposit in each Excess Reserve Fund Account
and the Supplemental Interest Account (after giving effect to
distributions on such Distribution Date);
(xix) 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;
(xx) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the related
Certificateholders with respect to Unpaid Interest Amounts, Applied
Realized Loss Amounts, Basis Risk Carry Forward Amounts;
(xxi) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xxii) LIBOR and Swap LIBOR;
(xxiii) the Subordinated Amount and Specified Subordinated Amount;
(xxiv) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxv) the amount distributed on the Class CE Certificates;
(xxvi) with respect to each Class of Certificates, any amounts not
covered by Compensating Interest on such Distribution Date;
(xxvii) the number of Mortgage Loans with respect to which a
reduction in the mortgage interest rate has occurred pursuant to the
Relief Act, as well as the amount of any Interest Shortfalls during the
related due period; both in the aggregate and for each Class of
Certificates;
(xxviii) if provided by the Servicer, any material changes to
methodology regarding calculations of delinquencies and charge offs;
(xxix) if provided by the Servicer, any material modifications,
extensions or waivers to pool asset terms, fees, penalties or payments
during the distribution period or that have cumulatively become material
over time;
(xxx) if provided by the Servicer, material breaches of pool asset
representations or warranties or transaction covenants;
(xxxi) if provided by the Servicer, if applicable, information
regarding any new issuance of asset backed securities backed by the same
asset pool, any pool asset changes (other than in connection with a pool
asset converting into cash in accordance with its terms), such as
additions or removals in connection with a prefunding period and pool
asset substitutions and repurchases (and purchase rates, if applicable),
and cash flows available for future purchases, such as the balances of any
prefunding or revolving accounts, if applicable;
(xxxii) if provided by the Servicer, any material changes in the
solicitation, credit granting, underwriting, origination, acquisition or
pool selection criteria or procedures, as applicable, used to originate,
acquire or select the new pool assets;
(xxxiii) the amount of any Subsequent Recoveries for such
Distribution Date; and
(xxxiv) the number of Mortgage Loans at the beginning and end of the
applicable reporting period, the pool factor, and the weighted average
interest rate, and weighted average remaining term.
In addition, each Form 10-D prepared and filed by the Trustee
pursuant to Section 8.14 shall include the following information with respect to
the related distribution:
(i) material breaches of Mortgage Loan representations and
warranties 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 has received written
notice.
(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 Servicer. 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 investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇.
A paper copy of the above statement will also be made available upon request.
Parties that are unable to use the website are entitled to have a paper copy
mailed to them via first class mail by calling the investor relations desk and
indicating such. The Trustee may change the way the monthly statements to
Certificateholders are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes. As a condition to access the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement.
The Trustee shall make available to each Analytics Company via the
Trustee's internet website each statement to Certificateholders prepared
pursuant to this Section 4.02(b). The Trustee shall cooperate in good faith with
the Depositor and the Servicer 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)(iii) and (a)(v) of this Section 4.02
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) 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 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.
Section 4.03 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, until the Class Certificate Balance of each
such Class is reduced to zero.
In the event Applied Realized Loss Amounts are allocated to any
Class of Certificates, their Class Certificate Balances shall be reduced by the
amount so allocated and no funds shall be distributed with respect to the
written down amounts or with respect to interest or Basis Risk Carry Forward
Amounts on the written down amounts on that Distribution Date or any future
Distribution Dates, even if funds are otherwise available therefor.
Notwithstanding the foregoing, the Class Certificate Balance of each
Class of Certificates that has been previously reduced by Applied Realized Loss
Amounts will be increased, in that order or seniority, by the amount of the
Subsequent Recoveries (but not in excess of the Applied Realized Loss Amount
allocated to the applicable Class of Certificates).
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 Principal 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.
(i) The Pass-Through Rate for each Class of Principal Certificates
for each Interest Accrual Period shall be determined by the Trustee on
each LIBOR Determination Date so long as the Principal Certificates are
Outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the Principal 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 Principal 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 Supplemental Interest Account and Posted Collateral
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 Principal Certificates (the "Supplemental Interest Account") as a
part of the Trust Fund. The Supplemental Interest 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. Funds in the
Supplemental Interest Account shall remain uninvested.
On any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipts for that Distribution
Date will be deposited into the Supplemental Interest Account. With respect to
any Distribution Date, funds in the Supplemental Interest Account will be
distributed in the following order of priority:
(i) to the Swap Provider, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment (to the extent not previously received by
the Swap Provider as a Replacement Swap Provider Payment), other than a
Defaulted Swap Termination Payment, to the Swap Provider, if any, owed for
that Distribution Date;
(ii) to the Class A-1 Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts, to the extent unpaid from Available Funds;
(iii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, to pay Accrued Certificate Interest and, if
applicable, Unpaid Interest Amounts for such Classes to the extent unpaid
from other Available Funds;
(iv) to the LIBOR Certificates, to pay any Basis Risk Carry Forward
Amounts as described, and in the same manner and priority as set forth in
Section 4.01(a)(iii)(D) above, to the extent unpaid from other Available
Funds (including funds on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, to pay principal as described, and in the
same manner and order of priority as set forth, in Section 4.01(a)(ii)(A)
or 4.01(a)(ii)(B) above, as applicable, but only to the extent necessary
to restore the Subordinated Amount to the Specified Subordinated Amount as
a result of current or prior Realized Losses not previously reimbursed,
after giving effect to payments and distributions from other Available
Funds;
(vi) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, to pay any Unpaid Realized Loss Amounts, in
each case in an amount equal to the remaining Unpaid Realized Loss Amount
for each such Class, to the extent unpaid from other Available Funds;
(vii) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(viii) to the Holders of the Class CE Certificates, any remaining
amounts.
Notwithstanding any other provision in this Agreement, in the event
that the Interest Rate Swap Agreement is terminated and the Trust enters into a
replacement interest rate swap agreement and the Trust is entitled to receive a
payment from a replacement swap provider, the Trustee shall direct the
replacement swap provider to make such payment (the "Replacement Swap Provider
Payment") to the Supplemental Interest Account. The Swap Provider shall be
entitled to receive from the Supplemental Interest Account the lesser of (x) the
amount so received from the Replacement Swap Provider and (y) any Swap
Termination Payment owed to the Swap Provider (to the extent not already paid by
the Trust) that is being replaced immediately upon receipt of the Replacement
Swap Provider Payment, regardless of whether the date of receipt thereof is a
Distribution Date; provided that to the extent that the Replacement Swap
Provider Payment is less than the Swap Termination Payment owed to the Swap
Provider, any remaining amounts will be paid to the Swap Provider on the
subsequent Distribution Date (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) in accordance with the priority
of payments described in Section 4.01 of 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, the Servicer, the Custodian, the Trustee or any other
Person.
Notwithstanding the foregoing, 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 a separate
non-interest bearing reserve account that constitutes a part of the Supplemental
Interest Account. On each subsequent Distribution Date (so long as funds are
available in the reserve account), the Trustee shall withdraw from such reserve
account and deposit into the Supplemental Interest Account an amount equal to
the amount of any Net Swap Receipt due the Trust under the Interest Rate Swap
Agreement (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 Supplemental Interest Account.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Account shall be distributed pursuant to the priorities
set forth in this Section 4.05.
The Trustee shall account for the Supplemental Interest Account as
assets of a grantor trust under subpart E, Part I of subchapter J of the Code
and not as an asset of any Trust REMIC created pursuant to this Agreement. The
beneficial owners of the Supplemental Interest Account are the Class CE
Certificateholders. For federal income tax purposes, Net Swap Payments and Swap
Termination Payments payable to the Swap Provider from Available Funds shall be
deemed to be paid to the Supplemental Interest Account from the Upper Tier
REMIC, first, by the Holder of the Class CE Certificates (in respect of the
Class IO Interest and, if applicable, Class CE Interest) and second, other than
any Defaulted Swap Termination Payment, by the Holders of the applicable Class
or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to
the extent provided in Section 8.15.
Any Basis Risk Carry Forward Amounts distributed by the Trustee to
the Offered Certificateholders from the Excess Reserve Fund Account or, in the
case of the LIBOR Certificates, the Supplemental Interest Account shall be
accounted for by the Trustee, for federal income tax purposes, as amounts paid
first to the Holders of the Class CE Certificates (in respect of the Class CE
Interest or the Class IO Interest, respectively) and then to the respective
Class or Classes of Offered Certificates. In addition, the Trustee shall account
for the rights of Holders of each Class of LIBOR Certificates to receive
payments of Basis Risk Carry Forward Amounts from the Supplemental Interest
Account (along with Basis Risk Carry Forward Amounts payable from the Excess
Reserve Fund Account) and the obligations of the Offered Certificates to pay
Class IO Shortfalls to the Supplemental Interest Account as rights and
obligations under a separate limited recourse notional principal contract
between the Class CE Certificateholders and of Holders of each such Class.
The Supplemental Interest 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 CE Certificates shall be the beneficial
owners of the Supplemental Interest Account for all federal income tax purposes,
and shall be taxable on all income earned thereon, and any amounts reimbursed
from the Upper Tier REMIC to the Supplemental Interest Account shall be treated
as having been distributed to the Holders of the Class CE Certificates.
In the event a Swap Provider does not deliver the Delivery Amount
(as defined in the Interest Rate Swap Agreement) to the Trustee, the Trustee
shall provide notice of such failure to the Swap Provider within one Business
Day of such failure.
With respect to the failure of a Swap Provider to perform any of its
obligations under the related Interest Rate Swap Agreement, the breach by such
Swap Provider of any of its representations and warranties made pursuant to such
Interest Rate Swap Agreement, or the termination of either of 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.
The Depositor shall cause any replacement swap provider to provide a
copy of the replacement interest rate swap agreement to the Trustee.
On the Closing Date, the Trustee pursuant to the Interest Rate Swap
Agreement shall open and maintain in its name, a separate non-interest bearing
trust account for the benefit of the holders of the Certificates (the "Posted
Collateral Account") as a part of the Trust Fund. The Posted Collateral 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.
Funds in the Posted Collateral Account shall be invested at the direction of the
Swap Provider as provided in the Interest Rate Swap Agreement and the Swap
Provider shall be responsible for all losses incurred in connection with
investments thereof. In no event shall the Trustee have any liability or
responsibility for the selection of investments and any losses incurred thereon,
and shall have no obligation to invest or reinvest any funds in the absence of
timely written direction.
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 CE
Certificates in the name of the Depositor or its designee.
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 Section 5.06, 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 CE Certificates or the Residual Certificates to the
Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class CE
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class CE 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. As directed by the
Depositor, the Trustee 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 Depositor shall cooperate with the Trustee and the Servicer in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Trustee such information regarding the Certificates,
the Mortgage Loans and other matters regarding the Trust Fund as the Depositor
shall reasonably determine 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 Servicer and the Depositor
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 the Class CE Certificates
or the Residual Certificates to the Depositor or an Affiliate of the Depositor,
(ii) the transfer of the Class CE Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class CE 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, 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 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 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 Depositor, the
Trustee, the Servicer, the Custodian 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, the Custodian or the Servicer 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 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 Residual Certificate to a
transferee that does not make the representation in clause (i) above shall be
void and of no effect.
None of the Residual Certificates may be sold to any employee
benefit plan subject to Title I of ERISA, any plan subject to Section 4975 of
the Code, or any plan subject to any Similar Law or any Person investing on
behalf or with plan assets of such plan.
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 an 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 (i) Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (for transactions by
independent "qualified professional asset managers"), (ii) PTCE 91-38 (for
transactions by bank collective investment funds), (iii) ▇▇▇▇ ▇▇-▇ (for
transactions by insurance company pooled separate accounts), (iv) PTCE 95-60
(for transactions by insurance company general accounts) or (v) PTCE 96-23 (for
transactions effected by "in-house asset managers") or similar exemption under
similar law.
(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) 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 be under no
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, the Trustee, the Custodian
or the Servicer, to the effect that the elimination of such restrictions will
not cause any Trust REMIC 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 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 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) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee, duly
executed by the Certificateholder or his attorney duly authorized in writing
(with copies directly (other than with respect to a Residual Certificate) to the
Swap Provider). The Trustee shall forward any such IRS Form (other than with
respect to a Residual Certificate) received to the Swap Provider. Each Private
Certificateholder by its purchase of a Certificate is deemed to consent to any
such IRS Form being so forwarded. The Trustee shall be required to forward any
tax certification received by it to the Swap Provider at the last known address
provided to it, and, subject to Article VIII hereof, shall not be liable for the
receipt of such tax certification by the Swap Provider, nor any action taken or
not taken by the Swap Provider with respect to such tax certification. Upon the
request of the Swap Provider, the Trustee shall forward the name and address and
Percentage Interest held in the Private Certificates for each Private
Certificateholder to the Swap Provider at the last known address provided to it.
The Trustee shall have no duty to take any action to correct any misstatement or
omission in any tax certification provided to it and forwarded to the Swap
Provider; provided however, if the Trustee has actual knowledge that a tax
certificate or name and address information provided to it by a Private
Certificateholder contains a misstatement or omission (including by reason of
the Swap Provider informing it of the misstatement or omission), it shall notify
the Swap Provider of the misstatement or omission, and when it receives a
corrected form or name and address information from the Holder of the Private
Certificate it shall forward the corrected form and/or name and address
information to the Swap Provider.
(g) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be canceled 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 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 Trustee, the Depositor and
any agent of 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 the Trustee, the Depositor, nor any agent of 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 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, the Servicer or such 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 where Certificates may be surrendered for registration of transfer
or exchange. The Trustee initially designates its offices located at DB Services
Tennessee, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Transfer Unit. 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
Section 6.01 Respective Liabilities of the Depositor. The Depositor
shall 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. The Depositor
will keep in full effect its existence, rights and franchises as a corporation
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 may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the Depositor
shall be a party, or any Person succeeding to the business of the Depositor,
shall be the successor of the Depositor, 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.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its 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 or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or any
such Person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Depositor and any director, officer, employee, Affiliate or agent of the
Depositor 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 any director, officer, employee or agent of the
Depositor 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 or any other unanticipated
or extraordinary expense, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Depositor shall not 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 the Depositor may in its discretion undertake
any such action (or direct the Trustee to undertake such actions 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
Trustee, if applicable, shall be entitled to be reimbursed therefor out of the
Distribution Account.
Section 6.04 Option to Purchase Defaulted Mortgage Loans. The
Depositor shall have the option, but is not obligated, to purchase from the
Trust any Mortgage Loan that is 90 days or more delinquent. The purchase price
therefor, which shall be deposited in the Distribution Account, shall be 100% of
the unpaid principal balance of such Mortgage Loan, plus all related accrued and
unpaid interest, and the amount of any unreimbursed Servicing Advances made by
the Servicer related to the applicable Mortgage Loan.
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default. If an Event of Default described in
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement shall occur with respect to the
Servicer then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Trustee may, or at the direction of
Certificateholders entitled to a majority of the Voting Rights the Trustee
shall, by notice in writing to the Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Servicer under the ▇▇▇▇▇
Fargo Sale and Servicing Agreement and in and to the Mortgage Loans serviced by
the Servicer and the proceeds thereof. The Holders of Certificates evidencing at
least 66% of the Voting Rights of Certificates affected by an Event of Default
may waive such Event of Default; provided, however, that (a) an Event of Default
with respect to the Servicer's obligation to make Monthly Advances may be waived
only by all of the holders of the Certificates affected by such Event of Default
and (b) no such waiver is permitted that would materially adversely affect any
non-consenting Certificateholder. On and after the receipt by the Servicer of
such written notice of termination, all authority and power of the Servicer
hereunder, whether with respect to the applicable Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the 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 applicable Mortgage Loans and related
documents, or otherwise.
Section 7.02 Trustee to Act; Appointment of Successor. Within 90
days after the Trustee gives, and the Servicer receives a notice of termination
pursuant to Section 7.01, the Trustee shall, subject to and to the extent
provided in Section 7.03, and subject to the rights of the Trustee to appoint a
successor Servicer pursuant to this Section 7.02, be the successor to the
Servicer in its capacity as servicer under the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement or comparable new agreement with the successor and the transactions
set forth or provided for herein and in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
thereof and applicable law including the obligation to make Monthly Advances or
Servicing Advances pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement (it
being understood and agreed that if the Servicer fails to make an Advance, the
Trustee as successor Servicer shall do so unless a determination has been made
that such Advance would constitute a Nonrecoverable Monthly Advance or a
Nonrecoverable Servicing Advance). As compensation therefor, the Trustee shall
be entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account if the Servicer had
continued to act under the ▇▇▇▇▇ Fargo Sale and Servicing Agreement including,
if the Servicer was receiving the Servicing Fee at the Servicing Fee Rate set
forth in the ▇▇▇▇▇ Fargo Sale and Servicing Agreement (as set forth in the
Mortgage Loan Schedule with respect to the related Mortgage Loans), such
Servicing Fee and the income on investments or gain related to the Collection
Account. It is understood and acknowledged by the parties hereto that there will
be a period of transition before the transfer of servicing obligations is fully
effective. Notwithstanding the foregoing, the Trustee will have a period (not to
exceed 90 days) to complete the transfer of all servicing data and correct or
manipulate such servicing data as may be required by the Trustee to correct any
errors or insufficiencies in the servicing data or otherwise enable the Trustee
to service the Mortgage Loans in accordance with accepted servicing
practices.Notwithstanding the foregoing, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Monthly Advances and Servicing Advances pursuant to a servicing agreement, or if
it is otherwise unable to so act, or, at the written request of
Certificateholders entitled to 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 the Servicer under the ▇▇▇▇▇ Fargo Sale and Servicing Agreement in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer. No such appointment of a successor to the Servicer hereunder
shall be effective until the Depositor shall have consented thereto. Any
successor to the Servicer shall be an institution which is a ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, which has a net worth of
at least $25,000,000, 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 the
terminated Servicer, (other than liabilities of the terminated Servicer incurred
prior to termination of the 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 the
Servicer hereunder, the Trustee, unless the Trustee is prohibited by law from so
acting, shall, subject to this Section 7.02, 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, the Depositor 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 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 to the 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.
Any successor Servicer shall be responsible for giving notice to the
related Mortgagors of such change of Servicer, in accordance with applicable
federal and state law, and shall, during the term of its service as Servicer,
maintain in force the policy or policies that such Servicer is required to
maintain pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement. In no event
shall the Trustee be responsible for paying the costs and expenses of
transferring the servicing of the Mortgage Loans.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and to each Rating
Agency.
(b) Promptly 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 of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE, THE CUSTODIAN, VARIOUS TAX MATTERS,
SERVICING REPORTS AND PERIODIC FILINGS
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 to the requirements of this Agreement which it believes 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 8.16. The Trustee shall indemnify the
Depositor and 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 8.16, including without limitation
any failure by the Trustee to identify pursuant to Section 8.16 any
Subcontractor that is a Servicing Function Participant. This indemnity shall
survive the termination of this Agreement or the earlier resignation or removal
of the Trustee.
Section 8.02 [Reserved].Section 8.03 Certain Matters Affecting the
Trustee. Except as otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
opinions (including an Opinion of Counsel), certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and the
Trustee shall have no responsibility to ascertain or confirm the genuineness of
any signature of any such party or parties;
(b) the Trustee 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 advice or Opinion of
Counsel;
(c) the Trustee shall not 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 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;
(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 a 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;
(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;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers granted
hereunder;
(l) notwithstanding anything to the contrary in the applicable
Servicing Agreement, the Trustee shall not consent to the Servicer's request of
assigning the Servicing Agreement or the servicing rights thereunder to any
other party; and
(m) should the Trustee deem the nature of any action required on its
part to be unclear, the Trustee may require prior to such action that it be
provided by the Depositor with reasonable further instructions.
Section 8.04 Trustee and Custodian 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. Neither the Trustee nor the Custodian
makes any representations as to the validity or sufficiency of this Agreement or
of the Certificates or of any Mortgage Loan or related document other than with
respect to the Trustee, the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application by
the Depositor or the Servicer of any funds paid to the Depositor or the Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Depositor or the Servicer.
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 a successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.05 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 8.06 Trustee's and Custodian's Fees and Expenses. As
compensation for its activities under this Agreement, the Trustee may withdraw
from the Distribution Account on each Distribution Date any interest or
investment income earned on funds deposited in the Distribution Account during
the Trustee Float Period. On each Distribution Date, the Trustee shall pay the
Custodian the Custodian Fee out of the interest or investment income earned on
funds deposited in the Distribution Account during the Trustee Float Period as
described in the previous sentence. The obligations of the Trustee under this
Section 8.06 shall survive the resignation, termination or removal of the
Custodian for payment of the Custodian Fee accrued prior to such termination,
resignation or removal. The Trustee and any director, officer, employee, or
agent of the Trustee shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
resulting from any error in any tax or information return prepared by the
Servicer or incurred in connection with any claim or legal action relating to:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement for which the Servicer has completed performance of its obligation to
indemnify the Trustee pursuant to such Servicing Agreement, (ii) resulting from
any breach of the Original Loan Seller's obligations in connection with the
▇▇▇▇▇ Fargo Sale and Servicing Agreement for which it has completed performance
of its obligation to indemnify the Trustee pursuant to the ▇▇▇▇▇ Fargo Sale and
Servicing Agreement, or (iii) incurred because of willful misfeasance, 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 misfeasance, 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, 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,
Registrar or paying agent under this Agreement or for any other routine expenses
incurred by the Trustee; provided, however, no expense shall be reimbursed
hereunder if it would not constitute an "unanticipated expense incurred by the
REMIC" within the meaning of the REMIC Provisions.
Section 8.07 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation, banking association or other
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 8.07 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 8.07, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.08. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its Affiliates or with
the Servicer and its Affiliates; provided, however, that such entity cannot be
an Affiliate of the Depositor or of the Servicer other than the Trustee in its
role as successor to the Servicer.
Section 8.08 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 Servicer, the Custodian and
each Rating Agency not less than 60 days before the date specified in such
notice, when, subject to Section 8.09, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.09 meeting the
qualifications set forth in Section 8.07. 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 8.07 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 duplicate, one copy of which shall
be delivered to the Trustee 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 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 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.09.
Section 8.09 Successor Trustee. Any successor trustee appointed as
provided in Section 8.08 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, 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 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 8.09 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.07 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 8.09, 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 8.10 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 8.07
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, the Trustee shall notify the Depositor
of such succession or appointment and shall furnish to the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary for the Trustee to accurately and timely
report, pursuant to Section 8.14(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 8.11 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 Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons 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 8.11, such powers, duties, obligations, rights and
trusts as the Trustee may consider appropriate. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.09 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.09.
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 8.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
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 and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the 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 8.12 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, sign 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) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all Trust REMICs and shall also 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) on or prior to the Closing Date, 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 also 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;
(d) 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 Providers promptly upon
receipt of such number after applying for it pursuant to 8.12(c) above and, in
any event, no later than the first Payment Date under the Interest Rate Swap
Agreement, and, if requested by the Swap Provider, an applicable IRS Form W-8IMY
if permitted or required under applicable law;
(e) make an election that each Trust REMIC be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(f) 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);
(g) 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);
(h) 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;
(i) 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;
(j) pay, from the sources specified in the last paragraph of this
Section 8.12, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on each Trust REMIC 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);
(k) cause federal, state or local income tax or information returns
to be signed by the Trustee or, if required by applicable tax law, such other
Person as may be required to sign such returns by the Code or state or local
laws, regulations or rules;
(l) maintain records relating to each of the Trust REMICs, 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; and
(m) as and when necessary and appropriate, represent each Trust
REMIC 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, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it at the expense of the Trust, which expense shall be paid or
reimbursed to the Trustee.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for each Trust REMIC 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 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, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any Trust REMIC, 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 CE
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Supplemental Interest Account (subject, other than in the case of the Class CE
Certificates, to the obligation to pay Basis Risk Carry Forward Amounts) and the
rights of the Offered Certificateholders to receive Basis Risk Carry Forward
Amounts as the beneficial ownership of interests in a grantor trust, and not as
an obligation of any Trust REMIC created hereunder, for federal income tax
purposes.
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 to each Class of
Certificates of the right to receive Basis Risk Carry Forward Amounts from the
Excess Reserve Fund Account and Basis Risk Carry Forward Amounts from the
Supplemental Interest Account. Unless otherwise advised by the Depositor, for
federal income tax purposes, the Trustee is hereby directed to assign a value of
zero to the right of each Holder allocating the purchase price of an initial
Offered Certificateholder between such right and the related Upper Tier Regular
Interest. 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 after the
Closing Date or any information that the Servicer is required to provide to the
Trustee. 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.
The Trustee shall not (i) cause 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
(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 Trust 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 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, result in
the imposition of a tax upon either Trust REMIC created hereunder or endanger
the status of any Trust REMIC.
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 Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on any Trust REMIC pursuant to Sections 23153 and 24874
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 in the performance of any of its
obligations under this Agreement, (ii) the Servicer, in the case of any such
minimum tax, and otherwise if such tax arises out of or results from a breach by
the Servicer of any of its obligations under the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement, (iii) the Original Loan Seller if such tax arises out of or results
from the Original Loan Seller's obligation to repurchase a Mortgage Loan
pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement or (iv) in all other
cases, or if the Trustee, the Servicer or the Original Loan Seller fails to
honor its obligations under the preceding clause (i), (ii), or (iii), any such
tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.01(a).
For as long as each Trust REMIC shall exist, the Trustee shall act
as specifically required herein, and the Trustee shall comply with any
directions of the Depositor stating that such directions are being given to
assure such continuing treatment. In particular, the Trustee shall not (a) sell
or authorize the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
purchase or repurchase of the Mortgage Loans pursuant to this Agreement or (b)
accept any contribution to any Trust REMIC after the Startup Day without receipt
of an Opinion of Counsel that such action described in clause (a) or (b) will
not result in the imposition of a tax on any Trust REMIC or cause any Trust
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Section 8.13 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants' Attestation Report.
(a) Not later than March 15th of each calendar year commencing in 2008, the
Trustee and Custodian shall deliver, and the Trustee and the Custodian shall
cause each Subcontractor utilized by the Trustee or the Custodian, as
applicable, and determined by the Trustee or the Custodian, as applicable,
pursuant to Section 8.16 to be "participating in a 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 Depositor, 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
8.14, 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 such Person, and shall address each of
the applicable Servicing Criteria set forth on Exhibit P hereto, or as set forth
in the notification furnished to the Depositor pursuant to Section 8.14(c). The
Trustee and Custodian each hereby acknowledges and agrees that its assessments
of compliance will cover the items identified on Exhibit P hereto as being
covered by the Trustee and Custodian, as applicable. 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,
the Depositor shall review each such report and, if applicable, consult with the
Trustee or Custodian, as applicable, as to the nature of any material instance
of noncompliance with the Servicing Criteria applicable to it (and each
Servicing Function Participant engaged or utilized by the Trustee or Custodian,
as applicable), as the case may be. Neither the Trustee nor the Custodian shall
be required to cause the delivery of any such assessments by March 15th in any
given year so long as Form 10-K is not required to be filed in respect of the
Trust for the preceding calendar year, as notified in writing by the Depositor.
(b) Not later than March 15th of each calendar year commencing in
2008, the Trustee and Custodian shall cause, and the Trustee and Custodian shall
cause each Servicing Function Participant utilized by such Person, 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 Depositor,
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 8.13(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. Neither the Trustee nor the
Custodian shall not be required to cause the delivery of any such attestation
required by this paragraph in any given year so long as Form 10-K is not
required to be filed in respect of the Trust for the preceding calendar year, as
notified in writing by the Depositor.
(c) No later than February 1 of each fiscal year, commencing in
2008, the Trustee and Custodian shall notify the Depositor as to the name of
each Servicing Function Participant utilized by it during the preceding calendar
year, and each such notice will specify what specific Servicing Criteria will be
addressed in the report on assessment of compliance prepared by such Servicing
Function Participant in each case, to the extent of any change from the prior
year's notice, if any. When the Trustee or Custodian submits its assessment
pursuant to Section 8.13(a), the Trustee or Custodian will also at such time
include the assessment (and related attestation pursuant to Section 8.13(b)) of
each Servicing Function Participant utilized by it.
Section 8.14 Periodic Filings. (a) The Trustee and the Custodian
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 10-D and 10-K and certain Form 8-K's (not
to include any Form 8-K related to the filing of this Agreement and any
amendments thereto), required by the Exchange Act and the rules and regulations
of the Commission thereunder, in order to permit the timely filing thereof, and
the Trustee shall file (via the Commission's Electronic Data Gathering and
Retrieval System, or ▇▇▇▇▇) such Forms executed by the Depositor.
(b) Within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Trustee shall prepare and file
on behalf of the Trust any Form 10-D required by the Exchange Act, in form and
substance as required by the Exchange Act. The Trustee shall file each Form 10-D
with a copy of the related Monthly Statement attached thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported to the Depositor and the
Trustee by the parties set forth on Exhibit P and directed and approved by the
Depositor 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 P hereto, within 5 calendar days after the
related Distribution Date, the parties, to the extent described on Exhibit P,
shall be required to provide to the Trustee and the Depositor, to the extent
known by such applicable parties, any Additional Form 10-D Disclosure, the form
and substance of the Additional Form 10-D Disclosure described on Exhibit P
applicable to such party (and shall include with such Additional Form 10-D
Disclosure an Additional Disclosure Notification in the form attached hereto as
Exhibit S (such form, the "Additional Disclosure Notification")), and the
Depositor will approve, as to form and substance, or disapprove, as the case may
be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Trustee has no duty under this Agreement to monitor or enforce the performance
by the parties listed on Exhibit P (other than with respect to the Trustee) of
their duties under this paragraph or proactively solicit or procure from such
parties any Additional Form 10-D Disclosure information; provided, however, the
Trustee shall cooperate with the Depositor in a reasonable manner in order for
the Depositor to comply with its reporting obligations under the Exchange Act as
set forth in Section 8.14(a). The Depositor will be responsible for any
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. The Trustee shall compile all such information provided to it in a
Form 10-D prepared by it.
After preparing the Form 10-D, the Trustee shall forward
electronically a copy of the Form 10-D to the Depositor for approval and
execution. No later than 2 Business Days prior to the 15th calendar day after
the related Distribution Date, an officer of the Depositor shall sign the Form
10-D and return an electronic or fax copy of such signed Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Trustee. If a
Form 10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Trustee will follow the procedures set forth in Section
8.14(f)(ii). Form 10-D 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 Depositor was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Trustee, with respect to each Form 10-D, to check "yes" for each
item unless the Trustee has received timely prior written notice from the
Depositor that the answer should be "no" for an item. The Depositor shall notify
the Trustee in writing, as soon as reasonably practicable but no later than 5
Business Days prior to the 15th calendar day after the related Distribution Date
with respect to the filing of a report on Form 10-D, if the answer to the
questions should be "no." The Trustee shall be entitled to rely on such
instructions in preparing and/or filing any such Form 10-D. The Depositor
acknowledges that the performance by the Trustee of its duties under this
Section 8.14(b) related to the timely preparation and filing of Form 10-D is
contingent upon the Servicer (including Subcontractors and Servicing Function
Participants), the Depositor and the Custodian observing all applicable
deadlines in the performance of their duties under this Section 8.14(b). 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 such
Form 10-D, where such failure results from the Trustee's inability or failure to
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 or before 90 days after the end of each fiscal year of the
Trust or such earlier date as may be required by the Exchange Act (the "10-K
Filing Deadline"), commencing in March 2008, the Trustee shall prepare and file
on behalf of the Trust a Form 10-K, in form and substance as required by the
Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Trustee within the applicable
time frames set forth in this Agreement, (i) an annual compliance statement for
the Servicer and each Subservicer engaged by such Servicer, as described under
the applicable Servicing Agreement, (ii)(A) the annual reports on assessment of
compliance with servicing criteria for the Trustee, the Servicer, the Custodian,
each Subservicer engaged by the Servicer and each Servicing Function Participant
utilized by the Servicer, the Custodian or the Trustee, as described under
Section 8.13 or the applicable Servicing Agreement, as the case may be, and (B)
if any such report on assessment of compliance with servicing criteria
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or such report on assessment of compliance with
servicing criteria 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, the Servicer, the Custodian, each Subservicer engaged by the
Servicer and each Servicing Function Participant utilized by the Servicer, the
Custodian or the Trustee, as described under Section 8.13, and (B) if any
registered public accounting firm attestation report 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 in the form attached hereto as Exhibit J, 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 reported to
the Depositor and the Trustee by the parties set forth on Exhibit Q and directed
and approved by the Depositor 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 Q hereto, no later than March 1 of each year
(or, in the case of the Servicer, March 5th of each year) that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2008, the
parties, to the extent described on Exhibit Q, shall be required to provide to
the Trustee and the Depositor, to the extent known by such applicable parties,
any Additional Form 10-K Disclosure, the form and substance of the Additional
Form 10-K Disclosure described on Exhibit Q applicable to such party (and shall
include with such Additional Form 10-K Disclosure an Additional Disclosure
Notification in the form attached hereto as Exhibit S), and the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Trustee has
no duty under this Agreement to monitor or enforce the performance by the
parties listed on Exhibit Q (other than with respect to the Trustee) of their
duties under this paragraph or proactively solicit from such parties any
Additional Form 10-K Disclosure information; provided, however, the Trustee
shall cooperate with the Depositor in a reasonable manner in order for the
Depositor to comply with its reporting obligations under the Exchange Act as set
forth in Section 8.14(a). The Depositor will be responsible for any 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. The Trustee shall compile all such information provided to it in a
Form 10-K prepared by it.
After preparing the Form 10-K, the Trustee shall forward
electronically a copy of the Form 10-K to the Depositor for approval and
execution. Form 10-K requires the registrant to indicate (by checking "yes" or
"no") that it "(1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor hereby
instructs the Trustee, with respect to each Form 10-K, to check "yes" for each
item unless the Trustee has received timely prior written notice from the
Depositor that the answer should be "no" for an item. The Depositor shall notify
the Trustee in writing by March 1st if the answer to the questions should be
"no." The Trustee shall be entitled to rely on such instructions in preparing
and/or filing any such Form 10-K. No later than 5:00 p.m. EST on the 4th
Business Day prior to the 10-K Filing Deadline, a senior 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 8.14(f)(ii). The Depositor acknowledges that the performance by
the Trustee of its duties under this Section 8.14(c) related to the timely
preparation and filing of Form 10-K is contingent upon the Depositor observing
all applicable deadlines in the performance of its duties under this Section
8.14(c) and Section 8.14(d) and is contingent upon the Servicer (and any
Subservicer or Servicing Function Participant engaged by such Servicer)
observing all applicable deadlines in the performance of its duties under the
applicable Servicing Agreement. 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 such Form 10-K, where such failure results
from the Trustee's inability or failure to receive, on a timely basis, any
information from any party hereto or any Subservicer or Servicing Function
Participant engaged by any such party hereto (other than the Trustee or any
Servicing Function Participant utilized by the Trustee) needed to prepare,
arrange for execution or file such Form 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(d) In connection with the execution of a Sarbanes Certification,
the Trustee shall sign a certification (in the form attached hereto as Exhibit
J, with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission) for the benefit of the Depositor and its
officers, directors and Affiliates. Each such certification shall be delivered
to the Depositor no later than March 10th of each year (or if such day is not a
Business Day, the immediately preceding Business Day) and the Depositor shall
deliver the Sarbanes Certification no later than the time set forth for the
delivery to the Trustee of the signed Form 10-K pursuant to Section 8.14(c) for
such year. In the event that prior to the filing date of the Form 10-K in March
of each year, the Trustee has actual knowledge of information material to the
Sarbanes Certification, that party shall promptly notify the Depositor. In
addition, 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 8.14(d) or the Trustee's material misstatement, material omission,
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless any indemnified party, then the Trustee agrees in connection with a
breach of the Trustee's obligations under this Section 8.14(d) or the Trustee's
material misstatement, material omission, 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. The obligations of the Trustee under
this Section 8.14(d) shall apply to the Trustee whether or not such Trustee is
acting as Trustee at the time such certification is required to be delivered.
The indemnification and contribution obligations set forth in this Section
8.14(d) shall survive the termination of this Agreement or the earlier
resignation or removal of the Trustee.
(e) Upon any filing of Form 10-D, Form 10-K or Form 8-K with the
Commission, the Trustee shall promptly deliver to the Depositor a copy of each
such executed report, statement or information.
