ACE SECURITIES CORP. Depositor GMAC MORTGAGE, LLC Servicer WELLS FARGO BANK, NATIONAL ASSOCIATION Master Servicer and Securities Administrator HSBC BANK USA, NATIONAL ASSOCIATION Trustee POOLING AND SERVICING AGREEMENT Dated as of April 1, 2007...
ACE
SECURITIES CORP.
Depositor
GMAC
MORTGAGE, LLC
Servicer
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
Master
Servicer and Securities Administrator
HSBC
BANK
USA, NATIONAL ASSOCIATION
Trustee
Dated
as
of April 1, 2007
Asset
Backed Pass-Through Certificates
TABLE
OF
CONTENTS
|
ARTICLE
I
|
DEFINITIONS
|
6
|
|
SECTION
1.01.
|
Defined
Terms.
|
6
|
|
SECTION
1.02.
|
Allocation
of Certain Interest Shortfalls.
|
62
|
|
ARTICLE
II
|
CONVEYANCE
OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
|
64
|
|
SECTION
2.01.
|
Conveyance
of the Mortgage Loans.
|
64
|
|
SECTION
2.02.
|
Acceptance
of REMIC I by Trustee.
|
65
|
|
SECTION
2.03.
|
Repurchase
or Substitution of Mortgage Loans.
|
65
|
|
SECTION
2.04.
|
Representations
and Warranties of the Master Servicer.
|
68
|
|
SECTION
2.05.
|
Representations,
Warranties and Covenants of the Servicer.
|
70
|
|
SECTION
2.06.
|
Issuance
of the REMIC I Regular Interests and the Class R-I
Interest.
|
72
|
|
SECTION
2.07.
|
Conveyance
of the REMIC I Regular Interests; Acceptance of REMIC II and REMIC
III by
the Trustee.
|
72
|
|
SECTION
2.08.
|
Issuance
of the Residual Certificates.
|
73
|
|
SECTION
2.09.
|
Establishment
of the Trust.
|
73
|
|
SECTION
2.10.
|
Purpose
and Powers of the Trust.
|
73
|
|
SECTION
2.11.
|
Representations
and Warranties of the Trustee.
|
74
|
|
ARTICLE
III
|
ADMINISTRATION
AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
|
75
|
|
SECTION
3.01.
|
The
Servicer to Act as Servicer.
|
75
|
|
SECTION
3.02.
|
Sub-Servicing
Agreements Between the Servicer and Sub-Servicers.
|
78
|
|
SECTION
3.03.
|
Successor
Sub-Servicers.
|
80
|
|
SECTION
3.04.
|
No
Contractual Relationship Between Sub-Servicer, Subcontractor, Trustee
or
the Certificateholders.
|
80
|
|
SECTION
3.05.
|
Assumption
or Termination of Sub-Servicing Agreement by Successor
Servicer.
|
80
|
|
SECTION
3.06.
|
Collection
of Certain Mortgage Loan Payments.
|
81
|
|
SECTION
3.07.
|
Collection
of Taxes, Assessments and Similar Items; Servicing
Accounts.
|
82
|
|
SECTION
3.08.
|
Collection
Account and Distribution Account.
|
83
|
|
SECTION
3.09.
|
Withdrawals
from the Collection Account and Distribution Account.
|
85
|
|
SECTION
3.10.
|
Investment
of Funds in the Investment Accounts.
|
87
|
|
SECTION
3.11.
|
Maintenance
of Hazard Insurance, Errors and Omissions and Fidelity Coverage and
Primary Mortgage Insurance.
|
89
|
|
SECTION
3.12.
|
Enforcement
of Due-on-Sale Clauses; Assumption Agreements
|
91
|
|
SECTION
3.13.
|
Realization
Upon Defaulted Mortgage Loans.
|
92
|
|
SECTION
3.14.
|
Trustee
to Cooperate; Release of Mortgage Files.
|
96
|
|
SECTION
3.15.
|
Servicing
Compensation.
|
97
|
|
SECTION
3.16.
|
Collection
Account Statements.
|
98
|
|
SECTION
3.17.
|
Annual
Statement as to Compliance.
|
98
|
i
|
SECTION
3.18.
|
Assessments
of Compliance and Attestation Reports.
|
99
|
|
SECTION
3.19.
|
[Reserved].
|
100
|
|
SECTION
3.20.
|
Annual
Certification; Additional Information.
|
100
|
|
SECTION
3.21.
|
Access
to Certain Documentation.
|
102
|
|
SECTION
3.22.
|
Title,
Management and Disposition of REO Property.
|
102
|
|
SECTION
3.23.
|
Obligations
of the Servicer in Respect of Prepayment Interest Shortfalls; Relief
Act
Interest Shortfalls.
|
105
|
|
SECTION
3.24.
|
Obligations
of the Servicer in Respect of Mortgage Rates and Monthly
Payments.
|
105
|
|
SECTION
3.25.
|
Reserve
Fund.
|
106
|
|
SECTION
3.26.
|
Advance
Facility.
|
107
|
|
SECTION
3.27.
|
Indemnification.
|
109
|
|
ARTICLE
IV
|
ADMINISTRATION
AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER
SERVICER
|
110
|
|
SECTION
4.01.
|
Master
Servicer.
|
110
|
|
SECTION
4.02.
|
REMIC-Related
Covenants.
|
111
|
|
SECTION
4.03.
|
Monitoring
of Servicer.
|
111
|
|
SECTION
4.04.
|
Fidelity
Bond.
|
112
|
|
SECTION
4.05.
|
Power
to Act; Procedures.
|
112
|
|
SECTION
4.06.
|
Due-on-Sale
Clauses; Assumption Agreements.
|
113
|
|
SECTION
4.07.
|
Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
|
113
|
|
SECTION
4.08.
|
Standard
Hazard Insurance and Flood Insurance Policies.
|
114
|
|
SECTION
4.09.
|
Presentment
of Claims and Collection of Proceeds.
|
114
|
|
SECTION
4.10.
|
Reserved.
|
115
|
|
SECTION
4.11.
|
Trustee
to Retain Possession of Certain Insurance Policies and
Documents.
|
115
|
|
SECTION
4.12.
|
Realization
Upon Defaulted Mortgage Loans.
|
115
|
|
SECTION
4.13.
|
Compensation
for the Master Servicer.
|
115
|
|
SECTION
4.14.
|
REO
Property.
|
115
|
|
SECTION
4.15.
|
Master
Servicer Annual Statement of Compliance.
|
116
|
|
SECTION
4.16.
|
Master
Servicer Assessments of Compliance.
|
117
|
|
SECTION
4.17.
|
Master
Servicer Attestation Reports.
|
118
|
|
SECTION
4.18.
|
Annual
Certification.
|
119
|
|
SECTION
4.19.
|
Obligation
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
|
120
|
|
SECTION
4.20.
|
Prepayment
Penalty Verification.
|
120
|
|
ARTICLE
V
|
PAYMENTS
TO CERTIFICATEHOLDERS
|
122
|
|
SECTION
5.01.
|
Distributions.
|
122
|
|
SECTION
5.02.
|
Statements
to Certificateholders.
|
131
|
|
SECTION
5.03.
|
Servicer
Reports; P&I Advances.
|
135
|
|
SECTION
5.04.
|
Allocation
of Realized Losses.
|
137
|
|
SECTION
5.05.
|
Compliance
with Withholding Requirements.
|
139
|
|
SECTION
5.06.
|
Reports
Filed with Securities and Exchange Commission.
|
139
|
ii
|
SECTION
5.07.
|
Supplemental
Interest Trust.
|
144
|
|
SECTION
5.08.
|
Tax
Treatment of Swap Payments and Swap Termination Payments.
|
147
|
|
SECTION
5.09.
|
Swap
Collateral Account.
|
148
|
|
SECTION
5.10.
|
The
Policy.
|
149
|
|
SECTION
5.11.
|
Class
A Certificate Insurer Default; Termination of Class A Certificate
Insurer’s Rights.
|
151
|
|
ARTICLE
VI
|
THE
CERTIFICATES
|
152
|
|
SECTION
6.01.
|
The
Certificates.
|
152
|
|
SECTION
6.02.
|
Registration
of Transfer and Exchange of Certificates.
|
154
|
|
SECTION
6.03.
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
160
|
|
SECTION
6.04.
|
Persons
Deemed Owners.
|
160
|
|
SECTION
6.05.
|
Certain
Available Information.
|
161
|
|
ARTICLE
VII
|
THE
DEPOSITOR, THE SERVICER AND THE MASTER SERVICER
|
162
|
|
SECTION
7.01.
|
Liability
of the Depositor, the Servicer and the Master Servicer.
|
162
|
|
SECTION
7.02.
|
Merger
or Consolidation of the Depositor, the Servicer or the Master
Servicer.
|
162
|
|
SECTION
7.03.
|
Limitation
on Liability of the Depositor, the Servicer, the Master Servicer
and
Others.
|
162
|
|
SECTION
7.04.
|
Limitation
on Resignation of the Servicer.
|
164
|
|
SECTION
7.05.
|
Limitation
on Resignation of the Master Servicer.
|
165
|
|
SECTION
7.06.
|
Assignment
of Master Servicing.
|
165
|
|
SECTION
7.07.
|
Rights
of the Depositor in Respect of the Servicer and the Master
Servicer.
|
166
|
|
SECTION
7.08.
|
Duties
of the Credit Risk Manager.
|
167
|
|
SECTION
7.09.
|
Limitation
Upon Liability of the Credit Risk Manager.
|
167
|
|
SECTION
7.10.
|
Removal
of the Credit Risk Manager.
|
167
|
|
ARTICLE
VIII
|
DEFAULT
|
169
|
|
SECTION
8.01.
|
Servicer
Events of Default.
|
169
|
|
SECTION
8.02.
|
Master
Servicer to Act; Appointment of Successor.
|
174
|
|
SECTION
8.03.
|
Notification
to Certificateholders.
|
175
|
|
SECTION
8.04.
|
Waiver
of Events of Default.
|
176
|
|
ARTICLE
IX
|
CONCERNING
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
|
177
|
|
SECTION
9.01.
|
Duties
of Trustee and Securities Administrator.
|
177
|
|
SECTION
9.02.
|
Certain
Matters Affecting Trustee and Securities Administrator.
|
178
|
|
SECTION
9.03.
|
Trustee
and Securities Administrator not Liable for Certificates or Mortgage
Loans.
|
181
|
|
SECTION
9.04.
|
Trustee
and Securities Administrator May Own Certificates.
|
181
|
|
SECTION
9.05.
|
Fees
and Expenses of Trustee, Custodian and Securities
Administrator.
|
181
|
iii
|
SECTION
9.06.
|
Eligibility
Requirements for Trustee and Securities Administrator.
|
182
|
|
SECTION
9.07.
|
Resignation
and Removal of Trustee and Securities Administrator.
|
183
|
|
SECTION
9.08.
|
Successor
Trustee or Securities Administrator.
|
184
|
|
SECTION
9.09.
|
Merger
or Consolidation of Trustee or Securities Administrator.
|
185
|
|
SECTION
9.10.
|
Appointment
of Co-Trustee or Separate Trustee.
|
185
|
|
SECTION
9.11.
|
Appointment
of Office or Agency.
|
186
|
|
SECTION
9.12.
|
Representations
and Warranties.
|
186
|
|
ARTICLE
X
|
▇▇▇▇▇▇▇▇▇▇▇
|
▇▇▇
|
|
▇▇▇▇▇▇▇
▇▇.▇▇.
|
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Liquidation of All Mortgage Loans.
|
188
|
|
SECTION
10.02.
|
Additional
Termination Requirements.
|
191
|
|
ARTICLE
XI
|
REMIC
PROVISIONS
|
193
|
|
SECTION
11.01.
|
REMIC
Administration.
|
193
|
|
SECTION
11.02.
|
Prohibited
Transactions and Activities.
|
195
|
|
SECTION
11.03.
|
Indemnification.
|
196
|
|
ARTICLE
XII
|
MISCELLANEOUS
PROVISIONS
|
197
|
|
SECTION
12.01.
|
Amendment.
|
197
|
|
SECTION
12.02.
|
Recordation
of Agreement; Counterparts.
|
198
|
|
SECTION
12.03.
|
Limitation
on Rights of Certificateholders.
|
199
|
|
SECTION
12.04.
|
Governing
Law.
|
199
|
|
SECTION
12.05.
|
Notices.
|
200
|
|
SECTION
12.06.
|
Severability
of Provisions.
|
200
|
|
SECTION
12.07.
|
Notice
to Rating Agencies and the Class A Certificate
Insurer.
|
201
|
|
SECTION
12.08.
|
Article
and Section References.
|
201
|
|
SECTION
12.09.
|
Grant
of Security Interest.
|
201
|
|
SECTION
12.10.
|
Survival
of Indemnification.
|
202
|
|
SECTION
12.11.
|
Intention
of the Parties and Interpretation.