(f) (i) The obligations set forth in paragraphs (a) through (d) of
this Section 8.14 shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. On or
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
start of any fiscal year, including any fiscal 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 8.14 and the parties hereto shall again
have the obligations set forth in this Section 8.14.
(ii) In the event that the Trustee is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed pursuant to this Agreement because required
disclosure information was either not delivered to it or delivered to it
after the delivery deadlines set forth in this Agreement, the Trustee will
promptly notify the Depositor. In the case of Form 10-D and 10-K, the
Depositor and Trustee will thereupon prepare and file, and the other
parties shall cooperate in connection with such preparation and filing, 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 required Form 8-K Disclosure Information and, upon the
approval and direction of the Depositor, include such disclosure
information on the next succeeding Form 10-D. In the event that any
previously filed Form 8-K, 10-D or 10-K needs to be amended, in connection
with any Additional Form 10-D Disclosure (other than, in the case of Form
10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Trustee will
notify the Depositor and such other parties to the transaction as are
affected by such amendment, and the Depositor and the Trustee shall
prepare and file, and such other parties will cooperate in connection with
such preparation and filing, any necessary Form 8-K/A, 10-D/A or 10-K/A.
Any Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed
by an officer or a senior officer of the Depositor. The Depositor
acknowledges that the performance by the Trustee of its duties under this
Section 8.14(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 upon
the Depositor observing all applicable deadlines in the performance of its
duties under this Section 8.14 and is contingent upon the Servicer
observing all applicable deadlines in the performance of its duties under
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement. 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 or any
Subservicer or any Servicing Function Participant engaged by any such
party hereto (other than the Trustee or any Servicing Function Participant
utilized by the Trustee) needed to prepare, arrange for execution or file
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K,
not resulting from its own negligence, bad faith or willful misconduct.
(g) 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 (other than the initial
Form 8-K) ("Form 8-K Disclosure Information") shall be reported to the Depositor
and the Trustee by the parties set forth on Exhibit T and directed and approved
by the Depositor 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 T hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business (New York City time) on the 2nd Business Day after the occurrence of a
Reportable Event the parties, to the extent described on Exhibit T, shall be
required to provide to the Trustee and the Depositor, to the extent known by
such applicable parties, any Form 8-K Disclosure Information, the form and
substance of the Form 8-K Disclosure Information described on Exhibit T
applicable to such party (and shall include with such Form 8-K Disclosure
Information, an Additional Disclosure Notification in the form attached hereto
as Exhibit S, and 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 on Form 8-K. The Trustee has no duty under this Agreement to monitor
or enforce the performance by the parties listed on Exhibit T (other than with
respect to the Trustee) of their duties under this paragraph or proactively
solicit or procure from such parties any Form 8-K Disclosure Information;
provided, however, the Trustee shall cooperate with the Depositor in a
reasonable manner in order for the Depositor to comply with its reporting
obligations under the Exchange Act as set forth in Section 8.14(a). The
Depositor will be responsible for any 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. The Trustee shall compile
all such information provided to it in a Form 8-K prepared by it.
After preparing the Form 8-K, the Trustee shall no later than 12:00
noon (New York City time) on the 3rd Business Day after the Reportable Event but
in no case without having had notice for 24 hours forward electronically a draft
copy of the Form 8-K to the Depositor for review. No later than 12:00 noon (New
York City time) on the 4th Business Day after the Reportable Event, an officer
of the Depositor shall sign the Form 8-K and return an electronic or fax copy of
such signed Form 8-K (with an original executed hard copy to follow by overnight
mail) to the Trustee. If a Form 8-K cannot be filed on time or if a previously
filed Form 8-K needs to be amended, the Trustee will follow the procedures set
forth in Section 8.14(f)(ii). The Depositor acknowledges that the performance by
the Trustee of its duties under this Section 8.14(g) related to the timely
preparation, arrangement for execution and filing of Form 8-K is contingent upon
the Depositor observing all applicable deadlines in the performance of its
duties under this Section 8.14(g). 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 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 from any party hereto (other than the Trustee or any
Subcontractor utilized by the Trustee) needed to prepare, arrange for execution
or file such Form 8-K, not resulting from its own negligence, bad faith or
willful misconduct.
(h) The Trustee shall have no liability for any loss, expense,
damage or claim arising out of or resulting from (i) the accuracy or inaccuracy
of any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form
8-K Disclosure Information (excluding any information therein provided by the
Trustee or any Subcontractor utilized by the Trustee) provided to the Trustee in
connection with the preparation of Forms 10-D, 10-K and 8-K pursuant to this
Section 8.14, or (ii) the failure of the Depositor to approve for filing any
Forms 10-D, 10-K and 8-K required to be prepared by the Trustee pursuant to this
Section 8.14, in either case, not resulting from the Trustee's own negligence,
bad faith or misconduct.
(i) Any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure Information required to be provided to the
Trustee shall be sent (by email at ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇ in
▇▇▇▇▇-compatible format, or in such other format as otherwise agreed upon by the
Trustee, the Depositor and the party providing such information. With respect to
any notice required to be delivered by the Trustee to the Depositor pursuant to
Section 8.14 of this Agreement, the Trustee may deliver such notice,
notwithstanding any contrary provision in Section 10.05, via facsimile to
▇▇▇-▇▇▇-▇▇▇▇ or telephonically by calling the General Counsel at 212-412-4000.
The signing party at the Depositor can be contacted at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or
such other address as to which the Depositor has provided prior written notice
to the Trustee.
Section 8.15 Tax Classification of the Excess Reserve Fund Account,
the Supplemental Interest Account and the Interest Rate Swap Agreement. For
federal income tax purposes, the Trustee shall treat the Excess Reserve Fund
Account, the Supplemental Interest Account and the Interest Rate Swap Agreement
as beneficially owned by the holders of the Class CE Certificates and shall
treat such portion of the Trust Fund as part of a grantor trust, within the
meaning of subpart E, Part I of subchapter J of the Code.
The Trustee shall treat the rights that each Class of Offered
Certificates has to receive payments of Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account and, in the case of the LIBOR Certificates, to
the extent not paid from the Excess Reserve Fund Account from the Supplemental
Interest Account, and the obligation to pay Class IO Shortfalls to the
Supplemental Interest Account as rights and obligations under a notional
principal contract between the Class CE Certificateholders and each such Class
and beneficially owned by each such Class through the grantor trust.
Accordingly, (i) each Class of Offered Certificates will be comprised of two
components - a Upper Tier REMIC Regular Interest and an interest in a notional
principal contract, subject to the obligation to pay Class IO Shortfalls, and
(ii) the Class CE Certificates will be comprised of the following components:
two Upper Tier REMIC Regular Interests (the Class CE Interest and the Class IO
Interest), an interest in the Excess Reserve Fund Account, subject to the
obligation to pay Basis Risk Carry Forward Amounts, and ownership of the
Supplemental Interest Account, the Interest Rate Swap Agreement and the right to
receive Class IO Shortfalls, subject to the obligation to pay Basis Risk Carry
Forward Amounts, Net Swap Payments and Swap Termination Payment. The Trustee
shall allocate the issue price for a Class of Certificates among the respective
components for purposes of determining the issue price of each Upper Tier REMIC
Regular Interest based on information received from the Depositor. Unless
otherwise advised by the Depositor in writing, for federal income tax purposes,
the Trustee is hereby directed to assign a value of zero to the right of each
Holder of an Offered Certificate to receive the related Basis Risk Carry Forward
Amount for purposes of allocating the purchase price of an initial Offered
Certificateholder between such right and the related Upper Tier REMIC Regular
Interest.
Holders of Offered Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class CE
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 CE Interest
available for such payments and amounts payable on the Class IO Interest (such
excess, a "Class IO Shortfall"), first from interest and then from principal
distributable on the Offered Certificates. A Class IO Shortfall payable from
interest collections shall be allocated pro rata among such Offered Certificates
based on the amount of interest otherwise payable to such Class of Offered
Certificates, and a Class IO Shortfall payable from principal collections shall
be allocated in reverse sequential order beginning with the most subordinate
Class of Offered Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Offered
Certificates in respect of the corresponding Upper Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class CE Certificates
through the Supplemental Interest Account.
Section 8.16 Subcontractors. (a) Subject to the conditions set forth
in this Section 8.16(a) and Section 8.17(c), each of the Trustee and the
Custodian is permitted to utilize one or more Subcontractors to perform certain
of its obligations hereunder. The Trustee or the Custodian, as applicable, shall
promptly upon request provide to the Depositor and the Trustee a written
description (in form and substance satisfactory to the Depositor) of the role
and function of each Subcontractor utilized by the Trustee or the Custodian,
specifying, not later than the date specified for delivery of the annual report
on assessment of compliance set forth in Section 8.13(a) (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 the Trustee or the
Custodian of any Subcontractor determined to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, the Trustee or the
Custodian, as applicable, shall cause any such Subcontractor used by the Trustee
or Custodian for the benefit of the Depositor to comply with the provisions of
Section 8.14 of this Agreement to the same extent as if such Subcontractor were
the Trustee or Custodian, as applicable. The Trustee and Custodian 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 8.14,
in each case as and when required to be delivered.
Section 8.17 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 relating to the Mortgage Loans
and REO Property and shall provide equipment for that purpose at the expense of
the person requesting such access.
(b) The Custodian may resign from its obligations hereunder upon 60
days' prior written notice to the Trustee, the Depositor and the Servicer. Such
resignation shall take effect upon (i) the appointment of a successor Custodian
reasonably acceptable to the Depositor within such 60 day period; and (ii)
delivery of all Mortgage Loan 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, promptly transfer to the successor
Custodian, as directed in writing by the Trustee, all applicable Mortgage Files
being administered under this Agreement. Notwithstanding the foregoing, the
Trust Fund, not the Custodian, shall bear the costs relating to the transfer of
Mortgage Files if the Custodian shall resign with cause (including the
Custodian's resignation due to the failure of the Custodian to be paid all fees
and expenses due to the Custodian hereunder).
(c) 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 without the prior written consent of the
Depositor, in its sole discretion.
(d) The Custodian and any of its directors, officers, employees or
agents shall be indemnified by the Trust Fund and held harmless against any and
all loss, claim, damage, fee, fine, penalty, liability, or expense (including
attorneys' fees and expenses) 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 directly
resulting from the willful misconduct, bad faith, or negligence in the
performance of any of the Custodian's duties under this Agreement. This
indemnity shall survive the termination or assignment 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.
(e) The Custodian shall indemnify the Depositor, the Sponsor, the
Trustee and any director, officer, employee, agent and affiliate of the
Depositor, the Sponsor or the Trustee and hold them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonably and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that any of them sustain directly resulting from (i) the failure of the
Custodian to deliver when required any assessment of compliance or accountant's
attestation report required to be delivered by the Custodian or (ii) any
material misstatement or material omission contained in any assessment of
compliance or accountant's attestation report delivered by the Custodian. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Custodian.
Section 8.18 Limitations on Custodial Responsibilities. (a) The
Custodian shall be under no duty or obligation to inspect, review or examine the
Mortgage Files to determine that the contents thereof are appropriate for the
represented purpose or that they have been actually recorded or that they are
other than what they purport to be on their face.
(b) The Custodian shall not be responsible for preparing or filing
any reports or returns relating to federal, state or local income taxes with
respect to this Agreement, other than for the Custodian's compensation or for
reimbursement of expenses.
(c) The Custodian shall not be responsible or liable for, and makes
no representation or warranty with respect to, the validity, adequacy,
perfection or priority of any lien upon or security interest in any Mortgage
File.
(d) The duties and obligations of the Custodian shall only be such
as are expressly set forth in this Agreement or as set forth in a written
amendment to this Agreement executed by the parties hereto or their successors
and assigns. In the event that any provision of this Agreement implies or
requires that action or forbearance be taken by a party, but is silent as to
which party has the duty to act or refrain from acting, the parties agree that
the Custodian shall not be the party required to take the action or refrain from
acting. In no event shall the Custodian have any responsibility to ascertain or
take action except as expressly provided herein.
(e) The Custodian makes no representations and shall have no
responsibilities (except as expressly set forth herein) as to the validity,
sufficiency, value, genuineness, ownership or transferability of any of the
Mortgage Loans.
(f) The Custodian shall not be liable for any error of judgment, or
for any act done or step taken or omitted by it, in good faith, or for any
mistake of fact or law, or for anything that it may do or refrain from doing in
connection therewith, except in the case of its negligent performance or
omission or its bad faith or willful misconduct.
(g) The Custodian shall not be responsible to verify (i) the
validity, legality, enforceability, sufficiency, due authorization or
genuineness of any document in the Mortgage File or of any Mortgage Loans or
(ii) the collectibility, insurability, effectiveness including the authority or
capacity of any Person to execute or issue any document in the Mortgage File, or
suitability of any Mortgage Loans.
(h) The Custodian shall have no obligation to verify the receipt of
any such documents the existence of which was not made known to the Custodian by
receipt of the Mortgage File.
(i) The Custodian shall have no obligation to determine whether the
recordation of any document is necessary.
(j) Except as set forth in Section 8.17(e), in no event shall the
Custodian or its directors, affiliates, officers, agents, and employees be held
liable for any special, indirect or consequential damages resulting from any
action taken or omitted to be taken by it or them hereunder or in connection
herewith even if advised of the possibility of such damages.
(k) In order to comply with laws, rules and regulations applicable
to banking institutions, including those related to the funding of terrorists
activities and money laundering, the Custodian is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Custodian. Accordingly, each of the parties
agrees to provide to the Custodian 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.
(l) The Custodian shall not be responsible for delays or failures in
performance resulting from acts beyond its control. Such acts shall include, but
not be limited to, acts of God, strikes, lockouts, riots, acts of war or
terrorism, epidemics, governmental or regulatory actions, fire, communication
line failures, computer viruses, power failures, or earthquakes (each a "Force
Majeure Event"). The Custodian agrees that it will use commercially reasonable
efforts to mitigate the effects of the Force Majeure Event. The Custodian
further agrees that it shall give notice (including a reasonable description of
such Force Majeure Event) to the other parties hereto within a reasonable time
but in no event later than two (2) Business Days of the Custodian having notice
or knowledge of such Force Majeure Event and use its best efforts to resume
performance as promptly as practicable under the circumstances.
(m) Nothing in this Agreement shall be deemed to impose on the
Custodian any duty to qualify to do business in any jurisdiction, other than (i)
any jurisdiction where any Mortgage File is or may be held by the Custodian from
time to time hereunder, and (ii) any jurisdiction where its ownership of
property or conduct of business requires such qualification and where failure to
qualify could have a material adverse effect on the Custodian or its property or
business or on the ability of the Custodian to perform it duties hereunder.
(n) The Custodian shall have no responsibility nor duty with respect
to any Mortgage File while such Mortgage File is not in its possession. If the
Custodian requests instructions from the Trustee with respect to any act, action
or failure to act in connection with this Agreement, the Custodian shall be
entitled to refrain from taking such action and continue to refrain from acting
unless and until the Custodian shall have received written instructions from the
Trustee, the Servicer or the Depositor with respect to a Mortgage File without
incurring any liability therefore to the Trustee or any other person.
(o) Any Person into which the Custodian may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Custodian shall be a party, or any person succeeding to the business of the
Custodian, shall be the successor of the Custodian 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.
(p) The Custodian shall not be liable with respect to any action
taken or omitted to be taken in accordance with the written direction,
instruction, acknowledgement, consent or any other communication from the
Trustee or any agent of the Trustee. In the event the terms of this Agreement
and the instructions of the Trustee conflict, the Trustee's instructions shall
control.
(q) In the event that (i) Trustee, any of the Servicer, the
Depositor, or the Custodian shall be served by a third party with any type of
levy, attachment, writ or court order with respect to any Mortgage File, or (ii)
a third party shall institute any court proceeding by which any Mortgage File
shall be required to be delivered otherwise than in accordance with the
provisions of this Agreement, the party receiving such service shall promptly
deliver or cause to be delivered to the other parties to this Agreement copies
of all court papers, orders, documents and other materials concerning such
proceedings. The Custodian shall, to the extent permitted by applicable law,
continue to hold and maintain under the terms of this Agreement all the Mortgage
Files that are the subject of such proceedings pending a final, nonappealable
order of a court of competent jurisdiction permitting or directing disposition
thereof. Upon the final determination of such court, the Custodian shall dispose
of such Mortgage File as directed by the Trustee or Depositor in writing,
consistent with such determination of such court. Expenses of the Custodian
incurred as a result of such proceedings shall be paid by the Trust Fund.
(r) The Custodian may consult with counsel of its choice and any
opinion of counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with such opinion of counsel.
(s) Notwithstanding anything to the contrary, the Custodian shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of its duties under this Agreement.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Custodian 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 the Holder of a majority percentage interest in
the Class CE Certificates, at the price (the "Termination 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 Interest Rate, and (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 the Servicer at the expense
of the Servicer 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, (iii) all unreimbursed Monthly
Advances, Servicing Advances and indemnification payments payable to the
Servicer, (iv) any Swap Termination Payment owed to the Swap Provider pursuant
to the Interest Rate Swap Agreement, and (v) any unreimbursed indemnification
payments payable to the Trustee under this 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.
Section 9.02 Final Distribution on the Certificates. If, on any
Servicer Remittance Date, the Servicer notifies the Trustee that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall promptly send a
Notice of Final Distribution to the applicable Certificateholders and the Swap
Provider. If the electing Person elects to terminate the Trust pursuant to
clause (a) of Section 9.01, by no later than the 10th day of the month of the
final distribution, the Trustee upon request by the electing Person will notify
the Depositor of the final Distribution Date and of the applicable repurchase
price of the Mortgage Loans and the related 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 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 the electing Person purchases the Mortgage Loans (and
REO Properties) pursuant to Section 9.01(a), such electing Person is required to
remit to the Trustee the Termination Price on the Servicer Remittance Date
immediately preceding the applicable final Distribution Date. Upon such final
deposit with respect to the Trust Fund and the receipt by the Custodian (with a
copy to the Trustee) of the Request for Release, the Custodian shall promptly
release to such electing Person or its designee 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 the Depositor and the Trustee hereunder), in
each case on the final Distribution Date and in the order set forth in Section
4.01, in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount up to an amount equal to (i) as
to each Class of Regular Certificates, the Class Certificate Balance thereof
plus for each such Class accrued interest thereon in the case of an
interest-bearing Certificate and all other amounts to which such Classes are
entitled pursuant to Section 4.01, (ii) as to the Residual Certificates, the
amount, if any, which remains on deposit in the Distribution Account after
application pursuant to clause (i) above (other than the amounts retained to
meet claims, which retained amounts shall also be released to the Residual
Certificates, as applicable, as and to the extent such amounts shall no longer
be required to be so retained). The foregoing provisions are intended to
distribute to each Class of Regular Certificates any accrued and unpaid interest
and principal to which they are entitled based on the Pass-Through Rates and
actual Class Certificate Balances or notional principal balances set forth in
the Preliminary Statement upon liquidation of the Trust.
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 CE 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
electing Person elects to purchase the Mortgage Loans as provided in Section
9.01, the related Trust REMICs 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 electing Person, 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 person electing to terminate or its designee, and, by the next Distribution
Date after such sale, the Trustee shall distribute to the related
Certificateholders the proceeds of such sale in complete liquidation of each of
the related Trust REMICs; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the terminated Trust REMICs 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 electing Person.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Trustee, the Depositor and the Custodian (and the Trustee may
request an amendment or consent to any amendment of the ▇▇▇▇▇ Fargo Sale and
Servicing Agreement) 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 in this Agreement which may be inconsistent with
any other provision herein or in the ▇▇▇▇▇ Fargo Sale and Servicing Agreement,
(iii) to add to the duties of the Depositor, the Custodian or the Trustee (or
with respect to the ▇▇▇▇▇ Fargo Sale and Servicing Agreement), (iv) to add any
other provisions with respect to matters or questions arising hereunder or under
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement, or (v) to modify, alter, amend,
add to or rescind any of the terms or provisions contained in this Agreement or
in the ▇▇▇▇▇ Fargo Sale and Servicing Agreement; provided that any action
pursuant to clause (iv) or (v) above shall not, as evidenced by an Opinion of
Counsel (which Opinion of Counsel shall be an expense of the requesting party,
but in any case shall not be an expense of the Trustee, the Custodian or the
Trust Fund), adversely affect in any material respect the interests of any
Certificateholder; provided, further, that the amendment shall not be deemed 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 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 and the Depositor also may at any time and from time to
time amend this Agreement (and the Trustee shall request the Servicer to amend
the ▇▇▇▇▇ Fargo Sale and Servicing Agreement), without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
each Trust REMIC under the REMIC Provisions, (ii) avoid or minimize the risk of
the imposition of any tax on any Trust REMIC pursuant to the Code that would be
a claim at any time prior to the final redemption of the Certificates or (iii)
comply with any other requirements of the Code; provided, that the Trustee has
been provided an Opinion of Counsel, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Custodian and the Trustee and the Trustee shall request the
Servicer to amend the ▇▇▇▇▇ Fargo Sale and Servicing Agreement) with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66-2/3% of each Class of Certificates affected thereby for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66-2/3%, or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement or the ▇▇▇▇▇ Fargo
Sale and Servicing 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 Providers (with a copy of such notice to the Trustee) of such
amendment, stating the provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer under the ▇▇▇▇▇ Fargo Sale and Servicing Agreement,
any Certificate beneficially owned by the Depositor or any of its Affiliates or
by the Original Loan Seller or any of its Affiliates shall be deemed not to be
Outstanding (and shall not be considered when determining the percentage of
Certificateholders consenting or when calculating the total number of
Certificates entitled to consent) for purposes of determining if the requisite
consents of Certificateholders under this Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement or
the ▇▇▇▇▇ Fargo Sale and Servicing 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 which modifies its obligations or liabilities without its consent and
in all cases 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 or the
▇▇▇▇▇ Fargo Sale and Servicing Agreement and that all requirements for amending
this Agreement or the ▇▇▇▇▇ Fargo Sale and Servicing Agreement have been
complied with; 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 Trustee's consent to, or request for, any
amendment of the ▇▇▇▇▇ Fargo Sale and Servicing Agreement pursuant to the terms
of this Section 10.01, the ▇▇▇▇▇ Fargo Sale and Servicing Agreement cannot be
amended without the consent of the Servicer.
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.
The Trustee may, but shall not be obligated to, enter into any
amendment which negatively affects the Trustee's own rights, duties or
immunities under this Agreement.
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 properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation shall be
effected by the Depositor at the expense of the Trust, but only if an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders is delivered to the Depositor.
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
Trustee and the Depositor 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, either of such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in either of 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 use its best efforts to
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 the Servicer or the Trustee
and the appointment of any successor;
(iv) the repurchase or substitution of Mortgage Loans pursuant to
this Agreement or the ▇▇▇▇▇ Fargo Sale and Servicing Agreement;
(v) any notice of a repurchase of a Mortgage Loan pursuant to this
Agreement or the ▇▇▇▇▇ Fargo Sale and Servicing Agreement; and
(vi) the final payment to Certificateholders.
(b) In addition, the Trustee shall promptly make available on its
internet website to each Rating Agency copies of the following:
(i) each report to Certificateholders described in Section 4.02;
(ii) the Servicer's annual statement of compliance and the
accountant's attestation described in the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement; and
(c) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, BCAP LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as
the Depositor may hereafter furnish to the Servicer and the Trustee; (b) in the
case of the Trustee to ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Trust Administration-BCAPB 2007-AB1 or in each case such other
address as the Trustee may hereafter furnish to the Depositor; (c) In the case
of the Custodian, to ▇▇▇▇▇ Fargo Bank, National Association, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Corporate Trust Services or such
other addresses as may be hereafter furnished to the Swap Provider and the other
parties hereto in writing; (d) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency; and (e) in the case of ▇▇▇▇▇ Fargo, as the Servicer, 1 Home
Campus, MAC ▇▇▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇,
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to General Counsel, or such other
address as may be hereafter furnished to the other parties hereto and the Swap
Provider in writing;. 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 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 10.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.08 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 10.09 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 10.10 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, the Trustee
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 the Trustee, reasonably believed by the Depositor to be
necessary in order to effect such compliance.
Section 10.11 Third Party Rights. The Swap 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.
* * *
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.
BCAP LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
▇▇▇▇▇ FARGO BANK, N.A., as Custodian
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signer
SCHEDULE I
Mortgage Loan Schedule
EXHIBIT A
FORM OF CLASS A-1, CLASS A-2, CLASS A-3, CLASS ▇-▇, ▇▇▇▇▇ ▇-▇, CLASS M-1,
CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6, CLASS M-7, CLASS M-8
and CLASS M-9 CERTIFICATES.
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.
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. :
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of
all Certificates of this Class : [A-1] $311,948,000
[A-2] $54,037,000
[A-3] $40,989,000
[A-4] $17,572,000
[A-5] $47,172,000
[M-1] $20,608,000
[M-2] $16,091,000
[M-3] $7,058,000
[M-4] $5,928,000
[M-5] $5,928,000
[M-6] $5,081,000
[M-7] $5,082,000
[M-8] $3,387,000
[M-9] $5,645,000
CUSIP : [A-1] [05529D AA0]
[A-2] [05529D AB8]
[A-3] [05529D AC6]
[A-4] [05529D AD4]
[A-5] [05529D AE2]
[M-1] [05529D AF9
[M-2] [05529D AG7]
[M-3] [05529D AH5]
[M-4] [05529D AJ1]
[M-5] [05529D AK8
[M-6] [05529D AL6]
[M-7] [05529D AM4]
[M-8] [05529D AN2]
[M-9] [05529D AP7]
ISIN : [A-1] [US05529DAA00]
[A-2] [US05529DAB82]
[A-3] [05529DAC65]
[A-4] [05529DAD49]
[A-5] [US05529DAE22]
[M-1] [US05529DAF96]
[M-2] [US05529DAG79]
[M-3] [US05529DAH52]
[M-4] [US05529DAJ19]
[M-5] [US05529DAK81]
[M-6] [US05529DAL64]
[M-7] [US05529DAM48]
[M-8] [US05529DAN21]
[M-9] [US05529DAP78]
BCAP LLC
BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates, Series 2007-AB1
[Class A-1] [Class A-2] [Class A-3] [Class A-4] [Class A-5] [Class M-1]
[Class M-2][Class M-3] [Class M-4][Class M-5] [Class M-6][Class M-7]
[Class M-8][Class M-9]
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 Class Certificate Balance at any time may be
less than the Class 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 or the Trustee 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 Trust Agreement dated as of the Cut-off Date
specified above (the "Agreement") between BCAP LLC, as depositor (the
"Depositor"), ▇▇▇▇▇ Fargo Bank, N.A., as custodian (the "Custodian"), and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:_________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Trustee
BCAP LLC
BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates, Series 2007-AB1
This Certificate is one of a duly authorized issue of Certificates
designated as BCAPB LLC Trust 2007-AB1 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 and the other parties to the Agreement.
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 for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately 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 office 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 Depositor, the Trustee and the other 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 office 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 Trustee and the Depositor and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of 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 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans in 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:
______________________________________________________________________________.
Dated:
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ______, or, if mailed by check, to_____________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by __________________________________,
the assignee named above, or _________________________________________________,
as its agent.
EXHIBIT B
FORM OF [CLASS R] CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN MULTIPLE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
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 UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO 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
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
CUSIP :
ISIN :
BCAP LLC
BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates, Series 2007-AB1
Class R
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor or the Trustee 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 Trust Agreement dated as of the Cut-off Date
specified above (the "Agreement") between BCAP LLC, as depositor (the
"Depositor"), ▇▇▇▇▇ Fargo Bank, N. A., as custodian (the "Custodian") and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). 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 office designated by the Trustee for such purposes.
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 or using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee 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 I to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, Trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Trustee
BCAP LLC
BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as BCAPB LLC Trust 2007-AB1 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 and the other parties to the Agreement.
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 for each
Distribution Date is the last Business Day of the monthly immediately preceding
the month in which such Distribution Date occurs.
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 office 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 Depositor, the Trustee and the other 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 office 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 Trustee, the Depositor, and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of 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 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
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:
Dated:
____________________________________
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ______, or, if mailed by check, to ____________________________,
Applicable statements should be mailed to ____________________________________,
This information is provided by __________________________________,
the assignee named above, or _________________________________________________,
as its agent.
EXHIBIT C
FORM OF CLASS CE CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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 AND THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE SATISFY THE REQUIREMENTS FOR
EXEMPTIVE RELIEF 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 AND 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 DEPOSITOR
OR THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN
THIS 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 CE CERTIFICATES SHALL BE MADE UNLESS THE PROPOSED
TRANSFEREE OF SUCH CLASS CE 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-8EC1, 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 CE CERTIFICATE, THE TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION
FORM PROVIDED TO IT TO THE SWAP PROVIDER. EACH HOLDER OF A CLASS CE CERTIFICATE
AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE TRUSTEE
FORWARDING TO THE SWAP 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 CE CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY
WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THIS AGREEMENT.
Certificate No. : CE
Cut-off Date : June 1, 2007
First Distribution Date : July 25, 2007
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : [_________________]
ISIN : [_________________]
BCAP LLC
BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates, Series 2007-AB1
CLASS CE
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 or the Trustee
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 Trust Agreement dated as
of the Cut-off Date specified above (the "Agreement") between BCAP LLC, as
depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, N.A., as custodian (the
"Custodian") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). 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
office designated by the Trustee for such purposes or the office or agency
maintained by the Trustee.
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 "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 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 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 1933 Act or is being made pursuant to
the 1933 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 and the certificate has been the subject of
an ERISA-Qualifying Underwriting, 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 satisfy the requirements for exemptive relief
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 Depositor or the Trust Fund, addressed to
the Trustee and the Depositor to the effect that the purchase and 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 Trustee to any obligation in addition to those
expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:____________________________________
Authenticated:
By:___________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Trustee
BCAP LLC
BCAPB LLC Trust 2007-AB1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as BCAPB LLC Trust 2007-AB1 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 and the other parties to the Agreement.
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 for each
Distribution Date is the last Business Day of the month immediately 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 office 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 Trustee and the other 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 office 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 Trustee, the Depositor and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Trustee, the Depositor, 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 10% of the Cut-off Date
Principal Balance, the Person specified in Section 9.01 of the Agreement 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:
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ______, or, if mailed by check, to ____________________________,
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by __________________________________,
the assignee named above, or _________________________________________________,
as its agent.
EXHIBIT D
FORM OF REQUEST FOR RELEASE
(for ▇▇▇▇▇ Fargo Bank, N.A., as custodian)
In connection with the administration of the Mortgage Loans held by
you as trustee, 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:
-----------------------
Reason for Requesting Documents (check one)
-------------------------------------------
_______ 1. Mortgage Loan Paid in Full. (The requestor hereby certifies
that all amounts received in connection therewith have been
credited to the Collection Account pursuant to the Trust
Agreement.)
_______ 2. Mortgage Loan Repurchased Pursuant to any or all of the Trust
Agreement, the applicable Servicing Agreements or the
Assignment Agreements. (The requestor hereby certifies that
the Repurchase Price (as defined in the applicable agreement)
has been credited to the Collection Account pursuant to the
Trust Agreement.)
_______ 3. Mortgage Loan Liquidated by _________________. (The requestor
hereby certifies that all proceeds of foreclosure, insurance,
condemnation or other liquidation have been finally received
and credited to the Collection Account pursuant to the Trust
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.
Capitalized terms not defined herein shall have the meanings set
forth in the Trust Agreement, dated as of July 1, 2007 (the "Trust Agreement"),
between BCAP LLC, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian, and
Deutsche Bank National Trust Company, as trustee.
I, the undersigned, hereby certify that the above statements are
true and correct and set my name hereof on this __ day of ___________, 200_.
[REQUESTOR]
By: _______________________________________
Name:
Title:
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form, if requested.
▇▇▇▇▇ FARGO BANK, N.A.,
as a Custodian
By: ______________________________
Name:
Title
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
▇▇▇▇▇ Fargo Bank, National Association
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
1 Home Campus MAC X2401-06T
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Trust Agreement, dated as of July 1, 2007, among BCAP LLC, as
depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian and
Deutsche Bank National Trust Company, as trustee
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Trust
Agreement (the "Trust Agreement"), the undersigned, as Custodian, certifies that
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 a MERS Loan, a duly executed Assignment
of the Mortgage (which may be included in a blanket assignment or
assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Trust Agreement. The Custodian makes no representations as to: (i) the validity,
legality, sufficiency, enforceability, recordability 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 collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or the
perfection or priority of any Mortgage. Notwithstanding anything herein to the
contrary, the Custodian has made no determination and makes no representations
as to whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
▇▇▇▇▇ FARGO BANK, N.A. not in its
individual capacity, but solely as
Custodian
By:_____________________________________
Name:
Title:
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Servicer]
[Original Loan Seller]
_____________________
_____________________
Re: Trust Agreement, dated as of July 1, 2007, among BCAP LLC, as
depositor, ▇▇▇▇▇ Fargo Bank, N.A., as custodian and Deutsche Bank
National Trust Company, as trustee
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Trust
Agreement (the "Trust Agreement"), the undersigned, as Custodian, hereby
certifies that as to each Mortgage Loan (other than any Mortgage Loan paid in
full or listed on the attached Document Exception Report) it has received:
(a) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(b) The original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Mortgage Loan;
(c) the related original Mortgage and evidence of its recording or,
in certain limited circumstances, a certified copy of the mortgage with
evidence of recording with the standard ▇▇▇▇▇▇ ▇▇▇/FHLMC Condominium Rider
or PUD Rider be attached if the mortgaged property is a condominium or is
located in a PUD;
(d) except with respect to a MERS Loan, originals of any intervening
Mortgage assignment or certified copies in either case evidencing
recording; provided that the assignment may be in the form of a blanket
assignment or assignments, a copy of which with evidence of recording
shall be acceptable;
(e) originals of all assumption, modification, agreements or
certified copies thereof, in either case with evidence of recording if
required to maintain the lien of the mortgage or if otherwise required,
or, if recordation is not required, an original or copy of the agreement;
(f) an original or copy of a title insurance policy, a certificate
of title, or attorney's opinion of title and abstract of title;
(g) to the extent applicable, (1) an original power of attorney, or
a certified copy thereof, in either case with evidence of recordation
thereon if necessary to maintain the lien of the Mortgage or if the
document to which such power of attorney relates is required to be
recorded, or, if recordation is not so required, an original or copy of
such power of attorney, and (2) an original or copy of any surety
agreement or guaranty agreement;
(h) for each Mortgage Loan with respect to which the Mortgagor's
name as it appears on the note does not match the borrower's name on the
mortgage loan schedule, one of the following: the original of the
assumption agreement, or a certified copy thereof, in either case with
evidence of recording thereon if required to maintain the lien of the
mortgage or if otherwise required, or, if recordation is not so required,
an original or copy of such assumption agreement;
(i) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if any.
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 2, 8, 31 and 32 of the
Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or the perfection or priority of any Mortgage. Notwithstanding anything
herein to the contrary, the Custodian has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
▇▇▇▇▇ FARGO BANK, N.A., not in its
individual capacity, but solely as
Custodian
By:____________________________________
Name:
Title:
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
BCAPB LLC Trust 2007-AB1,
Mortgage Pass-Through Certificates, Series 2007-AB1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Trust Agreement (the "Agreement"), between
BCAP LLC, as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Bank, N.A., as custodian
(the "Custodian") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). 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.
2. 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 Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
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 not a 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.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass through entity a Person that is not a
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.)
5. 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 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 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.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
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 not a 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 such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash flow
with respect thereto in some or all periods and intends to pay such taxes as
they become due. 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 Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the 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.
11. The Transferee will not cause income from the 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.
12. Check one of the following:
[ ] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the
Transferee to acquire such Certificate;
(ii) the present value of the expected future distributions on
such Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such 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 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 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 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 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.
13. 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__
BCAP LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
DB Services Tennessee
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Transfer Unit
Re: BCAPB LLC Trust 2007-AB1,
Mortgage Pass-Through Certificates Series 2007-AB1, 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, (A) we have no
knowledge the Transferee is not a Permitted Transferee and (B) 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 (C) 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__
BCAP LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
DB Services Tennessee
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Transfer Unit
Barclays Bank PLC,
as Swap Provider
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: BCAP 2007-AA3
Re: BCAP LLC Trust 2007-AB1,
Mortgage Pass-Through Certificates Series 2007-AA3, Class [_]
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A-1 Certificate,
Class A-2 Certificate, Class A-3 Certificate, Class A-4 Certificate, Class A-5
Certificate, Class M-1 Certificate, Class M-2 Certificate, Class M-3
Certificate, Class M-4 Certificate, Class M-5 Certificate, Class M-6
Certificate, Class M-7 Certificate, Class M-8 Certificate or Class M-9
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 (the "Code"), or a plan subject to any federal, state
or local law materially similar to the foregoing provisions of ERISA or the
Code, nor are we acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such acquisition, or, with
respect to a Class CE Certificate that has been the subject of an
ERISA-Qualifying Underwriting, 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 satisfy the requirements for exemptive relief 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.
Our taxpayer identification number is [_]. We attach hereto IRS Form
W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments) or W-9, as applicable.
We hereby consent to the attached Forms being provided to the Swap Providers.
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.
----------------
(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.
____ 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 as 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:
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
▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION
[DATE]
BCAPB TRUST LLC 2007-AB1
[ ]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: BCAPB TRUST LLC 2007-AB1
I, [identify the certifying individual], certify that:
1. I have reviewed the report on Form 10-K and all reports on Form
10-D required to be filed in respect of the period covered by this report on
Form 10-K of BCAPB TRUST LLC 2007-AB1 (the "Exchange Act periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken
as a whole, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and
other information required to be provided under Form 10-D for the period covered
by this report is included in the Exchange Act periodic reports;
4. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s) in all material respects and]
5. All of the reports on assessment of compliance with servicing
criteria for ABS and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor or trustee].]
Date: _______________
_______________________________________
[Signature]
[Title]
EXHIBIT K
FORM OF TRUSTEE CERTIFICATION TO
BE PROVIDED TO DEPOSITOR
Re: BCAPB LLC Trust 2007-AB1 (the "Trust") Mortgage Pass-Through
Certificates Series 2007-AB1, issued pursuant to the Trust
Agreement, dated as of July 1, 2007 (the "Trust Agreement"),
between BCAP LLC, as depositor (the "Depositor"), Deutsche
Bank National Trust Company, as trustee, and ▇▇▇▇▇ Fargo Bank,
National Association, as custodian
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:
1. 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 the period covered by the Annual Report (collectively with
the Annual Report, the "Reports"), of the Trust;
2. 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
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;
3. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Trust Agreement for inclusion in the
Reports is included in the Reports; and
4. The report on assessment of compliance with servicing criteria
applicable to the Trustee for asset-backed securities of the Trustee and each
Subcontractor utilized by the Trustee and its related attestation report on
assessment of compliance with servicing criteria 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:
By:____________________________________
Name:
Title:
Date: _________________________________
DEUTSCHE BANK NATIONAL
TRUST COMPANY
By:____________________________________
[Signature]
[Title]
EXHIBIT L
▇▇▇▇▇ FARGO SALE AND SERVICING AGREEMENT
BARCLAYS BANK PLC
Purchaser
and
▇▇▇▇▇ FARGO BANK, N.A.
Company
---------------------------------------------
SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of February 1, 2007
---------------------------------------------
Fixed Rate Mortgage Loans
TABLE OF CONTENTS
ARTICLE I.........................................................1
DEFINITIONS.......................................................2
ARTICLE II.......................................................19
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS
AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS..........19
ARTICLE III......................................................25
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH...............25
ARTICLE IV.......................................................53
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...................53
ARTICLE V........................................................74
PAYMENTS TO PURCHASER............................................74
ARTICLE VI.......................................................76
GENERAL SERVICING PROCEDURES.....................................76
ARTICLE VII......................................................82
COMPANY TO COOPERATE.............................................82
ARTICLE VIII.....................................................83
THE COMPANY......................................................83
ARTICLE IX.......................................................85
AGENCY TRANSFERS, SECURITIZATION TRANSACTIONS AND WHOLE LOAN
TRANSFERS........................................................85
ARTICLE X........................................................98
DEFAULT..........................................................98
ARTICLE XI......................................................101
TERMINATION.....................................................101
ARTICLE XII.....................................................102
MISCELLANEOUS PROVISIONS........................................102
EXHIBITS
Exhibit A Mortgage Loan Schedule
(WFHM 2007-AM04)
Exhibit A-1 Mortgage Loan Schedule
(WFHM 2007-AM05)
Exhibit B Custodial Agreement
Exhibit C Contents of Each Mortgage File and Servicing File
Exhibit D Data File Elements
Exhibit E Form of Opinion of Counsel
Exhibit F Servicing Criteria
Exhibit G Sarbanes Certification
Exhibit H Form of Assignment, Assumption and Recognition
Agreement
Exhibit I Form of Indemnification and Contribution Agreement
Exhibit J Form of Officer's Certificate
Exhibit K ▇▇▇▇▇▇▇ Mac Representations and
Warranties
This is a Seller's Warranties and Servicing Agreement for fixed rate,
residential, first lien mortgage loans, dated and effective as of February 1,
2007, and is executed between Barclays Bank PLC, as purchaser (the "Purchaser"),
and ▇▇▇▇▇ Fargo Bank, N.A., as seller and servicer (the "Company").
W I T N E S S E T H
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser certain pools of first lien, fixed
rate mortgage loans (each a "Pool" and collectively, the "Mortgage Loans") which
have an aggregate outstanding principal balance as of the close of business on
the Cut-off Date, after deduction of payments due on or before such date,
whether or not received, as indicated on the Mortgage Loan Schedules, which are
annexed hereto as Exhibit A and Exhibit A-1;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the related Mortgage Loan
Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Purchaser and the Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
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 the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agency/Agencies: ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or GNMA, or any of them as
applicable.
Agency Transfer: Any sale or transfer of some or all of the Mortgage Loans
by the Purchaser to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
Agreement: This Seller's Warranties and Servicing Agreement and all
exhibits, amendments and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgaged Property, or (ii)
the purchase price paid for the Mortgaged Property, provided, however, that in
the case of a refinanced Mortgage Loan, such value shall be based solely on the
appraisal made in connection with the origination of such Mortgage Loan.
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, or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Purchaser to be shown as the owner of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, an assignment of the Mortgage Note and Pledge Agreement.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Apartment is located to effect the
assignment of such Proprietary Lease.
Balloon Loan: A Mortgage Loan for which the Monthly Payments will not
fully amortize the mortgage loan by the end of the term, at which time the
balance of the principal is due in a lump sum.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the states where the
parties are located are authorized or obligated by law or executive order to be
closed.
Buydown Agreement: An agreement between the Company and a Mortgagor, or an
agreement among the Company, a Mortgagor and a seller of a Mortgaged Property or
a third party with respect to a Mortgage Loan which provides for the application
of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, the Company or any other source, plus interest
earned thereon, in order to enable the Mortgagor to reduce the payments required
to be made from the Mortgagor's funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant to
a Buydown Agreement, (i) the Mortgagor pays less than the full monthly payments
specified in the Mortgage Note for a specified period, and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
Closing Date: February 27, 2007.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: That certain letter agreement (i) dated as of January
12, 2007, relating to WFHM 2007-AM04 Pool and (ii) dated as of January 17, 2007,
relating to WFHM 2007-AM05 Pool, each between the Company and the Purchaser.
Company: ▇▇▇▇▇ Fargo Bank, N.A., or its successor in interest or assigns,
or any successor to the Company under this Agreement appointed as herein
provided.
Company Information: As defined in Section 9.01(e)(i)(A).
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Convertible Mortgage Loan: An Adjustable Rate Mortgage Loan that by its
terms and subject to certain conditions contained in the related Mortgage or
Mortgage Note allows the Mortgagor to convert the adjustable Mortgage Loan
Interest Rate on such Adjustable Rate Mortgage Loan to a fixed Mortgage Loan
Interest Rate.
Cooperative: The entity that holds title (fee or an acceptable leasehold
estate) to all of the real property that the Project comprises, including the
land, separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a
Cooperative Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the Company
if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of financing
statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative Shares
and a Proprietary Lease granting exclusive rights to occupy the related
Cooperative Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative, owned by
the Mortgagor, and allocated to a Cooperative Apartment.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.7, Appendix
E, revised July 1, 2006 (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002).
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which is annexed hereto as Exhibit B.
Custodian: The custodian under the Custodial Agreement, or its successor
in interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: February 1, 2007.
Data File: The electronic data file prepared by the Company and delivered
to the Purchaser including the data fields set forth on Exhibit D, with respect
to each Mortgage Loan.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the Company
in accordance with the terms of this Agreement and which is, in the case of a
substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
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 related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
Exchange Act: The Securities and Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First Remittance Date: March 19, 2007.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which is added to
the Index in order to determine the related Mortgage Interest Rate, as set forth
in the related Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law or (c) a "High Cost"
pursuant to the Standard & Poor's Glossary for File Format for LEVELS(R) Version
5.7, Appendix E, revised July 1, 2006.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A PMI Policy for
which the Company pays all premiums from its own funds, without reimbursement
therefore.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio
of the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the Appraised Value of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note which is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any Adjustment
Date.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage or
Assignment of Mortgage has been registered with MERS on the MERS System
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MIN: The Mortgage Identification Number used to identify mortgage loans
registered under MERS.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth in the related Mortgage Note which is
the minimum interest rate to which the Mortgage Interest Rate on such Mortgage
Loan may be decreased on any Adjustment Date.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and interest,
or in the case of an Interest Only Mortgage Loan, payments of (i) interest or
(ii) principal and interest, as applicable, on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note or the Pledge Agreement
securing the Mortgage Note for a Cooperative Loan.
Mortgage File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit C annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note from time to time in accordance with the provisions of the 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 related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the documents
listed on Exhibit C attached hereto.
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
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: For each Pool, a schedule of Mortgage Loans
annexed hereto as Exhibit A and Exhibit A-1, such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the Company's
Mortgage Loan number; (2) the city, state and zip code of the Mortgaged
Property; (3) a code indicating whether the Mortgaged Property is a single
family residence, two-family residence, three-family residence, four-family
residence, a Cooperative Apartment, planned unit development or condominium; (4)
the Mortgage Interest Rate as of the Cut-off Date; (5) the Mortgage Loan
Remittance Rate as of the Cut-off Date; (6) the Monthly Payment as of the
Cut-off Date; (7) 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) the Loan-to-Value Ratio; (12) the
next Adjustment Date immediately following the Cut-off Date; (13) the lifetime
Periodic Interest Rate Cap; (14) the Index; (15) the type of Adjustable Rate
Mortgage Loan; (16) the Maximum Mortgage Interest Rate; (17) the first
Adjustment Date immediately following origination; (18) whether the Mortgage
Loan is convertible or not; (19) a code indicating the mortgage guaranty
insurance company; and (20) the Servicing Fee Rate.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage, including any addendum, attachment, allonge,
amendment, supplement or modification thereto.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the
Cooperative Apartment.
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 the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Pledge Agreement: With respect to a Cooperative Loan, the specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease.
Pledge Instruments: With respect to a Cooperative Loan, the Stock Power,
the Assignment of the Proprietary Lease and the Assignment of the Mortgage Note
and Pledge Agreement.
Pledged Asset Mortgage Loan: A Mortgage Loan for which the Mortgagor has
pledged financial assets as partial collateral for the Mortgage Loan, in lieu of
a cash down payment.
PMI Policy: A policy of primary mortgage guaranty insurance evidenced by
an electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans. The premiums
on a PMI Policy may be paid (i) by the Mortgagor or (ii) by the Company from its
own funds, without reimbursement, in the case of an LPMI Policy. If the premiums
are paid by the Company, the PMI Policy is an LPMI Policy.
Prepayment Penalty: Payments penalties, fees or charges calculated
pursuant to the Mortgage Note and due pursuant to the terms of the Mortgage Loan
as the result of a Principal Prepayment of the Mortgage Loan, not otherwise due
thereon in respect of principal or interest.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
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.
Principal Prepayment Period: The calendar month preceding the month in
which the related Remittance Date occurs.
Project: With respect to a Cooperative Loan, all real property owned by
the related Cooperative including the land, separate dwelling units and all
common areas.
Proprietary Lease: With respect to a Cooperative Loan, a lease on a
Cooperative Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchase Price: The purchase price percentage for the Mortgage Loans as
specified in the related Commitment Letter and as may be adjusted pursuant to
the related Commitment Letter.
Purchaser: Barclays Bank PLC, or its successor in interest or any
successor to the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Company, 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 Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were 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; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the Company within 180 days after origination; (iii) 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 (iv) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchased or post-purchased
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
Company.
Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by Standard & Poor's Ratings Services or
Prime-1 by ▇▇▇▇▇'▇ Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company) at
the time any deposits are held on deposit therein.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company 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 Stated Principal Balance of
the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate not less
than, and not more than two percent (2%) greater, than the Mortgage Loan
Remittance 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 and
(v) comply with each representation and warranty set forth in Sections 3.01 and
3.02.
Rating Agency: Each of Fitch, Inc., ▇▇▇▇▇'▇ Investors Service, Inc.,
Standard & Poor's Ratings Services and Dominion Bond Rating Service, Inc., or
any successor thereto.
Recognition Agreement: An agreement whereby a Cooperative and a lender
with respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution: Any Securitization Transaction, Agency Transfer or Whole
Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by the
Company and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer, Agency Transfer or
Securitization Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be reconstituted as part of an Agency
Transfer, Securitization Transaction or Whole Loan Transfer pursuant to Section
9.01 hereof. The Reconstitution Date shall be such date which the Purchaser
shall designate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month, beginning with the
First Remittance Date.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of
the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: Unless agreed otherwise by the Purchaser and the Company
in the Commitment Letter, a price equal to (i) the Stated Principal Balance of
the Mortgage Loan as of the date on which such repurchase takes place, plus (ii)
interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate
from the date on which interest has last been paid and distributed to the
Purchaser through the last day of the month in which such repurchase takes
place, less amounts received or advanced in respect of such repurchased Mortgage
Loan which are being held in the Custodial Account for distribution in the month
of repurchase.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (a) 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 (b) an issuance of
publicly offered or privately placed, rated or unrated mortgage-backed
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 9.01(e)(iii).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.08 (excluding the Company's obligation to pay the premiums on
LPMI Policies) and Section 4.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period of
one full month, be 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, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
received. 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 Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: 0.375% per annum per Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Company consisting of originals of all documents in the Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan Documents
listed in the Custodial Agreement the originals of which are delivered to the
Custodian pursuant to Section 2.03.
Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
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 distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Stock Certificate: With respect to a Cooperative Loan, a certificate
evidencing ownership of the Cooperative Shares issued by the Cooperative.
Stock Power: With respect to a Cooperative Loan, an assignment of the
Stock Certificate or an assignment of the Cooperative Shares issued by the
Cooperative.
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.
Subsidy Account: An account maintained by the Company specifically to hold
all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed by the
employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
by the employer of the Mortgagor. Each Subsidy Loan will be identified as such
in the related Data File.
Tax Service Contract: A transferable contract maintained for the Mortgaged
Property with a tax service provider for the purpose of obtaining current
information from local taxing authorities relating to such Mortgaged Property.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company.
Underwriting Guidelines: The underwriting guidelines of the Company, a
copy of which has been delivered by the Company to the Purchaser.
Unverified Information: With respect to the Mortgage Loans identified on
the related Data File, information regarding the Mortgagor's income, source of
income, or assets that is stated on the loan application by the Mortgagor but
not verified in the origination process, pursuant to the applicable Underwriting
Guidelines.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans other than a Securitization Transaction or Agency Transfer.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS
AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The Company, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all the
right, title and interest of the Company in and to the Mortgage Loans. Pursuant
to Section 2.03, the Company has delivered the Mortgage Loan Documents for each
Mortgage Loan to the Custodian.
The contents of each Mortgage File not delivered to the Custodian are and
shall be held in trust by the Company for the benefit of the Purchaser as the
owner thereof. The Company shall maintain a Servicing File consisting of a copy
of the contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Custodian. The possession of each Servicing
File by the Company is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Company is in a custodial capacity only. Upon the sale of the Mortgage Loans the
ownership of each Mortgage Note, the related Mortgage and the related Mortgage
File and Servicing File shall vest immediately 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 Company shall vest
immediately in the Purchaser and shall be retained and maintained by the
Company, in trust, at the will of the Purchaser and only in such custodial
capacity. The Company shall release its custody of the contents of any Servicing
File only in accordance with written instructions from the Purchaser, unless
such release is required as incidental to the Company's servicing of the
Mortgage Loans or is in connection with a repurchase of any Mortgage Loan
pursuant to Section 3.03 or 6.02. All such costs associated with the release,
transfer and re-delivery of any Mortgage Files and/or Servicing Files shall be
the responsibility of the Purchaser (unless in connection with Section 3.03 or
6.02).
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Company agrees that it will cause the MERS System to indicate that such
Mortgage Loans have been assigned by the Company to the Purchaser in accordance
with this Agreement by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
the information required by the MERS System to identify the Purchaser as the
beneficial owner of such Mortgage Loan.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser all rights
arising out of the Mortgage Loans, including, but not limited to, all funds
received on or in connection with the Mortgage Loans, shall be received and held
by the Company in trust for the benefit of the Purchaser as owner of the
Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company 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
Company shall maintain in its possession, available for inspection by the
Purchaser, or its designee, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
and records of periodic inspections as required by Section 4.13. To the extent
that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Company
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including but not limited to, optical imagery
techniques so long as the Company complies with the requirements of the ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac Selling and Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by the Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transferee of a Mortgage Loan shall be
recognized by the Company hereunder unless such transfer is in compliance with
the terms hereof. For the purposes of this Agreement, the Company shall be under
no obligation to deal with any Person with respect to this Agreement or the
Mortgage Loans unless the books and records show such Person as the owner of the
Mortgage Loan. The Purchaser may, subject to the terms of this Agreement, sell
and transfer one or more of the Mortgage Loans. The Purchaser shall advise the
Company of the transfer. Upon receipt of notice of the transfer, the Company
shall ▇▇▇▇ its books and records to reflect the ownership of the Mortgage Loans
of such assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred. Such
notification of a transfer shall include a final loan schedule which shall be
received by the Company no fewer than five (5) Business Days before the last
Business Day of the month. If such notification is not received as specified
above, the Company's duties to remit and report as required by Section 5 shall
begin with the next Due Period.
Section 2.03 Custodial Agreement; Delivery of Documents.
The Company has delivered to the Custodian those Mortgage Loan Documents
as required by this Agreement with respect to each Mortgage Loan.
The Custodian has certified its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to this Agreement, as evidenced by
the trust receipt or initial certification of the Custodian in the form annexed
to the Custodial Agreement. The Purchaser will be responsible for the fees and
expenses of the Custodian.
The Company shall be responsible for paying any costs in connection with
recording the initial Assignment of Mortgage, if necessary or at the direction
of the Purchaser. The Purchaser shall be responsible for paying any costs in
connection with any subsequent recordings for the Assignments of Mortgage.
The Company shall forward to the Custodian original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one (1) week of
their execution, provided, however, that the Company shall provide the Custodian
with a certified true copy of any such document submitted for recordation within
ten (10) days of its execution, and shall 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 sixty (60) days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, the Company shall deliver to the Custodian within one hundred
eighty (180) days (successive thirty (30) day extensions may be obtained with
the consent of the Purchaser, which consent shall not be unreasonably withheld,
up to a maximum of two hundred forty (240) days) of its submission for
recordation, a copy of such document and 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 by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. The Company will be required to deliver the document
to the Custodian by the date specified in (iv) above. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent shall
not be unreasonably withheld.
Prior to Company's receipt of the Purchase Price, as adjusted pursuant to
the related Commitment Letter, the Purchaser shall cause the Custodian to act as
bailee for the sole and exclusive benefit of the Company pursuant to the
Custodial Agreement and act only in accordance with Company's instructions. Upon
the Company's receipt of the Purchase Price, as adjusted pursuant to the related
Commitment Letter, the Company shall provide notification to the Custodian to
release the ownership of the Mortgage Loan Documents specified above to the
Purchaser. Such notification shall be in a form of a written notice by facsimile
or other electronic media, with a copy sent to the Purchaser. Subsequent to such
release, such Mortgage Loan Documents shall be retained by the Custodian for the
benefit of the Purchaser. All Mortgage Loan Documents related to Mortgage Loans
not purchased by the Purchaser on the Closing Date shall be maintained by the
Custodian for the benefit of the Company and shall be returned to the Company
within two (2) Business Days after the Closing Date.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the Company
immediately shall deliver to the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to all of the
terms, covenants and conditions of this Agreement.
Section 2.04 Examination of Mortgage Files.
Prior to the Closing Date, the Company shall (a) deliver to the Purchaser
in escrow, for examination, the Mortgage File for each Mortgage Loan, including
a copy of the Assignment of Mortgage, pertaining to each Mortgage Loan, or (b)
make the Mortgage Files available to the Purchaser for examination at the
Company's offices or such other location as shall otherwise be agreed upon by
the Purchaser and the Company. Such examination may be made by the Purchaser at
any time before or after the Closing Date or by any prospective purchaser of the
Mortgage Loans from the Purchaser, at any time after the Closing Date upon prior
reasonable notice to the Company. The fact that the Purchaser or any prospective
purchaser of the Mortgage Loans 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 or remedy as provided under this Agreement.
Section 2.05 Closing.
The closing for the purchase and sale of the Mortgage Loans, shall take
place on the Closing Date. At the Purchaser's option, the 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 shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the Closing Date, the
Company shall deliver to the Purchaser the related Data File and
related Mortgage Loan Schedule;
(b) all of the representations and warranties of the Company under this
Agreement shall be true and correct as of the Closing Date and no
event shall have occurred which, with notice or the passage of time,
would constitute an Event of Default under this Agreement;
(c) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents, 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
respective terms thereof;
(d) the Company shall have delivered and released to the Custodian under
this Agreement all documents required pursuant to this Agreement;
and
(e) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Company on the Closing Date the Purchase Price by wire transfer of immediately
available funds to the account designated by the Company.
Section 2.06 Closing Documents.
With respect to the Mortgage Loans, the closing documents shall consist of
fully executed originals of the following documents:
(a) this Agreement, dated as of the Cut-off Date, in two counterparts;
(b) the Custodial Agreement, in three counterparts, in the form attached
as Exhibit B to this Agreement;
(c) the Mortgage Loan Schedules, one copy to be attached to each
counterpart of this Agreement;
(d) a trust receipt, as required under the Custodial Agreement;
(e) an Opinion of Counsel of the Company, in the form of Exhibit E
hereto;
(f) an Officer's Certificate of the Company, in the form of Exhibit J
hereto, including all attachments thereto; and
(g) the Commitment Letters.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of
the Closing Date:
(a) Due Organization and Authority.
The Company is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct
business of the type conducted by the Company, and in any event the
Company is in compliance with the laws of any such state to the
extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; the Company has the full power and
authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Company and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Company; and all requisite action has
been taken by the Company to make this Agreement valid and binding
upon the Company in accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Company, who is in the
business of selling and servicing loans, and the transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages by
the Company pursuant to this Agreement are not subject to the bulk
transfer or any similar statutory provisions in effect in any
applicable jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Company, the sale of the
Mortgage Loans to the Purchaser or 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, articles of incorporation or by-laws or
any legal restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitute a
default or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is
subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of conventional
residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the
facilities, procedures, and experienced personnel necessary for the
sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Company is a HUD approved mortgagee and is in good
standing to sell mortgage loans to and service mortgage loans for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but
not limited to a change in insurance coverage, which would make the
Company unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility
requirements or which would require notification to either ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac;
(e) Reasonable Servicing Fee; Fair Consideration.
The Company 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 Company, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. The
consideration received by the Company upon the sale of the Mortgage
Loans under this Agreement constitutes fair consideration and
reasonable equivalent value for the Mortgage Loans;
(f) Ability to Perform.
The Company 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 Company is solvent and the sale of the
Mortgage Loans will not cause the Company to become insolvent. The
sale of the Mortgage Loans is not undertaken to hinder, delay or
defraud any of the Company's creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or
threatened against the Company 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 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 this Agreement or
the Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the ability of
the Company to perform under the terms of this Agreement;
(h) No Consent Required.
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
this Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the Closing
Date;
(i) Selection Process.
The Mortgage Loans were selected from among the outstanding fixed
rate, one- to four-family mortgage loans in the Company's mortgage
banking portfolio at the Closing Date as to which the
representations and warranties set forth in Section 3.02 could be
made and such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(j) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(k) Sale Treatment.
The Company has determined that the disposition of the Mortgage
Loans pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes;
(l) No Material Change.
There has been no material adverse change in the business,
operations, financial condition or assets of the Company since the
date of the Company's most recent financial statements;
(m) No Brokers' Fees.
The Company has not dealt with any broker, investment banker, agent
or other Person that may be entitled to any commission or
compensation in the connection with the sale of the Mortgage Loans;
(n) MERS.
The Company is a member of MERS in good standing; and
(o) Insured Depository Institution.
The Company is an "insured depository institution" as that term is
defined in Section 1813(c)(2) of Title 12 of the United States Code,
as amended.
Section 3.02 Representations and Warranties Regarding Individual Mortgage
Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to
the Purchaser that as of the Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedules attached
hereto as Exhibit A and Exhibit A-1 and the information contained on
the Data File delivered to the Purchaser is true and correct;
provided that the Company makes no representation or warranty as to
the accuracy of Unverified Information;
(b) Payments Current.
All payments required to be made up to the Cut-off Date for the
Mortgage Loan under the terms of the Mortgage Note have been made
and credited. No payment under any Mortgage Loan has been thirty
(30) days delinquent more than one (1) time within twelve (12)
months prior to the Closing Date;
(c) No Outstanding Charges.
There are no defaults in complying with the terms of the Mortgages,
and all taxes, governmental assessments, insurance premiums,
leasehold payments, water, sewer and municipal charges, 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 Company has not advanced funds, or
induced, or solicited directly or indirectly, 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 later, to the day which
precedes by one month the Due Date of the first installment of
principal and interest;
(d) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage, and with respect to
each Cooperative Loan, the related Pledge Agreement, Proprietary
Lease and Pledge Instruments, 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 or registered
with the MERS System, if necessary, to protect the interests of the
Purchaser and maintain the lien priority of the Mortgage and which
has been delivered to the Custodian. The substance of any such
waiver, alteration or modification has been approved by the issuer
of any related PMI Policy and the title insurer, to the extent
required by the policy, and its terms are reflected on the related
Mortgage Loan Schedule. No Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement approved
by the issuer of any related PMI Policy and the title insurer, to
the extent required by the policy, and which assumption agreement is
part of the Mortgage File delivered to the Custodian 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, or subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(f) 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
satisfaction, release, cancellation, subordination or rescission;
(g) Validity of Mortgage Loan Documents.
The Mortgage Note and the Mortgage and related documents are
genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties
to the Mortgage Note and the Mortgage had legal capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note
and the Mortgage, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties;
With respect to each Cooperative Loan, the Mortgage Note, the
Mortgage, the Pledge Agreement, and related documents are genuine,
and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the
Mortgage Note, the Mortgage, the Pledge Agreement, the Proprietary
Lease, the Stock Power, Recognition Agreement and the Assignment of
Proprietary Lease had legal capacity to enter into the Mortgage Loan
and to execute and deliver such documents, and such documents have
been duly and properly executed by such parties;
(h) No Fraud.
No error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of the Company, or the Mortgagor (except with respect to the
accuracy of Unverified Information), or to the best of the Company's
knowledge, any appraiser, any builder, or any developer, or any
other party involved in the origination of the Mortgage Loan or in
the application of any insurance in relation to such Mortgage Loan;
(i) 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 and privacy, equal
credit opportunity, disclosure or predatory, abusive and fair
lending laws applicable to the Mortgage Loan have been complied
with. 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;
(j) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the
related Mortgage Loan Schedule and consists of a contiguous parcel
of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual
condominium unit in a condominium project, or a Cooperative
Apartment, or an individual unit in a planned unit development or a
townhouse, provided, however, that any condominium project, mixed
use property or planned unit development shall conform with the
applicable ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements, or the
Underwriting Guidelines, regarding such dwellings, and no residence
or dwelling is a mobile home or a manufactured dwelling. As of the
respective appraisal date for each Mortgaged Property, any Mortgaged
Property being used for commercial purposes conforms to the
Underwriting Guidelines and, to the best of the Company's knowledge,
since the date of such appraisal, no portion of the Mortgaged
Property was being used for commercial purposes outside of the
Underwriting Guidelines;
(k) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien on
the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at
any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) the lien of current real property taxes and assessments not
yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage
Loan and (i) referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan and
(ii) which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable first
lien and first priority security interest on the property described
therein and the Company has full right to sell and assign the same
to the Purchaser;
With respect to each Cooperative Loan, each Pledge Agreement creates
a valid, enforceable and subsisting first security interest in the
Cooperative Shares and Proprietary Lease, subject only to (i) the
lien of the related Cooperative for unpaid assessments representing
the Mortgagor's pro rata share of the Cooperative's payments for its
blanket mortgage, current and future real property taxes, insurance
premiums, maintenance fees and other assessments to which like
collateral is commonly subject and (ii) other matters to which like
collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the
Pledge Agreement; provided, however, that the appurtenant
Proprietary Lease may be subordinated or otherwise subject to the
lien of any mortgage on the Project;
(l) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed, except
for escrows established or created due to seasonal weather
conditions, as allowed under the Underwriting Guidelines, and there
is no requirement for future advances thereunder. 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) Consolidation of Future Advances.
Any future advances made prior to the Cut-off Date, have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
related Mortgage Loan Schedule. The lien of the Mortgage securing
the consolidated principal amount is expressly insured as having
first 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 ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; the
consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan; the Company shall not make future
advances after the Cut-off Date;
(n) Ownership.
The Company is the sole owner of record and holder of the Mortgage
Loan and the related Mortgage Note and the Mortgage are not assigned
or pledged, and the Company has good and marketable title thereto
and has full right and authority to transfer and sell the Mortgage
Loan to the Purchaser. The Company is transferring the Mortgage Loan
free and clear of any and all encumbrances, liens, pledges,
equities, participation interests, claims, charges or security
interests of any nature encumbering such Mortgage Loan;
(o) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan association,
a savings bank, a commercial bank, a credit union, an insurance
company, or similar institution that is supervised and examined by a
federal or state authority or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act. 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) organized under
the laws of such state, or (3) qualified to do business in such
state, or (4) federal savings and loan associations or national
banks having principal offices in such state, or (5) not doing
business in such state;
(p) LTV, PMI Policy.
Each Mortgage Loan has an LTV as specified on the Mortgage Loan
Schedules. Except as set forth on the related Data File, if the LTV
of the Mortgage Loans was greater than 80% at the time of
origination, a portion of the unpaid principal balance of the
Mortgage Loan is and will be insured as to payment defaults by a PMI
Policy. If the Mortgage Loan is insured by a PMI Policy which is not
an LPMI Policy, the coverage will remain in place until (i) the LTV
decreases to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 U.S.C ss.4901,
et seq. All provisions of such PMI Policy have been and are being
complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. The Qualified Insurer has a
claims paying ability acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Any
Mortgage Loan subject to a PMI Policy or an LPMI Policy obligates
the Mortgagor or the Company to maintain the PMI Policy or LPMI
Policy, as applicable, and to pay all premiums and charges in
connection therewith. The Mortgage Interest Rate for the Mortgage
Loan as set forth on the related Mortgage Loan Schedule is net of
any such insurance premium;
(q) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance
policy (or in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where such policies are generally
not available, an opinion of counsel of the type customarily
rendered in such jurisdiction in lieu of title insurance) or other
generally acceptable form of policy of insurance acceptable to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, 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
Company, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage
Loan, subject only to the exceptions contained in clauses (1), (2)
and (3) of Paragraph (k) of this Section 3.02, and 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.
Additionally, such lender's title insurance policy includes no
exceptions regarding ingress, egress or encroachments that impact
the value or the marketability of the Mortgaged Property. The
Company is the sole insured of such lender's title insurance policy,
and such lender's title insurance policy is 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 Mortgage, including the Company, has done, by act or
omission, anything which would impair the coverage of such lender's
title insurance policy;
(r) No Defaults.
There is no default, breach, violation or event of 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 of acceleration, and neither the Company nor its
predecessors have waived any default, breach, violation or event of
acceleration;
(s) 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 which are
not insured against by the title insurance policy referenced in
Paragraph (q) above;
(t) Location of Improvements; No Encroachments.
Except as insured against by the title insurance policy referenced
in Paragraph (q) above, 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;
(u) Payment Terms.
Except with respect to the Interest Only Mortgage Loans, principal
payments commenced no more than sixty (60) days after the funds were
disbursed to the Mortgagor in connection with the Mortgage Loan.
Each Mortgage Loan is payable in equal monthly installments of
principal and interest, with interest calculated and payable in
arrears, sufficient (except with respect to Balloon Loans) to
amortize the Mortgage Loan fully by the stated maturity date set for
in the Mortgage Note over an original term to maturity of not more
than thirty (30) years. With respect to each Balloon Loan, the
Mortgage Loan is payable in equal monthly installments of principal
and interest based on a fifteen (15), thirty (30) or forty (40) year
amortization schedule, as set forth in the related Mortgage Note,
and a final lump sum payment substantially greater than the
preceding Monthly Payment is required which is sufficient to
amortize the remaining principal balance of the Balloon Loan. No
Balloon Loan has an original stated maturity of less than seven (7)
years. As to each Adjustable Rate Mortgage Loan on each applicable
Adjustment Date, the Mortgage Interest Rate will be adjusted to
equal the sum of the Index plus the applicable Gross Margin, rounded
up or down to the nearest multiple of 0.125% indicated by the
Mortgage Note; provided that the Mortgage Interest Rate will not
increase or decrease by more than the Periodic Interest Rate Cap on
any Adjustment Date, and will in no event exceed the Maximum
Mortgage Interest Rate or be lower than the minimum Mortgage
Interest Rate listed on the Mortgage Note for such Mortgage Loan. As
to each Adjustable Rate Mortgage Loan that is not an Interest Only
Mortgage Loan, each Mortgage Note requires a monthly payment which
is sufficient, during the period prior to the first adjustment to
the Mortgage Interest Rate, to fully amortize the outstanding
principal balance as of the first day of such period over the then
remaining term of such Mortgage Note and to pay interest at the
related Mortgage Interest Rate. With respect to each Interest Only
Mortgage Loan, the interest-only period shall not exceed fifteen
(15) years (or such other period specified on the related Data File)
and following the expiration of such interest-only period, the
remaining Monthly Payments shall be sufficient to fully amortize the
original principal balance over the remaining term of the Mortgage
and to pay interest at the related Mortgage Interest Rate. As to
each Adjustable Rate Mortgage Loan, if the related Mortgage Interest
Rate changes on an Adjustment Date or, with respect to an Interest
Only Mortgage Loan, on an Adjustment Date following the related
interest-only period, the then outstanding principal balance will be
reamortized over the remaining life of such Mortgage Loan. No
Adjustable Rate Mortgage Loan contains terms or provisions which
would result in negative amortization;
(v) Customary Provisions.
The Mortgage and related Mortgage Note contain 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. 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;
(w) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was lawfully
occupied and as of the Closing Date, to the best of Company's
knowledge, the Mortgaged Property is lawfully occupied under
applicable law;
(x) No Additional Collateral.
The Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the
corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in Paragraph (k)
above;
(y) Deeds of Trust.
In the event the Mortgage constitutes a deed of trust, a trustee,
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
mortgagee to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(z) Acceptable Investment.
The Company has no knowledge of any circumstances or conditions with
respect to the Mortgage Loan, the Mortgaged Property, the Mortgagor
or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the
Mortgage Loan;
(aa) Transfer of Mortgage Loans.
If the Mortgage Loan is not a MERS Mortgage Loan, the Assignment of
Mortgage, upon the insertion of the name of the assignee and
recording information, is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located;
(bb) Mortgaged Property Undamaged.
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;
(cc) Collection Practices; Escrow Deposits.