|
202
|
|
SECTION
12.12.
|
Indemnification.
|
203
|
|
SECTION
12.13.
|
Third
Party Beneficiaries.
|
203
|
iv
Exhibits
|
Exhibit
A-1
|
Form
of Class A Certificate
|
|
Exhibit
A-2
|
Form
of Class M Certificate
|
|
Exhibit
A-3
|
Form
of Class CE Certificate
|
|
Exhibit
A-4
|
Form
of Class P Certificate
|
|
Exhibit
A-5
|
Form
of Class R Certificate
|
|
Exhibit
B-1
|
Form
of Transferor Representation Letter and Form of Transferee Representation
Letter in Connection with Transfer of the Class P Certificates, Class
CE
Certificates and Residual Certificates Pursuant to Rule 144A Under
the
Securities Act
|
|
Exhibit
B-2
|
Form
of Transferor Representation Letter and Form of Transferee Representation
Letter in Connection with Transfer of the Class P Certificates, Class
CE
Certificates and Residual Certificates Pursuant to Rule 501(a) Under
the
Securities Act
|
|
Exhibit
B-3
|
Form
of Transfer Affidavit and Agreement and Form of Transferor Affidavit
in
Connection with Transfer of Residual Certificates
|
|
Exhibit
C
|
Form
of Back-Up Certification
|
|
Exhibit
D
|
Form
of Power of Attorney
|
|
Exhibit
E
|
Servicing
Criteria
|
|
Exhibit
F-1
|
Mortgage
Loan Purchase and Sale Agreement
|
|
Exhibit
F-2
|
Assignment,
Assumption and Recognition Agreement
|
|
Exhibit
G
|
Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
|
|
Exhibit
H
|
Additional
Disclosure Notification
|
|
Exhibit
I
|
Swap
Agreement
|
|
Exhibit
J
|
Financial
Guaranty Insurance Policy
|
|
Schedule
1
|
Mortgage
Loan Schedule
|
|
Schedule
2
|
Prepayment
Charge Schedule
|
|
Schedule
3
|
Servicing
Performance Standards
|
|
Schedule
4
|
Standard
File Layout - Delinquency Reporting
|
|
Schedule
5
|
Standard
File Layout - Master Servicing
|
|
Schedule
6
|
Data
Requirements of Servicing Advances Incurred Prior to Cut-off
Date
|
v
This
Pooling and Servicing Agreement, is dated and effective as of April 1, 2007,
among ACE SECURITIES CORP., as Depositor, GMAC MORTGAGE, LLC, as Servicer,
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, as Master Servicer and Securities
Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.
PRELIMINARY
STATEMENT:
The
Depositor intends to sell pass-through certificates to be issued hereunder
in
multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest of the Trust Fund created hereunder. The Trust Fund will
consist of a segregated pool of assets comprised of the Mortgage Loans and
certain other related assets subject to this Agreement.
REMIC
I
As
provided herein, the Securities Administrator will elect to treat the segregated
pool of assets consisting of the Mortgage Loans and certain other related
assets
subject to this Agreement (other than the Reserve Fund and, for the avoidance
of
doubt, the Supplemental Interest Trust and the Swap Agreement) as a REMIC
for
federal income tax purposes, and such segregated pool of assets will be
designated as “REMIC I”. The Class R-I Interest will be the sole class of
“residual interests” in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the
REMIC I
Remittance Rate, the initial Uncertificated Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible
maturity date” for each of the REMIC I Regular Interests (as defined herein).
None of the REMIC I Regular Interests will be certificated.
|
Designation
|
REMIC
I
Remittance
Rate
|
Initial
Uncertificated
Balance
|
Latest
Possible
Maturity
Date(1)
|
||||
|
I
|
Variable(2)
|
$35,045,728.95
|
April
2037
|
||||
|
I-1-A
|
Variable(2)
|
$3,992,365.43
|
April
2037
|
||||
|
I-1-B
|
Variable(2)
|
$3,992,365.43
|
April
2037
|
||||
|
I-2-A
|
Variable(2)
|
$4,339,555.89
|
April
2037
|
||||
|
I-2-B
|
Variable(2)
|
$4,339,555.89
|
April
2037
|
||||
|
I-3-A
|
Variable(2)
|
$4,668,576.79
|
April
2037
|
||||
|
I-3-B
|
Variable(2)
|
$4,668,576.79
|
April
2037
|
||||
|
I-4-A
|
Variable(2)
|
$4,976,903.33
|
April
2037
|
||||
|
I-4-B
|
Variable(2)
|
$4,976,903.33
|
April
2037
|
||||
|
I-5-A
|
Variable(2)
|
$5,262,115.59
|
April
2037
|
||||
|
I-5-B
|
Variable(2)
|
$5,262,115.59
|
April
2037
|
||||
|
I-6-A
|
Variable(2)
|
$5,521,928.85
|
April
2037
|
||||
|
I-6-B
|
Variable(2)
|
$5,521,928.85
|
April
2037
|
||||
|
I-7-A
|
Variable(2)
|
$5,754,224.06
|
April
2037
|
||||
|
I-7-B
|
Variable(2)
|
$5,754,224.06
|
April
2037
|
||||
|
I-8-A
|
Variable(2)
|
$5,956,745.71
|
April
2037
|
||||
|
I-8-B
|
Variable(2)
|
$5,956,745.71
|
April
2037
|
||||
|
I-9-A
|
Variable(2)
|
$5,705,596.61
|
April
2037
|
||||
|
I-9-B
|
Variable(2)
|
$5,705,596.61
|
April
2037
|
||||
|
I-10-A
|
Variable(2)
|
$5,450,601.53
|
April
2037
|
||||
|
I-10-B
|
Variable(2)
|
$5,450,601.53
|
April
2037
|
||||
|
I-11-A
|
Variable(2)
|
$5,206,986.19
|
April
2037
|
||||
|
I-11-B
|
Variable(2)
|
$5,206,986.19
|
April
2037
|
||||
|
I-12-A
|
Variable(2)
|
$4,974,243.30
|
April
2037
|
||||
|
I-12-B
|
Variable(2)
|
$4,974,243.30
|
April
2037
|
||||
|
I-13-A
|
Variable(2)
|
$4,751,888.22
|
April
2037
|
||||
|
I-13-B
|
Variable(2)
|
$4,751,888.22
|
April
2037
|
||||
|
Designation
|
REMIC
I
Remittance
Rate
|
Initial
Uncertificated
Balance
|
Latest
Possible
Maturity
Date(1)
|
||||
|
I-14-A
|
Variable(2)
|
$4,539,457.83
|
April
2037
|
||||
|
I-14-B
|
Variable(2)
|
$4,539,457.83
|
April
2037
|
||||
|
I-15-A
|
Variable(2)
|
$4,336,509.70
|
April
2037
|
||||
|
I-15-B
|
Variable(2)
|
$4,336,509.70
|
April
2037
|
||||
|
I-16-A
|
Variable(2)
|
$4,142,621.04
|
April
2037
|
||||
|
I-16-B
|
Variable(2)
|
$4,142,621.04
|
April
2037
|
||||
|
I-17-A
|
Variable(2)
|
$3,957,387.96
|
April
2037
|
||||
|
I-17-B
|
Variable(2)
|
$3,957,387.96
|
April
2037
|
||||
|
I-18-A
|
Variable(2)
|
$3,780,424.49
|
April
2037
|
||||
|
I-18-B
|
Variable(2)
|
$3,780,424.49
|
April
2037
|
||||
|
I-19-A
|
Variable(2)
|
$3,611,361.93
|
April
2037
|
||||
|
I-19-B
|
Variable(2)
|
$3,611,361.93
|
April
2037
|
||||
|
I-20-A
|
Variable(2)
|
$3,449,847.94
|
April
2037
|
||||
|
I-20-B
|
Variable(2)
|
$3,449,847.94
|
April
2037
|
||||
|
I-21-A
|
Variable(2)
|
$3,295,545.92
|
April
2037
|
||||
|
I-21-B
|
Variable(2)
|
$3,295,545.92
|
April
2037
|
||||
|
I-22-A
|
Variable(2)
|
$3,148,134.21
|
April
2037
|
||||
|
I-22-B
|
Variable(2)
|
$3,148,134.21
|
April
2037
|
||||
|
I-23-A
|
Variable(2)
|
$3,007,305.56
|
April
2037
|
||||
|
I-23-B
|
Variable(2)
|
$3,007,305.56
|
April
2037
|
||||
|
I-24-A
|
Variable(2)
|
$2,872,766.33
|
April
2037
|
||||
|
I-24-B
|
Variable(2)
|
$2,872,766.33
|
April
2037
|
||||
|
I-25-A
|
Variable(2)
|
$2,744,236.02
|
April
2037
|
||||
|
I-25-B
|
Variable(2)
|
$2,744,236.02
|
April
2037
|
||||
|
I-26-A
|
Variable(2)
|
$2,621,446.60
|
April
2037
|
||||
|
I-26-B
|
Variable(2)
|
$2,621,446.60
|
April
2037
|
||||
|
I-27-A
|
Variable(2)
|
$2,504,141.99
|
April
2037
|
||||
|
I-27-B
|
Variable(2)
|
$2,504,141.99
|
April
2037
|
||||
|
I-28-A
|
Variable(2)
|
$2,392,077.52
|
April
2037
|
||||
|
I-28-B
|
Variable(2)
|
$2,392,077.52
|
April
2037
|
||||
|
I-29-A
|
Variable(2)
|
$2,285,019.42
|
April
2037
|
||||
|
I-29-B
|
Variable(2)
|
$2,285,019.42
|
April
2037
|
||||
|
I-30-A
|
Variable(2)
|
$2,182,744.34
|
April
2037
|
||||
|
I-30-B
|
Variable(2)
|
$2,182,744.34
|
April
2037
|
||||
|
I-31-A
|
Variable(2)
|
$2,085,038.90
|
April
2037
|
||||
|
I-31-B
|
Variable(2)
|
$2,085,038.90
|
April
2037
|
||||
|
I-32-A
|
Variable(2)
|
$1,991,699.18
|
April
2037
|
||||
|
I-32-B
|
Variable(2)
|
$1,991,699.18
|
April
2037
|
||||
|
I-33-A
|
Variable(2)
|
$1,902,530.42
|
April
2037
|
||||
|
I-33-B
|
Variable(2)
|
$1,902,530.42
|
April
2037
|
||||
|
I-34-A
|
Variable(2)
|
$1,817,346.48
|
April
2037
|
||||
|
I-34-B
|
Variable(2)
|
$1,817,346.48
|
April
2037
|
||||
|
I-35-A
|
Variable(2)
|
$1,735,969.55
|
April
2037
|
||||
|
I-35-B
|
Variable(2)
|
$1,735,969.55
|
April
2037
|
||||
|
I-36-A
|
Variable(2)
|
$1,658,229.72
|
April
2037
|
||||
|
I-36-B
|
Variable(2)
|
$1,658,229.72
|
April
2037
|
||||
|
I-37-A
|
Variable(2)
|
$1,583,964.69
|
April
2037
|
||||
|
I-37-B
|
Variable(2)
|
$1,583,964.69
|
April
2037
|
||||
|
I-38-A
|
Variable(2)
|
$1,513,019.36
|
April
2037
|
||||
|
I-38-B
|
Variable(2)
|
$1,513,019.36
|
April
2037
|
||||
|
I-39-A
|
Variable(2)
|
$1,445,245.56
|
April
2037
|
||||
|
I-39-B
|
Variable(2)
|
$1,445,245.56
|
April
2037
|
||||
|
I-40-A
|
Variable(2)
|
$1,380,501.73
|
April
2037
|
||||
|
I-40-B
|
Variable(2)
|
$1,380,501.73
|
April
2037
|
||||
|
I-41-A
|
Variable(2)
|
$1,318,652.61
|
April
2037
|
||||
|
I-41-B
|
Variable(2)
|
$1,318,652.61
|
April
2037
|
||||
|
I-42-A
|
Variable(2)
|
$1,259,568.97
|
April
2037
|
||||
|
I-42-B
|
Variable(2)
|
$1,259,568.97
|
April
2037
|
||||
|
I-43-A
|
Variable(2)
|
$1,203,127.36
|
April
2037
|
||||
|
I-43-B
|
Variable(2)
|
$1,203,127.36
|
April
2037
|
||||
2
|
Designation
|
REMIC
I
Remittance
Rate
|
Initial
Uncertificated
Balance
|
Latest
Possible
Maturity
Date(1)
|
||||
|
I-44-A
|
Variable(2)
|
$1,149,209.81
|
April
2037
|
||||
|
I-44-B
|
Variable(2)
|
$1,149,209.81
|
April
2037
|
||||
|
I-45-A
|
Variable(2)
|
$1,097,703.65
|
April
2037
|
||||
|
I-45-B
|
Variable(2)
|
$1,097,703.65
|
April
2037
|
||||
|
I-46-A
|
Variable(2)
|
$1,048,501.17
|
April
2037
|
||||
|
I-46-B
|
Variable(2)
|
$1,048,501.17
|
April
2037
|
||||
|
I-47-A
|
Variable(2)
|
$1,001,499.51
|
April
2037
|
||||
|
I-47-B
|
Variable(2)
|
$1,001,499.51
|
April
2037
|
||||
|
I-48-A
|
Variable(2)
|
$956,600.40
|
April
2037
|
||||
|
I-48-B
|
Variable(2)
|
$956,600.40
|
April
2037
|
||||
|
I-49-A
|
Variable(2)
|
$913,709.95
|
April
2037
|
||||
|
I-49-B
|
Variable(2)
|
$913,709.95
|
April
2037
|
||||
|
I-50-A
|
Variable(2)
|
$872,738.42
|
April
2037
|
||||
|
I-50-B
|
Variable(2)
|
$872,738.42
|
April
2037
|
||||
|
I-51-A
|
Variable(2)
|
$833,600.12
|
April
2037
|
||||
|
I-51-B
|
Variable(2)
|
$833,600.12
|
April
2037
|
||||
|
I-52-A
|
Variable(2)
|
$796,213.16
|
April
2037
|
||||
|
I-52-B
|
Variable(2)
|
$796,213.16
|
April
2037
|
||||
|
I-53-A
|
Variable(2)
|
$16,904,069.04
|
April
2037
|
||||
|
I-53-B
|
Variable(2)
|
$16,904,069.04
|
April
2037
|
||||
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date immediately following the maturity date for the
Mortgage
Loan with the latest maturity date has been designated as the “latest
possible maturity date” for each REMIC I Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “REMIC I Remittance Rate”
herein.
|
3
REMIC
II
As
provided herein, the Securities Administrator will elect to treat the segregated
pool of assets consisting of the REMIC I Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as “REMIC II.” The Class R-II Interest will evidence the sole class
of “residual interests” in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the REMIC II Remittance
Rate, the initial aggregate Uncertificated Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible
maturity date” for each of the REMIC II Regular Interests. None of the REMIC II
Regular Interests will be certificated.
|
Designation
|
REMIC
II
Remittance
Rate
|
Initial
Uncertificated
Balance
|
Latest
Possible
Maturity
Date (1)
|
|
AA
|
Variable(2)
|
$363,431,656.37
|
April
2037
|
|
A
|
Variable(2)
|
$3,170,750.00
|
April
2037
|
|
M-1
|
Variable(2)
|
$72,320.00
|
April
2037
|
|
M-2
|
Variable(2)
|
$114,960.00
|
April
2037
|
|
M-3
|
Variable(2)
|
$148,340.00
|
April
2037
|
|
M-4
|
Variable(2)
|
$166,890.00
|
April
2037
|
|
ZZ
|
Variable(2)
|
$3,743,712.58
|
April
2037
|
|
P
|
Variable(2)(3)
|
$100.00
|
April
2037
|
|
IO
|
Variable(2)
|
(4)
|
April
2037
|
__________________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date immediately following the maturity date for the
Mortgage
Loan with the latest maturity date has been designated as the “latest
possible maturity date” for each REMIC II Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “REMIC II Remittance Rate”
herein.
|
|
(3)
|
REMIC
II Regular Interest P will be entitled to 100% of the Prepayment
Charges.
|
|
(4)
|
REMIC
II Regular Interest IO will not have an Uncertificated Balance,
but will
accrue interest on its Notional
Amount.
|
4
REMIC
III
As
provided herein, the Securities Administrator will elect to treat the segregated
pool of assets consisting of the REMIC II Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as “REMIC III.” The Class R-III Interest will evidence the sole class
of “residual interests” in REMIC III for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through
Rate,
the initial aggregate Certificate Principal Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible
maturity date” for the indicated Classes of Certificates.
|
Designation
|
Pass-Through
Rate
|
Initial
Aggregate Certificate Principal Balance
|
Latest
Possible
Maturity
Date
(1)
|
|
Class
A
|
Variable(2)
|
$317,075,000.00
|
April
2037
|
|
Class
M-1
|
Variable(2)
|
$7,232,000.00
|
April
2037
|
|
Class
M-2
|
Variable(2)
|
$11,496,000.00
|
April
2037
|
|
Class
M-3
|
Variable(2)
|
$14,834,000.00
|
April
2037
|
|
Class
M-4
|
Variable(2)
|
$16,689,000.00
|
April
2037
|
|
Class
P
|
N/A(3)
|
$100.00
|
April
2037
|
|
Class
CE
|
(4)
|
$3,522,628.95
|
April
2037
|
|
Class
IO Interest
|
(5)
|
(5)
|
April
2037
|
__________________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date immediately following the maturity date for
the Mortgage
Loan with the latest maturity date has been designated as the
“latest
possible maturity date” for each Class of
Certificates.
|
|
(2)
|
Calculated
in accordance with the definition of “Pass-Through Rate”
herein.
|
|
(3)
|
The
Class P Certificates will not accrue
interest.
|
|
(4)
|
The
Class CE Certificates will accrue interest at their variable
Pass-Through
Rate on the Notional Amount of the Class CE Certificates outstanding
from
time to time which shall equal the Uncertificated Balance of
the REMIC II
Regular Interests (other than REMIC II Regular Interest P). The
Class CE
Certificates will not accrue interest on their Certificate Principal
Balance.
|
|
(5)
|
The
Class IO Interest will not have a Pass-Through Rate or a Certificate
Principal Balance, but will be entitled to 100% of amounts distributed
on
REMIC II Regular Interest IO.
|
The
Mortgage Loans had an aggregate Scheduled Principal Balance as of the Cut-off
Date, after deducting all Monthly Payments due on or before the Cut-off Date,
of
$370,848,728.95.
5
In
consideration of the mutual agreements herein contained, the Depositor, the
Servicer, the Master Servicer, the Securities Administrator and the Trustee
agree as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Defined
Terms.
Whenever
used in this Agreement, including, without limitation, in the Preliminary
Statement hereto, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless otherwise
specified, all calculations described herein shall be made on the basis of
a
360-day year consisting of twelve 30-day months.
“Accepted
Master Servicing Practices”:
With
respect to any Mortgage Loan, as applicable, either (x) those customary mortgage
master servicing practices of prudent mortgage servicing institutions that
master service mortgage loans of the same type and quality as such Mortgage
Loan
in the jurisdiction where the related Mortgaged Property is located, to the
extent applicable to the Master Servicer (except in its capacity as successor
to
the Servicer), or (y) as provided in Section 3.01 hereof, but in no event
below
the standard set forth in clause (x).
“Accepted
Servicing Practices”:
As
defined in Section 3.01.
“Account”:
The
Collection Account and the Distribution Account as the context may
require.
“Accrued
Certificate Interest”:
With
respect to any Class A Certificate, Mezzanine Certificate, Class CE Certificate
and each Distribution Date, interest accrued during the related Interest
Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution
Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount in the case of
the
Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates are not entitled to distributions
in
respect of interest and, accordingly, will not accrue interest. All
distributions of interest on the Class A Certificates and the Mezzanine
Certificates will be calculated on the basis of a 360-day year and the actual
number of days in the applicable Interest Accrual Period. All distributions
of
interest on the Class CE Certificates will be based on a 360-day year consisting
of twelve 30-day months. Accrued Certificate Interest with respect to each
Distribution Date, as to any Class A Certificate, Mezzanine Certificate or
Class
CE Certificate shall be reduced by an amount equal to the portion allocable
to
such Certificate pursuant to Section 1.02 hereof, if any, of the sum of (a)
the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to
the extent not covered by payments pursuant to Section 3.23 or Section 4.19
of
this Agreement and (b) the aggregate amount of any Relief Act Interest
Shortfall, if any, for such Distribution Date. In addition, Accrued Certificate
Interest with respect to each Distribution Date, as to any Class CE Certificate,
shall be reduced by an amount equal to the portion allocable to such Class
CE
Certificate of Realized Losses, if any, pursuant to Section 1.02 and Section
5.04 hereof.
6
“Additional
Disclosure Notification”:
Has
the meaning set forth in Section 5.06(a).
“Additional
Form 10-D Disclosure”:
Has
the meaning set forth in Section 5.06(a) of this Agreement.
“Additional
Form 10-K Disclosure”:
Has
the meaning set forth in Section 5.06(d) of this Agreement.
“Additional
Servicer”:
Means
each affiliate of the Servicer that Services any of the Mortgage Loans and
each
Person who is not an affiliate of the Servicer. For clarification purposes,
the
Master Servicer and the Securities Administrator are Additional
Servicers.
“Administration
Fees”:
The
sum of (i) the Servicing Fee, (ii) the Master Servicing Fee and (iii) the
Credit
Risk Management Fee.
“Administration
Fee Rate”:
The
sum of (i) the Servicing Fee Rate, (ii) the Master Servicing Fee Rate and
(iii)
the Credit Risk Management Fee Rate.
“Advance
Facility”:
As
defined in Section 3.26(a).
“Advance
Financing Person”:
As
defined in Section 3.26(a).
“Advance
Reimbursement Amounts”:
As
defined in Section 3.26(b).
“Affiliate”:
With
respect to any specified Person, any other Person controlling or controlled
by
or under common control with such specified Person. For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
“Aggregate
Loss Severity Percentage”:
With
respect to any Distribution Date, the percentage equivalent of a fraction,
the
numerator of which is the aggregate amount of Realized Losses incurred on
any
Mortgage Loans from the Cut-off Date to the last day of the preceding calendar
month and the denominator of which is the aggregate principal balance of
such
Mortgage Loans immediately prior to the liquidation of such Mortgage
Loans.
“Agreement”:
This
Pooling and Servicing Agreement, including all exhibits and schedules hereto
and
all amendments hereof and supplements hereto.
“Allocated
Realized Loss Amount”:
With
respect to any Class of Mezzanine Certificates and any Distribution Date,
an
amount equal to the sum of any Realized Loss allocated to that Class of
Certificates on the Distribution Date and any Allocated Realized Loss Amount
for
that Class remaining unpaid from the previous Distribution Date.
“Amounts
Held for Future Distribution”:
As to
any Distribution Date, the aggregate amount held in the Collection Account
at
the close of business on the immediately preceding Determination Date on
account
of (i) all Monthly Payments or portions thereof received in respect of the
Mortgage Loans due after the related Due Period and (ii) Principal Prepayments
and Liquidation Proceeds received in respect of such Mortgage Loans after
the
last day of the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Mortgage Loans during a period subsequent
to
the related Prepayment Period).
7
“Ancillary
Income”:
All
income derived from the Mortgage Loans, other than Servicing Fees and Prepayment
Charges, including but not limited to, late charges, fees received with respect
to checks or bank drafts returned by the related bank for non sufficient
funds,
assumption fees, optional insurance, administrative fees and all other
incidental fees and charges.
“Assignment”:
An
assignment of Mortgage, notice of transfer or equivalent instrument, in
recordable form, which is sufficient under the laws of the jurisdiction where
the related Mortgaged Property is located to reflect of record the sale and
assignment of the Mortgage, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law.
“Assignment
Agreement”:
The
Assignment, Assumption and Recognition Agreement, dated as of May 15, 2007,
among the Interim Seller as assignor, the Depositor as assignee, the Sponsor
and
the Master Servicer, and acknowledged and agreed to by the Guarantor evidencing
the assignment of the Mortgage Loan Purchase Agreement from the Interim Seller
to the Depositor, a copy of which is attached hereto as Exhibit F-2.
“Authorized
Officers”:
A
managing director of the whole loan trading desk and a managing director
in
global markets.
“Available
Distribution Amount”:
With
respect to any Distribution Date, an amount equal to (1) the sum of (a) the
aggregate of the amounts on deposit in the Collection Account and the
Distribution Account as of the close of business on the Servicer Remittance
Date, (b) the aggregate of any amounts deposited in the Distribution Account
by
the Servicer or the Master Servicer in respect of Prepayment Interest Shortfalls
for such Distribution Date pursuant to Section 3.23 or Section 4.19 of this
Agreement, (c) the aggregate of any P&I Advances for such Distribution Date
made by the Servicer pursuant to Section 5.03 of this Agreement and (d) the
aggregate of any P&I Advances made by a successor to the Servicer (including
the Master Servicer) for such Distribution Date pursuant to Section 8.02
of this
Agreement, reduced (to not less than zero) by (2) the portion of the amount
described in clause (1)(a) above that represents (i) Amounts Held for Future
Distribution, (ii) Liquidation Proceeds, Insurance Proceeds and Subsequent
Recoveries received in respect of the Mortgage Loans after the related
Prepayment Period, (iii) amounts reimbursable or payable to the Depositor,
the
Servicer, the Trustee, the Master Servicer, the Securities Administrator
or the
Custodian pursuant to Section 3.09 or 9.05 of this Agreement or otherwise
payable in respect of Extraordinary Trust Fund Expenses, (iv) the Credit
Risk
Management Fee, (v) amounts deposited in the Collection Account or the
Distribution Account in error, (vi) the amount of any Prepayment Charges
collected by the Servicer in connection with the Principal Prepayment of
any of
the Mortgage Loans and (vii) amounts reimbursable to a successor Servicer
(including the Master Servicer) pursuant to Section 8.02 of this Agreement.