The origination, servicing and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted
Servicing Practices, and have been in all material respects legal
and proper. With respect to escrow deposits and Escrow Payments, all
such payments are in the possession of the Company 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. No escrow deposits or Escrow Payments or other charges
or payments due the Company have been capitalized under the Mortgage
Note;
(dd) No Condemnation.
There is no proceeding pending or to the best of the Company's
knowledge threatened for the total or partial condemnation of the
related Mortgaged Property;
(ee) The Appraisal.
The Mortgage Loan Documents includes an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Company
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 the appraiser both satisfy the applicable
requirements of Title XI of the Financial Institution Reform,
Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
(ff) Insurance.
The Mortgaged Property (and, with respect to any Cooperative Loan,
the related Project) securing each Mortgage Loan is insured by an
insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are customary in the area
where the Mortgaged Property is located pursuant to insurance
policies conforming to the requirements of Section 4.10, in an
amount which is at least equal to the lesser of (i) 100% of the
insurable value, on a replacement cost basis, of the improvements on
the related Mortgaged Property and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such insurance shall be sufficient to
prevent the application to the Mortgagor or the loss payee of any
coinsurance clause under the policy. If the Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the project. If the improvements on the Mortgaged
Property are in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards,
a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with
a generally acceptable insurance carrier and such policy conforms to
the Underwriting Guidelines, in an amount representing coverage not
less than the least of (A) the outstanding principal balance of the
Mortgage Loan, (B) the full insurable value and (C) the maximum
amount of insurance which was available under the Flood Disaster
Protection Act of 1973, as amended. All individual insurance
policies contain a standard mortgagee clause naming the Company and
its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain a 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. 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 Company has not acted or failed to act so as to
impair the coverage of any such insurance policy or the validity,
binding effect and enforceability thereof;
(gg) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor under
the Servicemembers Civil Relief Act, as amended, or similar state
laws;
(hh) No Graduated Payments or Contingent Interests.
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. No Adjustable Rate Mortgage Loan is a
Convertible Mortgage Loan;
(ii) No Construction Loans.
No Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgage Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent
Mortgage Loan;
(jj) Underwriting.
Each Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines and the Mortgage Note and Mortgage are on
forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae;
(kk) No Bankruptcy.
No Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated
and as of the Closing Date, the Company has not received notice that
any Mortgagor is a debtor under any state or federal bankruptcy or
insolvency proceeding;
(ll) The Mortgagor.
The Mortgagor is one or more natural Persons and/or an Illinois land
trust or a "living trust" and such "living trust" is in compliance
with the Underwriting Guidelines;
(mm) Interest Calculation.
Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(nn) Environmental Status.
There is no pending action or proceeding directly involving the
Mortgaged Property of which the Company is aware 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;
(oo) No High Cost Loans.
No Mortgage Loan is a High Cost Loan or Covered Loan;
(pp) Anti-Money Laundering Laws.
The Company has complied with all applicable anti-money laundering
laws and regulations, (the "Anti-Money Laundering Laws"), and has
established an anti-money laundering compliance program as required
by the Anti-Money Laundering Laws. 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 the Treasury (the
"OFAC Regulations") or in violation of the Executive Order or the
OFAC Regulations, and as of the origination date of the related
Mortgage Loan, no Mortgagor was subject to the provisions of such
Executive Order or the OFAC Regulations nor listed as a "blocked
person" for purposes of the OFAC Regulations;
(qq) Single Premium Credit Life Insurance.
No Mortgagor was required to purchase any single premium credit
insurance policy (e.g. life, disability, 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, disability, accident, unemployment or health insurance
product) as part of the origination of the Mortgage Loan. No
proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies or debt cancellation agreements as part of
the origination of, or as a condition to closing, such Mortgage
Loan;
(rr) Buydown Mortgage Loans.
With respect to each Mortgage Loan that is a Buydown Mortgage Loan:
(i) On or before the date of origination of such Mortgage Loan,
the Company and the Mortgagor, or the Company, the Mortgagor
and the seller of the Mortgaged Property or a third party
entered into a Buydown Agreement. The Buydown Agreement
provides that the seller of the Mortgaged Property (or third
party) shall deliver to the Company temporary Buydown Funds in
an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such
Mortgage Loan is obligated to pay on each Due Date in
accordance with the terms of the Buydown Agreement, is equal
to the full scheduled Monthly Payment due on such Mortgage
Loan. The temporary Buydown Funds enable the Mortgagor to
qualify for the Buydown Mortgage Loan. The effective interest
rate of a Buydown Mortgage Loan if less than the interest rate
set forth in the related Mortgage Note will increase within
the Buydown Period as provided in the related Buydown
Agreement so that the effective interest rate will be equal to
the interest rate as set forth in the related Mortgage Note.
The Buydown Mortgage Loan satisfies the requirements of the
Underwriting Guidelines;
(ii) The Mortgage and Mortgage Note reflect the permanent payment
terms rather than the payment terms of the Buydown Agreement.
The Buydown Agreement provides for the payment by the
Mortgagor of the full amount of the Monthly Payment on any Due
Date that the Buydown Funds are available. The Buydown Funds
were not used to reduce the original principal balance of the
Mortgage Loan or to increase the Appraised Value of the
Mortgage Property when calculating the Loan-to-Value Ratios
for purposes of the Agreement and, if the Buydown Funds were
provided by the Company and if required under the Underwriting
Guidelines, the terms of the Buydown Agreement were disclosed
to the appraiser of the Mortgaged Property;
(iii) The Buydown Funds may not be refunded to the Mortgagor unless
the Mortgagor makes a principal payment for the outstanding
balance of the Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with the
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac guidelines or the
Underwriting Guidelines regarding buydown agreements.
(ss) Cooperative Loans.
With respect to each Cooperative Loan
(i) The Cooperative Shares are held by a Person as a
tenant-stockholder in a Cooperative. Each original UCC
financing statement, continuation statement or other
governmental filing or recordation necessary to create or
preserve the perfection and priority of the first lien and
security interest in the Cooperative Loan and Proprietary
Lease has been timely and properly made. Any security
agreement, chattel mortgage or equivalent document related to
the Cooperative Loan and delivered to Purchaser or its
designee establishes in Purchaser a valid and subsisting
perfected first lien on and security interest in the Mortgaged
Property described therein, and Purchaser has full right to
sell and assign the same. The Proprietary Lease term expires
no less than five years after the Mortgage Loan term or such
other term acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(ii) A Cooperative Lien Search has been made by a company competent
to make the same which company is acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction
where the Cooperative is located and such search has not
revealed information which would materially and adversely
affect the Cooperative Loan;
(iii)(a) The term of the related Proprietary Lease is not less than
the terms of the Cooperative Loan; (b) there is no provision
in any Proprietary Lease which requires the Mortgagor to offer
for sale the Cooperative Shares owned by such Mortgagor first
to the Cooperative; (c) there is no prohibition in any
Proprietary Lease against pledging the Cooperative Shares or
assigning the Proprietary Lease; (d) the Cooperative has been
created and exists in full compliance with the requirements
for residential cooperatives in the jurisdiction in which the
Project is located and qualifies as a cooperative housing
corporation under Section 210 of the Code; (e) the Recognition
Agreement is on a form published by Aztech Document Services,
Inc. or includes similar provisions; and (f) the Cooperative
has good and marketable title to the Project, and owns the
Project either in fee simple or under a leasehold that
complies with the requirements of the ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac guidelines or the Underwriting Guidelines; such title is
free and clear of any adverse liens or encumbrances, except
the lien of any blanket mortgage;
(iv) The Company has the right under the terms of the Mortgage
Note, Pledge Agreement and Recognition Agreement to pay any
maintenance charges or assessments owed by the Mortgagor; and
(v) Each Stock Power (i) has all signatures guaranteed or (ii) if
all signatures are not guaranteed, then such Cooperative
Shares will be transferred by the stock transfer agent of the
Cooperative if the Company undertakes to convert the ownership
of the collateral securing the related Cooperative Loan.
(tt) Delivery of Mortgage Files.
The Mortgage Loan Documents required to be delivered by the Company
have been delivered to the Custodian in accordance with this
Agreement. The Company is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit C, except for such
documents the originals of which have been delivered to the
Custodian or for such documents where the originals of which have
been sent for recordation;
(uu) Credit Reporting.
With respect to each Mortgage Loan, the Company has furnished
complete information on the related borrower credit files to
Equifax, Experian and Trans Union Credit Information Company, in
accordance with the Fair Credit Reporting Act and its implementing
regulations;
(vv) Pledged Asset Mortgage Loan.
No Mortgage Loan is a Pledged Asset Mortgage Loan;
(ww) Indiana.
There is no Mortgage Loan that was originated on or after January 1,
2005, which is a "high cost home loan" as defined under the Indiana
Home Loan Practices Act (I.C. 24-9);
(xx) Leasehold Estate.
With respect to each Mortgage Loan secured in whole or in part by
the interest of the Mortgagor as a lessee under a ground lease of
the related Mortgaged Property (a "Ground Lease") and not be a fee
interest in such Mortgaged Property:
(i) The Mortgagor is the owner of a valid and subsisting interest as
tenant under the Ground Lease;
(ii) The Ground Lease is in full force and effect;
(iii)The Mortgagor is not in default under any provision of the
lease;
(iv) The lessor under the Ground Lease is not in default under any
of the terms or provisions thereof on the part of the lessor to be
observed or performed;
(v) The term of the Ground Lease exceeds the maturity date of the
related Mortgage Loan by at least five (5) years;
(vi) The Mortgagee under the Mortgage Loan is given at least sixty
(60) days' notice of any default and an opportunity to cure any
defaults under the Ground Lease or to take over the Mortgagor's
rights under the Ground Lease;
(vii)The Ground Lease does not contain any default provisions that
could result in forfeiture or termination of the Ground Lease except
for non-payment of the Ground Lease or a court order;
(viii) The Ground Lease provides that the leasehold can be
transferred, mortgaged and sublet an unlimited number of times
either without restriction or on payment of a reasonable fee and
delivery of reasonable documentation to the lessor;
(ix) The Ground Lease or a memorandum thereof has been recorded and
by its terms permits the leasehold estate to be mortgaged; and
(x) The execution, delivery and performance of the Mortgage do not
require consent (other than those consents which have been obtained
and are in full force and effect) under, and will not contravene any
provision of or cause a default under, the Ground Lease;
(yy) Tax Service Contract.
Each Mortgage Loan shall have a Tax Service Contract which shall
have a term of the life of the Mortgage Loan. Each such Tax Service
Contract shall be fully transferable, without penalty, premium or
cost to the Purchaser or its designee; provided, however, in the
event of termination under Section 11.02 herein, the Company shall
be required to reimburse the Purchaser for all costs and expenses
incurred by the Purchaser or its designee in connection wit the
assignment of any such Tax Service Contract;
(zz) Due on Sale.
The Mortgage contains an enforceable provision, to the extent not
prohibited by applicable law as of the date of such Mortgage, 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;
(aaa)Arbitration.
With respect to each Mortgage Loan, neither the related Mortgage nor
the related Mortgage Note requires the Mortgagor to submit to
arbitration to resolve any dispute arising out of or relating in any
way to the Mortgage Loan transaction; and
(bbb)Georgia Fair Lending Act.
There is no Mortgage Loan that was originated on or after October 1,
2002 and before March 7, 2003, that is secured by property located
in the State of Georgia. There is no Mortgage Loan that was
originated on or after March 7, 2003, that is a "high cost home
loan" as defined under the Georgia Fair Lending Act.
Section 3.03 Repurchase.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
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 Company 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 (or which materially and adversely
affects the interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.
Within ninety (90) days of the earlier of either discovery by or notice to
the Company of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans, the Company shall use its
best efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Company shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.01, and such
breach cannot be cured within ninety (90) days of the earlier of either
discovery by or notice to the Company of such breach, all of the Mortgage Loans
shall, at the Purchaser's option, be repurchased by the Company at the
Repurchase Price.
Notwithstanding the above paragraphs, within sixty (60) days of the
earlier of either discovery by, or notice to, the Company of any breach of the
representations or warranties set forth in clauses (oo), (qq), (uu), (aaa) or
(bbb) of Section 3.02 or any of the representations or warranties set forth in
Exhibit K attached hereto, the Company shall repurchase such Mortgage Loan at
the Repurchase Price. However, if the breach shall involve a representation or
warranty set forth in Section 3.02 and the Company discovers or receives notice
of any such breach within 120 days of the Closing Date, the Company shall, if
the breach cannot be cured, at the Purchaser's option and provided that the
Company 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 Closing Date. If the Company has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan within ninety (90) days of
the written notice of the breach or the failure to cure, whichever is later. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Section 3.03 shall be accomplished by deposit in the Custodial Account of
the amount of the Repurchase Price for distribution to Purchaser on the
Remittance Date immediately following the Principal Prepayment Period in which
such Repurchase Price is received, 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.
At the time of repurchase or substitution, the Purchaser and the Company
shall arrange for the reassignment of the Deleted Mortgage Loan to the Company
and the delivery to the Company of any documents held by the Custodian relating
to the Deleted Mortgage Loan. If the Company repurchases a Mortgage Loan that is
a MERS Mortgage Loan, the Company shall cause MERS to designate on the MERS
System to remove the Purchaser as the beneficial holder with respect to such
Mortgage Loan. In the event of a repurchase or substitution, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase or substitution has taken place, amend the respective 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 respective Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company 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 Company shall effect such substitution by delivering to the
Custodian for such Qualified Substitute Mortgage Loan the documents required by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due 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 Company. With respect to any Deleted Mortgage Loan,
distributions to Purchaser shall include the Monthly Payment due on any Deleted
Mortgage Loan in the month of substitution, and the Company shall thereafter be
entitled to retain all amounts subsequently received by the Company in respect
of such Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company 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 Company in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, the Company shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
In addition to such repurchase or substitution obligation, the Company
shall indemnify the Purchaser and its present and former directors, officer,
employees and agents and hold them 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 representations and warranties contained in this
Agreement. It is understood and agreed that the obligations of the Company set
forth in this Section 3.03 to cure, substitute for or repurchase a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Section 3.03
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Company relating to or arising out of the
breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a Subservicer or a Subcontractor, to do any and all
things in connection with such servicing and administration which the Company
may deem necessary or desirable, consistent with the terms of this Agreement and
with Accepted Servicing Practices. The Company shall be responsible for any and
all acts of a Subservicer and a Subcontractor, and the Company's utilization of
a Subservicer or a Subcontractor shall in no way relieve the liability of the
Company under this Agreement.
Consistent with the terms of this Agreement, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, the Company shall not make any future advances,
other than Servicing Advances, with respect to a Mortgage Loan. The Company
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of principal
(except for actual payments of principal) or change the final maturity date on
such Mortgage Loan, unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Company, imminent. In
the event that no default exists or is imminent, the Company shall request
written consent from the Purchaser to permit such a modification and the
Purchaser shall provide written consent or notify the Company of its objection
to such modification within three (3) Business Days of its receipt of the
Company's request. In the event of any such modification which permits the
deferral of interest or principal payments on any Mortgage Loan, the Company
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, deposit
in the Custodial Account from its own funds, in accordance with Section 5.03,
the difference between (a) such month's principal and one month's interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 5.03. Without limiting the generality of the
foregoing, the Company shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. If reasonably required by the Company, the
Purchaser shall furnish the Company with any powers of attorney and other
documents necessary or appropriate to enable the Company to carry out its
servicing and administrative duties under this Agreement.
The Company is authorized and empowered by the Purchaser, in its own name,
when the Company believes it appropriate in its reasonable judgment to register
any Mortgage Loan on the MERS System, or cause the removal from MERS
registration of any Mortgage Loan on the MERS System, to execute and deliver, on
behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.
The Company shall cause to be maintained for each Cooperative Loan a copy
of the financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy. In the
event that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of ninety (90) days or any
other default continues for a period of ninety (90) days beyond the expiration
of any grace or cure period, the Company shall commence foreclosure proceedings.
In the event the Purchaser objects to such foreclosure action, the Company shall
not be required to make Monthly Advances with respect to such Mortgage Loan,
pursuant to Section 5.03, and the Company's obligation to make such Monthly
Advances shall terminate on the 90th day referred to above. In such connection,
the Company shall from its own funds make all necessary and proper Servicing
Advances, provided, however, that the Company shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration or
preservation of any Mortgaged Property, unless it shall determine (a) that such
preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for
such expenses and (b) that such expenses will be recoverable by it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company 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 Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company 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 the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs the Company not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Company shall proceed diligently to collect
all payments due under each of the Mortgage Loans when the same shall become due
and payable and shall take special care in ascertaining and estimating Escrow
Payments and all other charges that will become due and payable with respect to
the Mortgage Loan and the Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received in
connection with a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "▇▇▇▇▇ Fargo Bank, N.A.,
in trust for the Purchaser and/or subsequent purchasers of Mortgage Loans - P &
I." The Custodial Account shall be established with a Qualified Depository. Upon
request of the Purchaser and within ten (10) days thereof, the Company shall
provide the Purchaser with written confirmation of the existence of such
Custodial Account. The Custodial Account shall at all times be insured to the
fullest extent allowed by applicable law. Funds deposited in the Custodial
Account may be drawn on by the Company in accordance with Section 4.05.
The Company shall deposit in the Custodial Account within two (2) Business
Days of Company's receipt, and retain therein, the following collections
received by the Company and payments made by the Company after the Cut-off Date,
other than payments of principal and interest due on or before the Cut-off Date,
or received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to
be deposited by the Company in connection with a shortfall in
principal amount of any Qualified Substitute Mortgage Loan pursuant
to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be paid by
the Company out of its funds) which, when added to all amounts
allocable to interest received in connection with the Principal
Prepayment, equals one month's interest on the amount of principal
so prepaid at the Mortgage Loan Remittance Rate;
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any
blanket hazard insurance policy;
(x) any amounts received with respect to or related to any REO Property
and all REO Disposition Proceeds pursuant to Section 4.16;
(xi) with respect to Buydown Mortgage Loans and Subsidy Loans, an amount
from the Escrow Account that when added to the amount received from
the Mortgagor for such month, equal the full Monthly Payment due
under the related Mortgage Note; and
(xii) any Prepayment Penalties received with respect to any Mortgage
Loan.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's funds
made pursuant to Section 5.03, the Company's right to reimburse
itself pursuant to this sub clause (ii) being limited to amounts
received on the related Mortgage Loan which represent late Monthly
Payments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Company
respecting which any such advance was made, it being understood
that, in the case of any such reimbursement, the Company's right
thereto shall be prior to the rights of Purchaser, except that,
where the Company is required to repurchase a Mortgage Loan
pursuant to Section 3.03 or 6.02, the Company's right to such
reimbursement shall be subsequent to the payment to the Purchaser
of the Repurchase Price pursuant to such sections and all other
amounts required to be paid to the Purchaser with respect to such
Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for
any unpaid Servicing Fees, the Company's right to reimburse itself
pursuant to this sub clause (iii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating
to the Mortgage Loan, it being understood that, in the case of any
such reimbursement, the Company's right thereto shall be prior to
the rights of Purchaser, except that where the Company is required
to repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, in
which case the Company's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case
of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses
after liquidation of the Mortgaged Property not otherwise
reimbursed above;
(viii) to remove funds inadvertently placed in the Custodial Account by
the Company; and
(ix) to clear and terminate the Custodial Account upon the termination
of this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"▇▇▇▇▇ Fargo Bank, N.A., in trust for the Purchaser and/or subsequent purchasers
of Residential Mortgage Loans, and various Mortgagors - T & I." The Escrow
Accounts shall be established with a Qualified Depository, in a manner which
shall provide maximum available insurance thereunder. Upon request of the
Purchaser and within ten (10) days thereof, the Company shall provide the
Purchaser with written confirmation of the existence of such Escrow Account.
Funds deposited in the Escrow Account may be drawn on by the Company in
accordance with Section 4.07.
The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of Company's receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as
required under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of
any Mortgaged Property;
(iii) all payments on account of Buydown Funds; and
(iv) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire
and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce the
principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section
4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to remove funds inadvertently placed in the Escrow Account by the
Company;
(viii) to transfer payment on account of Buydown Funds and/or Subsidy
Funds to the Custodial Account, as applicable; and
(ix) to clear and terminate the Escrow Account on the termination of
this Agreement.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. To the extent that a Mortgage does not provide
for Escrow Payments, the Company shall determine whether any such payments are
made by the Mortgagor at the time they first become due. The Company assumes
full responsibility for the timely payment of all such bills and shall effect
timely payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and the
Company shall make advances from its own funds to effect such payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account, Subsidy Account or the
Escrow Account to a different Qualified Depository from time to time, provided
that the Company shall give notice to the Purchaser of such transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) 100% of the insurable value, on a replacement cost basis, of the
improvements on the related Mortgaged Property and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such insurance shall be sufficient to prevent the application to
the Mortgagor or the loss payee of any coinsurance clause under the policy. In
the event a hazard insurance policy shall be in danger of being terminated, or
in the event the insurer shall cease to be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, the Company shall notify the Purchaser and the related Mortgagor, and shall
use its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event, however,
shall a Mortgage Loan be without a hazard insurance policy at any time, subject
only to Section 4.11 hereof.
If the related Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac in an amount representing coverage equal to the lesser of (i)
the minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Company determines in accordance with the
applicable law and pursuant to the ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guide, that the
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance or is covered in an amount less than the amount required by
the Flood Disaster Protection Act of 1973, as amended, the Company shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Company shall
force place the required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
In the event that the Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor's behalf.
All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.10. The Company shall prepare and make any claims on the blanket policy as
deemed necessary by the Company in accordance with Accepted Servicing Practices.
Any amounts collected by the Company under any such policy relating to a
Mortgage Loan shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05. Such policy may contain a deductible clause, in which
case, in the event that there shall not have been maintained on the related
Mortgaged Property a policy complying with Section 4.10, and there shall have
been a loss which would have been covered by such policy, the Company shall
deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of the Purchaser, the Company shall cause to be delivered
to such Purchaser a certificate of insurance and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty (30) days' prior written notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Company shall maintain with responsible companies, at its own expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other Persons acting in any capacity
requiring such Persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered to
such Purchaser a certificate of insurance for such Fidelity Bond and Errors and
Omissions Insurance Policy and a statement from the surety and the insurer that
such Fidelity Bond and Errors and Omissions Insurance Policy shall in no event
be terminated or materially modified without thirty (30) days' prior written
notice to the Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than sixty (60) days delinquent, the Company
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
record of each such inspection and, upon request, shall provide the Purchaser
with such information.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Company shall take all steps necessary to preserve the priority
of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Company shall place the Insurance
Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy; Claims.
Except as indicated on the related Data File, with respect to each
Mortgage Loan with an LTV in excess of 80% at the time of origination, the
Company shall, without any cost to the Purchaser maintain or cause the Mortgagor
to maintain in full force and effect a PMI Policy insuring the portion of the
unpaid principal balance of the Mortgage Loan as to payment defaults. If the
Mortgage Loan is insured by a PMI Policy for which the Mortgagor pays all
premiums, the coverage will remain in place until (i) the LTV decreases to 78%
or (ii) the PMI Policy is otherwise terminated pursuant to the Homeowners
Protection Act of 1998, 12 U.S.C ss.4901, et seq. In the event that such PMI
Policy shall be terminated other than as required by law, the Company shall
obtain from another Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated PMI Policy. If
the insurer shall cease to be a Qualified Insurer, the Company shall determine,
in accordance with Accepted Servicing Practices, whether recoveries under the
PMI Policy are jeopardized for reasons related to the financial condition of
such insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy for
such reason. If the Company determines that recoveries are so jeopardized, it
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company shall not
take any action which would result in noncoverage under any applicable PMI
Policy of any loss which, but for the actions of the Company would have been
covered thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 6.01, the Company shall
promptly notify the insurer under the related PMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such PMI
Policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under such PMI Policy. If such PMI
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement PMI Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms of
such PMI Policy and, in this regard, to take such action as shall be necessary
to permit recovery under any PMI Policy respecting a defaulted Mortgage Loan.
Pursuant to Section 4.04, any amounts collected by the Company under any PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser's designee, or in the event the
Purchaser is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Company from any
attorney duly licensed to practice law in the state where the REO Property is
located. The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser.
The Company shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, 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. The Company 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 the Company deems to
be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event prior to the
close of the third calendar year beginning after the year in which title has
been taken to such REO Property, unless (i) a REMIC election has not been made
with respect to the arrangement under which the Mortgage Loans and the REO
Property are held, and (ii) the Company determines that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than three years is permitted under the foregoing sentence, (i) the Company
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property and (ii) if a purchase money mortgage is taken in connection
with such sale, such purchase money mortgage (1) shall name the Company as
mortgagee, and (2) shall not be held pursuant to this Agreement.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Company at
such price, and upon such terms and conditions, as the Company deems to be in
the best interests of the Purchaser. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as practical
thereafter the expenses of such sale shall be paid and the Company shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03. On the
Remittance Date immediately following the Principal Prepayment Period in which
such sale proceeds are received the net cash proceeds of such sale remaining in
the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account funds necessary for
the proper operation management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any managing agent of the Company, or the Company itself. The Company
shall make monthly distributions on each Remittance Date to the Purchaser of the
net cash flow from the REO Property (which shall equal the revenues from such
REO Property net of the expenses described in this Section 4.16 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous month. That statement shall be
accompanied by such other information available to the Company as the Purchaser
shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
Section 4.20 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Company shall have
deposited into the Escrow Account, no later than the last day of the month,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required to
be paid by the Mortgagor under the terms of the related Mortgage Note (without
regard to the related Buydown Agreement as if the Mortgage Loan were not subject
to the terms of the Buydown Agreement). With respect to each Buydown Mortgage
Loan, the Company will distribute to the Purchaser on each Remittance Date an
amount of Buydown Funds equal to the amount that, when added to the amount
required to be paid on such date by the related Mortgagor, pursuant to and in
accordance with the related Buydown Agreement, equals the full Monthly Payment
that would otherwise be required to be paid on such Mortgage Loan by the related
Mortgagor under the terms of the related Mortgage Note (as if the Mortgage Loan
were not a Buydown Mortgage Loan and without regard to the related Buydown
Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Company or the
insurer under any related Primary Insurance Policy) the Company shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such Mortgage
Loan then remaining in the Escrow Account. Pursuant to the terms of each Buydown
Agreement, any amounts distributed to the Purchaser in accordance with the
preceding sentence will be applied to reduce the outstanding principal balance
of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan
prepays such Mortgage Loan in its entirety during the related Buydown Period,
the Company shall be required to withdraw from the Escrow Account any Buydown
Funds remaining in the Escrow Account with respect to such Buydown Mortgage Loan
in accordance with the related Buydown Agreement. If a principal prepayment by a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Escrow Account related to such
Buydown Mortgage Loan, would result in a principal prepayment of the entire
unpaid principal balance of the Buydown Mortgage Loan, the Company shall
distribute to the Purchaser on the Remittance Date occurring in the month
immediately succeeding the month in which such Principal Prepayment is received,
all Buydown Funds related to such Mortgage Loan so remaining in the Escrow
Account, together with any amounts required to be deposited into the Custodial
Account.
Section 4.21 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Company shall
adjust the Mortgage Interest Rate on the related Adjustment Date and shall
adjust the Monthly Payment accordingly in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Company 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
Interest Rate and Monthly Payment adjustments. Upon the discovery by the Company
or the receipt of notice from the Purchaser that the Company has failed to
adjust a Mortgage Interest Rate or Monthly Payment in accordance with the terms
of the related Mortgage Note, the Company shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or deferral
caused the Purchaser thereby.
Section 4.22 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies. Each party agrees that it shall
comply with all applicable laws and regulations regarding the privacy or
security of Customer Information and shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616 (the
"Interagency Guidelines"). For purposes of this Section, the term "Customer
Information" shall have the meaning assigned to it in the Interagency
Guidelines.
Section 4.23 Fair Credit Reporting Act
The Company, in its capacity as servicer for each Mortgage Loan, 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 Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
Section 4.24 Establishment of and Deposits to Subsidy Account.
The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "▇▇▇▇▇ Fargo
Bank, N.A., in trust for the Purchaser, its successors or assigns, and/or
subsequent purchasers of Residential Mortgage Loans, and various Mortgagors."
The Subsidy Account shall be an eligible deposit account established with an
eligible institution.
The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
(i) to deposit in the Custodial Account in the amounts and in the
manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in accordance
with Section 4.09 hereof;
(iii)to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the termination
of this Agreement.
Notwithstanding anything to the contrary elsewhere in this Agreement, the
Company may employ the Escrow Account as the Subsidy Account to the extent that
the Company can separately identify any Subsidy Funds deposited therein.
Section 4.25 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 under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.25. 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 under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section 4.25.
(a) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subservicer. 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 4.25 and with Sections 6.04, 6.06,
9.01(d)(iii), 9.01(d)(v), 9.01(d)(vi), 9.01(d)(vii) and 9.01(e) of this
Agreement to the same extent as if such Subservicer were the Company, and
to provide the information required with respect to such Subservicer under
Section 9.01(d)(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 6.04 and any assessment of compliance
and attestation required to be delivered by such Subservicer under Section
6.06 and any certification required to be delivered to the Person that
will be responsible for signing the Sarbanes Certification under Section
6.06 as and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subcontractor. The
Company shall promptly upon request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as an administrator) a
written description (in form and substance satisfactory to the Purchaser
and such Depositor) of the role and function of each Subcontractor
utilized by the Company or any Subservicer, specifying (i) the identity of
each such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122
of Regulation AB, and (iii) which elements of the Servicing Criteria will
be addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(e) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation and other certifications required to be delivered by such
Subcontractor under Section 6.06, in each case as and when required to be
delivered.
Section 4.26 Quality Control Procedures.
The Company shall 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 Company's loan
production and the servicing activities of the Company in accordance with
industry standards.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but due on a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date, and minus (e) any amounts attributable to Buydown Funds being held in the
Custodial Account, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after the second
Business Day following the Business Day on which such payment was due, the
Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover the
period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the Remittance Date, the Company shall furnish to the
Purchaser a monthly remittance advice, with a trial balance report attached
thereto, as to the remittance period ending on the last day of the preceding
month.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the
Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due on
the Mortgage Loans during the applicable Due Period and which were delinquent at
the close of business on the immediately preceding Determination Date or which
were deferred pursuant to Section 4.01. Any amounts held for future distribution
and so used shall be replaced by the Company by deposit in the Custodial Account
on or before any future Remittance Date if funds in the Custodial Account on
such Remittance Date shall be less than payments to the Purchaser required to be
made on such Remittance Date. The Company's obligation to make such Monthly
Advances as to any Mortgage Loan will continue through the last Monthly Payment
due prior to the payment in full of the Mortgage Loan, or through the last
Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including REO Disposition
Proceeds, Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan; provided, however, that such obligation shall cease if the
Company determines, in its sole reasonable opinion, that advances with respect
to such Mortgage Loan are non-recoverable by the Company from Liquidation
Proceeds, REO Disposition Proceeds, Insurance Proceeds, Condemnation Proceeds,
or otherwise with respect to a particular Mortgage Loan. In the event that the
Company determines that any such advances are non-recoverable, the Company shall
provide the Purchaser with a certificate signed by two officers of the Company
evidencing such determination. The Company shall not have an obligation to make
such Monthly Advances as to any Mortgage Loan with respect to shortfalls
relating to the Servicemembers Civil Relief Act or similar state and local laws.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property has
been conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
monthly remittance advice as provided in Section 5.02, and may request the
release of any Mortgage Loan Documents.
If the Company satisfies or releases the lien of the Mortgage without
first having obtained payment in full of the indebtedness secured by the
Mortgage (other than as a result of a modification of the Mortgage pursuant to
the terms of this Agreement or liquidation of the Mortgaged Property pursuant to
the terms of this Agreement) or should the Company otherwise prejudice any
rights the Purchaser may have under the mortgage instruments, upon written
demand of the Purchaser, the Company shall repurchase the related Mortgage Loan
at the Repurchase Price by deposit thereof in the Custodial Account within two
(2) Business Days of receipt of such demand by the Purchaser. The Company shall
maintain the Fidelity Bond and Errors and Omissions Insurance Policy as provided
for in Section 4.12 insuring the Company against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled
to withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 4.05) of such Monthly Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statements as to Compliance.
On or before March 1 of each calendar year, 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 (a) a review of the Company's activities during the
immediately preceding calendar year (or applicable portion thereof) and of its
performance under this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer's supervision, and (b) to
the best of such officers' knowledge, based on such review, the Company has
fulfilled all of its 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.
Section 6.05 [Reserved]
Section 6.06 Report on Assessment of Compliance and Attestation.
On or before March 1 of each calendar year, the Company shall:
(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such
Depositor) 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 "Applicable Servicing
Criteria" specified on Exhibit F hereto delivered to the Purchaser
at the time of any Securitization Transaction;
(ii) deliver to the Purchaser and any Depositor a report of a registered
public accounting firm reasonably acceptable to the Purchaser and
such Depositor 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;
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.25(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation
AB, to deliver to the Purchaser and such Depositor an assessment of
compliance and accountants' attestation as and when provided in
paragraphs (i) and (ii) of this Section 6.06; and
(iv) if requested by the Purchaser and any Depositor not later than
February 1 of the calendar year in which such certification is to be
delivered, deliver to the Purchaser, any Depositor and 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 in the form
attached hereto as Exhibit G.
The Company acknowledges that the parties identified in clause (iv) 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. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (iv) above unless a Depositor is required under the Exchange Act to file
an annual report on Form 10-K with respect to an issuing entity whose asset pool
includes Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(i) shall address each of the Servicing Criteria specified
substantially in the form of Exhibit F hereto delivered to the Purchaser at the
time of any Securitization Transaction 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 Subcontractor pursuant to Section
6.06(iii) need not address any elements of the Servicing Criteria other than
those specified by the Company pursuant to Section 4.25.
Section 6.07 Remedies.
(i) Any failure by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.25, Section 6.04 or Section 6.06, or any breach by the Company of a
representation or warranty set forth in Section 9.01(d)(vi)(A), or in a writing
furnished pursuant to Section 9.01(d)(vi)(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 Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(d)(vi)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or any 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 or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company; 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
Company as servicer, such provision shall be given effect.
(ii) Any failure by the Company, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants' letter when and
as required under Section 6.04 or Section 6.06, including (except as provided
below) any failure by the Company to identify any Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB,
which continues unremedied for ten (10) 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 any Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company 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 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 Company as servicer,
such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to terminate the
rights and obligations of the Company pursuant to this Section 6.07(ii) if a
failure of the Company to identify a Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or function of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
(iii)The Company shall promptly reimburse the Purchaser (or any designee
of the Purchaser), any 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 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.
Section 6.08 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and audit
any and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own expenses associated with such
examination.
Section 6.09 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action, cause the REMIC to take any action or fail to take any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC as a REMIC or (ii) result in the imposition of
a tax upon the REMIC (including but not limited to the tax on (a) "prohibited
transactions" or "income from non-permitted assets" as defined in Section
860F(a)(2) of the Code, (b) "contributions" to a REMIC set forth in Section
860G(d) of the Code, (c) "foreclosure" property as defined in Section 860G(a)(8)
of the Code and (d) "net income from foreclosure property" which is subject to
tax under the REMIC Provisions) unless the Company has received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the effect
that the contemplated action will not endanger such REMIC status or result in
the imposition of any such tax.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by such Consolidated Statement
of Operations. The Company, upon request, also shall make available any
comparable interim statements to the extent any such statements have been
prepared by or on behalf of the Company (and are available upon request to
members or stockholders of the Company or to the public at large).
The Company also shall make available to Purchaser or prospective
purchasers a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit any prospective purchaser to
inspect the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and their respective present and
former directors, officers, employees and agents 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 such party may sustain in any way related to the failure of
the Company to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Company's
indemnification pursuant to Section 3.03, or the failure of the Company to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement.