8
“Avoided
Payment”:
With
respect to the Insured Certificates, any payment of principal or interest
previously distributed to a holder of an Insured Certificate by or on behalf
of
the Trust that is voided as a result of any Insolvency Proceeding and which
is
returned by a holder of Insured Certificates as required by a final,
nonappealable order of a court of competent jurisdiction.
“Balloon
Mortgage Loan”:
A
Mortgage Loan that provides for the payment of the unamortized principal
balance
of such Mortgage Loan in a single payment, that is substantially greater
than
the preceding monthly payment at the maturity of such Mortgage
Loan.
“Balloon
Payment”:
A
payment of the unamortized principal balance of a Mortgage Loan in a single
payment, that is substantially greater than the preceding Monthly Payment
at the
maturity of such Mortgage Loan.
“Bankruptcy
Code”:
The
Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as
amended.
“Book-Entry
Certificates”:
The
Class A Certificates and Mezzanine Certificates for so long as the Certificates
of such Class shall be registered in the name of the Depository or its
nominee.
“Book-Entry
Custodian”:
The
custodian appointed pursuant to Section 6.01.
“Business
Day”:
Any
day other than a Saturday, a Sunday or a day on which banking or savings
and
loan institutions in the States of New York, Maryland, Minnesota, Pennsylvania
or in the city in which the Corporate Trust Office of the Trustee is located,
are authorized or obligated by law or executive order to be closed.
“Cash-Out
Refinancing”:
A
Refinanced Mortgage Loan the proceeds of which are more than a nominal amount
in
excess of the principal balance of any existing first mortgage plus any
subordinate mortgage on the related Mortgaged Property and related closing
costs.
“Certificate”:
Any
one of the SunTrust Acquisition Closed-End Seconds Trust, Asset Backed
Pass-Through Certificates, Series 2007-1, Class A, Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class
M-3, Class M-4, Class P, Class CE and Class R Certificates issued under this
Agreement.
“Certificate
Factor”:
With
respect to any Class of Certificates (other than the Residual Certificates)
as
of any Distribution Date, a fraction, expressed as a decimal carried to six
places, the numerator of which is the aggregate Certificate Principal Balance
(or Notional Amount, in the case of the Class CE Certificates) of such Class
of
Certificates on such Distribution Date (after giving effect to any distributions
of principal and allocations of Realized Losses resulting in reduction of
the
Certificate Principal Balance (or Notional Amount, in the case of the Class
CE
Certificates) of such Class of Certificates to be made on such Distribution
Date), and the denominator of which is the initial aggregate Certificate
Principal Balance (or Notional Amount, in the case of the Class CE Certificates)
of such Class of Certificates as of the Closing Date.
9
“Certificate
Margin”:
With
respect to the Class A Certificates and, for purposes of the definition of
“Marker Rate”, REMIC II Regular Interest A, 0.32% in the case of each
Distribution Date through and including the Optional Termination Date and
0.64%
in the case of each Distribution Date thereafter.
With
respect to the Class M-1 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-1, 2.50% in the case of each
Distribution Date through and including the Optional Termination Date and
3.75%
in the case of each Distribution Date thereafter.
With
respect to the Class M-2 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-2, 2.50% in the case of each
Distribution Date through and including the Optional Termination Date and
3.75%
in the case of each Distribution Date thereafter.
With
respect to the Class M-3 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-3, 2.50% in the case of each
Distribution Date through and including the Optional Termination Date and
3.75%
in the case of each Distribution Date thereafter.
With
respect to the Class M-4 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-4, 2.50% in the case of each
Distribution Date through and including the Optional Termination Date and
3.75%
in the case of each Distribution Date thereafter.
“Certificateholder”
or
“Holder”:
The
Person in whose name a Certificate is registered in the Certificate Register,
except that a Disqualified Organization or a Non-United States Person shall
not
be a Holder of a Residual Certificate for any purposes hereof, and solely
for
the purposes of giving any consent pursuant to this Agreement, any Certificate
registered in the name of or beneficially owned by the Depositor, the Sponsor,
the Servicer, the Master Servicer, the Securities Administrator, the Trustee
or
any Affiliate thereof shall be deemed not to be outstanding and the Voting
Rights to which it is entitled shall not be taken into account in determining
whether the requisite percentage of Voting Rights necessary to effect any
such
consent has been obtained, except as otherwise provided in Section 12.01.
The
Trustee and the Securities Administrator may conclusively rely upon a
certificate of the Depositor, the Sponsor, the Master Servicer, the Securities
Administrator or the Servicer in determining whether a Certificate is held
by an
Affiliate thereof. All references herein to “Holders” or “Certificateholders”
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except
as
otherwise specified herein; provided, however, that the Trustee and the
Securities Administrator shall be required to recognize as a “Holder” or
“Certificateholder” only the Person in whose name a Certificate is registered in
the Certificate Register.
10
“Certificate
Owner”:
With
respect to a Book-Entry Certificate, the Person who is the beneficial owner
of
such Certificate as reflected on the books of the Depository or on the books
of
a Depository Participant or on the books of an indirect participating brokerage
firm for which a Depository Participant acts as agent.
“Certificate
Principal Balance”:
With
respect to each Class A Certificate, Mezzanine Certificate or Class P
Certificate as of any date of determination, the Certificate Principal Balance
of such Certificate on the Closing Date, minus (i) all distributions allocable
to principal made thereon prior to such date of determination, minus (ii)
Realized Losses allocated to the applicable Mezzanine Certificate, if any,
prior
to such date of determination, plus (iii) any Subsequent Recoveries added
to the
Certificate Principal Balance of such Mezzanine Certificate prior to such
date
of determination pursuant to Section 5.04. With respect to each Class CE
Certificate as of any date of determination, an amount equal to the Percentage
Interest evidenced by such Certificate times the excess, if any, of (A) the
then
aggregate Uncertificated Balances of the REMIC II Regular Interests over
(B) the
then aggregate Certificate Principal Balances of the Class A Certificates,
the
Mezzanine Certificates and the Class P Certificates then outstanding. The
aggregate initial Certificate Principal Balance of each Class of Regular
Certificates is set forth in the Preliminary Statement hereto.
“Certificate
Register”:
The
register maintained pursuant to Section 6.02.
“Certification
Parties”:
Has
the meaning set forth in Section 3.20 of this Agreement.
“Certifying
Person”:
Has
the meaning set forth in Section 3.20 of this Agreement.
“Charged
Off Loan”:
With
respect to any Distribution Date, a defaulted Mortgage Loan that the Servicer
is
required to charge off once such Mortgage Loan becomes 180 days delinquent
pursuant to Section 3.13, provided that such Mortgage Loan is not a Liquidated
Mortgage Loan.
“Class”:
Collectively, all of the Certificates bearing the same class
designation.
“Class
A Certificate”:
Any
one of the Class A Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-1 and evidencing (i) a Regular Interest in REMIC III,
(ii)
the right to receive the related Net WAC Rate Carryover Amount and (iii)
the
obligation to pay any Class IO Distribution Amount.
“Class
A Certificate Insurer”:
XL
Capital Assurance Inc.
“Class
A Principal Distribution Amount”:
With
respect to any Distribution Date on or after the Stepdown Date and on which
a
Trigger Event is not in effect, the excess of (x) the Certificate Principal
Balance of the Class A Certificates immediately prior to such Distribution
Date
over (y) the lesser of (A) the product of (i) 71.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and
(B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.
11
“Class
CE Certificate”:
Any
one of the Class CE Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-3 and evidencing (i) a Regular Interest in REMIC III,
(ii)
beneficial ownership of the Reserve Fund and (iii) beneficial ownership of
the
Supplemental Interest Trust.
“Class
IO Distribution Amount”:
As defined in Section 5.07(f) hereof. For
purposes of clarity, the Class IO Distribution Amount for any Distribution
Date
shall equal the amount payable to the Supplemental Interest Trust on such
Distribution Date in excess of the amount payable on the Class IO Interest
on
such Distribution Date, all as further provided in Section 5.07(f)
hereof.
“Class
IO Interest”:
An
uncertificated interest in the Trust Fund held by the Trustee, evidencing
a
REMIC Regular Interest in REMIC III for purposes of the REMIC
Provisions.
“Class
M-1 Certificate”:
Any
one of the Class M-1 Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-2 and evidencing (i) a Regular Interest in REMIC III,
(ii)
the right to receive the related Net WAC Rate Carryover Amount and (iii)
the
obligation to pay any Class IO Distribution Amount.
“Class
M-1 Principal Distribution Amount”:
With
respect to any Distribution Date on or after the Stepdown Date and on which
a
Trigger Event is not in effect, the excess of (x) the sum of (i) the Certificate
Principal Balance of the Class A Certificates after taking into account the
payment of the Class A Principal Distribution Amount on the Distribution
Date
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to the Distribution Date over (y) the lesser of (A) the
product of (i) 74.90% and (ii) the aggregate Stated Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period (after giving
effect
to scheduled payments of principal due during the related Due Period, to
the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections
of
principal received during the related Prepayment Period) minus the product
of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans
as of
the Cut-off Date.
“Class
M-2 Certificate”:
Any
one of the Class M-2 Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-2 and evidencing (i) a Regular Interest in REMIC III,
(ii)
the right to receive the related Net WAC Rate Carryover Amount and (iii)
the
obligation to pay any Class IO Distribution Amount.
12
“Class
M-2 Principal Distribution Amount”:
With
respect to any Distribution Date on or after the Stepdown Date and on which
a
Trigger Event is not in effect, the excess of (x) the sum of (i) the Certificate
Principal Balance of the Class A Certificates after taking into account the
payment of the Class A Principal Distribution Amount on the Distribution
Date,
(ii) the Certificate Principal Balance of the Class M-1 Certificates after
taking into account the payment of the Class M-1 Principal Distribution Amount
on the Distribution Date and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to the Distribution Date over (y)
the
lesser of (A) the product of (i) 81.10% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections
of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.
“Class
M-3 Certificate”:
Any
one of the Class M-3 Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-2 and evidencing (i) a Regular Interest in REMIC III,
(ii)
the right to receive the related Net WAC Rate Carryover Amount and (iii)
the
obligation to pay any Class IO Distribution Amount.
“Class
M-3 Principal Distribution Amount”:
With
respect to any Distribution Date on or after the Stepdown Date and on which
a
Trigger Event is not in effect, the excess of (x) the sum of (i) the Certificate
Principal Balance of the Class A Certificates after taking into account the
payment of the Class A Principal Distribution Amount on the Distribution
Date,
(ii) the Certificate Principal Balance of the Class M-1 Certificates after
taking into account the payment of the Class M-1 Principal Distribution Amount
on the Distribution Date, (iii) the Certificate Principal Balance of the
Class
M-2 Certificates after taking into account the payment of the Class M-2
Principal Distribution Amount on the Distribution Date and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to the
Distribution Date over (y) the lesser of (A) the product of (i) 89.10% and
(ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans
as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
“Class
M-4 Certificate”:
Any
one of the Class M-4 Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-2 and evidencing (i) a Regular Interest in REMIC III,
(ii)
the right to receive the related Net WAC Rate Carryover Amount and (iii)
the
obligation to pay any Class IO Distribution Amount.
13
“Class
M-4 Principal Distribution Amount”:
With
respect to any Distribution Date on or after the Stepdown Date and on which
a
Trigger Event is not in effect, the excess of (x) the sum of (i) the Certificate
Principal Balance of the Class A Certificates after taking into account the
payment of the Class A Principal Distribution Amount on the Distribution
Date,
(ii) the Certificate Principal Balance of the Class M-1 Certificates after
taking into account the payment of the Class M-1 Principal Distribution Amount
on the Distribution Date, (iii) the Certificate Principal Balance of the
Class
M-2 Certificates after taking into account the payment of the Class M-2
Principal Distribution Amount on the Distribution Date, (iv) the Certificate
Principal Balance of the Class M-3 Certificates after taking into account
the
payment of the Class M-3 Principal Distribution Amount on the Distribution
Date
and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to the Distribution Date over (y) the lesser of (A) the
product of (i) 98.10% and (ii) the aggregate Stated Principal Balance of
the
Mortgage Loans as of the last day of the related Due Period (after giving
effect
to scheduled payments of principal due during the related Due Period, to
the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections
of
principal received during the related Prepayment Period) minus the product
of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans
as of
the Cut-off Date.
“Class
P Certificate”:
Any
one of the Class P Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-4 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.
“Class
R Certificates”:
Any
one of the Class R Certificates executed and authenticated by the Securities
Administrator and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-5, and evidencing the Class R-I Interest, the Class R-II
Interest and the Class R-III Interest.
“Class
R-I Interest”:
The
uncertificated residual interest in REMIC I.
“Class
R-II Interest”:
The
uncertificated residual interest in REMIC II.
“Class
R-III Interest”:
The
uncertificated residual interest in REMIC III.
“Closing
Date”:
May 15, 2007.
“Code”:
The
Internal Revenue Code of 1986, as amended from time to time.
“Collection
Account”:
The
separate account or accounts created and maintained, or caused to be created
and
maintained, by the Servicer pursuant to Section 3.08(a) of this Agreement
for
the benefit of the Certificateholders, which shall be entitled “GMAC Mortgage,
LLC, as Servicer for HSBC Bank USA, National Association as Trustee, in trust
for the registered holders of SunTrust Acquisition Closed-End Seconds Trust,
Series ▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates. The Collection Account
must be an Eligible Account.
14
“Combined
Loan-to-Value Ratio”:
With
respect to any Mortgage Loan and as of any date of determination, the fraction
(expressed as a percentage) the numerator of which is the sum of (i) original
principal balance of the related Mortgage Loan at such date of determination
and
(ii) the unpaid principal balance of the related First Mortgage Loan as of
the
date of origination of that Mortgage Loan and the denominator of which is
(a)
with respect to a Refinanced Mortgage Loan, the Value of the related Mortgaged
Property at origination and (b) with respect to all other Mortgage Loans,
the
lesser of (i) the Value of the related Mortgage Property at origination and
(ii)
the purchase price of the related Mortgaged Property.
“Commission”:
The
Securities and Exchange Commission.
“Controlling
Person”:
Means,
with respect to any Person, any other Person who “controls” such Person within
the meaning of the Securities Act.
“Corporate
Trust Office”:
The
principal corporate trust office of the Trustee or the Securities Administrator,
as the case may be, at which, at any particular time, its corporate trust
business in connection with this Agreement shall be administered, which office
at the date of the execution of this instrument is located at (i) with respect
to the Trustee, HSBC Bank USA, National Association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: CTLA-Structured Finance/STACS 2007-1, or at such
other address as the Trustee may designate from time to time by notice to
the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Servicer, or (ii) with respect to the Securities
Administrator, (A) for purposes of Certificate transfers and surrender, ▇▇▇▇▇
Fargo Bank, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust (STACS 2007-1),
and (B)
for all other purposes, ▇▇▇▇▇ Fargo Bank, National Association, ▇.▇. ▇▇▇
▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust (STACS 2007-1) (or for
overnight deliveries, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust (STACS 2007-1)), or at such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Servicer and
the
Trustee.
“Corresponding
Certificate”:
With
respect to each REMIC II Regular Interest, as follows:
|
REMIC
II Regular Interest
|
Class
|
|
REMIC
II Regular Interest A
|
A
|
|
REMIC
II Regular Interest M-1
|
M-1
|
|
REMIC
II Regular Interest M-2
|
M-2
|
|
REMIC
II Regular Interest M-3
|
M-3
|
|
REMIC
II Regular Interest M-4
|
M-4
|
|
REMIC
II Regular Interest P
|
P
|
15
“Credit
Enhancement Percentage”:
For
any Distribution Date, the percentage equivalent of a fraction, the numerator
of
which is the sum of the aggregate Certificate Principal Balances of the
Mezzanine Certificates and the Class CE Certificates (which includes the
Overcollateralization Amount), and the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans, calculated after taking into
account distributions of principal on the Mortgage Loans and distribution
of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date.
“Credit
Risk Management Agreements”:
The
agreements between the Credit Risk Manager and the Servicer and/or Master
Servicer, each regarding the loss mitigation and advisory services to be
provided by the Credit Risk Manager.
“Credit
Risk Management Fee”:
The
amount payable to the Credit Risk Manager on each Distribution Date as
compensation for all services rendered by it in the exercise and performance
of
any and all powers and duties of the Credit Risk Manager under the Credit
Risk
Management Agreements, which amount shall equal one twelfth of the product
of
(i) the Credit Risk Management Fee Rate multiplied by (ii) the Stated Principal
Balance of the Mortgage Loans and any related REO Properties as of the first
day
of the related Due Period.
“Credit
Risk Management Fee Rate”:
0.010%
per annum.
“Credit
Risk Manager”:
▇▇▇▇▇▇▇ Fixed Income Services Inc., a Colorado corporation and its successors
and assigns.
“Custodial
Agreement”:
The
Custodial Agreement, dated as of April 1, 2007, among the Trustee, the Custodian
and the Servicer, as may be amended or supplemented from time to time, or
any
other custodial agreement entered into after the date hereof with respect
to any
Mortgage Loan subject to this Agreement.
“Custodian”:
Deutsche Bank National Trust Company or any other custodian appointed under
any
custodial agreement entered into after the date of this Agreement.
“Cut-off
Date”:
With
respect to each Mortgage Loan, April 1, 2007. With respect to all Qualified
Substitute Mortgage Loans, their respective dates of substitution. References
herein to the “Cut-off Date,” when used with respect to more than one Mortgage
Loan, shall be to the respective Cut-off Dates for such Mortgage
Loans.
“DBRS”:
DBRS,
Inc.
“Debt
Service Reduction”:
With
respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment
for
such Mortgage Loan by a court of competent jurisdiction in a proceeding under
the Bankruptcy Code, except such a reduction resulting from a Deficient
Valuation.
“Deficiency
Amount”:
As of
any Distribution Date, the sum of the following amounts, in each case after
giving effect to distributions made on the Insured Certificates on such
Distribution Date from sources other than the Policy:
16
(i) the
excess, if any, of (A) the Interest Distribution Amount for the related Interest
Accrual Period on the Insured Certificates (calculated without regard to
any
step-up of the related Pass-Through Rate following the first Distribution
Date
following the Optional Termination Date) over (B) the Interest Remittance
Amount
allocated to pay such Interest Distribution Amount pursuant to this Agreement
from sources other than the Policy;
(ii) if
such
Distribution Date is not the Final Maturity Date, the amount, if any, by
which
the Certificate Principal Balance of the Insured Certificates (after giving
effect to all distributions to the Insured Certificates on such Distribution
Date) exceeds the aggregate principal balance of the Mortgage Loans as of
the
last day of the related Due Period; and
(iii) the
Certificate Principal Balance of the Insured Certificates on its Final Maturity
Date after giving effect to all distributions to the Insured Certificates
on
such date.
“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 Bankruptcy Code.
“Definitive
Certificates”:
As
defined in Section 6.01(b).
“Deleted
Mortgage Loan”:
A
Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage
Loan.
“Delinquency
Percentage”:
As of
the last day of the related Due Period, the percentage equivalent of a fraction,
the numerator of which is the aggregate Stated Principal Balance of all Mortgage
Loans that, using the OTS Method, are sixty (60) or more days delinquent,
are in
foreclosure, have been converted to REO Properties or have been discharged
by
reason of bankruptcy (but excluding Charged Off Loans), and the denominator
of
which is the aggregate Stated Principal Balance of the Mortgage Loans and
REO
Properties as of the last day of the previous calendar month.
“Depositor”:
ACE
Securities Corp., a Delaware corporation, or its successor in
interest.
“Depository”:
The
Depository Trust Company, or any successor Depository hereafter named. The
nominee of the initial Depository, for purposes of registering those
Certificates that are to be Book-Entry Certificates, is Cede & Co. The
Depository shall at all times be a “clearing corporation” as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York and a “clearing
agency” registered pursuant to the provisions of Section 17A of the Exchange
Act.
“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 (or, in the case of a depository
institution that is the principal subsidiary of a holding company, such holding
company has unsecured commercial paper or other short-term unsecured debt
obligations) that are rated at least A-1+ by S&P, F-1+ by Fitch and P-1 by
▇▇▇▇▇’▇ (or, if such Rating Agencies are no longer rating the Offered
Certificates, comparable ratings by any other nationally recognized statistical
rating agency then rating the Offered Certificates).
17
“Depository
Participant”:
A
broker, dealer, bank or other financial institution or other Person for whom
from time to time a Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
“Determination
Date”:
With
respect to each Distribution Date, the 15th
day of
the calendar month in which such Distribution Date occurs, or if such
15th
day is
not a Business Day, the Business Day immediately preceding such 15th
day. The
Determination Date for purposes of Article X hereof shall mean the
15th
day of
the month, or if such 15th
day is
not a Business Day, the first Business Day following such 15th
day.
“Directly
Operate”:
With
respect to any REO Property, the furnishing or rendering of services to the
tenants thereof, the management or operation of such REO Property, the holding
of such REO Property primarily for sale to customers, the performance of
any
construction work thereon or any use of such REO Property in a trade or business
conducted by REMIC I other than through an Independent Contractor; provided,
however, that the Servicer, on behalf of the Trustee, shall not be considered
to
Directly Operate an REO Property solely because the Servicer establishes
rental
terms, chooses tenants, enters into or renews leases, deals with taxes and
insurance, or makes decisions as to repairs or capital expenditures with
respect
to such REO Property.
“Disqualified
Organization”:
Any of
the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation
if
all of its activities are subject to tax and, except for ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such governmental unit), (ii)
any
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers’ cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the
Code, (v) an “electing large partnership” and (vi) any other Person so
designated by the Securities Administrator based upon an Opinion of Counsel
that
the holding of an Ownership Interest in a Residual Certificate by such Person
may cause any Trust REMIC or any Person having an Ownership Interest in any
Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but
for
the Transfer of an Ownership Interest in a Residual Certificate to such Person.
The terms “United States,” “State” and “international organization” shall have
the meanings set forth in Section 7701 of the Code or successor
provisions.
“Distribution
Account”:
The
separate trust account or accounts created and maintained by the Securities
Administrator pursuant to Section 3.08(b) in the name of the Securities
Administrator for the benefit of the Certificateholders and designated “▇▇▇▇▇
Fargo Bank, National Association, in trust for registered holders of SunTrust
Acquisition Closed-End Seconds Trust, Series 2007-1 ”. Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement. The Distribution Account must be an
Eligible Account.
18
“Distribution
Date”:
The
25th day of any month, or if such 25th day is not a Business Day, the Business
Day immediately following such 25th day, commencing in May 2007.
“Due
Date”:
With
respect to each Distribution Date, the day of the month on which the Monthly
Payment is due on a Mortgage Loan during the related Due Period, exclusive
of
any days of grace.
“Due
Period”:
With
respect to any Distribution Date, the period commencing on the second day
of the
month immediately preceding the month in which such Distribution Date occurs
and
ending on the first day of the month in which such Distribution Date
occurs.
“Eligible
Account”:
Any of
(i) an account or accounts maintained with a Depository Institution, (ii)
an
account or accounts the deposits in which are fully insured by the FDIC,
(iii) a
trust account or accounts maintained with a federal depository institution
or
state chartered depository institution acting in its fiduciary capacity or
(iv)
an account or accounts acceptable to each Rating Agency as confirmed and
approved in writing by each Rating Agency. Eligible Accounts may bear
interest.
“ERISA”:
The
Employee Retirement Income Security Act of 1974, as amended from time to
time.
“Escrow
Account”:
an
account established by the Servicer for Escrow Payments on any Mortgage
Loan.
“Escrow
Mortgage Loan”:
Any
Mortgage Loan for which the Servicer has established an Escrow Account for
items
constituting Escrow Payments.
“Escrow
Payments”:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
mortgage insurance premiums, fire and hazard insurance premiums, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage, applicable law or any other related document.
“Estate
in Real Property”:
A fee
simple estate in a parcel of land.
“Excess
Liquidation Proceeds”:
To the
extent that such amount is not required by law to be paid to the related
Mortgagor, the amount, if any, by which Liquidation Proceeds with respect
to a
liquidated Mortgage Loan exceed the sum of (i) the outstanding principal
balance
of such Mortgage Loan and accrued but unpaid interest at the related Net
Mortgage Rate through the last day of the month in which the related Liquidation
Event occurs, plus (ii) related liquidation expenses or other amounts to
which
the Servicer is entitled to be reimbursed from Liquidation Proceeds with
respect
to such liquidated Mortgage Loan pursuant to Section 3.09 of this
Agreement.
19
“Exchange
Act”:
The
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.
“Extraordinary
Trust Fund Expense”:
Any
amounts payable or reimbursable to the Trustee, the Master Servicer, the
Securities Administrator, the Custodian or any director, officer, employee
or
agent of any such Person from the Trust Fund pursuant to the terms of this
Agreement and any amounts payable from the Distribution Account in respect
of
taxes pursuant to Section 11.01(g)(v).
“▇▇▇▇▇▇
▇▇▇”:
▇▇▇▇▇▇
▇▇▇, formerly known as the Federal National Mortgage Association, or any
successor thereto.
“FDIC”:
Federal Deposit Insurance Corporation or any successor thereto.
“Final
Maturity Date”:
The
Distribution Date occurring in April 2037.