The indemnification rights set forth in this Section 8.01 shall survive
the termination of this Agreement or the resignation or removal of the Company
for any reason.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and
franchises, and shall obtain and preserve its qualification to do business 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 Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company 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 be an institution which is a ▇▇▇▇▇▇
▇▇▇/▇▇▇▇▇▇▇ Mac-approved seller/servicer in good standing. Furthermore, in the
event the Company transfers or otherwise disposes of all or substantially all of
its assets to an affiliate of the Company, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of the
Company's obligations and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser 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 Company or any such Person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company 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 Company shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however, that the Company 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 Company shall be entitled to reimbursement
from the Purchaser of the reasonable legal expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement nor the servicing rights hereunder
or delegate its rights or duties hereunder (other than pursuant to Section 4.01)
or any portion hereof or sell or otherwise dispose of all of its property or
assets without the prior written consent of the Purchaser, which consent shall
not be unreasonably withheld.
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its rights or duties hereunder (other
than pursuant to Section 4.01) or any portion hereof or sell or otherwise
dispose of all or substantially all of its property or assets, without the prior
written consent of the Purchaser, then the Purchaser shall have the right to
terminate this Agreement upon notice given as set forth in Section 10.01,
without any payment of any penalty or damages and without any liability
whatsoever to the Purchaser or any third party.
ARTICLE IX
AGENCY TRANSFERS, SECURITIZATION TRANSACTIONS AND WHOLE LOAN
TRANSFERS
Section 9.01 Agency Transfers, Securitization Transactions and Whole Loan
Transfers
The Purchaser and the Company agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Securitization Transactions, retaining the Company as
the servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." On the Reconstitution Date, the Mortgage Loans
transferred may cease to be covered by this Agreement; provided, however, that,
in the event that any Mortgage Loan transferred pursuant to this Section 9.01 is
rejected by the transferee, the Company shall continue to service such rejected
Mortgage Loan on behalf of the Purchaser in accordance with the terms and
provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Sale or Securitization Transaction in accordance
with this Section 9.01. In connection therewith:
(a) The Company shall make all representations and warranties made
herein with respect to the Mortgage Loans as of the Closing Date and
all representations and warranties made herein with respect to the
Company itself as of the closing date of each Whole Loan Transfer,
Agency Sale or Securitization Transaction. In the event of a
Securitization Transaction or Agency Sale for which ▇▇▇▇▇▇▇ Mac
representations and warranties are required, the Company agrees to
make the representations and warranties listed on Exhibit K, as of
the related Closing Date, at the time of such Securitization
Transaction or Agency Sale, with respect to the Mortgage Loans
included therein;
(b) The Company shall negotiate in good faith and execute any (i)
seller/servicer agreements required to effectuate the foregoing
provided such agreements create no greater obligation or cost on the
part of the Company than otherwise set forth in this Agreement or
(ii) an Assignment, Assumption and Recognition Agreement,
substantially in the form attached hereto as Exhibit H, or a pooling
and servicing agreement in form and substance reasonably acceptable
to the Purchaser and the Company, which shall not create any greater
obligation upon the Company.
(c) The Company shall execute any seller/servicer agreements required
within a reasonable period of time after receipt of such
seller/servicer agreements which time shall be sufficient for the
Company and Company's counsel to review such seller/servicer
agreements. Under this Agreement, the Company shall retain a
Servicing Fee for each Mortgage Loan at the Servicing Fee Rate; and
(d) In connection with any Securitization Transaction, the Company shall
(1) within five (5) 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 and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the
information and materials specified in paragraphs (i), (ii), (iii)
and (vii) of this subsection (d), and (2) as promptly as practicable
following notice to or discovery by the Company, 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 (iv) of this subsection (d).
(i) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding (1) the Company, as
originator of the Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), or (2) each
Third-Party Originator, and (3) as applicable, each Subservicer, as
is requested for the purpose of compliance with Items 1103(a)(1),
1105, 1110, 1117 and 1119 of Regulation AB. Such information shall
include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how long
the originator has been engaged in originating residential mortgage
loans, which description shall include a discussion of the
originator's experience in originating mortgage loans of a similar
type as the Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and
information that may be material, in the good faith judgment of the
Purchaser or any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s) as the
Mortgage Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance with
Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Company, each
Third-Party Originator and each Subservicer; and
(D) a description of any affiliation or relationship (of a type
described in Item 1119 of Regulation AB) between the Company, each
Third-Party Originator, 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 in advance of a 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, 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 (1) the Company,
if the Company is an originator of Mortgage Loans (including as an
acquirer of Mortgage Loans from a Qualified Correspondent), and/or
(2) each Third-Party Originator. Such Static Pool Information shall
be prepared by the Company (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 Company (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. 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 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 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), 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 Company's or Third-Party Originator's
originations or purchases, to calendar months commencing January 1,
2006, as the Purchaser or such Depositor shall reasonably request.
Such letters shall be addressed to and be for the benefit of such
parties as the Purchaser or such Depositor shall designate, which
may include, by way of example, any sponsor, any Depositor and any
broker dealer acting as underwriter, placement agent or initial
purchaser with respect to a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally
applicable document accompanied by a reliance letter authorizing
reliance by the addressees designated by the Purchaser or such
Depositor.
(iii) If so 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
requested for the purpose of compliance with Item 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 good
faith judgment 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) If so requested by the Purchaser or any Depositor for the purpose of
satisfying the reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Company shall
(or shall cause each Subservicer and Third-Party Originator to) (1)
notify the Purchaser and any Depositor in writing of (A) any
material litigation or governmental proceedings involving the
Company, any Subservicer or any Third-Party Originator and (B) any
affiliations or relationships that develop following the closing
date of a Securitization Transaction between the Company, any
Subservicer or any Third-Party Originator and any of the parties
specified in Section 9.01(d)(i)(D) (and any other parties identified
in writing by the requesting party) with respect to such
Securitization Transaction, and (2) provide to the Purchaser and any
Depositor a description of such proceedings, affiliations or
relationships.
(v) As a condition to the succession to the Company or any Subservicer
as servicer or Subservicer under this Agreement or any
Reconstitution Agreement 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
fifteen (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
and in form and substance reasonably satisfactory to the Purchaser
and such Depositor, 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) (A) 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 this Section 9.01(d) that,
except as disclosed in writing to the Purchaser or such Depositor
prior to such date: (1) 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; (2)
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; (3) 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; (4) 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; (5) 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;
(6) 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 (7) 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.
(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 this Section 9.01(d), the Company
shall, within five (5) Business Days following such request, confirm
in writing the accuracy of the representations and warranties set
forth in sub clause (A) above 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.
(vii) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this Agreement,
if so requested by the Purchaser or any Depositor, the Company shall
provide such information regarding the performance or servicing of
the Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121 of
Regulation AB. Such information shall be provided concurrently with
the monthly reports otherwise required to be delivered by the
servicer under this Agreement, commencing with the first such report
due not less than ten (10) Business Days following such request.
(e) The Company 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 (each, an "Indemnified Party"), in an
Indemnification Agreement substantially in the form of Exhibit I attached
hereto, 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 in written or electronic form
under Sections 4.25, 6.04, 6.06, 9.01(d) and (e) by or on behalf of
the Company, or provided under Sections 4.25, 6.04, 6.06, 9.01(d)
and (e) by or on behalf of any Subservicer, Subcontractor or
Third-Party Originator (collectively, the "Company Information"), or
(B) 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 (B) 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;
(ii) any breach by the Company of its obligations under this Section
9.01(e), including particularly any failure by the Company, any
Subservicer, any Subcontractor or any Third-Party Originator to
deliver any information, report, certification, accountants' letter
or other material when and as required under Sections 4.25, 6.04,
6.06 and 9.01(d), including any failure by the Company to identify
any Subcontractor "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Company of a representation or warranty set forth
in Section 9.01(d)(vi)(A) or in a writing furnished pursuant to
Section 9.01(d)(vi)(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
Company of a representation or warranty in a writing furnished
pursuant to Section 9.01(d)(vi)(B) to the extent made as of a date
subsequent to such closing date.
In the case of any failure of performance described in sub-clause
(ii) of this Section 9.01(e), the Company 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 Company, any Subservicer,
any Subcontractor or any Third-Party Originator.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, 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 sub-clause
(ii) of this Section 9.01(e), the Company 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 Company, any Subservicer,
any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
(f) The Purchaser and a credit-worthy parent of the Purchaser, reasonably
acceptable to the Company shall indemnify the Company, each affiliate of
the Company, each Person who controls any of such parties or the Company
(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
Company, in an Indemnification Agreement substantially in the form of
Exhibit I attached hereto, 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) any untrue statement of a material fact contained or alleged to be
contained in any offering materials related to a Securitization
Transaction, including without limitation the registration
statement, prospectus, prospectus supplement, any private placement
memorandum, any free writing prospectuses, any ABS informational and
computational material, and any amendments or supplements to the
foregoing (collectively, the "Securitization Materials") or
(ii) the omission or alleged omission to state in the Securitization
Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading,
but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement
or omission arising out of, resulting from, or based upon the
Company Information.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the
Purchaser 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 Purchaser on the other.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
The Purchaser and the Company acknowledge and agree that the purpose of
Section 9.01(d) 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
Company 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 provisions 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 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,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the 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 in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Company, any Subservicer, any Third-Party Originator
and the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably
believed by the Purchaser or any Depositor to be necessary in order to effect
such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Company by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment of Mortgage in blank or to the trustee from the Company
acceptable to the trustee for each Mortgage Loan that is part of the Whole Loan
Transfers, Agency Sales or Securitization Transactions. The Purchaser shall pay
all preparation and recording costs associated therewith, if such Assignments of
Mortgage have been previously prepared and recorded in the name of the Purchaser
or its designee. The Company shall execute each Assignment of Mortgage, track
such Assignments of Mortgage to ensure they have been recorded and deliver them
as required by the trustee upon the Company's receipt thereof. Additionally, the
Company shall prepare and execute, at the direction of the Purchaser, any note
endorsements in connection with any and all seller/servicer agreements.
All Mortgage Loans (i) not sold or transferred pursuant to Whole Loan
Transfers, Agency Sales or Securitization Transactions or (ii) that are subject
to a Securitization Transaction for which the related trust is terminated for
any reason, shall remain subject to this Agreement and shall continue to be
serviced in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part of
the Company:
(i) any failure by the Company to remit to the Purchaser any payment
required to be made under the terms of this Agreement which
continues unremedied for a period of five (5) Business Days after
the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Company by the
Purchaser; or
(ii) failure by the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Company set forth in this Agreement or in the Custodial Agreement
which continues unremedied for a period of thirty (30) days after
the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Company by the
Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to do business in any
jurisdiction where the Mortgaged Property is located if such license
is required; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, including
bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such decree or order
shall have remained in force undischarged or unstayed for a period
of sixty (60) days; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Company or of or relating to all or substantially
all of its property; or
(vi) the Company 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, bankruptcy or reorganization statute,
make an assignment for the benefit of its creditors, voluntarily
suspend payment of its obligations or cease its normal business
operations for three (3) Business Days; or
(vii) the Company ceases to meet the qualifications of a ▇▇▇▇▇▇
Mae/▇▇▇▇▇▇▇ Mac servicer; or
(viii) the Company attempts to assign its right to servicing compensation
hereunder or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or
any portion thereof in violation of Section 8.04; or
(ix) an Event of Default as defined in Section 6.07.
If the Company obtains knowledge of an Event of Default, the Company shall
promptly notify the Purchaser. In each and every such case, so long as an Event
of Default shall not have been remedied, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief and
specific performance, the Purchaser, by notice in writing to the Company, may
terminate, without compensation to the Company, other than payments to the
Company for services performed under this Agreement up to the date of such
termination as provided for herein, all the rights and obligations of the
Company under this Agreement and in and to the Mortgage Loans and the proceeds
thereof.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written request from any Purchaser, the Company
shall prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such successor's
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account, Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company
may have hereunder, without cause as provided in this Section 11.02. Any such
notice of termination shall be in writing and delivered to the Company by
registered mail as provided in Section 12.05.
The Company shall be entitled to receive, as such liquidated damages, upon
the transfer of the servicing rights, an amount equal to: (i) 2.75% of the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Purchaser to the Company with respect to all of the
Mortgage Loans for which a servicing fee rate of .25% is paid per annum, (ii)
3.25% of the aggregate outstanding principal amount of the Mortgage Loans as of
the termination date paid by the Purchaser to the Company with respect to all of
the Mortgage Loans for which a servicing fee rate of .375% is paid per annum,
and (iii) 3.75% of the aggregate outstanding principal amount of the Mortgage
Loans as of the termination date paid by the Purchaser to the Company with
respect to all of the Mortgage Loans for which a servicing fee rate of .44% or
greater is paid per annum.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02 the Purchaser shall, (i) succeed to and assume all of the
Company's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor having the characteristics set forth in Section 8.02
and which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Company under this Agreement prior to the
termination of Company's responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Purchaser may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. In the event that the
Company's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Sections 3.03 and 8.01, it being understood and agreed that the
provisions of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the
Company notwithstanding any such sale, assignment, resignation or termination of
the Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, except for subsection (h) with respect to the sale of
the Mortgage Loans and subsections (i) and (k) thereof, whereupon such successor
shall become fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Company, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Company or termination of this Agreement pursuant to Section 8.04, 10.01, 11.01
or 11.02 shall not affect any claims that any Purchaser may have against the
Company arising out of the Company's actions or failure to act prior to any such
termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in
the Custodial Account, Subsidy Account and Escrow Account and all Mortgage Files
and related documents and statements held by it hereunder and the Company shall
account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement
signed by the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York at 6 0 nd the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect or any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing issues:
▇▇▇▇▇ Fargo Bank, N.A.
1 Home ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, MAC X2302-033
Fax: 515/▇▇▇-▇▇▇▇
(ii) if to the Company with respect to all other issues:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/▇▇▇-▇▇▇▇
In each instance, with a copy to:
▇▇▇▇▇ Fargo Bank, N.A.
1 Home Campus
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel MAC X2401-06T
or such other address as may hereafter be furnished to
the Purchaser in writing by the Company;
(ii) if to Purchaser:
Barclays Bank PLC
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
In each instance, with a copy to:
Barclays Bank PLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or such other address as may hereafter be furnished to
the Company in writing by the Purchaser;
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns. The parties agree that this
Agreement and signature pages thereof may be transmitted between them by
facsimile and that faxed signatures may constitute original signatures and that
a faxed signature page containing the signature (faxed or original) is binding
on the parties.
Section 12.09 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 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 at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any Person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form attached as Exhibit H, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Purchaser with respect to such Mortgage Loans. All references to the Purchaser
in this Agreement shall be deemed to include its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Closing Date, take any action to solicit
the refinancing of any Mortgage Loan. It is understood and agreed that neither
(i) promotions undertaken by either party or any affiliate of either party which
are directed to the general public at large, including, without limitation, mass
mailings based upon commercially acquired mailing lists, newspaper, radio,
television advertisements nor (ii) serving the refinancing needs of a Mortgagor
who, without solicitation, contacts either party in connection with the
refinance of such Mortgage or Mortgage Loan, shall constitute solicitation under
this Section.
Section 12.12 Further Agreements.
The Purchaser and the Company each agree to execute and deliver to the
other such additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement.
Section 12.13 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(i) 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;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles;
(iii)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;
(iv) a 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;
(v) 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
(vi) the term "include" or "including" shall mean without limitation by
reason of enumeration.
[Intentionally Blank - Next Page Signature Page]
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
BARCLAYS BANK PLC ▇▇▇▇▇ FARGO BANK, N.A.
Purchaser Company
By: By:
---------------------------------- ----------------------------------
Name: Name:
-------------------------------- -------------------------------
Title: Title:
------------------------------- -------------------------------
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of February, 2007 before me, a Notary Public in and for
said State, personally appeared ______, known to me to be _________ of ▇▇▇▇▇
Fargo Bank, N.A., the national banking association that executed the within
instrument and also known to me to be the person who executed it on behalf of
said bank, and acknowledged to me that such bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
--------------------------------------------
Notary Public
My Commission expires
-----------------------
STATE OF )
) ss:
COUNTY OF )
On the _____ day of February, 2007 before me, a Notary Public in and for
said State, personally appeared _______________________________, known to me to
be the _____________________ of Barclays Bank PLC, the corporation that executed
the within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
--------------------------------------------
Notary Public
My Commission expires
-----------------------
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(WFHM 2007-AM04)
EXHIBIT A-1
MORTGAGE LOAN SCHEDULE
(WFHM 2007-AM05)
EXHIBIT B
CUSTODIAL AGREEMENT
EXHIBIT C
CONTENTS OF EACH MORTGAGE FILE AND SERVICING 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 retained by the Company in the
Mortgage File or Servicing File or delivered to the Custodian pursuant to
Sections 2.01 and 2.03 of the Seller's Warranties and Servicing Agreement to
which this Exhibit is attached (the "Agreement"):
With respect to each Mortgage File:
1. The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of ____________ without recourse" and
signed in the name of the Company by an authorized officer (in the
event that the Mortgage Loan was acquired by the Company in a
merger, the signature must be in the following form: "[Company],
successor by merger to [name of predecessor]"; and in the event that
the Mortgage Loan was acquired or originated by the Company while
doing business under another name, the signature must be in the
following form: "[Company], formerly known as [previous name]").
2. The originals or certified true copies of any document sent for
recordation of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
3. Except in the case of MERS Mortgage Loans, the original Assignment
of Mortgage for each Mortgage Loan, in form and substance acceptable
for recording (except for the insertion of the name of the assignee
and recording information). 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. 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
Company in a merger, the Assignment of Mortgage must be made by
"[Company], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the Assignment of Mortgage must be by
"[Company], formerly know as [previous name]."
4. The original of any guarantee executed in connection with the
Mortgage Note.
5. Original or certified copy of power of attorney, if applicable.
6. The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for
recordation. If in connection with any Mortgage Loan, the Company
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 Company 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 Company 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
Company; 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 or
by the title insurance company that issued the title policy to be a
true and complete copy of the original recorded Mortgage.
For each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN for that Mortgage Loan and either language
indicating that the Mortgage Loan was originated in the name of
MERS, or if the Mortgage Loan was not originated in the name of
MERS, the original Mortgage and the assignment to MERS, with
evidence of recording thereon. Further, with respect to MERS
Mortgage Loans, (a) the Mortgage names MERS as the Mortgagee and (b)
the requirements set forth in the Electronic Tracking Agreement have
been satisfied, with a conformed recorded copy to follow as soon as
the same is received by the Company.
7. Originals or certified true copies of documents sent for recordation
of all intervening assignments of the Mortgage 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 Company 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 Company
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 or by the title
insurance company that issued the title policy 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 Company; 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.
8. The electronic form of PMI Policy as identified by certificate
number.
9. The original mortgagee policy of title insurance or other evidence
of title such as a copy of the title commitment or copy of the
preliminary title commitment.
10. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
11. For each Cooperative Loan, the original or a copy of the following:
Pledge Agreement entered into by the Mortgagor with respect to such
Cooperative Loan;
UCC-3 assignment in blank (or equivalent instrument), sufficient
under the laws of the jurisdiction where the related Cooperative
Apartment is located to reflect of record the sale and assignment of
the Cooperative Loan to the Purchaser;
Assignment of Pledge Agreement in blank showing a complete chain of
assignment from the originator of the related Cooperative Loan to
the Company;
Form UCC-1 and any continuation statements with evidence of filing
thereon with respect to such Cooperative Loan;
Cooperative Shares with a Stock Certificate in blank attached;
Proprietary Lease;
Assignment of Proprietary Lease, in blank, and all intervening
assignments thereof;
Recognition agreement of the interests of the mortgagee with respect
to the Cooperative Loan by the Cooperative, the stock of which was
pledged by the related Mortgagor to the originator of such
Cooperative Loan; and
Any assumption, consolidation or modification agreements relating to
any of the items specified above.
12. For each Pledged Asset Mortgage Loan, an Assigned Letter of Credit.
With respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
13. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
14. Residential loan application.
15. Mortgage Loan closing statement.
16. Verification of employment and income, unless originated under the
Company's Limited Documentation program, ▇▇▇▇▇▇ ▇▇▇ Timesaver Plus.
17. Verification of acceptable evidence of source and amount of down
payment, including any related asset verification, if applicable.
18. Credit report on the Mortgagor.
19. Residential appraisal report, including the related completion
certificate, if applicable.
20. Photograph of the Mortgaged Property.
21. Survey of the Mortgage property, if required by the title company or
applicable law.
22. 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.
23. All required disclosure statements.
24. If available, termite report, structural engineer's report, water
potability and septic certification.
25. Sales contract, if applicable.
26. Evidence of payment of taxes and insurance premiums, insurance claim
files, correspondence, current and historical computerized data
files, 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.
27. Amortization schedule, if available.
28. Payment history for any Mortgage Loan that has been closed for more
than 90 days.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within one
hundred eighty (180) days (successive thirty (30) day extensions may be obtained
with the consent of the Purchaser, which consent shall not be unreasonably
withheld, up to a maximum of two hundred forty (240) days of the Closing Date,
an Officer's Certificate which shall (i) identify the recorded document, (ii)
state that the recorded document has not been delivered to the Custodian due
solely to a delay caused by the public recording office, (iii) state the amount
of time generally required by the applicable recording office to record and
return a document submitted for recordation, and (iv) specify the date the
applicable recorded document will be delivered to the Custodian. The Company
shall be required to deliver to the Custodian the applicable recorded document
by the date specified in (iv) above. An extension of the date specified in (iv)
above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Notwithstanding Paragraphs 1 and 3 above, the Purchaser acknowledges that
the Company may deliver (i) a Mortgage Note for which the chain of endorsements
is not identical to that of the intervening Assignments with respect to such
Mortgage Note, which shall not affect the enforceability of such Mortgage Note,
and/or (ii) intervening Assignments which are not identical to the chain of
endorsements with respect to such Mortgage Note, which shall not affect the
validity of such intervening Assignments; provided, however, that such
acknowledgment shall in no way operate to negate the Purchaser's remedies for
the Company's breach of the representations and warranties under this Agreement.
EXHIBIT D
DATA FILE ELEMENTS
(1) the Mortgage Loan number;
(2) the street address of the Mortgaged Property including the city,
state, county and zip code;
(3) a code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a cooperative, a townhouse,
manufactured housing or a unit in a condominium project;
(4) the Mortgage Interest Rate as of the Cut-off Date;
(5) the current Monthly Payment;
(6) the original loan term (in number of months);
(7) the stated maturity date;
(8) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of
principal due on or before the Cut-off Date;
(9) the Loan-to-Value Ratio;
(10) a code indicating whether the Mortgage Loan is an Interest Only
Mortgage Loan;
(11) a code indicating whether the Mortgage Loan is a temporary buydown
(Y or N);
(12) the Servicing Fee Rate;
(13) a code indicating whether the Mortgage Loan is covered by
lender-paid mortgage insurance (Y or N);
(14) a code indicating whether the Mortgage Loan is a Time$aver(R)
Mortgage Loan (Y or N);
(15) the Mortgagor's first and last name;
(16) a code indicating a Co-Borrower (Y or N);
(17) the Co-Borrower's first and last name, if applicable;
(18) a code indicating whether the Mortgaged Property is owner-occupied,
a second home or an investment property;
(19) the remaining months to maturity from the Cut-off Date, based on the
original amortization schedule;
(20) the date on which the first Monthly Payment was due on the Mortgage
Loan;
(21) the last Due Date on which a Monthly Payment was actually applied to
the actual principal balance;
(22) the original principal amount of the Mortgage Loan;
(23) a code indicating the purpose of the loan (i.e., purchase,
financing, rate/term refinancing, cash-out refinancing);
(24) the Mortgage Interest Rate at origination;
(25) a code indicating the documentation style (i.e., full (providing two
years employment verification - 2 years W-2's and current pay stub
or 2 years 1040's for self employed borrowers), alternative or
reduced);
(26) a code indicating if the Mortgage Loan is subject to a PMI Policy;
(27) the Appraised Value of the Mortgage Property;
(28) the sale price of the Mortgaged Property, if applicable;
(29) the Mortgagor's underwriting FICO score;
(30) term of Prepayment Penalty in years;
(31) a code indicating the product type;
(32) a code indicating the credit grade of the Mortgage Loan;
(33) the unpaid balance of the Mortgage Loan as of the close of business
on the Cut-off Date, after deduction of all payments of principal;
(34) the Mortgage Note date of the Mortgage Loan;
(35) the mortgage insurance certificate number and percentage of
coverage, if applicable;
(36) the Mortgagor's date of birth;
(37) if the Mortgage Loan is a MERS Mortgage Loan, the MIN, if
applicable;
(38) employer name;
(39) subsidy program code;
(40) servicer name;
(41) the combined Loan-to-Value Ratio at origination;
(42) the total Loan-to-Value Ratio;
(43) whether the Mortgage Loan is convertible (Y or N);
(44) a code indicating whether the Mortgage Loan is a relocation loan (Y
or N);
(45) a code indicating whether the Mortgage Loan is a leasehold loan (Y
or N);
(46) a code indicating whether the Mortgage Loan is an Alt A loan (Y or
N);
(47) a code indicating whether the Mortgage Loan is a no ratio loan (Y or
N);
(48) a code indicating whether the Mortgage Loan is a Pledged Asset
Mortgage Loan (Y or N);
(49) effective LTV percentage for Pledged Asset Mortgage Loan;
(50) citizenship type code;
(51) a code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan balance;
(52) the name of the client for which the Mortgage Loan was originated;
(53) a code indicating amortization type (1= Full or 2=IO);
(54) a code indicating interest-only terms in months for Interest Only
Mortgage Loans;
(55) the remaining interest-only term for Interest-Only Mortgage Loans;
(56) a date when first full payment is due after interest-only period is
over for Interest Only Mortgage Loans;
(57) the current monthly tax and insurance payment;
(58) a code indicating whether the Mortgage Loan was originated through
the correspondent, retail or wholesale channel;
(59) front end debt-to-income ratio;
(60) back end debt-to-income ratio;
(61) a code indicating borrower or lender verification of assets (B or
L);
(62) combined balance of the first lien and second lien mortgage loan
balances, if applicable;
(63) a code indicating age of Mortgage Loan in months;
(64) a code indicating delinquency status for last twelve (12) months
(rolling);
(65) updated FICO score;
(66) a code indicating if borrower is self-employed (Y or N);
(67) a policy number or certificate number of the physical document
evidencing mortgage insurance;
(68) a borrower's prior rent or mortgage payment history (not associated
with subject Mortgage Loan);
(69) the appraisal form used to document the Appraisal Value of the
Mortgage Property;
(70) documentation type translated to ▇▇▇▇▇'▇ definition;
(71) type of asset verification utilized for decisioning the loan,
translated to ▇▇▇▇▇'▇ definitions;
(72) documentation type translated to Standard and Poor's definition;
(73) type of asset verification utilized for decisioning the loan,
translated to Standard and Poor's definitions;
(74) documentation type translated to Fitch's definition;
The Company shall provide the following
For the Home Mortgage Disclosure Act (HMDA):
(75) the Mortgagor's and co-Mortgagor's (if applicable) ethnicity;
(76) the Mortgagor's and co-Mortgagor's (if applicable) race;
(77) lien status;
(78) for cash-out refinance loans, the cash purpose;
(79) the Mortgagor's and co-Mortgagor's (if applicable) gender;
(80) the Mortgagor's and co-Mortgagor's (if applicable) social security
numbers;
(81) the number of units for the property;
(82) the year in which the property was built;
(83) the qualifying monthly income of the Mortgagor;
(84) the number of bedrooms contained in the Mortgaged Property;
(85) a code indicating first time buyer (Y or N);
(86) the total rental income, if any;
The Seller shall provide the following
for the Adjustable Rate Mortgage Loans (if applicable):
(87) the maximum Mortgage Interest Rate under the terms of the Mortgage
Note for Adjustable Rate Mortgage Loans;
(88) the Periodic Interest Rate Cap for Adjustable Rate Mortgage Loans;
(89) the Index for Adjustable Rate Mortgage Loans;
(90) the next Adjustment Date for Adjustable Rate Mortgage Loans;
(91) the Gross Margin for Adjustable Rate Mortgage Loans;
(92) the lifetime interest rate cap for Adjustable Rate Mortgage Loans;
(93) the initial rate cap for Adjustable Rate Mortgage Loans;
(94) the first adjustment cap for Adjustable Rate Mortgage Loans;
(95) minimum interest rate allowed per Mortgage Note for Adjustable Rate
Mortgage Loans;
(96) look-back period for Adjustable Rate Mortgage Loans (to determine
loan index);
(97) minimum rate first adjustment period percent for Adjustable Rate
Mortgage Loans;
(98) maximum rate first adjustment period percent for Adjustable Rate
Mortgage Loans.
EXHIBIT E
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: ▇▇▇▇▇ Fargo Bank, N.A.
Mortgage Loan Series @
Dear Sir/Madam:
I am @ of ▇▇▇▇▇ Fargo Home Mortgage, a division of ▇▇▇▇▇ Fargo Bank, N.A. and
have acted as counsel to ▇▇▇▇▇ Fargo Home Mortgage, a division of ▇▇▇▇▇ Fargo
Bank, N.A. (the "Company"), with respect to certain matters in connection with
the sale by the Company of the mortgage loans designated as Mortgage Loan Series
@ (the "Mortgage Loans") pursuant to that certain Seller's Warranties and
Servicing Agreement by and between the Company and @ (the "Purchaser"), dated as
of @, 20__, (the "Agreement"), which sale is in the form of whole Mortgage
Loans. Capitalized terms not otherwise defined herein have the meanings set
forth in the Agreement.
I have examined the following documents:
1. the Seller's Warranties and Servicing Agreement;
2. the Custodial Agreement;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreement. I have
assumed the authenticity of all documents submitted to 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 my opinion that;
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Company has the power to engage in the transactions contemplated by
the Agreement, the Custodial Agreement and all requisite power, authority
and legal right to execute and deliver the Agreement, the Custodial
Agreement and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company, signed
(a) the Agreements and (b) any other document delivered prior hereto or on
the date hereof in connection with the sale and servicing of the Mortgage
Loans in accordance with the Agreements was, at the respective times of
such signing and delivery, and is, as of the date hereof, duly elected or
appointed, qualified and acting as such officer or attorney-in-fact, and
the signatures of such persons appearing on such documents are their
genuine signatures.
4. Each of the Agreement, the Custodial Agreement, and the Mortgage Loans,
has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement enforceable in accordance with its
terms, subject to the effect of insolvency, liquidation, conservatorship
and other similar laws administered by the Federal Deposit Insurance
Corporation affecting the enforcement of contract obligations of insured
banks 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.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in order
to complete the transactions contemplated by the Agreement and the
Custodial Agreement and in order to execute the endorsements to the
Mortgage Notes and the assignments of the Mortgages, and the original or
facsimile signature of the officer at the Company executing the Agreement,
the Custodial Agreement, the endorsements to the Mortgage Notes and the
assignments of the Mortgages represents the legal and valid signature of
said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreement, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by the
Agreement and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreement and the Custodial Agreement,
will conflict with or results in 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.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my opinion,
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 Agreement, and the
Custodial Agreement, 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 Agreement and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested to
the legal department of the Company or an employee of the Company
responsible for the receipt of process a present intention to initiate
such proceedings; nor have I regarded any legal or governmental actions,
investigations or proceedings as including those that are conducted by
state or federal authorities in connection with their routine regulatory
activities. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient fully to transfer all
right, title and interest of the Company thereto as noteholder and
mortgagee, apart from the rights to service the Mortgage Loans pursuant to
the Agreement.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes
to the Purchaser. Upon the completion of the endorsement of the Mortgage
Notes and the completion of the assignments of the Mortgages, and the
recording thereof, the endorsement of the Mortgage Notes, the delivery to
the Custodian of the completed assignments of the Mortgages, and the
delivery of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser's direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser's direction, to avail
itself of all protection available under applicable law against the claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
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 its date.
Sincerely,
@
@
@/@
EXHIBIT F
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company][Name of
Subservicer] shall address, as a minimum, the criteria identified below as
"Applicable Servicing Criteria"
------------------------------------------------------------------------------------------------------------------------------------
Reg AB Reference Servicing Criteria Applicable Inapplicable
Servicing Criteria Servicing
Criteria
------------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other X
triggers and events of default in accordance with the transaction
agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, X
policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up X
servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party X
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 appropriate custodial X
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 obligor or to an X
investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X
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 reserve accounts or X
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 insured depository X
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 unauthorized access. X
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X
securities related bank accounts, including custodialaccounts 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 the Commission, are X
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 accordance with X
timeframes, distribution priority and other terms set forth in the
transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two business days to X
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 agree with cancelled X
checks, or other form of payment, or custodial bank statements.
Pool Asset Administration
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required by the X
transaction agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the X
transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X
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, made in accordance with X
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 agree with the X
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 obligor's mortgage loans X
(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 plans, modifications X
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 during the period a X
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 mortgage loans with X
variable rates are computed based on the related mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow accounts): X
(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 insurance payments) X
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 payment to be made on X
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 within two business X
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 are
recognized and X recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1) X
through (3) or Item 1115 of Regulation AB, is maintained as set forth in
the transaction agreements.
EXHIBIT G
SARBANES CERTIFICATION
Re: The [_] agreement dated as of [_], 200[_] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer] (the "Servicer"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer'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 Servicer during 200[_] that were delivered by
the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Servicer Servicing Information");
(2) Based on my knowledge, the Servicer 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 Servicer Servicing
Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the
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 Servicer has fulfilled its obligations under the
Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Servicer and by any Subservicer or
Subcontractor 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 H
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
[____________ __, 20__] ("Agreement"), among Barclays Bank PLC ("Assignor"),
[____________________] ("Assignee") and ▇▇▇▇▇ Fargo Bank, N.A., (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"), (b) except as described below, that certain Seller's
Warranties and Servicing Agreement (the "Seller's Warranties and Servicing
Agreement"), dated as of [_________], 200[_], between the Assignor, as purchaser
(the "Purchaser"), and the Company, as seller, solely insofar as the Seller's
Warranties and Servicing Agreement relates to the Mortgage Loans and (c) that
certain Custodial Agreement (the "Custodial Agreement"), dated as of
[__________], 200[_], by and among the Company, the Purchaser and
[_____________] (the "Custodian").
The Assignor specifically reserves and does not assign to the
Assignee hereunder 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 Seller's Warranties and Servicing Agreement which are not the Mortgage Loans
set forth on the Mortgage Loan Schedule and are not the subject of this
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 Seller's Warranties
and Servicing 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 Seller's Warranties and Servicing Agreement,
including, without limitation, the enforcement of the document delivery
requirements set forth in Article II of the Seller's Warranties and Servicing
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 or the Custodian under the Seller's Warranties and
Servicing 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 Seller's Warranties and Servicing Agreement which amendment, modification,
waiver or other alteration would in any way affect the Mortgage Loans or the
Company's performance under the Seller's Warranties and Servicing 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 Seller's Warranties and
Servicing 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 Seller's Warranties and Servicing 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 Seller's Warranties and Servicing Agreement, and
the Company is solvent.
4. Pursuant to Section 9.01 of the Seller's Warranties and Servicing
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 3.01 of the Seller's Warranties and Servicing Agreement are
true and correct as of the date hereof as if such representations and warranties
were made on the date hereof.
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 Section 3.03 of the Seller's Warranties and
Servicing 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 Seller's Warranties and Servicing
Agreement shall survive the conveyance of the Mortgage Loans and the assignment
of the Seller's Warranties and Servicing 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 Seller's Warranties
and Servicing 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 Seller's Warranties and Servicing 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 Seller's Warranties and Servicing 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.
▇▇▇▇▇ FARGO BANK, N.A.
By:
--------------------------------
Name:
---------------------------
Its:
----------------------------
BARCLAYS BANK PLC
By:
--------------------------------
Name:
---------------------------
Its:
----------------------------
By:
--------------------------------
Name:
---------------------------
Its:
----------------------------
[__________________________]
By:
--------------------------------
Name:
---------------------------
Its:
----------------------------
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT I
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among Securitized Asset Backed Receivables LLC, a Delaware
limited liability company (the "Depositor"), [______________], a
[______________] (the "Underwriter"), 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
that certain Assignment, Assumption and Recognition Agreement (as defined
herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to ____________ (the
"Purchaser"), an affiliate of the Depositor, in anticipation of the
securitization transaction;
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: Any written
communication as defined in Item 1101(a) of Regulation AB, 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, the Free Writing Prospectus or any
amendment or supplement thereto (i) contained under the headings ["___________
and ["_________"], (ii) the static pool information contained on Exhibit B
attached hereto, which has been prepared by the Company with respect to mortgage
loans originated by it that are of a type similar to the Mortgage Loans, and
(iii) any information or data regarding the Mortgage Loans provided by the
Company or its affiliates to the Depositor or any of its affiliates for the
purpose of disclosure in the Prospectus Supplement, the Offering Circular or the
Free Writing Prospectus.