“Final
Recovery Determination”:
With
respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased by an originator, the Sponsor or
the
Terminator pursuant to or as contemplated by Section 2.03, 3.13(c) or Section
10.01), a determination made by the Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer,
in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered, which determination shall be evidenced by
a
certificate of a Servicing Officer of the Servicer delivered to the Master
Servicer and maintained in its records.
“First
Mortgage Loan”:
A
mortgage loan that is secured by a first lien on the related Mortgaged
Property.
“Fitch”:
Fitch
Ratings or any successor in interest.
“Form
8-K Disclosure Information”:
Has
the meaning set forth in Section 5.06(b) of this Agreement.
“▇▇▇▇▇▇▇
Mac”:
▇▇▇▇▇▇▇ Mac, formerly known as the Federal Home Loan Mortgage Corporation,
or
any successor thereto.
“Guarantor”:
SunTrust Bank.
“GMAC”:
GMAC
Mortgage, LLC or any successor thereto appointed hereunder in connection
with
the servicing and administration of the Mortgage Loans.
“Independent”:
When
used with respect to any accountants, a Person who is “independent” within the
meaning of Rule 2-01(B) of the Commission’s Regulation S-X. When used with
respect to any specified Person, any such Person who (a) is in fact independent
of the Depositor, the Master Servicer, the Securities Administrator, the
Servicer, the Sponsor, any originator and their respective Affiliates, (b)
does
not have any direct financial interest in or any material indirect financial
interest in the Depositor, the Master Servicer, the Securities Administrator,
the Servicer, the Sponsor, any originator or any Affiliate thereof, (c) is
not
connected with the Depositor, the Master Servicer, the Securities Administrator,
the Servicer, the Sponsor, any originator or any Affiliate thereof as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions and (d) is not a member of the immediate family
of
a Person defined on clause (b) or (c) above.
20
“Independent
Contractor”:
Either
(i) any Person (other than the Servicer) that would be an “independent
contractor” with respect to REMIC I within the meaning of Section 856(d)(3) of
the Code if REMIC I were a real estate investment trust (except that the
ownership tests set forth in that section shall be considered to be met by
any
Person that owns, directly or indirectly, 35% or more of any Class of
Certificates), so long as REMIC I does not receive or derive any income from
such Person and provided that the relationship between such Person and REMIC
I
is at arm’s length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the Trustee
has received an Opinion of Counsel to the effect that the taking of any action
in respect of any REO Property by such Person, subject to any conditions
therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as “foreclosure
property” within the meaning of Section 860G(a)(8) of the Code (determined
without regard to the exception applicable for purposes of Section 860D(a)
of
the Code), or cause any income realized in respect of such REO Property to
fail
to qualify as Rents from Real Property.
“Insolvency
Proceeding”:
The
commencement after the Closing Date of any bankruptcy, insolvency, readjustment
of debt, reorganization, marshalling of assets and liabilities or similar
proceedings by or against any person, the commencement, after the Closing
Date,
of any proceedings by or against any person for the winding up or liquidation
of
its affairs, or the consent, after the date hereof, to the appointment of
a
trustee, conservator, receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, reorganization, marshalling of assets and liabilities
or
similar proceedings of or relating to any person.
“Insurance
Agreement”:
The
Insurance and Indemnity Agreement dated as of May 15, 2007, among the Class
A Certificate Insurer, the Sponsor, the Guarantor, the Servicer, the Interim
Seller, the Depositor, the Master Servicer and the Securities
Administrator.
“Insurance
Proceeds”:
Proceeds of any title policy, hazard policy or other insurance policy, covering
a Mortgage Loan or the related Mortgaged Property, to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property
or
released to the Mortgagor or a senior lienholder in accordance with Accepted
Servicing Practices, subject to the terms and conditions of the related Mortgage
Note and Mortgage.
“Insured
Amounts”:
With
respect to any Distribution Date and the Insured Certificates, that portion
of
the Scheduled Payments that shall become due for payment but shall be unpaid
by
reason of Nonpayment on such Distribution Date (which shall be equal to the
amount of any related Deficiency Amount).
“Insured
Certificates”:
The
Class A Certificates.
21
“Insured
Payments”:
With
respect to any Distribution Date, the aggregate amount actually paid by the
Class A Certificate Insurer to the Securities Administrator in respect of
Insured Amounts for such Distribution Date.
“Insurer
Reimbursement Amount”:
As of
any Distribution Date, the sum of (x)(i) all Insured Payments and Avoided
Payments paid by the Class A Certificate Insurer, but for which the Class
A
Certificate Insurer has not been reimbursed prior to such Distribution Date,
plus (ii) interest accrued on such Insured Payments and Avoided Payments
not
previously paid calculated at the Late Payment Rate, from the date the Class
A
Certificate Insurer paid the related Insured Payments or Avoided Payments
to the
Securities Administrator or (in the case of Avoided Payments) other authorized
recipient, and (y) without duplication, (i) any amounts then due and owing
to
the Class A Certificate Insurer under the Insurance Agreement or this Agreement
but for which the Class A Certificate Insurer has not been paid or reimbursed
prior to such Distribution Date, plus (ii) interest on such amounts at the
Late
Payment Rate.
“Interest
Accrual Period”:
With
respect to any Distribution Date and the Class A Certificates and the Mezzanine
Certificates, the period commencing on the Distribution Date of the month
immediately preceding the month in which such Distribution Date occurs (or,
in
the case of the first Distribution Date, commencing on the Closing Date)
and
ending on the day preceding such Distribution Date. With respect to any
Distribution Date and the Class CE Certificates and the REMIC I Regular
Interests, the one-month period commencing on the first day of the month
prior
to the month in which the Distribution Date occurs and ending on the last
day of
the calendar month immediately preceding the month in which such Distribution
Date occurs.
“Interest
Carry Forward Amount”:
With
respect to any Distribution Date and any Class A Certificate or Mezzanine
Certificate, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class as of the immediately preceding Distribution
Date exceeded (b) the actual amount distributed on such Class in respect
of
interest on such immediately preceding Distribution Date and (ii) the amount
of
any Interest Carry Forward Amount for such Class remaining unpaid from the
previous Distribution Date, plus accrued interest on such sum calculated
at the
related Pass-Through Rate for the most recently ended Interest Accrual
Period.
“Interest
Determination Date”:
With
respect to the Class A Certificates, the Mezzanine Certificates, REMIC I
Regular
Interests and REMIC II Regular Interests (other than REMIC II Regular Interest
P) and any Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual Period.
“Interest
Distribution Amount”:
With
respect to any Distribution Date and any Class A Certificates, any Mezzanine
Certificates and any Class CE Certificates, the aggregate Accrued Certificate
Interest on the Certificates of such Class for such Distribution
Date.
“Interest
Remittance Amount”:
With
respect to any Distribution Date, that portion of the Available Distribution
Amount for such Distribution Date equal to an amount equal to (1) the sum,
without duplication, of (a) all scheduled interest received during the related
Due Period with respect to the Mortgage Loans less the Servicing Fee and
the fee
payable to any provider of lender-paid mortgage insurance, if any (b) the
aggregate of any amounts deposited in the Distribution Account by the Servicer
or the Master Servicer in respect of Prepayment Interest Shortfalls for such
Distribution Date pursuant to Section 3.23 or Section 4.19 of this Agreement,
(c) the interest portion of the aggregate of any P&I Advances for such
Distribution Date made by the Servicer pursuant to Section 5.03 of this
Agreement and (d) the interest portion of the aggregate of any P&I Advances
made by a successor to the Servicer (including the Master Servicer) for such
Distribution Date pursuant to Section 8.02 of this Agreement, reduced (to
not
less than zero) by (2) the portion of the amount described in clause (1)(a)
above that represents (i) Amounts Held for Future Distribution in respect
of
interest payments, (ii) the interst portion of Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries received in respect of the Mortgage Loans
after the related Prepayment Period, (iii) amounts reimbursable or payable
to
the Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Custodian pursuant to Section 3.09 or 9.05 of this
Agreement or otherwise payable in respect of Extraordinary Trust Fund Expenses,
(iv) the Credit Risk Management Fee and the Master Servicing Fee, and (v)
amounts reimbursable to a successor Servicer (including the Master Servicer)
pursuant to Section 8.02 of this Agreement.
22
“Interim
Seller”:
GMAC
Mortgage, LLC.
“Last
Scheduled Distribution Date”:
The
Distribution Date occurring in April 2037 which is the Distribution Date
immediately following the maturity date for the Mortgage Loan with the latest
maturity date.
“Late
Collections”:
With
respect to any Mortgage Loan and any Due Period, all amounts received subsequent
to the Determination Date immediately following such Due Period with respect
to
such Mortgage Loan, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments
or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent
for
such Due Period and not previously recovered.
“Late
Payment Rate”:
The
lesser of (a) the greater of (i) the prime rate as published in the Wall
Street
Journal (or if no such rate is published thereby, in a publication selected
by
the Class A Certificate Insurer) (any change in such rate of interest to
be
effective on the date such change is published) plus 2%, and (ii) the highest
rate of interest on any of the Insured Certificates and (b) the maximum rate
permissible under applicable usury or similar laws limiting interest rates.
The
Late Payment Rate shall be computed on the basis of the actual number of
days
elapsed over a year of 360 days for any Distribution Date.
“Liquidated
Mortgage Loan”:
A
Liquidated Mortgage Loan is a Mortgage Loan that was liquidated and for which
the Servicer has determined that it has received all amounts it expects to
receive in connection with such liquidation, including payments under any
related private mortgage insurance policy, hazard insurance policy or any
condemnation proceeds and amounts received in connection with the final
disposition of the related REO Property.
“Liquidation
Event”:
With
respect to any Mortgage Loan, any of the following events: (i) such Mortgage
Loan is paid in full; (ii) a Final Recovery Determination is made as to such
Mortgage Loan; or (iii) such Mortgage Loan is removed from REMIC I by reason
of
its being purchased, sold or replaced pursuant to or as contemplated by Section
2.03, Section 3.13(c) or Section 10.01 of this Agreement. With respect to
any
REO Property, either of the following events: (i) a Final Recovery Determination
is made as to such REO Property or (ii) such REO Property is removed from
REMIC
I by reason of its being purchased pursuant to Section 10.01.
23
“Liquidation
Proceeds”:
The
amount (other than Insurance Proceeds, amounts received in respect of the
rental
of any REO Property prior to REO Disposition, or required to be released
to a
Mortgagor or a senior lienholder in accordance with applicable law or the
terms
of the related Mortgage Loan Documents) received by the Servicer in connection
with (i) the taking of all or a part of a Mortgaged Property by exercise
of the
power of eminent domain or condemnation (other than amounts required to be
released to the Mortgagor or a senior lienholder), (ii) the liquidation of
a
defaulted Mortgage Loan through a trustee’s sale, foreclosure sale or otherwise,
(iii) the repurchase, substitution or sale of a Mortgage Loan or an REO Property
pursuant to or as contemplated by Section 2.03, Section 3.13(c), Section
3.22 or
Section 10.01 of this Agreement or (iv) any Subsequent Recoveries.
“Loan-to-Value
Ratio”:
As of
any date of determination, the fraction, expressed as a percentage, the
numerator of which is the principal balance of the related Mortgage Loan
at such
date and the denominator of which is the Value of the related Mortgaged
Property.
“London
Business Day”:
Any
day on which banks in the Cities of London and New York are open and conducting
transactions in United States dollars.
“Loss
Severity Percentage”:
With
respect to any Distribution Date, the percentage equivalent of a fraction,
the
numerator of which is the amount of Realized Losses incurred on a Mortgage
Loan
and the denominator of which is the principal balance of such Mortgage Loan
immediately prior to the liquidation of such Mortgage Loan.
“Marker
Rate”:
With
respect to the Class CE Certificates and any Distribution Date, a per annum
rate
equal to two (2) times the weighted average of the REMIC II Remittance Rate
for
each of REMIC II Regular Interest A, REMIC II Regular Interest M-1, REMIC
II
Regular Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest
M-4 and REMIC II Regular Interest ZZ, with the rate on each such REMIC II
Regular Interest (other than REMIC II Regular Interest ZZ) subject to a cap
equal to the lesser of (i) the related One-Month LIBOR Pass-Through Rate
and
(ii) the related Net WAC Pass-Through Rate for the Corresponding Certificate
for
the purpose of this calculation for such Distribution Date and with the rate
on
REMIC II Regular Interest ZZ subject to a cap of zero for the purpose of
this
calculation; provided however, each such cap for each REMIC II Regular Interest
(other than REMIC II Regular Interest ZZ) shall be multiplied by a fraction
the
numerator of which is the actual number of days in the related Interest Accrual
Period and the denominator of which is 30.
“Master
Servicer”:
As of
the Closing Date, ▇▇▇▇▇ Fargo Bank, National Association and thereafter,
its
respective successors in interest who meet the qualifications of this Agreement.