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: [_______] Trust [_______], 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: [_______] Trust [_______], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing 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.
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
(a) Each party hereto represents and warrants that it has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement;
(b) Each party hereto represents and warrants that this Agreement
has been duly authorized, executed and delivered by such party;
(c) Each party hereto represents and warrants that assuming the due
authorization, execution and delivery by each other party hereto, this Agreement
constitutes the legal, valid and binding obligation of such party and
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 present and former
directors, officers, employees, agents and each Person, if any, that controls
the Depositor, the Underwriter, as the case may be, 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, 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) (i) 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 (ii) 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; provided, by way of clarification, that clause (ii) shall be
construed to apply solely by reference to omissions from the Indemnifying Party
Information and not to any other information. 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(a) shall be in addition to any other liability
that the Indemnifying Party may otherwise have.
(b) Indemnification by the Depositor of the Indemnifying Party. (a)
The Depositor shall indemnify and hold harmless the Indemnifying Party and its
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Indemnifying Party, within the meaning of
either the 1933 Act or the 1934 Act, against any and all losses, claims,
damages, penalties, fines, forfeitures or liabilities, to which each such
Indemnifying 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) (i) 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 (ii) 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 Prospectus Supplement, the Offering
Circular, the ABS Informational and Computational Materials, any Free Writing
Prospectus or any amendment or supplement thereto, other than the Indemnifying
Party Information. The Depositor shall in each case reimburse each Indemnifying
Party for any legal or other costs, fees, or expenses reasonably incurred and as
incurred by such Indemnifying Party in connection with investigating or
defending any such loss, claim, damage, penalty, fine, forfeiture, liability or
action. The Depositor's liability under this Section 3.1(b) shall be in addition
to any other liability that the Depositor may otherwise have.
(c) 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,
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 Barclays Bank PLC Obligations. Barclays Bank PLC agrees with the
Indemnifying Party, for the sole and exclusive benefit of the Indemnifying Party
and each person who controls the Indemnifying Party within the meaning of either
the 1933 Act or the 1934 Act and not for the benefit of any assignee thereof or
any other person or persons dealing with the Indemnifying Party, to indemnify
and hold harmless the Indemnifying Party and each person who controls the
Indemnify Party within the meaning of either the 1933 Act or 1934 Act against
any failure by the Depositor to perform any of its obligations under this
Agreement. Barclays Bank PLC agrees that there are no conditions precedent to
the obligations of Barclays Bank PLC hereunder other than written demand to the
Depositor to perform its obligations under this Agreement.
4.6 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:
▇▇▇▇▇▇ Funding LLC
c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice
President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
c/o Barclays Bank PLC, as administrator
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
[__________]
Telephone: (212) ___-____
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 J
FORM OF COMPANY CERTIFICATION
I, ____________, hereby certify that I am the duly elected ____________ of ▇▇▇▇▇
Fargo Bank, N.A., an institution organized under the laws of the United States
(the "Company") and state as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy of the
articles of association of the Company which are in full force and effect
on the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of the
bylaws of the Company which are in effect on the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of the
resolutions of the Mortgage Banking Committee of the Board of Directors of
the Company authorizing the Company to execute and deliver each of the
Master Seller's Warranties and Servicing Agreement dated as of _________
by and between the Company and the Purchaser (the "Seller's Warranties and
Servicing Agreement") and the Custodial Agreement among the Purchaser, the
Company and ____________ as ("Custodian"), collectively (the
"Agreements"), by original signature, and to endorse the Mortgage Notes
and execute the Assignments of Mortgages by original or facsimile
signature, and each such resolutions are in effect on the date hereof.__
5. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by the Agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. To the best of my knowledge, 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 any statute or order, rule, regulation, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. There are no actions, suits or proceedings pending or, to the best of my
knowledge, threatened against or affecting the Company that would
materially and adversely affect the Company's ability to perform its
obligations under the Agreements. No proceedings looking toward merger,
consolidation or liquidation, dissolution or bankruptcy of the Company are
pending or contemplated.
8. The Company is duly authorized to engage in the transactions described and
contemplated by the Agreements.
9. Capitalized terms used but not defined herein shall have the meanings
assigned in the Seller's Warranties and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed by name and affixed the seal of
the Company.
Dated: By:
---------------------------------------
Name:
-------------------------------------
[Seal] Title:
------------------------------------
I, _____________, ______________ of ▇▇▇▇▇ Fargo Bank, N.A., hereby certify
that _____________ is the duly elected, qualified and acting _____________
of the Company and that the signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
EXHIBIT K
▇▇▇▇▇▇▇ MAC REPRESENTATIONS AND WARRANTIES
1. Eligible Products.
With respect to each Mortgage Loan, the Mortgagor was not encouraged or
required to select a mortgage loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less creditworthy
borrowers, taking into account such facts as, without limitation, the
Mortgage Loan's requirements and the borrower's credit history, income,
assets and liabilities. For a borrower who seeks financing through a
Mortgage Loan originator's higher-priced subprime lending channel, the
borrower should be directed towards or offered the Mortgage Loan
originator's prime mortgage line if the borrower is able to qualify for
one of the prime products.
2. Borrower's Ability to Repay.
The methodology used in underwriting the extension of credit for each
Mortgage Loan in the trust did not rely solely on the extent of the
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.
3. Prepayment Penalties.
With respect to any Mortgage Loan that contains a Prepayment Penalty: (a)
the Mortgage Loan provides some benefit to the Mortgagor (e.g., a rate or
fee reduction) in exchange for accepting such Prepayment Penalty; (b) 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
Prepayment Penalty; (c) the Prepayment Penalty was adequately disclosed to
the Mortgagor pursuant to applicable state and federal law; (d) no
subprime Mortgagor Loan originated on or after October 1, 2002 will
provide for Prepayment Penalties for a term in excess of three (3) years
and any Mortgage Loans originated prior to such date, and any non-subprime
loans, will not provide for Prepayment Penalties for a term in excess of
five (5) years; in each case unless the Mortgage Loan was modified to
reduce the prepayment period to no more than three years from the date of
the note and the Mortgagor was notified in writing of such reduction in
prepayment period; and (e) such Prepayment Penalty may be imposed in any
instance when the Mortgage Loan is accelerated or paid off in connection
with the workout of a delinquent Mortgage Loan or due to the Mortgagor's
default, notwithstanding that the terms of the Mortgage Loan or state or
federal law might permit the imposition of such Prepayment Penalty.
4. Manufactured Housing.
No Mortgage Loan is secured by manufactured housing.
EXHIBIT M
▇▇▇▇▇ FARGO ASSIGNMENT AGREEMENT
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated July 19, 2007
("Agreement"), among Barclays Bank PLC ( the "Assignor"), BCAP LLC ("Assignee"),
▇▇▇▇▇ Fargo Bank, National Association, as servicer (in such capacity, the
"Servicer"), and as seller (in such capacity, the "Company") and Deutsche Bank
National Trust Company , as trustee (the "Trustee"):
For and in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, 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, interest and obligations 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, the Seller's Warranties and
Servicing Agreement-WFHM 2007-AM04 and WFHM 2007-AM05 (the "Sale and Servicing
Agreement"), dated as of February 1, 2007, between the Assignor, as purchaser
(the "Purchaser") and the Company, as seller/servicer, solely insofar as the
Sale and Servicing Agreement relate to the Mortgage Loans.
From and after the date hereof, the Servicer shall service the
Mortgage Loans in accordance with the Sale and Servicing Agreement as modified
by this Agreement.
The Assignor specifically reserves and does not assign to the
Assignee hereunder 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 Sale and Servicing Agreement that are not the Mortgage Loans set forth on
the Mortgage Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
--------------------------
2. From and after the date hereof (the "Securitization Closing
Date"), each of the Company and the Servicer shall and does hereby recognize
that the Assignee, in connection with a securitization of the Mortgage Loans
(the "Securitization"), will transfer the Mortgage Loans and assign its rights
under the Sale and Servicing Agreement (solely to the extent set forth herein)
and this Agreement to BCAPB LLC Trust 2007-AB1 (the "Trust") created pursuant to
a Trust Agreement, dated as of July 1, 2007 (the "Trust Agreement"), among the
Assignee, ▇▇▇▇▇ Fargo Bank, National Association, as custodian, and Deutsche
Bank National Trust Company, as trustee (including its successors in interest
and any successor trustees under the Trust Agreement, the "Trustee"). Each of
the Company, the Servicer and the Trustee on behalf of the Trust 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 and the Servicer 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 shall have and assume all
the rights, remedies and obligations available to the Assignor, insofar as they
relate to the Mortgage Loans, under the Sale and Servicing Agreement, including,
without limitation, the enforcement of the document delivery requirements set
forth in Article 2 of the Sale and Servicing Agreement, and shall be entitled to
enforce all of the obligations of the Company thereunder insofar as they relate
to the Mortgage Loans, (iv) all references to the Purchaser under the Sale and
Servicing Agreement insofar as they relate to the Mortgage Loans, shall be
deemed to refer to the Trust and (v) the Mortgage Loans will be part of a "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code (a "REMIC"), and the Servicer shall service the Mortgage Loans and any real
property acquired upon default thereof (including, without limitation, making or
permitting any modification, waiver or amendment of any term of any Mortgage
Loan) in accordance with the Sale and Servicing Agreement but in no event in a
manner that would (A) cause the REMIC to fail to qualify as a REMIC or (B)
result in the imposition of a tax upon the REMIC, and all custodial accounts and
escrow accounts maintained under the Sale and Servicing Agreement with respect
to the Mortgage Loans shall be Eligible Accounts as set forth in this Agreement.
Representations and Warranties of the Company and the Servicer
--------------------------------------------------------------
3. Each of the Company and the Servicer warrants and represents to
the Assignor, the Assignee, the Trustee and the Trust as of the date hereof
that:
(a) It is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, as
applicable;
(b) It 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 Sale and Servicing Agreement to which it is a party.
The execution by it of this Agreement is in the ordinary course of its business
and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of its charter or bylaws or organization documents, as
applicable, or any legal restriction, or any material agreement or instrument to
which it 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 its or its
property is subject. The execution, delivery and performance by it of this
Agreement have been duly authorized by all necessary action on its part. This
Agreement has been duly executed and delivered by it, and, upon the due
authorization, execution and delivery by the Assignor and the Assignee, will
constitute its valid and legally binding obligation, enforceable against it 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 it in connection with the execution, delivery or performance by it of
this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
to the best of its knowledge threatened against it, before any court,
administrative agency or other tribunal, which would draw into question the
validity of this Agreement or the Sale and Servicing Agreement, or which, either
in any one instance or in the aggregate, would result in any material adverse
change in its ability to perform its obligations under this Agreement or the
Sale and Servicing Agreement, and it is solvent.
Amendments to Sale and Servicing Agreements for the Securitization
------------------------------------------------------------------
4. Solely with respect to the Mortgage Loans, the following
amendments are hereby made to the Sale and Servicing Agreement:
(a) Section 5.02 is deleted and replaced in entirety with the
following:
"Not later than the 10th Business Day of each month, the Company
shall furnish to the Trustee a monthly remittance advice, with a trial balance
report attached thereto, as to the remittance period ending on the last day of
the preceding month."
(b) in Section 6.04, the text "the Purchaser and any Depositor" and
"the Purchaser and such Depositor" are deleted and replaced with "the
Depositor."
(c) in Section 6.06, the text "the Purchaser and any Depositor" and
"the Purchaser and such Depositor" are deleted and replaced with "the
Depositor."
(d) Section 4.13 is deleted and replaced in its entirety with the
following:
"The Company or it's agent shall inspect the Mortgaged Property as
often as deemed necessary by the Company in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer, to
assure itself that the value of the Mortgaged Property is being preserved. The
Company shall keep a record of each such inspection and, upon request, shall
provide the Purchaser with an electronic report of each such inspection."
(e) in Section 4.10, the text "and if the Mortgagor does not obtain
such coverage, the Company shall immediately force place the required coverage
on the Mortgagor's behalf" in the fourth paragraph is deleted.
Remedies for Breach of Representations and Warranties
-----------------------------------------------------
5. Each of the Company and the Servicer hereby acknowledges and
agrees that the remedies available to the Assignor, the Assignee and the Trust
in connection with any breach of the representations and warranties made by it
set forth in Section 3 hereof shall be as set forth in Section 3.03 of the Sale
and Servicing 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. For all purposes of the Company's obligations in connection with
Regulation AB compliance and filings of the Purchaser, pursuant to the Sale and
Servicing Agreement (including indemnifications in favor of the Purchaser under
Section 9.01), the term "Purchaser" shall include the Trust and the Trustee.
9. This Agreement shall inure to the benefit of (i) the parties
hereto and their respective successors and assigns and (ii) the Trust. Any
entity into which the Assignor, Assignee, the Servicer or Company may be merged
or consolidated shall, without the requirement for any further writing, be
deemed Assignor, Assignee, the Servicer or Company, respectively, hereunder.
10. Each of this Agreement and the Sale and Servicing Agreement
shall survive the conveyance of the Mortgage Loans and the assignment of the
Sale and Servicing Agreement (to the extent assigned hereunder) by the Assignor
to Assignee and by Assignee to the Trust and nothing contained herein shall
supersede or amend the terms of the Sale and Servicing Agreement.
11. 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.
12. In the event that any provision of this Agreement conflicts with
any provision of any Sale and Servicing Agreement with respect to the Mortgage
Loans, the terms of this Agreement shall control.
13. 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 Sale and Servicing Agreement.
14. All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to:
In the case of Barclays:
Barclays Bank PLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of the Depositor:
BCAP LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Barclays Bank PLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of the Trustee
for the purposes of notices and delivery of reports:
Deutsche Bank Trust Company Americas
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Trust Administration - BC0705
for the purposes of remittance:
Deutsche Bank Trust Company Americas
ABA #: 021 001 033
Acct. #: 01419663
Acct. Name: NYLTD Funds Control-Stars West
Ref: Trust Administration - BCAPB 2007-AB1
In the case of the Company and Servicer:
▇▇▇▇▇ Fargo Bank, National Association
1 Home Campus
MAC ▇▇▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: General Counsel, 1 Home Campus,
MAC X2401-06T, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇
Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Agreement is executed by the Trustee (i) it
is acknowledged and agreed to by Deutsche Bank National Trust Company in the
exercise of the powers and authority conferred and vested in it as Trustee under
the Trust Agreement, (ii) each of the representations, undertakings and
agreements herein made is intended not as personal representations of the
Trustee but is made and intended for the purpose of binding only the Trust, and
(iii) Deutsche Bank National Trust Company in its individual capacity shall not
be personally liable under any circumstance for the payment of any indebtedness
or expenses or be personally liable for the breach of failure of any obligation,
representation, warranty or covenant made or undertaken under this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as seller
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as servicer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
BARCLAYS BANK PLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Its: Managing Director
BCAP LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Its: President and Chief Executive
Officer
ACKNOWLEDGED AND AGREED:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its individual capacity
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signer
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
(Delivered to Trustee on the Closing Date)
EXHIBIT N
INTEREST RATE SWAP AGREEMENT
[BARCLAYS CAPITAL LOGO]
Barclays Bank PLC
5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
DATE: July 19, 2007
TO: BCAPB LLC Trust 2007-AB1, Mortgage Pass-Through
Certificates, Series 2007-AB1 (the "Trust"),
Deutsche Bank National Trust Company, not
individually, but solely as Trustee
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: Trust Administration - BC0705
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
FROM: Barclays Bank PLC
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: 1855857B
The purpose of this long-form confirmation ("Confirmation") is to
confirm the terms and conditions of the Transaction entered into on the
Trade Date specified below (the "Transaction") between Barclays Bank PLC
("Party A") and Deutsche Bank National Trust Company, not individually,
but solely as trustee (the "Trustee") on behalf of the trust with
respect to the BCAPB LLC Trust 2007-AB1, Mortgage Pass-Through
Certificates, Series 2007-AB1 (the "Trust") ("Party B") created under
the Trust Agreement, dated as of July 1, 2007, among BCAP LLC, as
Depositor, Deutsche Bank National Trust Company, as Trustee, and ▇▇▇▇▇
Fargo, National Association, as Custodian (the "Base Agreement"). This
Confirmation evidences a complete and binding agreement between you and
us to enter into the Transaction on the terms set forth below and
replaces any previous agreement between us with respect to the subject
matter hereof. Item 2 of this Confirmation constitutes a "Confirmation"
as referred to in the ISDA Master Agreement (defined below); Item 3 of
this Confirmation constitutes a "Schedule" as referred to in the ISDA
Master Agreement; and Annex A hereto constitutes Paragraph 13 of a
Credit Support Annex to the Schedule.
1. The Confirmation set forth at Item 2 hereof shall supplement,
form a part of, and be subject to an agreement in the form of the
ISDA Master Agreement (Multicurrency - Cross Border) as published
and copyrighted in 1992 by the International Swaps and Derivatives
Association, Inc. (the "ISDA Master Agreement"), as if Party A and
Party B had executed an agreement in such form on the date hereof,
with a Schedule as set forth in Item 3 of this Confirmation, and
an ISDA Credit Support Annex (Bilateral Form - ISDA Agreements
Subject to New York Law Only version) as published and copyrighted
in 1994 by the International Swaps and Derivatives Association,
Inc., with Paragraph 13 thereof as set forth in Annex A hereto (the
"Credit Support Annex"). For the avoidance of doubt, the
Transaction described herein shall be the sole Transaction
governed by such ISDA Master Agreement.
2. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Notional Amount: With respect to any Calculation
Period, the amount set forth for
such period on Schedule I attached
hereto.
Trade Date: July 19, 2007
Effective Date: July 19, 2007
Termination Date: November 25, 2019, which for the
purpose of the final Fixed Rate
Payer Calculation Period is
subject to No Adjustment, and for
the purpose of the final Floating
Rate Payer Calculation Period is
subject to adjustment in
accordance with the Business Day
Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Period End Dates: The 25th calendar day of each
month during the Term of this
Transaction, commencing July 25,
2007, subject to No Adjustment.
Fixed Rate Payer
Payment Dates: Early Payment shall be applicable.
For each Calculation Period, the
Fixed Rate Payer Payment Date
shall be the first Business Day
prior to the related Fixed Rate
Payer Period End Date.
Fixed Rate: 5.510%
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer
Period End Dates: The 25th calendar day of each
month during the Term of this
Transaction, commencing July 25,
2007, subject to adjustment in
accordance with the Business Day
Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable.
For each Calculation Period, the
Floating Rate Payer Payment Date
shall be the first Business Day
prior to the related Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
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
Business Day
Convention: Modified Following
Calculation Agent: Party A
Account Details and Settlement Information:
Payments to Party A: Correspondent: BARCLAYS BANK PLC NEW YORK
FEED: ▇▇▇▇▇▇▇▇▇
Beneficiary: BARCLAYS SWAPS
Beneficiary Account: ▇▇▇-▇▇▇▇▇-▇
Payments to Party B: Deutsche Bank National Trust Company
ABA #: 021 001 033
Acct #: 01419663
Acct. Name: NYLTD Funds Control - Stars West
Ref: Trust Administration -BCAPB 2007-AB1
3. Provisions Deemed Incorporated in a Schedule to the ISDA Master
Agreement:
Part 1. Termination Provisions.
For the purposes of this Agreement:-
(a) "Specified Entity" will not apply to Party A or Party B for any purpose.
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) Events of Default.
The statement below that an Event of Default will apply to a
specific party means that upon the occurrence of such an Event of
Default with respect to such party, the other party shall have the
rights of a Non-defaulting Party under Section 6 of this
Agreement; conversely, the statement below that such event will
not apply to a specific party means that the other party shall not
have such rights.
(i) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will
apply to Party A and will apply to Party B.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) will apply
to Party A and will not apply to Party B; provided, however, that
notwithstanding anything to the contrary in Section 5(a)(ii), 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 not constitute an Event of Default under Section 5(a)(ii)
unless (A) a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and
been continuing for 30 or more Local Business Days, (B) an S&P
Required Ratings Downgrade Event has occurred and been continuing
for 10 or more Local Business Days, or (C) a Fitch Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
days.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B except that Section
5(a)(iii)(1) will apply to Party B solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support Annex;
provided, however, that notwithstanding anything to the contrary in
Section 5(a)(iii)(1), 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 not constitute an Event of
Default under Section 5(a)(iii) unless (A) a ▇▇▇▇▇'▇ Second Trigger
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days, (B) an S&P Required Ratings Downgrade Event has
occurred and been continuing for 10 or more Local Business Days, or
(C) a Fitch Required Ratings Downgrade Event has occurred and been
continuing for 30 or more days.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) will apply to
Party A and will not apply to Party B.
(v) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
(vi) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B. For purposes of Section
5(a)(vi), solely with respect to Party A:
"Specified Indebtedness" will have the meaning specified in Section
14, except that such term shall not include obligations in respect
of deposits received in the ordinary course of Party A's banking
business.
"Threshold Amount" means with respect to Party A an amount equal to
three percent (3%) of the Shareholders' Equity of Party A or, if
applicable, a guarantor under an Eligible Guarantee with credit
ratings at least equal to the S&P Required Ratings Threshold, the
▇▇▇▇▇'▇ Second Trigger Threshold and the Fitch Approved Ratings
Threshold.
"Shareholders' Equity" means with respect to an entity, at any time,
such party's shareholders' equity (on a consolidated basis)
determined in accordance with generally accepted accounting
principles in such party's jurisdiction of incorporation or
organization as at the end of such party's most recently completed
fiscal year.
(vii) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to Party
A and will apply to Party B; provided, however, that, for purposes
of applying Section 5(a)(vii) to Party B: (A) Section 5(a)(vii)(2)
shall not apply, (B) Section 5(a)(vii)(3) shall not apply to any
assignment, arrangement or composition that is effected by or
pursuant to the Base Agreement, (C) Section 5(a)(vii)(4) shall not
apply to a proceeding instituted, or a petition presented, by Party
A or any of its Affiliates (notwithstanding anything to the contrary
in this Agreement, for purposes of Section 5(a)(vii)(4), Affiliate
shall have the meaning set forth in Section 14 of the ISDA Master
Agreement), (D) Section 5(a)(vii)(6) shall not apply to any
appointment that is effected by or pursuant to the Base Agreement,
or any appointment to which Party B has not yet become subject; (E)
Section 5(a)(vii) (7) shall not apply; (F) Section 5(a)(vii)(8)
shall apply only to the extent of any event which has an effect
analogous to any of the events specified in clauses (1), (3), (4),
(5) or (6) of Section 5(a)(vii), in each case as modified in this
Part 1(c)(vii), and (G) Section 5(a)(vii)(9) shall not apply.
(viii) The "Merger Without Assumption" provisions of Section 5(a)(viii)
will apply to Party A and will not apply to Party B.
(d) Termination Events.
The statement below that a Termination Event will apply to a
specific party means that upon the occurrence of such a
Termination Event, if such specific party is the Affected Party
with respect to a Tax Event, the Burdened Party with respect to a
Tax Event Upon Merger (except as noted below) or the non-Affected
Party with respect to a Credit Event Upon Merger, as the case may
be, such specific party shall have the right to designate an Early
Termination Date in accordance with Section 6 of this Agreement;
conversely, the statement below that such an event will not apply
to a specific party means that such party shall not have such
right; provided, however, with respect to "Illegality" the
statement that such event will apply to a specific party means
that upon the occurrence of such a Termination Event with respect
to such party, either party shall have the right to designate an
Early Termination Date in accordance with Section 6 of this
Agreement.
(i) The "Illegality" provisions of Section 5(b)(i) will apply to Party A
and will apply to Party B.
(ii) The "Tax Event" provisions of Section 5(b)(ii) will apply to Party A
and will apply to Party B.
(iii) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will
apply to Party A and will apply to Party B, provided that 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.
(iv) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply, provided, however, that, in the event
of a Derivative Provider Trigger Event, the following provisions
will apply:
(A) The definition of Market Quotation in Section 14 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 a Reference Market-maker that is an Eligible
Replacement, (2) for an amount 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 such Reference
Market-maker to enter into a Replacement Transaction,
and (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.
(B) 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 equal to:
(a) if, on or prior to such Early Termination Date, a Market
Quotation for the relevant Terminated Transaction or
group of Terminated Transactions is accepted by Party B
so as to become legally binding, the Termination
Currency Equivalent of the amount (whether positive or
negative) of such Market Quotation;
(b) if, on such Early Termination Date, no Market Quotation
for the relevant Terminated Transaction or group of
Terminated Transactions has been accepted by Party B so
as to become legally binding and one or more Market
Quotations from Approved Replacements have been
communicated to Party B and remain capable of becoming
legally binding upon acceptance by Party B, the
Termination Currency Equivalent of the amount (whether
positive or negative) of the lowest of such Market
Quotations (for the avoidance of doubt, (i) a Market
Quotation expressed as a negative number is lower than a
Market Quotation expressed as a positive number and (ii)
the lower of two Market Quotations expressed as negative
numbers is the one with the largest absolute value); or
(c) if, on such Early Termination Date, no Market Quotation
for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by Party B so as to
become legally binding and no Market Quotation from an
Approved Replacement has been communicated to Party B
and remains capable of becoming legally binding upon
acceptance by Party B, Party B's Loss (whether positive
or negative and without reference to any Unpaid Amounts)
for the relevant Terminated Transaction or group of
Terminated Transactions.
(C) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to do so
before the Early Termination Date.
(D) If the Settlement Amount is a negative number, Section
6(e)(i)(3) shall be deleted in its entirety and replaced with
the following:
"(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, (I) Party B shall pay to Party A
an amount equal to the absolute value of the Settlement Amount
in respect of the Terminated Transactions, (II) Party B shall
pay to Party A the Termination Currency Equivalent of the
Unpaid Amounts owing to Party A and (III) Party A shall pay to
Party B the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B; provided, however, that (x) the
amounts payable under the immediately preceding clauses (II)
and (III) shall be subject to netting in accordance with
Section 2(c) of this Agreement and (y) notwithstanding any
other provision of this Agreement, any amount payable by Party
A under the immediately preceding clause (III) shall not be
netted against any amount payable by Party B under the
immediately preceding clause (I)."
(E) At any time on or before the Early Termination Date at which
two or more Market Quotations from Approved Replacements have
been communicated to Party B and remain capable of becoming
legally binding upon acceptance by Party B, Party B shall be
entitled to accept only the lowest of such Market Quotations
(for the avoidance of doubt, (i) a Market Quotation expressed
as a negative number is lower than a Market Quotation
expressed as a positive number and (ii) the lower of two
Market Quotations expressed as negative numbers is the one
with the largest absolute value).
(ii) The Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events. Additional Termination Events will apply as
provided in Part 5(c).
Part 2. Tax Matters.
(a) Tax Representations.
(i) Payer Representations. For the purpose of Section 3(e) of
this Agreement:
(A) Party A makes the following representation(s):
None.
(B) Party B makes the following representation(s):
None.
(ii) Payee Representations. For the purpose of Section 3(f) of this
Agreement:
(A) Party A makes the following representation(s):
None.
(B) Party B makes the following representation(s):
None.
(b) Tax Provisions.
(i) Indemnifiable Tax. 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 (i) such
Taxes are assessed directly against Party B and not by deduction or
withholding by Party A or (ii) 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 relation to payments by Party B, no Tax shall be an
Indemnifiable Tax, unless the Tax is due to a Change in Tax Law and
otherwise satisfies the definition of Indemnifiable Tax provided in
Section 14.
Part 3. Agreement to Deliver Documents.
(a) For the purpose of Section 4(a)(i), tax forms, documents, or
certificates to be delivered are:
Party
required Form/Document/ Date by which to
to deliver Certificate be delivered
document
Party A Any form or document required or Promptly upon reasonable demand
reasonably requested to allow by Party B.
Party B to make payments under
the Agreement without any
deduction or withholding for or
on account of any Tax, or with
such deduction or withholding at
a reduced rate.
Party B (i) A correct, complete and duly In each case (i) upon entering
executed IRS Form W-9 (or any into this Agreement, (ii) in
successor thereto) of the Trust the case of a W-8ECI, W-8IMY,
that eliminates U.S. federal and W-8BEN that does not
withholding and backup include a U.S. taxpayer
withholding tax on payments identification number in line
under this Agreement, (ii) if 6, before December 31 of each
requested by Party A, a correct, third succeeding calendar year,
complete and executed Form (iii) promptly upon reasonable
W-8IMY of the Trust, and (iii) a demand by Party A, and (iv)
complete and executed IRS Form promptly upon actual knowledge
▇-▇, ▇-▇▇▇▇, ▇-▇▇▇▇, or W-8IMY that any such Form previously
(with attachments) (as provided by Party B has become
appropriate) from each obsolete or incorrect.
Certificateholder that is not an
"exempt recipient" as that term
is defined in Treasury
regulations section
1.6049-4(c)(1)(ii), that
eliminates U.S. federal
withholding and backup
withholding tax on payments
under this Agreement.
(b) For the purpose of Section 4(a)(ii), other documents to be
delivered are:
Party
required Form/Document/ Date by which to Covered by
to deliver Certificate be delivered Section 3(d)
document Representation
Party A and Any documents reasonably Upon the execution Yes
Party B required by the receiving and delivery of
party to evidence the this Agreement
authority of the delivering
party or its Credit Support
Provider, if any, for it to
execute and deliver the
Agreement, this
Confirmation, and any Credit
Support Documents to which
it is a party, and to
evidence the authority of
the delivering party or its
Credit Support Provider to
perform its obligations
under the Agreement, this
Confirmation and any Credit
Support Document, as the
case may be
Party A and A certificate of an Upon the execution Yes
Party B authorized officer of the and delivery of
party (except, with respect this Agreement
to Party B, of the Trustee),
as to the incumbency and
authority of the respective
officers of the party signing
the Agreement, this
Confirmation, and any
relevant Credit Support
Document, as the case may be
Party A An opinion of counsel to Upon the execution No
Party A reasonably and delivery of
satisfactory to Party B. this Agreement
Party B An opinion of counsel to Upon the execution No
Party B reasonably and delivery of
satisfactory to Party A. this Agreement
Party B An executed copy of the Base Within 30 days after No
Agreement the date of this
Agreement.
Part 4. Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
Phone: ▇▇(▇▇) ▇▇▇ ▇▇▇▇▇
(For all purposes)
Address for notices or communications to Party B:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration - BC0705
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇ ▇▇▇▇
(For all purposes)
(b) 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.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is a Multibranch Party and may act through its London and New York
Offices.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided, however,
that if an Event of Default shall have occurred with respect to Party A,
Party B shall have the right to appoint as Calculation Agent a financial
institution which would qualify as a Reference Market-maker, reasonably
acceptable to Party A, the cost for which shall be borne by Party A.
(f) Credit Support Document.
Party A: The Credit Support Annex, and any guarantee in support
of Party A's obligations under this Agreement.
Party B: The Credit Support Annex, solely in respect of Party
B's obligations under Paragraph 3(b) of the Credit
Support Annex.
(g) Credit Support Provider.
Party A: The guarantor under any guarantee in support of Party
A's obligations under this Agreement.
Party B: None.
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole
(including any claim or controversy arising out of or relating to this
Agreement), without regard to the conflict of law provisions thereof other
than New York General Obligations Law Sections 5-1401 and 5-1402.
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) will apply to each
Transaction hereunder.
(j) Affiliate. "Affiliate" shall have the meaning assigned thereto in Section
14; provided, however, that Party B shall be deemed to have no Affiliates
for purposes of this Agreement, including for purposes of Section
6(b)(ii).
Part 5. Other Provisions.
(a) Definitions. Unless otherwise specified in a Confirmation, this Agreement
and each Transaction under this Agreement are subject to the 2000 ISDA
Definitions as published and copyrighted in 2000 by the International
Swaps and Derivatives Association, Inc. (the "Definitions"), and will be
governed in all relevant respects by the provisions set forth in the
Definitions, without regard to any amendment to the Definitions subsequent
to the date hereof. The provisions of the Definitions are hereby
incorporated by reference in and shall be deemed a part of this Agreement,
except that (i) references in the Definitions to a "Swap Transaction"
shall be deemed references to a "Transaction" for purposes of this
Agreement, and (ii) references to a "Transaction" in this Agreement shall
be deemed references to a "Swap Transaction" for purposes of the
Definitions. Each term capitalized but not defined in this Agreement shall
have the meaning assigned thereto in the Base Agreement.
Each reference herein to a "Section" (unless specifically referencing the
Base Agreement) or to a "Section" "of this Agreement" will be construed as
a reference to a Section of the ISDA Master Agreement; each herein
reference to a "Part" will be construed as a reference to the Schedule to
the ISDA Master Agreement; each reference herein to a "Paragraph" will be
construed as a reference to a Paragraph of the Credit Support Annex.
(b) Amendments to ISDA Master Agreement.
(i) Single Agreement. Section 1(c) is hereby amended by the adding the
words "including, for the avoidance of doubt, the Credit Support
Annex" after the words "Master Agreement".
(ii) Change of Account. Section 2(b) is hereby amended by the addition of
the following after the word "delivery" in the first line thereof:
"to another account in the same legal and tax jurisdiction as the
original account".
(iii) Representations. Section 3 is hereby amended by adding at the end
thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Non-Reliance. Party A is acting for its own account, and
with respect to Party B, the Trustee is executing this
Agreement on behalf of Party B in its capacity as
trustee of the Trust. Each party 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 advisors as it has deemed necessary. 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 will not be considered
investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received
from the other party will be deemed to be an assurance
or guarantee as to the expected results of that
Transaction.
(2) 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.
(3) Purpose. 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) Status of Parties. The other party is not acting as
fiduciary for or advisor to it in respect of the
Transaction.
(5) Eligible Contract Participant. It is an "eligible
contract participant" as defined in Section 1a(12) of
the Commodity Exchange Act, as amended."
(iv) Transfer to Avoid Termination Event. Section 6(b)(ii) is hereby
amended by (i) deleting the words "or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party," and (ii) by
deleting the words "to transfer" and inserting the words "to effect
a Permitted Transfer" in lieu thereof.
(v) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in
the second line of subparagraph (i) thereof the word "non-", (ii)
deleting "; and" from the end of subparagraph (i) and inserting "."
in lieu thereof, and (iii) deleting the final paragraph thereof.
(vi) Local Business Day. The definition of Local Business Day in Section
14 is hereby amended by the addition of the words "or any Credit
Support Document" after "Section 2(a)(i)" and the addition of the
words "or Credit Support Document" after "Confirmation".
(c) Additional Termination Events. The following Additional Termination Events
will apply:
(i) First Rating Trigger Collateral. If Party A has failed to comply
with or perform any obligation to be complied with or performed by
Party A in accordance with the Credit Support Annex and such failure
has not given rise to an Event of Default under Section 5(a)(i) or
Section 5(a)(iii), then an Additional Termination Event shall have
occurred with respect to Party A and Party A shall be the sole
Affected Party with respect to such Additional Termination Event.
(ii) Second Rating Trigger Replacement. The occurrence of any event
described in this Part 5(c)(ii) shall constitute an Additional
Termination Event with respect to Party A and Party A shall be the
sole Affected Party with respect to such Additional Termination
Event.
(A) A Moody's Second Trigger Downgrade Event has occurred and been
continuing for 30 or more Local Business Days and at least one
Eligible Replacement has made a Firm Offer that would,
assuming the occurrence of an Early Termination Date, qualify
as a Market Quotation (on the basis that paragraphs (i) and
(ii) of Part 1(f) (Payments on Early Termination) apply) and
which remains capable of becoming legally binding upon
acceptance.
(B) An S&P Required Ratings Downgrade Event has occurred and been
continuing for 60 or more calendar days.
(C) A Fitch Required Ratings Downgrade Event has occurred and been
continuing for 30 or more calendar days.