The Master Servicer and the Securities Administrator shall at all times be
the
same Person or an Affiliate.
24
“Master
Servicer Event of Default”:
One or
more of the events described in Section 8.01(b).
“Master
Servicing Fee”:
With
respect to each Mortgage Loan and for any calendar month, an amount equal
to
one-twelfth of the product of the Master Servicing Fee Rate multiplied by
the
Scheduled Principal Balance of the Mortgage Loans as of the Due Date in the
preceding calendar month.
“Master
Servicing Fee Rate”:
0.009%
per annum.
“Maximum
ZZ Uncertificated Interest Deferral Amount”:
With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC II Remittance Rate applicable to REMIC II Regular Interest ZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC
II
Regular Interest ZZ minus the REMIC II Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC
II
Regular Interest A, REMIC II Regular Interest M-1, REMIC II Regular Interest
M-2, REMIC II Regular Interest M-3 and REMIC II Regular Interest M-4 for
such
Distribution Date, with the rate on each such REMIC II Regular Interest subject
to a cap equal to the lesser of (i) the related One-Month LIBOR Pass-Through
Rate and (ii) the related Net WAC Pass-Through Rate for the Corresponding
Certificate for the purpose of this calculation for such Distribution Date;
provided however, each such cap for each REMIC II Regular Interest shall
be
multiplied by a fraction the numerator of which is the actual number of days
in
the related Interest Accrual Period and the denominator of which is
30.
“MERS”:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
“MERS®
System”:
The
system of recording transfers of mortgages electronically maintained by
MERS.
“Mezzanine
Certificate”:
Any
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 or Class M-4 Certificate.
“MIN”:
The
Mortgage Identification Number for Mortgage Loans registered with MERS on
the
MERS® System.
“MOM
Loan”:
With
respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage
Loan, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns, at the origination thereof.
“Monthly
Payment”:
With
respect to any Mortgage Loan, the scheduled monthly payment of principal
and
interest on such Mortgage Loan which is payable by the related Mortgagor
from
time to time under the related Mortgage Note, determined: (a) after giving
effect to (i) any Deficient Valuation and/or Debt Service Reduction with
respect
to such Mortgage Loan and (ii) any reduction in the amount of interest
collectible from the related Mortgagor pursuant to the Relief Act or similar
state or local laws; (b) without giving effect to any extension granted or
agreed to by the Servicer pursuant to Section 3.01 of this Agreement; and
(c) on
the assumption that all other amounts, if any, due under such Mortgage Loan
are
paid when due.
25
“Moody’s”:
▇▇▇▇▇’▇ Investors Service, Inc. or any successor in interest.
“Mortgage”:
The
mortgage, deed of trust or other instrument creating a second lien on, or
second
priority security interest in, a Mortgaged Property securing a Mortgage
Note.
“Mortgage
File”:
The
Mortgage Loan Documents pertaining to a particular Mortgage Loan.
“Mortgage
Loan”:
Each
mortgage loan transferred and assigned to the Trustee and the Mortgage Loan
Documents for which have been delivered to the Custodian pursuant to Section
2.01 of this Agreement and pursuant to the Custodial Agreement, as held from
time to time as a part of the Trust Fund, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
“Mortgage
Loan Documents”:
The
documents evidencing or relating to each Mortgage Loan delivered to the
Custodian under the Custodial Agreement on behalf of the Trustee.
“Mortgage
Loan Purchase Agreement”:
Shall
mean the Mortgage Loan Purchase and Sale Agreement dated as of May 15, 2007,
between the Sponsor as seller and the Interim Seller as purchaser, a copy
of
which is attached hereto as Exhibit F-1.
“Mortgage
Loan Schedule”:
As of
any date, the list of Mortgage Loans included in REMIC I on such date, attached
hereto as Schedule 1. The Depositor shall deliver or cause the delivery of
the
initial Mortgage Loan Schedule to the Servicer, the Master Servicer, the
Custodian and the Trustee on the Closing Date. The Mortgage Loan Schedule
shall
set forth the following information with respect to each Mortgage
Loan:
(i) the
Mortgage Loan identifying number;
(ii) the
Mortgagor’s first and last name;
(iii) the
street address of the Mortgaged Property including the state and zip
code;
(iv) a
code
indicating whether the Mortgaged Property is owner-occupied;
(v) a
code
indicating whether the Mortgaged Property is a single family residence,
two-family residence, three-family residence, four-family residence, PUD,
townhouse or condominium;
(vi) the
original term to maturity or the remaining months to maturity from the Cut-off
Date, in any case based on the original amortization schedule, and if different,
the maturity expressed in the same manner but based on the actual amortization
schedule;
26
(vii) [reserved];
(viii) the
Combined Loan-to-Value Ratio at origination;
(ix) the
Mortgage Rate in effect immediately following the Cut-off Date;
(x) the
date
on which the first Monthly Payment was due on the Mortgage Loan;
(xi) the
scheduled maturity date;
(xii) the
amount of the Monthly Payment at origination;
(xiii) the
amount of the Monthly Payment as of the Cut-off Date;
(xiv) the
last
payment date on which a payment was actually applied;
(xv) the
original principal amount of the Mortgage Loan;
(xvi) 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;
(xvii) a
code
indicating the purpose of the loan (i.e., purchase financing, rate/term
refinancing, cash-out refinancing);
(xviii) the
Mortgage Rate at origination;
(xix) the
date
on which the first Monthly Payment was due on the Mortgage Loan and, if such
date is not consistent with the Due Date currently in effect, such Due
Date;
(xx) a
code
indicating the documentation style (i.e., full, stated or limited);
(xxi) [reserved];
(xxii) the
Appraised Value of the Mortgaged Property;
(xxiii) [reserved];
(xxiv) a
code
indicating whether the Mortgage Loan is subject to a Prepayment Charge, the
term
of such Prepayment Charge and the amount of such Prepayment Charge;
27
(xxv) the
product type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30 balloon,
etc.);
(xxvi) the
FICO
score at origination; and
(xxvii) with
respect to each Mortgage Loan registered on MERS, the MIN.
The
Mortgage Loan Schedule shall set forth the following information with respect
to
the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number
of
Mortgage Loans; (2) the current principal balance of the Mortgage Loans;
(3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall
be
amended from time to time by the Depositor in accordance with the provisions
of
this Agreement. With respect to any Qualified Substitute Mortgage Loan, the
Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-off Date
herein.
“Mortgage
Note”:
The
original executed note or other evidence of the indebtedness of a Mortgagor
under a Mortgage Loan.
“Mortgage
Rate”:
With
respect to each Mortgage Loan, the annual rate at which interest accrues
on such
Mortgage Loan from time to time in accordance with the provisions of the
related
Mortgage Note. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance
with
the immediately preceding sentence as of the date such Mortgage Loan became
an
REO Property.
“Mortgaged
Property”:
The
underlying property securing a Mortgage Loan, including any REO Property,
consisting of an Estate in Real Property improved by a Residential
Dwelling.
“Mortgagor”:
The
obligor on a Mortgage Note.
“Net
Monthly Excess Cashflow”:
With
respect to any Distribution Date, the sum of (i) any Overcollateralization
Reduction Amount for such Distribution Date and (ii) the excess of (x) the
Available Distribution Amount for such Distribution Date over (y) the sum
for
such Distribution Date of (A) the aggregate Senior Interest Distribution
Amounts
payable to the Holders of the Class A Certificates, (B) the aggregate Interest
Distribution Amounts payable to the holders of the Mezzanine Certificates,
(C)
the Principal Remittance Amount, (D) any Net Swap Payment or Swap Termination
Payment (not caused by the occurrence of a Swap Provider Trigger Event) owed
to
the Swap Provider (to the extent such amount has not been paid by the Securities
Administrator from any upfront payment received pursuant to any related
replacement interest rate swap agreement that may be entered into by the
Trustee
on behalf of the Supplemental Interest Trust) and (E) the Premium payable
to the
Class A Certificate Insurer and any reimbursements payable to the Class A
Certificate Insurer pursuant to the Insurance Agreement.
28
“Net
Mortgage Rate”:
With
respect to any Mortgage Loan (or the related REO Property) as of any date
of
determination, a per annum rate of interest equal to the then applicable
Mortgage Rate for such Mortgage Loan minus the Administration Fee
Rate.
“Net
Swap Payment”:
With
respect to each Distribution Date, the net payment required to be made pursuant
to the terms of the Swap Agreement by either the Swap Provider or Securities
Administrator from the Supplemental Interest Trust, which net payment shall
not
take into account any Swap Termination Payment.
“Net
WAC Pass-Through Rate”:
With
respect to the Offered Certificates and any Distribution Date, a rate per
annum
(adjusted for the actual number of days elapsed in the related Interest Accrual
Period) equal to the product of (i) twelve and (ii) a fraction, expressed
as a
percentage, the numerator of which is the amount of interest which accrued
on
the Mortgage Loans in the prior calendar month minus the fees payable to
the
Servicer, the Master Servicer and the Credit Risk Manager for such Distribution
Date and any Net Swap Payment payable to the Swap Provider and any Swap
Termination Payment payable to the Swap Provider which was not caused by
the
occurrence of a Swap Provider Trigger Event (to the extent such amount has
not
been paid by the Securities Administrator from any upfront payment received
pursuant to any related replacement interest rate swap agreement that may
be
entered into by the Supplemental Interest Trust Trustee), and, the Premium
payable to the Class A Certificate Insurer in each case for such Distribution
Date and the denominator of which is the aggregate principal balance of the
Mortgage Loans as of the last day of the immediately preceding Due Period
(or as
of the Cut-off Date with respect to the first Distribution Date), after giving
effect to principal prepayments received during the related Prepayment Period.
For federal income tax purposes, such rate shall be expressed as the weighted
average of (adjusted for the actual number of days elapsed in the related
Interest Accrual Period) the REMIC II Remittance Rates on the REMIC II Regular
Interests (other than REMIC II Regular Interest IO), weighted on the basis
of
the Uncertificated Balance of such REMIC II Regular Interest.
“Net
WAC Rate Carryover Amount”:
With
respect to any Class A Certificate or Mezzanine Certificate and any Distribution
Date on which the Pass-Through Rate is limited to the applicable Net WAC
Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the
amount of interest such Class would have been entitled to receive on such
Distribution Date if the applicable Net WAC Pass-Through Rate would not have
been applicable to such Class on such Distribution Date over (y) the amount
of
interest paid to such Class on such Distribution Date at the applicable Net
WAC
Pass-Through Rate plus (ii) the related Net WAC Rate Carryover Amount for
the
previous Distribution Date not previously distributed to such Class together
with interest thereon at a rate equal to the Pass-Through Rate for such Class
for the most recently ended Interest Accrual Period without taking into account
the applicable Net WAC Pass-Through Rate.
“New
Lease”:
Any
lease of REO Property entered into on behalf of REMIC I, including any lease
renewed or extended on behalf of REMIC I, if REMIC I has the right to
renegotiate the terms of such lease.
“Nonpayment”:
With
respect to any Distribution Date, the failure of the Securities Administrator
to
receive in full, in accordance with the terms of this Agreement, funds legally
available to pay all or a portion of the Scheduled Payment that is due for
payment on the Insured Certificates with respect to such Distribution
Date.
29
“Nonrecoverable
P&I Advance”:
Any
P&I Advance previously made or proposed to be made in respect of a Mortgage
Loan or REO Property that, in the good faith business judgment of the Servicer
or a successor to the Servicer (including the Master Servicer) will not or,
in
the case of a proposed P&I Advance, would not be ultimately recoverable from
related Late Collections, Insurance 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 that, in the good faith business judgment of
the
Servicer or a successor to the Servicer (including the Master Servicer) will
not
or, in the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
“Non-United
States Person”:
Any
Person other than a United States Person.
“Notional
Amount”:
With
respect to the Class CE Certificates and any Distribution Date, the
Uncertificated Balance of the REMIC II Regular Interests (other than REMIC
II
Regular Interest P) for such Distribution Date. As of the Closing Date, the
Notional Amount of the Class CE Certificates is equal to
$370,848,628.95.
With
respect to REMIC II Regular Interest IO and each Distribution Date listed
below,
the aggregate Uncertificated Balance of the REMIC I Regular Interests ending
with the designation “A” listed below:
|
Distribution
Date
|
REMIC
I Regular Interests
|
|
1
|
I-1-A
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through I-53-A
|
|
10
|
I-10-A
through I-53-A
|
|
11
|
I-11-A
through I-53-A
|
|
12
|
I-12-A
through I-53-A
|
|
13
|
I-13-A
through I-53-A
|
|
14
|
I-14-A
through I-53-A
|
|
15
|
I-15-A
through I-53-A
|
|
16
|
I-16-A
through I-53-A
|
|
17
|
I-17-A
through I-53-A
|
|
18
|
I-18-A
through I-53-A
|
|
19
|
I-19-A
through I-53-A
|
|
20
|
I-20-A
through I-53-A
|
|
21
|
I-21-A
through I-53-A
|
|
22
|
I-22-A
through I-53-A
|
|
23
|
I-23-A
through I-53-A
|
|
24
|
I-24-A
through I-53-A
|
30
|
Distribution
Date
|
REMIC
I Regular Interests
|
|
25
|
I-25-A
through I-53-A
|
|
26
|
I-26-A
through I-53-A
|
|
27
|
I-27-A
through I-53-A
|
|
28
|
I-28-A
through I-53-A
|
|
29
|
I-29-A
through I-53-A
|
|
30
|
I-30-A
through I-53-A
|
|
31
|
I-31-A
through I-53-A
|
|
32
|
I-32-A
through I-53-A
|
|
33
|
I-33-A
through I-53-A
|
|
34
|
I-34-A
through I-53-A
|
|
35
|
I-35-A
through I-53-A
|
|
36
|
I-36-A
through I-53-A
|
|
37
|
I-37-A
through I-53-A
|
|
38
|
I-38-A
through I-53-A
|
|
39
|
I-39-A
through I-53-A
|
|
40
|
I-40-A
through I-53-A
|
|
41
|
I-41-A
through I-53-A
|
|
42
|
I-42-A
through I-53-A
|
|
43
|
I-43-A
through I-53-A
|
|
44
|
I-44-A
through I-53-A
|
|
45
|
I-45-A
through I-53-A
|
|
46
|
I-46-A
through I-53-A
|
|
47
|
I-47-A
through I-53-A
|
|
48
|
I-48-A
through I-53-A
|
|
49
|
I-49-A
through I-53-A
|
|
50
|
I-50-A
through I-53-A
|
|
51
|
I-51-A
through I-53-A
|
|
52
|
I-52-A
and I-53-A
|
|
53
|
I-53-A
and
|
|
thereafter
|
$0.00
|
With
respect to the Class IO Interest and any Distribution Date, an amount equal
to
the Notional Amount of the REMIC II Regular Interest IO.
“Offered
Certificates”:
The
Class A Certificates and the Mezzanine Certificates, collectively.
“Officer’s
Certificate”:
With
respect to any Person, a certificate signed by the Chairman of the Board,
the
Vice Chairman of the Board, the President or a vice president (however
denominated), or by the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries of such Person (or, in the case of a
Person
that is not a corporation, signed by the person or persons having like
responsibilities).
“One-Month
LIBOR”:
With
respect to the Class A Certificates, the Mezzanine Certificates, REMIC II
Regular Interests (other than REMIC II Regular Interest P) and any Interest
Accrual Period therefor, the rate determined by the Securities Administrator
on
the related Interest Determination Date on the basis of the offered rate
for
one-month U.S. dollar deposits, as such rate appears on Reuters Screen LIBOR01
Page as of 11:00 a.m. (London time) on such Interest Determination Date;
provided that if such rate does not appear on Reuters Screen LIBOR01 Page,
the
rate for such date will be determined on the basis of the offered rates of
the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Securities
Administrator will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If on such Interest Determination
Date, two or more Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the arithmetic mean
of
such offered quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the
related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on
the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above,
LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable
index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator’s subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.
31
“One-Month
LIBOR Pass-Through Rate”:
With
respect to the Class A Certificates and, for purposes of the definition of
“Marker Rate”, REMIC II Regular Interest A, a per annum rate equal to One-Month
LIBOR plus the related Certificate Margin.
With
respect to the Class M-1 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-1, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-2 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-2, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-3 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-3, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With
respect to the Class M-4 Certificates and, for purposes of the definition
of
“Marker Rate”, REMIC II Regular Interest M-4, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
“Opinion
of Counsel”:
A
written opinion of counsel, who may, without limitation, be salaried counsel
for
the Depositor, the Servicer, the Securities Administrator or the Master
Servicer, acceptable to the Trustee, except that any opinion of counsel relating
to (a) the qualification of any REMIC as a REMIC or (b) compliance with the
REMIC Provisions must be an opinion of Independent counsel.
“Optional
Termination Date”:
The
first Distribution Date on which the aggregate principal balance of the Mortgage
Loans (and properties acquired in respect thereof) remaining in the Trust
Fund
as of the last day of the related Due Period has been reduced to less than
or
equal to 10% of the aggregate principal balance of the Mortgage Loans as
of the
Cut-off Date.
32
“OTS
Method”:
The
Office of Thrift Supervision (OTS) Delinquency Calculation Method, pursuant
to
which a Mortgage Loan is considered delinquent if a Monthly Payment has not
been
received by the close of business on such Mortgage Loan’s Due Date in the
following month. By way of example, a Mortgage Loan will be considered 30
days
delinquent if the Mortgagor fails to make a Monthly Payment due on July 1
by the
close of business on August 1. Such Mortgage Loan will be reported as current
at
the end of July and on the August statement to Certificateholders and will
not
be reported as delinquent until the end of August and on the September statement
to Certificateholders.
“Overcollateralization
Amount”:
With
respect to any Distribution Date, the excess, if any, of (a) the aggregate
Stated Principal Balances of the Mortgage Loans and REO Properties immediately
as of the close of business on the Due Date in the month in which the
Distribution Date occurs after giving effect to principal prepayments received
during the Prepayment Period that includes such Due Date over (b) the sum
of the
aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates as of such Distribution
Date
(after taking into account the payment of the Principal Remittance Amount
on
such Distribution Date).
“Overcollateralization
Increase Amount”:
With
respect to any Distribution Date, the amount by which the Required
Overcollateralization Amount for such Distribution Date exceeds the
Overcollateralization Amount (calculated for this purpose assuming 100% of
the
Principal Remittance Amount is distributed to the Class A Certificates and
the
Mezzanine Certificates on such Distribution Date) for such Distribution
Date.
“Overcollateralization
Reduction Amount”:
With
respect to any Distribution Date, the lesser of (i) the amount by which the
Overcollateralization Amount (calculated for this purpose assuming 100% of
the
Principal Remittance Amount is distributed to the Class A Certificates and
the
Mezzanine Certificates on such Distribution Date) exceeds the Required
Overcollateralization Amount and (ii) the Principal Remittance Amount for
such
Distribution Date. The Overcollateralization Reduction Amount shall equal
zero
when a Trigger Event is in effect.
“Ownership
Interest”:
As to
any Certificate, any ownership or security 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, as owner
or
as pledgee.
“P&I
Advance”:
As to
any Mortgage Loan or REO Property, any advance made by the Servicer in respect
of any Determination Date pursuant to Section 5.03 of this Agreement, an
Advance
Financing Person pursuant to Section 3.26 of this Agreement or in respect
of any
Distribution Date by a successor Servicer pursuant to Section 8.02 of this
Agreement (which advances shall not include principal or interest shortfalls
due
to bankruptcy proceedings or application of the Relief Act or similar state
or
local laws.)
“Pass-Through
Rate”:
With
respect to the Class A Certificates and the Mezzanine Certificates, and any
Distribution Date, a rate per annum equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate for such Distribution Date and (ii) the
related Net WAC Pass-Through Rate for such Distribution Date.
33
With
respect to the Class CE Certificates and any Distribution Date, a rate per
annum
equal to the percentage equivalent of a fraction, the numerator of which
is the
sum of the amounts calculated pursuant to clauses (i) through (viii) below,
and
the denominator of which is the aggregate Uncertificated Balances of REMIC
II
Regular Interest AA, REMIC II Regular Interest A, REMIC II Regular Interest
M-1,
REMIC II Regular Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular
Interest M-4 and REMIC II Regular Interest ZZ. For purposes of calculating
the
Pass-Through Rate for the Class CE Certificates, the numerator is equal to
the
sum of the following components:
(i) the
REMIC
II Remittance Rate for REMIC II Regular Interest AA minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest AA;
(ii) the
REMIC
II Remittance Rate for REMIC II Regular Interest A minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest A;
(iii) the
REMIC
II Remittance Rate for REMIC II Regular Interest M-1 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest M-1;
(iv) the
REMIC
II Remittance Rate for REMIC II Regular Interest M-2 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest M-2;
(v) the
REMIC
II Remittance Rate for REMIC II Regular Interest M-3 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest M-3;
(vi) the
REMIC
II Remittance Rate for REMIC II Regular Interest M-4 minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest M-4;
(vii) the
REMIC
II Remittance Rate for REMIC II Regular Interest ZZ minus the Marker Rate,
applied to an amount equal to the Uncertificated Balance of REMIC II Regular
Interest ZZ; and
(viii) 100%
of
the interest on REMIC II Regular Interest P.
The
Class
IO Interest shall not have a Pass-Through Rate, but current interest for
the
Class IO Interest and each Distribution Date shall be an amount equal to
100% of
the amounts distributable to REMIC II Regular Interest IO for such Distribution
Date.
“PCAOB”:
Means
the Public Company Accounting Oversight Board.
“Percentage
Interest”:
With
respect to any Class of Certificates (other than the Residual Certificates),
the
undivided percentage ownership in such Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the initial Certificate
Principal Balance represented by such Certificate and the denominator of
which
is the aggregate initial Certificate Principal Balance or Notional Amount
of all
of the Certificates of such Class. The Class A Certificates and the Mezzanine
Certificates are issuable only in minimum Percentage Interests corresponding
to
minimum initial Certificate Principal Balances of $25,000 and integral multiples
of $1.00 in excess thereof. The Class P Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances
of
$20 and integral multiples thereof. The Class CE Certificates are issuable
only
in minimum Percentage Interests corresponding to minimum initial Notional
Amounts of $10,000 and integral multiples of $1.00 in excess thereof; provided,
however, that a single Certificate of each such Class of Certificates may
be
issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Notional Amount of such Class or to an otherwise authorized
denomination for such Class plus such remainder. With respect to any Residual
Certificate, the undivided percentage ownership in such Class evidenced by
such
Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 5% in excess thereof.
34
“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 Depositor,
the Servicer, the Master 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) (A)
demand and time deposits in, certificates of deposit of, bankers’ acceptances
issued by or federal funds sold by any depository institution or trust company
(including the Trustee or its agent acting in their respective commercial
capacities) incorporated under the laws of the United States of America or
any
state thereof and subject to supervision and examination by federal and/or
state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution or
trust
company (or, if the only Rating Agency is S&P, in the case of the principal
depository institution in a depository institution holding company, debt
obligations of the depository institution holding company) or its ultimate
parent has a short-term uninsured debt rating in the highest available rating
category of Moody’s and S&P and provided that each such investment has an
original maturity of no more than 365 days; and provided further that, if
the
only Rating Agency is S&P and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations of
such
subsidiary are not separately rated, the applicable rating shall be that
of the
bank holding company; and, provided further that, if the original maturity
of
such short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term rating
of such
institution shall be A-1+ in the case of S&P if S&P is the Rating
Agency; and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(iii) repurchase
obligations with a term not to exceed 30 days with respect to any security
described in clause (i) above and entered into with a depository institution
or
trust company (acting as principal) rated A-1+ or higher by S&P, and A2 or
higher by Moody’s, provided, however, that collateral transferred pursuant to
such repurchase obligation must be of the type described in clause (i) above
and
must (A) be valued daily at current market prices plus accrued interest,
(B)
pursuant to such valuation, be equal, at all times, to 105% of the cash
transferred by a party in exchange for such collateral and (C) be delivered
to
such party or, if such party is supplying the collateral, an agent for such
party, in such a manner as to accomplish perfection of a security interest
in
the collateral by possession of certificated securities;
35
(iv) securities
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States of America or any state
thereof
and that are rated by each Rating Agency that rates such securities in its
highest long-term unsecured rating categories at the time of such investment
or
contractual commitment providing for such investment;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not
more
than 30 days after the date of acquisition thereof) that is rated by each
Rating
Agency that rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units
of
money market funds that have been rated “AAAm” or “AAAm-G” by S&P or “Aaa”
by Moody’s including any such money market fund managed or advised by the Master
Servicer, the Trustee or any of their Affiliates; and
(vii) if
previously confirmed in writing to the Trustee, any other demand, money market
or time deposit, or any other obligation, security or investment, as may
be
acceptable to the Rating Agencies as a permitted investment of funds backing
securities having ratings equivalent to its highest initial rating of the
Class
A Certificates;
provided,
however, that no instrument described hereunder shall (a) evidence either
the
right to receive (1) only interest with respect to the obligations underlying
such instrument or (2) 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, (b) be
sold or disposed of before its maturity or (c) be any obligation of the Sponsor
or any of its Affiliates. Any Permitted Investment shall be relatively risk
free
and no options or voting rights shall be exercised with respect to any Permitted
Investment. Any Permitted Investment shall be sold or disposed of in accordance
with Statement of Financial Accounting Standards No. 140,
paragraph 35c(6), in effect as of the Closing Date.
“Permitted
Transferee”:
Any
Transferee of a Residual Certificate other than a Disqualified Organization
or
Non-United States Person.
“Person”:