(iii) Amendment of Base Agreement. If, without the prior written consent
of Party A where such consent is required under the Base Agreement,
an amendment is made to the Base Agreement which amendment could
reasonably be expected to have a material adverse effect on the
interests of Party A (excluding, for the avoidance of doubt, any
amendment to the Base Agreement that is entered into solely for the
purpose of appointing a successor servicer, master servicer,
securities administrator, trustee or other service provider) under
this Agreement, an Additional Termination Event shall have occurred
with respect to Party B and Party B shall be the sole Affected Party
with respect to such Additional Termination Event; provided,
however, that notwithstanding Section 6(b)(iv) of this Agreement,
both Party A and Party B shall have the right to designate an Early
Termination Date in respect of this Additional Termination Event.
(iv) Termination of Trust. If, the Trust is terminated pursuant to the
Base Agreement and all rated certificates or notes, as applicable,
have been paid in accordance with the terms of the Base Agreement,
an Additional Termination Event shall have occurred with respect to
Party B and Party B shall be the sole Affected Party with respect to
such Additional Termination Event; provided, however, that
notwithstanding Section 6(b)(iv) of this Agreement, both Party A and
Party B shall have the right to designate an Early Termination Date
in respect of this Additional Termination Event.
(v) Securitization Unwind. If a Securitization Unwind (as hereinafter
defined) occurs, an Additional Termination Event shall have occurred
with respect to Party B and Party B shall be the sole Affected Party
with respect to such Additional Termination Event; provided,
however, that notwithstanding Section 6(b)(iv) of this Agreement,
both Party A and Party B shall have the right to designate an Early
Termination Date in respect of this Additional Termination Event.
The Early Termination Date in respect of such Additional Termination
Event shall be not earlier than the latest possible date that the
amount of a termination payment may be submitted to a party
exercising a clean-up call in order to be included in the clean-up
call price. As used herein, "Securitization Unwind" means notice of
the requisite amount of a party's intention to exercise its option
to purchase the underlying mortgage loans pursuant the Base
Agreement is given by the Trustee to certificateholders or
noteholders, as applicable, pursuant to the Base Agreement.
(d) Required Ratings Downgrade Event. In the event that no Relevant Entity has
credit ratings at least equal to the Required Ratings Threshold of each
relevant Rating Agency (such event, a "Required Ratings Downgrade Event"),
then Party A shall, as soon as reasonably practicable and so long as a
Required Ratings Downgrade Event is in effect, at its own expense, use
commercially reasonable efforts to procure either (A) a Permitted Transfer
or (B) an Eligible Guarantee.
(e) Transfers.
(i) Section 7 is hereby amended to read in its entirety as follows:
"Subject to Section 6(b)(ii), neither Party A nor Party B is
permitted to assign, novate or transfer (whether by way of security
or otherwise) as a whole or in part any of its rights, obligations
or interests under the Agreement or any Transaction without (a) the
prior written consent of the other party and (b) satisfaction of the
Rating Agency Condition, 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);
(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); and
(c) Party A may transfer or assign this Agreement to any Person,
including, without limitation, another of Party A's offices,
branches or affiliates (any such Person, office, branch or
affiliate, a "Transferee") on at least five Business Days'
prior written notice to Party B and the Trustee; provided
that, with respect to this clause (c), (A) as of the date of
such transfer the Transferee will not be required to withhold
or deduct on account of a Tax from any payments under this
Agreement unless the Transferee will be required to make
payments of additional amounts pursuant to Section 2(d)(i)(4)
of this Agreement in respect of such Tax (B) a Termination
Event or Event of Default does not occur under this Agreement
as a result of such transfer; (C) such notice is accompanied
by a written instrument pursuant to which the Transferee
acquires and assumes the rights and obligations of Party A so
transferred; (D) Party A will be responsible for any costs or
expenses incurred in connection with such transfer and (E)
Party A obtains in respect of such transfer a written
acknowledgement of satisfaction of the Rating Agency Condition
(except for Moody's). Party B will execute such documentation
provided to it as is reasonably deemed necessary by Party A
for the effectuation of any such transfer."
(ii) If an Eligible Replacement has made a Firm Offer (which remains an
offer that will become legally binding upon acceptance by Party B)
to be the transferee pursuant to a Permitted Transfer, Party B
shall, at Party A's written request and at Party A's expense,
execute such documentation provided to it as is reasonably deemed
necessary by Party A to effect such transfer.
(iii) Upon any transfer of this Agreement by Party A, each of the
transferee and the transferor must be a "dealer in notional
principal contracts" for purposes of Treasury regulations section
1.1001-4(a). For the avoidance of doubt, the Trustee is not
obligated to determine whether each of the transferee and the
transferor are such "dealers in notional principal contracts."
(f) Non-Recourse. Party A acknowledges and agree that, notwithstanding any
provision in this Agreement to the contrary, the obligations of Party B
hereunder are limited recourse obligations of Party B, payable solely from
the Trust and the proceeds thereof, in accordance with the priority of
payments and other terms of the Base Agreement and that Party A will not
have any recourse to any of the directors, officers, employees,
shareholders or affiliates of Party B with respect to any claims, losses,
damages, liabilities, indemnities or other obligations in connection with
any transactions contemplated hereby. In the event that the Trust and the
proceeds thereof, should be insufficient to satisfy all claims outstanding
and following the realization of the account held by the Trust and the
proceeds thereof, any claims against or obligations of Party B under the
ISDA Master Agreement or any other confirmation thereunder still
outstanding shall be extinguished and thereafter not revive. The Trustee
shall not have liability for any failure or delay in making a payment
hereunder to Party A due to any failure or delay in receiving amounts in
the account held by the Trust from the Trust created pursuant to the Base
Agreement. This provision will survive the termination of this Agreement.
(g) Rating Agency Notifications. Notwithstanding any other provision of this
Agreement, no Early Termination Date shall be effectively designated
hereunder by Party B and no transfer of any rights or obligations under
this Agreement shall be made by either party unless each Rating Agency has
been given prior written notice of such designation or transfer.
(h) No Set-off. Except as expressly provided for in Section 2(c), Section 6 or
Part 1(f)(i)(D) hereof, and 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 or 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) shall be amended by deleting the following sentence: "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) Amendment. Notwithstanding any provision to the contrary in this
Agreement, no amendment of either this Agreement or any Transaction under
this Agreement shall be permitted by either party unless each of the
Rating Agencies has been provided prior written notice of the same and
such amendment satisfies the Rating Agency Condition with respect to S&P
and Fitch.
(j) Notice of Certain Events or Circumstances. Each Party agrees, upon
learning of the occurrence or existence of any event or condition that
constitutes (or that with the giving of notice or passage of time or both
would constitute) an Event of Default or Termination Event with respect to
such party, promptly to give the other Party and to each Rating Agency
notice of such event or condition; provided that failure to provide notice
of such event or condition pursuant to this Part 5(j) shall not constitute
an Event of Default or a Termination Event.
(k) Proceedings. No Relevant Entity shall institute against, or cause any
other person to institute against, or join any other person in instituting
against Party B, the Trust, or the trust formed pursuant to the Base
Agreement, in 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 (or, if longer, the
applicable preference period) and one day following payment in full of the
Certificates and any Notes; provided, however, that nothing will preclude,
or be deemed to stop, Party A (i) from taking any action prior to the
expiration of the aforementioned one year and one day period, or if longer
the applicable preference period then in effect, in (A) any case or
proceeding voluntarily filed or commenced by Party B or (B) any
involuntary insolvency proceeding filed or commenced by a Person other
than Party A, or (ii) from commencing against Party B or any of the
Collateral any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium, liquidation or similar proceeding.
This provision will survive the termination of this Agreement.
(l) Trustee Liability Limitations. It is expressly understood and agreed by
the parties hereto that (a) this Agreement is executed by Deutsche Bank
National Trust Company ("DBNTC") not in its individual capacity, but
solely as Trustee under the Base Agreement in the exercise of the powers
and authority conferred and invested in it thereunder; (b) DBNTC has been
directed pursuant to the Base Agreement to enter into this Agreement and
to perform its obligations hereunder; (c) each of the representations,
undertakings and agreements herein made on behalf of the Trust is made and
intended not as personal representations of DBNTC but is made and intended
for the purpose of binding only the Trust; and (d) under no circumstances
shall DBNTC in its individual capacity be personally liable for any
payments hereunder or for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Agreement.
(m) 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) in any
respect, 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 this severability provision shall not be
applicable if any provision of Section 2, 5, 6, or 13 (or any definition
or provision in Section 14 to the extent it relates to, or is used in or
in 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.
(n) 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, marketing, and operations
personnel of the parties and their Affiliates, waives any further notice
of such monitoring or recording, and agrees to notify such personnel of
such monitoring or recording.
(o) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any in respect of any suit, action or proceeding
relating to this Agreement or any Credit Support Document.
(p) Regarding Party A. Party B acknowledges and agrees that Party A, in its
capacity as swap provider, has had and will have no involvement in and,
accordingly Party A accepts no responsibility for: (i) the establishment,
structure, or choice of assets of Party B; (ii) the selection of any
person performing services for or acting on behalf of Party B; (iii) the
selection of Party A as the Counterparty; (iv) the terms of the
Certificates; (v) the preparation of or passing on the disclosure and
other information (other than disclosure and information furnished by
Party A) contained in any offering circular for the Certificates, the Base
Agreement, or any other agreements or documents used by Party B or any
other party in connection with the marketing and sale of the Certificates;
(vi) the ongoing operations and administration of Party B, including the
furnishing of any information to Party B which is not specifically
required under this Agreement; or (vii) any other aspect of Party B's
existence.
(q) Rating Agency Requirements. Notwithstanding anything to the contrary
herein, to the extent any Rating Agency does not assign a rating to the
notes or certificates, as applicable, issued pursuant to the Base
Agreement, references to the requirements of such Rating Agency herein
shall be ignored for purposes of this Agreement.
(r) Additional Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth below, unless the context clearly requires otherwise:
"Approved Ratings Threshold" means each of the S&P Approved Ratings
Threshold, the Moody's First Trigger Ratings Threshold and the Fitch
Approved Ratings Threshold.
"Approved Replacement" means, with respect to a Market Quotation, an
entity making such Market Quotation, which entity would satisfy
conditions (a), (b), (c) and (d) of the definition of Permitted
Transfer if such entity were a Transferee, as defined in the
definition of Permitted Transfer.
"Derivative Provider Trigger Event" means (i) an Event of Default
with respect to which Party A is a Defaulting Party, (ii) a
Termination Event (other than an Illegality or Tax Event) with
respect to which Party A is the sole Affected Party or (iii) an
Additional Termination Event with respect to which Party A is the
sole Affected Party.
"Eligible Guarantee" means an unconditional and irrevocable
guarantee of all present and future obligations of Party A under
this Agreement (or, solely for purposes of the definition of
Eligible Replacement, all present and future obligations of such
Eligible Replacement under this Agreement or its replacement, as
applicable) which is provided by a guarantor as principal debtor
rather than surety and which is directly enforceable by Party B, the
form and substance of which guarantee are subject to the Rating
Agency Condition with respect to S&P and Fitch, and either (A) a law
firm has given a legal opinion confirming that none of the
guarantor's payments to Party B under such guarantee will be subject
to deduction or Tax collected by withholding, or (B) such guarantee
provides that, in the event that any of such guarantor's payments to
Party B are subject to deduction or Tax collected by withholding,
such guarantor is required to pay such additional amount as is
necessary to ensure that the net amount actually received by Party B
(free and clear of any Tax collected by withholding) will equal the
full amount Party B would have received had no such deduction or
withholding been required, or (C) in the event that any payment
under such guarantee is made net of deduction or withholding for
Tax, Party A is required, under Section 2(a)(i), to make such
additional payment as is necessary to ensure that the net amount
actually received by Party B from the guarantor will equal the full
amount Party B would have received had no such deduction or
withholding been required.
"Eligible Replacement" means an entity (A) (I) (x) which has credit
ratings from S&P at least equal to the S&P Required Ratings
Threshold or (y) all present and future obligations of which entity
owing to Party B under this Agreement (or its replacement, as
applicable) are guaranteed pursuant to an Eligible Guarantee
provided by a guarantor with credit ratings from S&P at least equal
to the S&P Required Ratings Threshold, in either case if S&P is a
Rating Agency, (II) (x) which has credit ratings from Moody's at
least equal to the Moody's Second Trigger Ratings Threshold or (y)
all present and future obligations of which entity owing to Party B
under this Agreement (or its replacement, as applicable) are
guaranteed pursuant to an Eligible Guarantee provided by a guarantor
with credit ratings from Moody's at least equal to the Moody's
Second Trigger Ratings Threshold, in either case if ▇▇▇▇▇'▇ is a
Rating Agency, and (III) (x) which has credit ratings from Fitch at
least equal to the applicable Fitch Approved Ratings Threshold or
(y) all present and future obligations of which entity owing to
Party B under this Agreement (or its replacement, as applicable) are
guaranteed pursuant to an Eligible Guarantee provided by a guarantor
with credit ratings from Fitch at least equal to the Fitch Approved
Ratings Threshold, in either case if Fitch is a Rating Agency. All
credit ratings described in this definition of "Eligible
Replacement" shall be provided to Party B by any such Eligible
Replacement in writing.
"Financial Institution" means a bank, broker/dealer, insurance
company, structured investment company or derivative product
company.
"Firm Offer" means a quotation from an Eligible Replacement (i) in
an amount equal to the actual amount payable by or to Party B in
consideration of an agreement between Party B and such Eligible
Replacement to replace Party A as the counterparty to this Agreement
by way of novation or, if such novation is not possible, an
agreement between Party B and such Eligible Replacement to enter
into a Replacement Transaction (assuming that all Transactions
hereunder become Terminated Transactions), and (ii) that constitutes
an offer by such Eligible Replacement to replace Party A as the
counterparty to this Agreement or enter a Replacement Transaction
that will become legally binding upon such Eligible Replacement upon
acceptance by Party B.
"Fitch" means Fitch Ratings Ltd., or any successor thereto.
"Fitch Approved Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee, or an Eligible
Replacement, a long-term unsecured and unsubordinated debt rating
from Fitch of "A" and a short-term unsecured and unsubordinated debt
rating from Fitch of "F1".
"Fitch Required Ratings Downgrade Event" means that no Relevant
Entity has credit ratings from Fitch at least equal to the Fitch
Required Ratings Threshold.
"Fitch Required Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee, or an Eligible
Replacement, a long-term unsecured and unsubordinated debt rating
from Fitch of "BBB+" and a short-term unsecured and unsubordinated
debt rating from Fitch of "F2".
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"Moody's First Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee, or an Eligible
Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A2" and a short-term unsecured and unsubordinated debt rating from
Moody's of "Prime-1", or (ii) if such entity does not have a
short-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's, a long-term unsecured and unsubordinated debt
rating or counterparty rating from Moody's of "A1".
"Moody's Second Trigger Downgrade Event" means that no Relevant
Entity has credit ratings from Moody's at least equal to the Moody's
Second Trigger Ratings Threshold.
"Moody's Second Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee, or an Eligible
Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A3" and a short-term unsecured and unsubordinated debt rating from
Moody's of "Prime-2", or (ii) if such entity does not have a
short-term unsecured and unsubordinated debt rating from Moody's, a
long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's of "A3".
"Permitted Transfer" means a transfer by novation by Party A to a
transferee (the "Transferee") of all, but not less than all, of
Party A's rights, liabilities, duties and obligations under this
Agreement, with respect to which transfer each of the following
conditions is satisfied: (a) the Transferee is an Eligible
Replacement that is a recognized dealer in interest rate swaps, (b)
as of the date of such transfer the Transferee would not be required
to withhold or deduct on account of Tax from any payments under this
Agreement or would be required to gross up for such Tax under
Section 2(d)(i)(4), (c) an Event of Default or Termination Event
would not occur as a result of such transfer (d) pursuant to a
written instrument (the "Transfer Agreement"), the Transferee
acquires and assumes all rights and obligations of Party A under the
Agreement and the relevant Transaction, (e) such Transfer Agreement
is effective to transfer to the Transferee all, but not less than
all, of Party A's rights and obligations under the Agreement and all
relevant Transactions; (f) Party A will be responsible for any costs
or expenses incurred in connection with such transfer (including any
replacement cost of entering into a replacement transaction); (g)
Moody's has been given prior written notice of such transfer and the
Rating Agency Condition (other than with respect to ▇▇▇▇▇'▇) is
satisfied; and (h) such transfer otherwise complies with the terms
of the Base Agreement.
"Rating Agencies" means, with respect to any date of determination,
each of S&P, ▇▇▇▇▇'▇ and Fitch, to the extent that each such rating
agency is then providing a rating for any of the related notes or
certificates, as applicable.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder and each Rating Agency
specified in connection with such proposed act or omission, that the
party proposing such act or failure to act must consult with each of
the specified Rating Agencies and receive from each such Rating
Agency prior written confirmation that the proposed action or
inaction would not cause a downgrade or withdrawal of the
then-current rating of any Certificates or Notes.
"Relevant Entity" means Party A and, to the extent applicable, a
guarantor under an Eligible Guarantee.
"Replacement Transaction" means, with respect to any Terminated
Transaction or group of Terminated Transactions, a transaction or
group of transactions that (i) would have the effect of preserving
for Party B 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, and (ii) has terms which are substantially
the same as this Agreement, including, without limitation, rating
triggers, Regulation AB compliance and credit support documentation,
save for the exclusion of provisions relating to Transactions that
are not Terminated Transactions.
"Required Ratings Downgrade Event" means that no Relevant Entity has
credit ratings at least equal to the Required Ratings Threshold.
"Required Ratings Threshold" means each of the S&P Required Ratings
Threshold, the Moody's Second Trigger Ratings Threshold and the
Fitch Required Ratings Threshold.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"S&P Approved Ratings Threshold" means, with respect to Party A, the
guarantor under an Eligible Guarantee, or an Eligible Replacement, a
short-term unsecured and unsubordinated debt rating of "A-1" from
S&P, or, if such entity does not have a short-term unsecured and
unsubordinated debt rating from S&P, a long-term unsecured and
unsubordinated debt rating or counterparty rating of "A+" from S&P.
"S&P Required Ratings Downgrade Event" means that no Relevant Entity
has credit ratings from S&P at least equal to the S&P Required
Ratings Threshold.
"S&P Required Ratings Threshold" means, with respect to Party A, the
guarantor under an Eligible Guarantee, or an Eligible Replacement,
(I) if such entity is a Financial Institution, a short-term
unsecured and unsubordinated debt rating of "A-2" from S&P, or, if
such entity does not have a short-term unsecured and unsubordinated
debt rating from S&P, a long-term unsecured and unsubordinated debt
rating or counterparty rating of "BBB+" from S&P, or (II) if such
entity is not a Financial Institution, a short-term unsecured and
unsubordinated debt rating of "A-1" from S&P, or, if such entity
does not have a short-term unsecured and unsubordinated debt rating
from S&P, a long-term unsecured and unsubordinated debt rating or
counterparty rating of "A+" from S&P.
[Remainder of this page intentionally left blank.]
The time of dealing will be confirmed by Party A upon written request. Barclays
is regulated by the Financial Services Authority. Barclays is acting for its own
account in respect of this Transaction.
Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operations,
Fax ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6857, Tel ▇(▇▇) ▇▇-▇▇▇▇-▇▇▇▇/6904/6965, and (ii) mailing
the signed copy to Barclays Bank PLC, 5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention of Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operation.
Your failure to respond within such period shall not affect the validity or
enforceability of the Transaction against you. This facsimile shall be the only
documentation in respect of the Transaction and accordingly no hard copy
versions of this Confirmation for this Transaction shall be provided unless
Party B requests such a copy.
For and on behalf of For and on behalf of
BARCLAYS BANK PLC BCAPB LLC Trust 2007-AB1, Mortgage
Pass-Through Certificates, Series
2007-AB1
By: Deutsche Bank National Trust
Company, not individually, but solely
as trustee of the Trust
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory Title: Authorized Signer
Date: July 19, 2007 Date: July 19, 2007
Barclays Bank PLC and its Affiliates, including Barclays Capital Inc., may share
with each other information, including non-public credit information, concerning
its clients and prospective clients. If you do not want such information to be
shared, you must write to the Director of Compliance, Barclays Bank PLC, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
SCHEDULE I
From and including To but excluding Notional Amount (USD)
------------------ ---------------- ----------------------
19-Jul-07 25-Jul-07 386,756,000.00
25-Jul-07 25-Aug-07 376,859,536.42
25-Aug-07 25-Sep-07 366,213,612.35
25-Sep-07 25-Oct-07 354,851,322.67
25-Oct-07 25-Nov-07 342,807,402.30
25-Nov-07 25-Dec-07 330,121,869.72
25-Dec-07 25-Jan-08 316,835,716.29
25-Jan-08 25-Feb-08 303,191,042.24
25-Feb-08 25-Mar-08 289,920,793.73
25-Mar-08 25-Apr-08 277,014,735.58
25-Apr-08 25-May-08 264,462,911.60
25-May-08 25-Jun-08 252,255,636.96
25-Jun-08 25-Jul-08 240,383,490.87
25-Jul-08 25-Aug-08 228,837,309.35
25-Aug-08 25-Sep-08 217,608,178.27
25-Sep-08 25-Oct-08 206,687,426.54
25-Oct-08 25-Nov-08 196,066,619.50
25-Nov-08 25-Dec-08 185,737,552.50
25-Dec-08 25-Jan-09 175,692,244.62
25-Jan-09 25-Feb-09 165,922,932.62
25-Feb-09 25-Mar-09 156,422,064.97
25-Mar-09 25-Apr-09 147,182,296.12
25-Apr-09 25-May-09 138,196,480.90
25-May-09 25-Jun-09 129,457,669.04
25-Jun-09 25-Jul-09 120,959,099.90
25-Jul-09 25-Aug-09 112,694,197.26
25-Aug-09 25-Sep-09 104,656,564.36
25-Sep-09 25-Oct-09 96,839,978.97
25-Oct-09 25-Nov-09 89,238,388.67
25-Nov-09 25-Dec-09 81,845,906.20
25-Dec-09 25-Jan-10 74,808,000.00
25-Jan-10 25-Feb-10 74,808,000.00
25-Feb-10 25-Mar-10 74,808,000.00
25-Mar-10 25-Apr-10 74,808,000.00
25-Apr-10 25-May-10 74,808,000.00
25-May-10 25-Jun-10 74,808,000.00
25-Jun-10 25-Jul-10 74,808,000.00
25-Jul-10 25-Aug-10 73,687,270.01
25-Aug-10 25-Sep-10 68,304,973.44
25-Sep-10 25-Oct-10 63,070,928.53
25-Oct-10 25-Nov-10 57,981,071.36
25-Nov-10 25-Dec-10 53,031,449.00
25-Dec-10 25-Jan-11 48,218,216.50
25-Jan-11 25-Feb-11 46,429,165.61
25-Feb-11 25-Mar-11 45,140,526.57
25-Mar-11 25-Apr-11 43,887,411.66
25-Apr-11 25-May-11 42,668,846.46
25-May-11 25-Jun-11 41,483,883.20
25-Jun-11 25-Jul-11 40,331,600.02
25-Jul-11 25-Aug-11 39,211,100.23
25-Aug-11 25-Sep-11 38,121,511.68
25-Sep-11 25-Oct-11 37,061,986.02
25-Oct-11 25-Nov-11 36,031,698.14
25-Nov-11 25-Dec-11 35,029,845.45
25-Dec-11 25-Jan-12 34,055,647.32
25-Jan-12 25-Feb-12 33,107,366.69
25-Feb-12 25-Mar-12 32,183,649.73
25-Mar-12 25-Apr-12 31,285,494.06
25-Apr-12 25-May-12 30,412,196.57
25-May-12 25-Jun-12 29,563,073.43
25-Jun-12 25-Jul-12 28,737,459.53
25-Jul-12 25-Aug-12 27,934,707.98
25-Aug-12 25-Sep-12 27,154,189.59
25-Sep-12 25-Oct-12 26,395,292.43
25-Oct-12 25-Nov-12 25,657,421.32
25-Nov-12 25-Dec-12 24,939,997.40
25-Dec-12 25-Jan-13 24,242,457.66
25-Jan-13 25-Feb-13 23,564,254.52
25-Feb-13 25-Mar-13 22,904,855.43
25-Mar-13 25-Apr-13 22,263,742.39
25-Apr-13 25-May-13 21,640,411.66
25-May-13 25-Jun-13 21,034,373.25
25-Jun-13 25-Jul-13 20,445,150.66
25-Jul-13 25-Aug-13 19,872,280.42
25-Aug-13 25-Sep-13 19,315,311.77
25-Sep-13 25-Oct-13 18,773,806.34
25-Oct-13 25-Nov-13 18,247,337.77
25-Nov-13 25-Dec-13 17,735,491.38
25-Dec-13 25-Jan-14 17,237,863.90
25-Jan-14 25-Feb-14 16,754,063.09
25-Feb-14 25-Mar-14 16,283,707.50
25-Mar-14 25-Apr-14 15,826,426.14
25-Apr-14 25-May-14 15,381,858.20
25-May-14 25-Jun-14 14,949,652.77
25-Jun-14 25-Jul-14 14,529,468.60
25-Jul-14 25-Aug-14 14,120,973.77
25-Aug-14 25-Sep-14 13,723,845.51
25-Sep-14 25-Oct-14 13,337,769.90
25-Oct-14 25-Nov-14 12,962,441.63
25-Nov-14 25-Dec-14 12,597,563.79
25-Dec-14 25-Jan-15 12,242,847.63
25-Jan-15 25-Feb-15 11,898,012.33
25-Feb-15 25-Mar-15 11,532,332.31
25-Mar-15 25-Apr-15 11,127,742.52
25-Apr-15 25-May-15 10,734,430.43
25-May-15 25-Jun-15 10,352,084.16
25-Jun-15 25-Jul-15 9,980,400.43
25-Jul-15 25-Aug-15 9,619,084.29
25-Aug-15 25-Sep-15 9,267,848.89
25-Sep-15 25-Oct-15 8,926,415.28
25-Oct-15 25-Nov-15 8,594,512.18
25-Nov-15 25-Dec-15 8,271,875.78
25-Dec-15 25-Jan-16 7,958,249.51
25-Jan-16 25-Feb-16 7,653,383.88
25-Feb-16 25-Mar-16 7,357,036.26
25-Mar-16 25-Apr-16 7,068,970.69
25-Apr-16 25-May-16 6,788,957.71
25-May-16 25-Jun-16 6,516,774.18
25-Jun-16 25-Jul-16 6,252,203.10
25-Jul-16 25-Aug-16 5,995,033.44
25-Aug-16 25-Sep-16 5,745,060.01
25-Sep-16 25-Oct-16 5,502,083.23
25-Oct-16 25-Nov-16 5,265,909.06
25-Nov-16 25-Dec-16 5,036,348.76
25-Dec-16 25-Jan-17 4,813,218.85
25-Jan-17 25-Feb-17 4,596,340.84
25-Feb-17 25-Mar-17 4,385,271.33
25-Mar-17 25-Apr-17 4,180,124.34
25-Apr-17 25-May-17 3,980,735.32
25-May-17 25-Jun-17 3,786,944.24
25-Jun-17 25-Jul-17 3,598,595.50
25-Jul-17 25-Aug-17 3,415,537.77
25-Aug-17 25-Sep-17 3,237,623.93
25-Sep-17 25-Oct-17 3,064,710.89
25-Oct-17 25-Nov-17 2,896,659.54
25-Nov-17 25-Dec-17 2,733,334.58
25-Dec-17 25-Jan-18 2,574,604.47
25-Jan-18 25-Feb-18 2,420,341.29
25-Feb-18 25-Mar-18 2,270,420.68
25-Mar-18 25-Apr-18 2,124,721.67
25-Apr-18 25-May-18 1,983,126.68
25-May-18 25-Jun-18 1,845,521.35
25-Jun-18 25-Jul-18 1,711,794.49
25-Jul-18 25-Aug-18 1,581,838.00
25-Aug-18 25-Sep-18 1,455,546.73
25-Sep-18 25-Oct-18 1,332,818.49
25-Oct-18 25-Nov-18 1,213,553.88
25-Nov-18 25-Dec-18 1,097,656.25
25-Dec-18 25-Jan-19 985,031.65
25-Jan-19 25-Feb-19 875,588.71
25-Feb-19 25-Mar-19 769,238.59
25-Mar-19 25-Apr-19 665,894.92
25-Apr-19 25-May-19 565,473.72
25-May-19 25-Jun-19 467,893.32
25-Jun-19 25-Jul-19 373,074.34
25-Jul-19 25-Aug-19 280,939.57
25-Aug-19 25-Sep-19 191,413.96
25-Sep-19 25-Oct-19 104,424.53
25-Oct-19 25-Nov-19 19,900.33
Annex A
Paragraph 13 of the Credit Support Annex
ANNEX A
ISDA(R)
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement
dated as of July 19, 2007 between
Barclays Bank PLC (hereinafter referred to as "Party A" or "Pledgor")
and
BCAPB LLC Trust 2007-AB1, Mortgage Pass-Through Certificates, Series 2007-AB1
(the "Trust") (hereinafter referred to as "Party B" or "Secured Party") by
Deutsche Bank National Trust Company, not individually, but solely as trustee
(the "Trustee")
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.
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: not applicable.
With respect to Party B: not applicable.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a),
except that:
(I) the words "upon a demand made by the Secured Party on or
promptly following a Valuation Date" shall be deleted
and replaced with the words "not later than the close of
business on each Valuation Date", and
(II) the sentence beginning "Unless otherwise specified in
Paragraph 13" and ending "(ii) the Value as of that
Valuation Date of all Posted Credit Support held by the
Secured Party." shall be deleted in its entirety and
replaced with the following:
"The "Delivery Amount" applicable to the Pledgor for any
Valuation Date will equal the greatest of
(1) the amount by which (a) the S&P Credit Support
Amount for such Valuation Date exceeds (b) the S&P
Value, as of such Valuation Date, of all Posted
Credit Support held by the Secured Party,
(2) the amount by which (a) the ▇▇▇▇▇'▇ Credit Support
Amount for such Valuation Date exceeds (b) the
Moody's Value, as of such Valuation Date, of all
Posted Credit Support held by the Secured Party,
and
(3) the amount by which (a) the Fitch Credit Support
Amount for such Valuation Date exceeds (b) the
Fitch Value, as of such Valuation Date, of all
Posted Credit Support held by the Secured Party."
(B) "Return Amount" has the meaning specified in Paragraph 3(b),
except that:
(I) the sentence beginning "Unless otherwise specified in
Paragraph 13" and ending "(ii) the Credit Support
Amount." shall be deleted in its entirety and replaced
with the following:
"The "Return Amount" applicable to the Secured Party for
any Valuation Date will equal the least of
(1) the amount by which (a) the S&P Value, as of such
Valuation Date, of all Posted Credit Support held
by the Secured Party exceeds (b) the S&P Credit
Support Amount for such Valuation Date,
(2) the amount by which (a) the ▇▇▇▇▇'▇ Value, as of
such Valuation Date, of all Posted Credit Support
held by the Secured Party exceeds (b) the Moody's
Credit Support Amount for such Valuation Date, and
(3) the amount by which (a) the Fitch Value, as of
such Valuation Date, of all Posted Credit Support
held by the Secured Party exceeds (b) the Fitch
Credit Support Amount for such Valuation Date."
(C) "Credit Support Amount" shall not apply. For purposes of
calculating any Delivery Amount or Return Amount for any
Valuation Date, reference shall be made to the S&P Credit
Support Amount, the ▇▇▇▇▇'▇ Credit Support Amount, or the
Fitch Credit Support Amount, in each case for such Valuation
Date, as provided in Paragraphs 13(b)(i)(A) and 13(b)(i)(B),
above.
(ii) Eligible Collateral.
On any date, the following items will qualify as "Eligible
Collateral" (for the avoidance of doubt, all Eligible Collateral to
be denominated in USD):
S&P ▇▇▇▇▇'▇
Approved S&P Required First ▇▇▇▇▇'▇ Second
Ratings Ratings Trigger Trigger Fitch
Valuation Valuation Valuation Valuation Valuation
Collateral Percentage Percentage Percentage Percentage Percentage
---------- ---------- ---------- ---------- ---------- ----------
(A) Cash 100% 80% 100% 100% 100%
(B) Fixed-rate negotiable debt
obligations issued by the U.S.
Treasury Department having a
remaining maturity on such date 98.9% 79.1% 100% 100% 97.5%
of not more than one year
(C) Fixed-rate negotiable debt
obligations issued by the U.S.
Treasury Department having a
remaining maturity on such date
of more than one year but not 92.6% 74.1% 100% 94% 86.3%
more than ten years
(D) Fixed-rate negotiable debt
obligations issued by the U.S.
Treasury Department having a
remaining maturity on such date N/A N/A 100% 87% 79%
of more than ten years
Notwithstanding the Valuation Percentages set forth in the preceding
table, upon the first Transfer of Eligible Collateral under this
Annex, the Pledgor may, at the Pledgor's expense, agree the
Valuation Percentages in relation to (B) through (D) above with the
relevant rating agency (to the extent such rating agency is
providing a rating for the Certificates), and upon such agreement
(as evidenced in writing), such Valuation Percentages shall
supersede those set forth in the preceding table.
(iii) Other Eligible Support.
The following items will qualify as "Other Eligible Support" for the
party specified:
Such Other Eligible Support as the Pledgor may designate; provided,
at the expense of the Pledgor, the prior written consent of the
relevant rating agency (to the extent such rating agency is
providing a rating for the Certificates) shall have been obtained.
For the avoidance of doubt, there are no items that qualify as Other
Eligible Support as of the date of this Annex.
(iv) Threshold.
(A) "Independent Amount" means zero with respect to Party A and Party B.
(B) "Moody's Threshold" means, with respect to Party A and any Valuation
Date, if a Moody's First Trigger Downgrade Event has occurred and is
continuing and such Moody's First Trigger Downgrade Event has been
continuing for at least 30 Local Business Days or since this Annex
was executed, zero; otherwise, infinity.
"S&P Threshold" means, with respect to Party A and any Valuation
Date, if an S&P Approved Threshold Downgrade Event has occurred and
is continuing and such S&P Approved Threshold Downgrade Event has
been continuing for at least 10 Local Business Days or since this
Annex was executed, zero; otherwise, infinity.
"Fitch Threshold" means, with respect to Party A and any Valuation
Date, if a Fitch Approved Threshold Downgrade Event has occurred and
is continuing and such Fitch Approved Threshold Downgrade Event has
been continuing for at least 30 calendar days or since this Annex
was executed, zero; otherwise, infinity
"Threshold" means, with respect to Party B and any Valuation Date,
infinity.
(C) "Minimum Transfer Amount" means USD 100,000; provided, however, that
if the aggregate Class Certificate Balance of Certificates rated by
S&P ceases to be more than USD 50,000,000, "Minimum Transfer Amount"
means USD 50,000; provided further, with respect to the Secured
Party at any time when the Secured Party is a Defaulting Party,
"Minimum Transfer Amount" means zero.
(D) Rounding: The Delivery Amount will be rounded up and the Return
Amount will be rounded down to the nearest integral multiple of USD
1000.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A. The Valuation Agent's calculations
shall be made in accordance with standard market practices using
commonly accepted third party sources such as Bloomberg or Reuters.
(ii) "Valuation Date" means each Local Business Day.
(iii) "Valuation Time" means the close of business in the city of the
Valuation Agent on the Local Business Day immediately preceding 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 11:00 a.m., New York time, on a Local
Business Day.
(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 if the Termination Event
occurs with respect to that party): None.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. If specified here as applicable, then the Pledgor must
obtain the Secured Party's consent for any substitution pursuant to
Paragraph 4(d): Inapplicable.
(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. Notwithstanding anything to the contrary in Paragraph 12, for
the purpose of Paragraphs 5(i)(C) and 5(ii), the S&P Value, Moody's
Value, and Fitch Value, on any date, of Eligible Collateral will be
calculated as follows:
For Eligible Collateral comprised of Cash, the amount of such Cash.
For Eligible Collateral comprising securities, the sum of (A) the
product of (1)(x) the bid price at the Valuation Time for such
securities on the principal national securities exchange on which
such securities are listed, or (y) if such securities are not listed
on a national securities exchange, the bid price for such securities
quoted at the Valuation Time by any principal market maker for such
securities selected by the Valuation Agent, or (z) if no such bid
price is listed or quoted for such date, the bid price listed or
quoted (as the case may be) at the Valuation Time for the day next
preceding such date on which such prices were available and (2) the
applicable Valuation Percentage for such Eligible Collateral, and
(B) the accrued interest on such securities (except to the extent
Transferred to the Pledgor pursuant to Paragraph 6(d)(ii) or
included in the applicable price referred to in the immediately
preceding clause (A)) as of such date.
(iii) Alternative. The provisions of Paragraph 5 will apply; provided,
that the obligation of the appropriate party to deliver the
undisputed amount to the other party will not arise prior to the
time that would otherwise have applied to the Transfer pursuant to,
or deemed made, under Paragraph 3 if no dispute had arisen.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians.
Party B is not and will not be entitled to hold Posted Collateral.
Party B's Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(1) The Custodian for Party B shall be the same banking
institution that acts as Trustee for the Certificates.
(2) The Custodian for Party B or such Custodian's parent
shall have a short-term unsecured and unsubordinated
debt rating from S&P of at least "A-1" or, if no
short-term rating is available, a long-term unsecured
debt rating from S&P of "A+." The Trustee is required to
replace the Custodian within 60 calendar days of the
Custodian's rating falling below "A-1," in the case of a
short-term rating, or "A+," in the case of a long-term
rating.
Initially, the Custodian for Party B is: the Trustee.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will not
apply to Party B; therefore, Party B will not have any of the rights
specified in Paragraph 6(c)(i) or 6(c)(ii); provided, however, that
the Trustee shall invest Cash Posted Credit Support in such
investments as designated by Party A, with losses (net of gains)
incurred in respect of such investments to be for the account of
Party A; provided further, that such investments designated by Party
A shall be limited to money market funds rated "AAAm" or "AAAm-G" by
S&P and from which such invested Cash Posted Credit Support may be
withdrawn upon no more than 2 Local Business Day's notice of a
request for withdrawal.
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the actual interest rate
earned on Posted Collateral in the form of Cash pursuant to
Paragraph 13(g)(ii).
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the second Local Business Day following the end of
each calendar month and on any other Local Business Day on which
Posted Collateral in the form of Cash is Transferred to the Pledgor
pursuant to Paragraph 3(b); provided, however, that the obligation
of Party B to Transfer any Interest Amount to Party A shall be
limited to the extent that Party B has earned and received such
funds and such funds are available to Party B.
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). There are no additional representations by
either party.
(j) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support shall have such meaning as the parties shall agree in
writing from time to time pursuant to Paragraph 13(b)(iii).
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support shall have such meaning as the parties shall agree in
writing from time to time pursuant to Paragraph 13(b)(iii).
(k) Demands and Notices.All demands, specifications and notices under this
Annex will be made pursuant to the Notices Section of this Agreement,
except that any demand, specification or notice shall be given to or made
at the following addresses, or at such other address as the relevant party
may from time to time designate by giving notice (in accordance with the
terms of this paragraph) to the other party:
If to Party A:
▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, England
Attention: Swaps Documentation
Facsimile No.: ▇▇▇▇-▇▇▇-▇▇▇▇/6858
Telephone No.: ▇▇▇▇-▇▇▇-▇▇▇▇/6904
with a copy to:
General Counsel's ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices to Party A shall not be deemed effective unless
delivered to the London address set forth above.
If to Party B's Custodian:
BCAPB LLC Trust 2007-AB1, Mortgage Pass-Through Certificates,
Series 2007-AB1
c/o Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Trust Administration - BC0705
(l) Address for Transfers. Each Transfer hereunder shall be made to the
address specified in writing from time to time by the party to which such
Transfer will be made.
(m) Other Provisions.
(i) Collateral Account. The Secured Party shall cause any Custodian
appointed hereunder to open and maintain a segregated trust account
and to hold, record and identify all the Posted Collateral in such
segregated trust account and, subject to Paragraph 8(a), such Posted
Collateral shall at all times be and remain the property of the
Pledgor and shall at no time constitute the property of, or be
commingled with the property of, the Secured Party or the Custodian.
(ii) Agreement as to Single Secured Party and Single Pledgor. Party A and
Party B hereby agree that, notwithstanding anything to the contrary
in this Annex, (a) the term "Secured Party" as used in this Annex
means only Party B, (b) the term "Pledgor" as used in this Annex
means 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.
(iii) Calculation of Value. Paragraph 4(c) is hereby amended by deleting
the word "Value" and inserting in lieu thereof "S&P Value, ▇▇▇▇▇'▇
Value, Fitch Value". Paragraph 4(d)(ii) is hereby amended by (A)
deleting the words "a Value" and inserting in lieu thereof "an S&P
Value, a ▇▇▇▇▇'▇ Value, and a Fitch Value" and (B) deleting the
words "the Value" and inserting in lieu thereof "S&P Value, ▇▇▇▇▇'▇
Value, and Fitch Value". Paragraph 5 (flush language) is hereby
amended by deleting the word "Value" and inserting in lieu thereof
"S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value". Paragraph 5(i) (flush
language) is hereby amended by deleting the word "Value" and
inserting in lieu thereof "S&P Value, ▇▇▇▇▇'▇ Value, and Fitch
Value". Paragraph 5(i)(C) is hereby amended by deleting the word
"the Value, if" and inserting in lieu thereof "any one or more of
the S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value, as may be". Paragraph
5(ii) is hereby amended by (1) deleting the first instance of the
words "the Value" and inserting in lieu thereof "any one or more of
the S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value" and (2) deleting the
second instance of the words "the Value" and inserting in lieu
thereof "such disputed S&P Value, ▇▇▇▇▇'▇ Value, or Fitch Value".
Each of Paragraph 8(b)(iv)(B) and Paragraph 11(a) is hereby amended
by deleting the word "Value" and inserting in lieu thereof "least of
the S&P Value, ▇▇▇▇▇'▇ Value or Fitch Value".
(iv) Form of Annex. Party A and Party B hereby agree that the text of
Paragraphs 1 through 12, inclusive, of this Annex is intended to be
the printed form of ISDA Credit Support Annex (Bilateral Form - ISDA
Agreements Subject to New York Law Only version) as published and
copyrighted in 1994 by the International Swaps and Derivatives
Association, Inc.
(v) Events of Default. Paragraph 7 will not apply to cause any Event of
Default to exist with respect to Party B except that Paragraph 7(i)
will apply to Party B solely in respect of Party B's obligations
under Paragraph 3(b) of the Credit Support Annex. Notwithstanding
anything to the contrary in Paragraph 7, 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 only be an
Event of Default if (A) a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has
occurred and been continuing for 30 or more Local Business Days, (B)
an S&P Required Ratings Downgrade Event has occurred and been
continuing for 10 or more Local Business Days, or (C) a Fitch
Required Ratings Downgrade Event has occurred and been continuing
for 30 or more days.
(vi) Expenses. Notwithstanding anything to the contrary in Paragraph 10,
the Pledgor will be responsible for, and will reimburse the Secured
Party for, all transfer and other taxes and other costs involved in
any Transfer of Eligible Collateral.
(vii) Withholding. Paragraph 6(d)(ii) is hereby amended by inserting
immediately after "the Interest Amount" in the fourth line thereof
the words "less any applicable withholding taxes."
(viii) Additional Definitions. As used in this Annex:
"Exposure" has the meaning specified in Paragraph 12, except that
(1) after the word "Agreement" the words "(assuming, for this
purpose only, that Part 1(f)(i)(A)-(E) of the Schedule is deleted)"
shall be inserted and (2) at the end of the definition of Exposure,
the words "with terms that are, in all material respects, no less
beneficial for Party B than those of this Agreement" shall be added.
"Fitch Approved Ratings Downgrade Event" means that no Relevant
Entity has credit ratings from Fitch at least equal to the Fitch
Approved Ratings Threshold.
"Fitch Credit Support Amount" means, for any Valuation Date, the
excess, if any, of
(I) (A) for any Valuation Date on which a Fitch Approved Ratings
Downgrade Event has occurred and been continuing for at
least 30 days, an amount equal to the sum of (1) 100.0%
of the Secured Party's Exposure for such Valuation Date
and (2) the product of the Fitch Volatility Cushion for
each Transaction to which this Annex relates and the
Notional Amount of each such Transaction for the
Calculation Period which includes such Valuation Date,
or
(B) for any other Valuation Date, zero, over
(II) the Threshold for Party A for such Valuation Date.
"Fitch Valuation Percentage" means, for any Valuation Date and each
item of Eligible Collateral, means, with respect to a Valuation Date
and each item of Eligible Collateral, the corresponding percentage
for such Eligible Collateral in the column headed "Fitch Valuation
Percentage".
"Fitch Value" means, on any date and with respect to any Eligible
Collateral other than Cash, the product of (x) the bid price
obtained by the Valuation Agent for such Eligible Collateral and (y)
the Fitch Valuation Percentage for such Eligible Collateral set
forth in paragraph 13(b)(ii). The Fitch Value of Cash will be the
amount of such Cash.
"Fitch Volatility Cushion" means, for any Transaction, the related
percentage set forth in the following table.
The higher of the Fitch Remaining Weighted Average Maturity
credit rating of (i) Party (years)
A and (ii) the Credit
Support Provider of
Party A, if applicable 1 2 3 4 5 6 7 8
At least "AA-" 0.8% 1.7% 2.5% 3.3% 4.0% 4.7% 5.3% 5.9%
"A+/A" 0.6% 1.2% 1.8% 2.3% 2.8% 3.3% 3.8% 4.2%
"A-/BBB+" or lower 0.5% 1.0% 1.6% 2.0% 2.5% 2.9% 3.3% 3.6%
The higher of the Fitch Remaining Weighted Average Maturity
credit rating of (i) Party (years)
A and (ii) the Credit
Support Provider of
Party A, if applicable 9 10 11 12 13 14 Greater than or
equal to 15
At least "AA-" 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5%
"A+/A" 4.6% 5.0% 5.3% 5.7% 6.0% 6.4% 6.7%
"A-/BBB+" or lower 4.0% 4.3% 4.7% 5.0% 5.3% 5.6% 5.9%
"Local Business Day" means, for purposes of this Annex: any day on
which (A) commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in New York and
the location of Party A, Party B and any Custodian, and (B) in
relation to a Transfer of Eligible Collateral, any day on which the
clearance system agreed between the parties for the delivery of
Eligible Collateral is open for acceptance and execution of
settlement instructions (or in the case of a Transfer of Cash or
other Eligible Collateral for which delivery is contemplated by
other means a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign deposits) in New
York and the location of Party A, Party B and any Custodian.
"▇▇▇▇▇'▇ Credit Support Amount" means, for any Valuation Date:
(A) if the ▇▇▇▇▇'▇ Threshold for such Valuation Date is zero and it
is not the case that a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has
occurred and been continuing for at least 30 Local Business Days, an
amount equal to the greater of (x) zero and (y) the sum of the
Secured Party's Exposure and the aggregate of ▇▇▇▇▇'▇ First Trigger
Additional Amounts for each Transaction and such Valuation Date;
(B) if a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and
been continuing for at least 30 Local Business Days, an amount equal
to the greatest of (x) zero, (y) the aggregate amount of the Next
Payments for each Transaction and such Valuation Date, and (z) the
sum of the Secured Party's Exposure and the aggregate of ▇▇▇▇▇'▇
Second Trigger Additional Amounts for each Transaction and such
Valuation Date; or
(C) if the ▇▇▇▇▇'▇ Threshold for such Valuation Date is infinity,
zero.
"▇▇▇▇▇'▇ First Trigger Additional Amount" means, for any Valuation
Date and any Transaction, the product of (i) the applicable ▇▇▇▇▇'▇
First Trigger Factor set forth in Table 1, (ii) the Scale Factor, if
any, for such Transaction, or, if no Scale Factor is applicable for
such Transaction, one, and (iii) the Notional Amount for such
Transaction for the Calculation Period for such Transaction (each as
defined in the related Confirmation) which includes such Valuation
Date.
"▇▇▇▇▇'▇ First Trigger Downgrade Event" means that no Relevant
Entity has credit ratings from ▇▇▇▇▇'▇ at least equal to the ▇▇▇▇▇'▇
First Trigger Ratings Threshold.
"▇▇▇▇▇'▇ Second Trigger Additional Amount" means, for any Valuation
Date and any Transaction,
(A) if such Transaction is not a Transaction-Specific Hedge, the
product of (i) the applicable ▇▇▇▇▇'▇ Second Trigger Factor set
forth in Table 2, (ii) the Scale Factor, if any, for such
Transaction, or, if no Scale Factor is applicable for such
Transaction, one, and (iii) the Notional Amount for such Transaction
for the Calculation Period for such Transaction (each as defined in
the related Confirmation) which includes such Valuation Date; or
(B) if such Transaction is a Transaction-Specific Hedge, the product
of (i) the applicable ▇▇▇▇▇'▇ Second Trigger Factor set forth in
Table 3, (ii) the Scale Factor, if any, for such Transaction, or, if
no Scale Factor is applicable for such Transaction, one, and (iii)
the Notional Amount for such Transaction for the Calculation Period
for such Transaction (each as defined in the related Confirmation)
which includes such Valuation Date;
"▇▇▇▇▇'▇ Valuation Percentage" means, with respect to a Valuation
Date and each item of Eligible Collateral, (i) if the ▇▇▇▇▇'▇
Threshold for such Valuation Date is zero and it is not the case
that a ▇▇▇▇▇'▇ Second Trigger Downgrade Event has occurred and been
continuing for at least 30 Local Business Days, the corresponding
percentage for such Eligible Collateral in the column headed
"▇▇▇▇▇'▇ First Trigger Valuation Percentage" or (ii) if a ▇▇▇▇▇'▇
Second Trigger Ratings Event has occurred and been continuing for at
least 30 Local Business Days, the corresponding percentage for such
Eligible Collateral in the column headed "▇▇▇▇▇'▇ Second Trigger
Valuation Percentage".
"▇▇▇▇▇'▇ Value" means, on any date and with respect to any Eligible
Collateral other than Cash, the product of (x) the bid price
obtained by the Valuation Agent and (y) the applicable ▇▇▇▇▇'▇
Valuation Percentage set forth in Paragraph 13(b)(ii). The ▇▇▇▇▇'▇
Value of Cash will be the amount of such Cash.
"Next Payment" means, for each Transaction and each Valuation Date,
the greater of (i) the aggregate amount of any payments due to be
made by Party A under Section 2(a) in respect of such Transaction on
the related Next Payment Date less the aggregate amount of any
payments due to be made by Party B under Section 2(a) on such Next
Payment Date (any such payments determined based on rates prevailing
on such Valuation Date) and (ii) zero.
"Next Payment Date" means, for each Transaction, the date on which
the next scheduled payment under such Transaction is due to be paid.
"S&P Approved Ratings Downgrade Event" means that no Relevant Entity
has credit ratings from S&P at least equal to the S&P Approved
Ratings Threshold.
"S&P Credit Support Amount" means, for any Valuation Date:
(A) if the S&P Threshold for such Valuation Date is zero and it is
not the case that an S&P Required Ratings Downgrade Event has
occurred and been continuing for at least 10 Local Business
Days, an amount equal to the Secured Party's Exposure;
(B) if an S&P Required Ratings Downgrade Event has occurred and
been continuing for at least 10 Local Business Days, an amount
equal to 125% of the Secured Party's Exposure; or
(C) if the S&P Threshold for such Valuation Date is infinity,
zero.
"S&P Valuation Percentage" means, with respect to a Valuation Date
and each item of Eligible Collateral, (i) if the S&P Threshold for
such Valuation Date is zero and it is not the case that a S&P
Required Ratings Downgrade Event has occurred and been continuing
for at least 10 Local Business Days, the corresponding percentage
for such Eligible Collateral in the column headed "S&P Approved
Ratings Valuation Percentage" or (ii) if an S&P Required Ratings
Downgrade Event has occurred and been continuing for at least 10
Local Business Days, the corresponding percentage for such Eligible
Collateral in the column headed "S&P Required Ratings Valuation
Percentage".
"S&P Value" means, on any date and with respect to any Eligible
Collateral, the product of (x) the bid price obtained by the
Valuation Agent for such Eligible Collateral and (y) the applicable
S&P Valuation Percentage for such Eligible Collateral set forth in
paragraph 13(b)(ii). The S&P Value of Cash will be the face amount
of such Cash.
"Transaction-Specific Hedge" means any Transaction in respect of
which (x) the notional amount is "balance guaranteed" or (y) the
notional amount for any Calculation Period (as defined in the
related Confirmation) otherwise is not a specific dollar amount that
is fixed at the inception of the Transaction.
"Valuation Percentage" shall mean, for purposes of determining the
S&P Value, ▇▇▇▇▇'▇ Value and Fitch Value with respect to any
Eligible Collateral or Posted Collateral, the applicable S&P
Valuation Percentage, ▇▇▇▇▇'▇ Valuation Percentage, or Fitch
Valuation Percentage for such Eligible Collateral or Posted
Collateral, respectively, in each case as set forth in Paragraph
13(b)(ii).
"Value" shall mean, in respect of any date, the related S&P Value,
the related ▇▇▇▇▇'▇ Value, and the related Fitch Value.
[Remainder of this page intentionally left blank]
Table 1
Remaining ▇▇▇▇▇'▇ First Trigger
Weighted Average Life Factor--Single Currency Interest ▇▇▇▇▇'▇ First Trigger
of Hedge in Years Rate ▇▇▇▇▇▇ Factor--Currency ▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------
Equal to or less than 1 0.15% 1.10%
Greater than 1 but less than or equal to
2 0.30% 1.20%
Greater than 2 but less than or equal to
3 0.40% 1.30%
Greater than 3 but less than or equal to
4 0.60% 1.40%
Greater than 4 but less than or equal to
5 0.70% 1.50%
Greater than 5 but less than or equal to
6 0.80% 1.60%
Greater than 6 but less than or equal to
7 1.00% 1.60%
Greater than 7 but less than or equal to
8 1.10% 1.70%
Greater than 8 but less than or equal to
9 1.20% 1.80%
Greater than 9 but less than or equal to
10 1.30% 1.90%
Greater than 10 but less than or equal
to 11 1.40% 1.90%
Greater than 11 but less than or equal
to 12 1.50% 2.00%
Greater than 12 but less than or equal
to 13 1.60% 2.10%
Greater than 13 but less than or equal
to 14 1.70% 2.10%
Greater than 14 but less than or equal
to 15 1.80% 2.20%
Greater than 15 but less than or equal
to 16 1.90% 2.30%
Greater than 16 but less than or equal
to 17 2.00% 2.30%
Greater than 17 but less than or equal
to 18 2.00% 2.40%
Greater than 18 but less than or equal
to 19 2.00% 2.40%
Greater than 19 but less than or equal
to 20 2.00% 2.50%
Greater than 20 but less than or equal
to 21 2.00% 2.50%
Greater than 21 but less than or equal
to 22 2.00% 2.50%
Greater than 22 but less than or equal
to 23 2.00% 2.50%
Greater than 23 but less than or equal
to 24 2.00% 2.50%
Greater than 24 but less than or equal
to 25 2.00% 2.50%
Greater than 25 but less than or equal
to 26 2.00% 2.50%
Greater than 26 but less than or equal
to 27 2.00% 2.50%
Greater than 27 but less than or equal
to 28 2.00% 2.50%
Greater than 28 but less than or equal
to 29 2.00% 2.50%
Greater than 29 2.00% 2.50%
Table 2
Remaining ▇▇▇▇▇'▇ Second Trigger
Weighted Average Life Factor--Single Currency Interest ▇▇▇▇▇'▇ Second Trigger
of Hedge in Years Rate Swaps Factor--Currency Swaps
-------------------------------------------------------------------------------------------------------
Equal to or less than 1 0.50% 6.10%
Greater than 1 but less than or equal 1.00% 6.30%
to 2
Greater than 2 but less than or equal 1.50% 6.40%
to 3
Greater than 3 but less than or equal 1.90% 6.60%
to 4
Greater than 4 but less than or equal 2.40% 6.70%
to 5
Greater than 5 but less than or equal 2.80% 6.80%
to 6
Greater than 6 but less than or equal 3.20% 7.00%
to 7
Greater than 7 but less than or equal 3.60% 7.10%
to 8
Greater than 8 but less than or equal 4.00% 7.20%
to 9
Greater than 9 but less than or equal 4.40% 7.30%
to 10
Greater than 10 but less than or 4.70% 7.40%
equal to 11
Greater than 11 but less than or 5.00% 7.50%
equal to 12
Greater than 12 but less than or 5.40% 7.60%
equal to 13
Greater than 13 but less than or 5.70% 7.70%
equal to 14
Greater than 14 but less than or 6.00% 7.80%
equal to 15
Greater than 15 but less than or 6.30% 7.90%
equal to 16
Greater than 16 but less than or 6.60% 8.00%
equal to 17
Greater than 17 but less than or 6.90% 8.10%
equal to 18
Greater than 18 but less than or 7.20% 8.20%
equal to 19
Greater than 19 but less than or 7.50% 8.20%
equal to 20
Greater than 20 but less than or 7.80% 8.30%
equal to 21
Greater than 21 but less than or 8.00% 8.40%
equal to 22
Greater than 22 but less than or 8.00% 8.50%
equal to 23
Greater than 23 but less than or 8.00% 8.60%
equal to 24
Greater than 24 but less than or 8.00% 8.60%
equal to 25
Greater than 25 but less than or 8.00% 8.70%
equal to 26
Greater than 26 but less than or 8.00% 8.80%
equal to 27
Greater than 27 but less than or 8.00% 8.80%
equal to 28
Greater than 28 but less than or 8.00% 8.90%
equal to 29
Greater than 29 8.00% 9.00%
Table 3
Remaining ▇▇▇▇▇'▇ Second Trigger ▇▇▇▇▇'▇ Second Trigger
Weighted Average Life Factor--Single Currency Factor--Currency ▇▇▇▇▇▇
of Hedge in Years Interest Rate ▇▇▇▇▇▇
---------------------------------------------------------------------------------------------------------
Equal to or less than 1 0.65% 6.30%
Greater than 1 but less than or equal 1.30% 6.60%
to 2
Greater than 2 but less than or equal 1.90% 6.90%
to 3
Greater than 3 but less than or equal 2.50% 7.10%
to 4
Greater than 4 but less than or equal 3.10% 7.40%
to 5
Greater than 5 but less than or equal 3.60% 7.70%
to 6
Greater than 6 but less than or equal 4.20% 7.90%
to 7
Greater than 7 but less than or equal 4.70% 8.20%
to 8
Greater than 8 but less than or equal 5.20% 8.40%
to 9
Greater than 9 but less than or equal 5.70% 8.60%
to 10
Greater than 10 but less than or equal 6.10% 8.80%
to 11
Greater than 11 but less than or equal 6.50% 9.00%
to 12
Greater than 12 but less than or equal 7.00% 9.20%
to 13
Greater than 13 but less than or equal 7.40% 9.40%
to 14
Greater than 14 but less than or equal 7.80% 9.60%
to 15
Greater than 15 but less than or equal 8.20% 9.80%
to 16
Greater than 16 but less than or equal 8.60% 10.00%
to 17
Greater than 17 but less than or equal 9.00% 10.10%
to 18
Greater than 18 but less than or equal 9.40% 10.30%
to 19
Greater than 19 but less than or equal 9.70% 10.50%
to 20
Greater than 20 but less than or equal 10.00% 10.70%
to 21
Greater than 21 but less than or equal 10.00% 10.80%
to 22
Greater than 22 but less than or equal 10.00% 11.00%
to 23
Greater than 23 but less than or equal 10.00% 11.00%
to 24
Greater than 24 but less than or equal 10.00% 11.00%
to 25
Greater than 25 but less than or equal 10.00% 11.00%
to 26
Greater than 26 but less than or equal 10.00% 11.00%
to 27
Greater than 27 but less than or equal 10.00% 11.00%
to 28
Greater than 28 but less than or equal 10.00% 11.00%
to 29
Greater than 29 10.00% 11.00%
EXHIBIT O
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [each Custodian], [the
Servicer], [each Subservicer] and [each Subcontractor] shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria."
The responsibilities set forth herein may be amended without amending the Trust
Agreement upon mutual agreement among the applicable party requesting such
amendment and the other parties to the Agreement.
-----------------------------------------------------------------------------------------------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-------------------- --------------------------------------------------------------------- ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
General Servicing Considerations
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance Trustee
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 third Trustee
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a N/A
back-up servicer for the mortgage loans are maintained.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the N/A
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 pool assets are deposited into the appropriate Trustee
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 obligor or to Trustee
an investor are made only by authorized personnel.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows N/A
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
-------------------- --------------------------------------------------------------------- ----------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with Trustee
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured Trustee
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 unauthorized Trustee
access.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all Trustee
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 the Trustee
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 accordance Trustee
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
-------------------- --------------------------------------------------------------------- ----------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of Trustee
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 Trustee
1122(d)(3)(iv) statements.
-------------------- --------------------------------------------------------------------- ----------------------
Pool Asset Administration
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as required by Custodian
the transaction agreements or related mortgage loan documents.
-------------------- --------------------------------------------------------------------- ----------------------
Mortgage loan and related documents are safeguarded as required by Custodian
1122(d)(4)(ii) the transaction agreements
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are Trustee
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, made in N/A
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 agree with the N/A
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 obligor's N/A
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 plans, N/A
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 during the N/A
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 mortgage loans N/A
with variable rates are computed based on the related mortgage loan
documents.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow N/A
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 insurance N/A
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 payment to be N/A
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 within two N/A
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 are N/A
recognized and recorded in accordance with the transaction
agreements.
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item Trustee, if
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained applicable.
as set forth in the transaction agreements.
-------------------- --------------------------------------------------------------------- ----------------------
EXHIBIT P
Additional Form 10-D Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool Performance Information
---------------------------------------------------------- --------------------------------------------------------
Information included in the Distribution Statement Trustee
---------------------------------------------------------- --------------------------------------------------------
Any information required by 1121 which is NOT included on Depositor
the Distribution Statement
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceeding known to
be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
Issuing Entity Trustee
Depositor
---------------------------------------------------------- --------------------------------------------------------
Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
Sponsors Depositor
---------------------------------------------------------- --------------------------------------------------------
1110(b) Originator N/A
---------------------------------------------------------- --------------------------------------------------------
Any 1108(a)(2) Servicer (other than the Trustee) N/A
---------------------------------------------------------- --------------------------------------------------------
Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds Depositor
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsors,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales and
use of proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if securities
were not registered.
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Trustee
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Trustee
Holders
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Assets N/A
Item 1112(b) - Significant Obligor Financial Information*
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
Item 1115(b) - Derivative Counterparty Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information
Disclose any information required to be reported on Form Any party to the Agreement responsible for the
8-K during the period covered by the Form 10-D but not applicable Form 8-K Disclosure item
reported
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------- --------------------------------------------------------
Distribution Statement to Certificateholders Trustee
---------------------------------------------------------- --------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
---------------------------------------------------------- --------------------------------------------------------
EXHIBIT Q
Additional Form 10-K Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information Any party to this Agreement responsible for disclosure
Disclose any information required to be reported on Form items on Form 8-K
8-K during the fourth quarter covered by the Form 10-K
but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules Trustee
Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1112(b): Significant Obligors of Pool Assets
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Financial Information* N/A
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-K
if updated information is required pursuant to
Item 1112(b).
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement Provider
Financial Information
---------------------------------------------------------- --------------------------------------------------------
Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
* This information need only be reported on the Form
10-K if updated information is required pursuant to the
Item.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
---------------------------------------------------------- --------------------------------------------------------
Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
* This information need only be reported on the Form
10-K if updated information is required pursuant to the
Item.
---------------------------------------------------------- --------------------------------------------------------
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 proceeding known to
be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
Issuing Entity Trustee and Depositor
---------------------------------------------------------- --------------------------------------------------------
Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
Sponsors Depositor
---------------------------------------------------------- --------------------------------------------------------
Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1108(a)(2) Servicer (other than the Servicer or Servicer
Trustee)
---------------------------------------------------------- --------------------------------------------------------
Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1119: Affiliations and Relationships
---------------------------------------------------------- --------------------------------------------------------
Whether (a) the Sponsors (Seller), Depositor or Issuing Depositor as to (a)
Entity is an affiliate of the following parties, and (b) Custodian as to (a)
to the extent known and material, any of the following
parties are affiliated with one another:
---------------------------------------------------------- --------------------------------------------------------
Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
Trustee Trustee as to (a)
---------------------------------------------------------- --------------------------------------------------------
Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
Any 1110 Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1112(b) Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1114 Credit Enhancement Provider Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1115 Derivative Counterparty Provider Depositor
---------------------------------------------------------- --------------------------------------------------------
Any other 1101(d)(1) material party Depositor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in
an arm's length transaction between (a) the Sponsors
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
---------------------------------------------------------- --------------------------------------------------------
Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
Trustee Depositor
---------------------------------------------------------- --------------------------------------------------------
Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
Any 1110 Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1112(b) Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1114 Credit Enhancement Provider Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1115 Derivative Counterparty Provider Depositor
---------------------------------------------------------- --------------------------------------------------------
Any other 1101(d)(1) material party Depositor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any specific relationships involving Depositor as to (a)
the transaction or the pool assets between (a) the
Sponsors (Seller), Depositor or Issuing Entity on the
one hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
---------------------------------------------------------- --------------------------------------------------------
Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
Trustee Depositor
---------------------------------------------------------- --------------------------------------------------------
Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
Any 1110 Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1112(b) Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1114 Credit Enhancement Provider Depositor
---------------------------------------------------------- --------------------------------------------------------
Any 1115 Derivative Counterparty Provider Depositor
---------------------------------------------------------- --------------------------------------------------------
Any other 1101(d)(1) material party Depositor
---------------------------------------------------------- --------------------------------------------------------
EXHIBIT R
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
---------------------------------------------------------- --------------------------------------------------------
Item 1.01- Entry into a Material Definitive Agreement The party to this Agreement entering into such
material definitive agreement
Disclosure is required regarding entry into or amendment
of any definitive agreement that is material to the
securitization, even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
---------------------------------------------------------- --------------------------------------------------------
Item 1.02- Termination of a Material Definitive Agreement The party to this Agreement requesting termination of
a material definitive agreement
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance with
its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 1.03- Bankruptcy or Receivership Depositor
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
---------------------------------------------------------- --------------------------------------------------------
Sponsors (Seller) Depositor
---------------------------------------------------------- --------------------------------------------------------
Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
Credit Enhancer (10% or more) Depositor
---------------------------------------------------------- --------------------------------------------------------
Derivative Counterparty Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Increase Depositor
a Direct Financial Obligation or an Obligation under an Trustee
Off-Balance Sheet Arrangement
Includes an early amortization, performance trigger or
other event, including event of default, that would
materially alter the payment priority/distribution of
cash flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the monthly statements
to the certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Trustee/Depositor
Holders
Disclosure is required of any material modification to
documents defining the rights of Certificateholders,
including the Trust Agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation or Depositor
Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to the
governing documents of the issuing entity."
---------------------------------------------------------- --------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 6.02- Change of Servicer or Trustee Depositor /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 Depositor
servicer is also required.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new Trustee is also required. Trustee
---------------------------------------------------------- --------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor/Trustee
Support
Covers termination of any enhancement in manner other
than by its terms, the addition of an enhancement, or a
material change in the enhancement provided. Applies to
external credit enhancements as well as derivatives.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new enhancement provider is Depositor
also required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution 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 required Depositor
to be disclosed under Regulation AB as a result of the
foregoing, provide the information called for in Items
1108 and 1110 respectively.
---------------------------------------------------------- --------------------------------------------------------
Item 7.01- Reg FD Disclosure 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 Party responsible for reporting/disclosing the
financial statement or exhibit
---------------------------------------------------------- --------------------------------------------------------
EXHIBIT S
ADDITIONAL DISCLOSURE NOTIFICATION
BCAP LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [_________]
**SEND VIA EMAIL TO ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇ AND VIA OVERNIGHT MAIL TO THE
ADDRESS IMMEDIATELY BELOW
Deutsche Bank National Trust Company, as trustee
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇
Attn.: Trust & Securities Services- BCAP 2007-AA3
Re: RE: **Additional Form [10-D][10-K][8-K] Disclosure** Required
--------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 8.15 of the Trust Agreement, dated as of
May 1, 2007, between BCAP LLC, as depositor, ▇▇▇▇▇ Fargo Bank, N.A., as
custodian and Deutsche Bank National Trust Company, as trustee. The undersigned,
as [____], hereby notifies you that certain events have come to our attention
that [will] [may] need to be disclosed on Form [10-D][10-K][8-K].
Description of Additional Form [10-D][10-K][8-K] Disclosure:
List of any Attachments hereto to be included in the Additional Form
[10-D][10-K][8-K] Disclosure:
Any inquiries related to this notification should be directed to
[____], phone number: [____]; email address: [____].
[NAME OF PARTY],
as [role]
By:____________________________________
Name:
Title:
EXHIBIT T
REPRESENTATION LETTER
SIDE LETTER
THIS AGREEMENT, dated as of July 19, 2007 (the "Agreement") is
entered into between Barclays Bank PLC ("BBPLC") and BCAP LLC (the "Depositor").
RECITALS
WHEREAS, reference is made to the Trust Agreement, dated as of July
1, 2007 (the "Trust Agreement"), among the Depositor, Deutsche Bank National
Trust Company, as trustee (the "Trustee"), and ▇▇▇▇▇ Fargo Bank, N. A., as
custodian.
WHEREAS, pursuant to the Seller's Warranties and Servicing
Agreement, dated as of February 1, 2007, between BBPLC, as purchaser, and ▇▇▇▇▇
Fargo Bank, N. A. ("▇▇▇▇▇ Fargo"), as seller, ▇▇▇▇▇ Fargo has made
representations and warranties regarding the Mortgage Loans (as defined in the
Trust Agreement) as of the date specified therein (the "▇▇▇▇▇ Fargo Original
Sale Date").
WHEREAS, pursuant to the ▇▇▇▇ of Sale, dated as of July 19, 2007
(the "▇▇▇▇ of Sale"), between the Depositor and BPPLC, BPPLC sold the Mortgage
Loans to the Depositor.
NOW, THEREFORE, the parties hereto agree as follows:
Definitions
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Trust Agreement.
Representations and Warranties of BBPLC
With respect to the Mortgage Loans, BBPLC hereby represents to the
Depositor that, to the best of its knowledge, no event has occurred since the
applicable ▇▇▇▇▇ Fargo Original Sale Date that would render the representations
and warranties made by ▇▇▇▇▇ Fargo in paragraphs (a) through (k), (n), (q), (r),
(s) (ff), (xx) and (bbb) of Section 3.02 of the ▇▇▇▇▇ Fargo Agreement to be
untrue in any material respect as of the Closing Date.
In addition, BBPLC hereby represents to the Depositor that:
(i) No Mortgage Loan is a Mortgage Loan categorized as "High Cost"
or "Covered" pursuant to Appendix E of Standard & Poor's Glossary. No
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is governed by the Georgia Fair Lending Act.
(ii) 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 predatory and abusive lending laws.
Repurchase of Mortgage Loans
In the event of a breach by BBPLC of its representations and
warranties above that materially and adversely affects Certificateholders, BBPLC
shall repurchase each such Mortgage Loan within 60 days of the earlier of
discovery or receipt of notice of breach with respect to each such Mortgage Loan
at the Repurchase Price set forth in the Trust Agreement.
Third-Party Beneficiary
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
Trustee and its successors and assigns under the Trust Agreement shall be a
third-party beneficiary to the provisions of this Agreement, and shall be
entitled to rely upon and directly to enforce such provisions of this Agreement,
except as expressly limited by the terms hereof. Except as expressly stated
otherwise herein or in the Trust Agreement, any right of the Trustee to direct,
appoint, consent to, approve of, or take any action under this Agreement, shall
be a right exercised by the Trustee in its sole and absolute discretion.
Governing Law
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Counterparts
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all of which
counterparts shall together constitute but one and the same instrument.
Amendments
This Agreement may be amended from time to time by BBPLC and the
Depositor, with the prior written consent of the Trustee.
[SIGNATURE PAGE FOLLOWS]
Executed as of the day and year first above written.
▇▇▇▇▇▇▇ BANK PLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
BCAP LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer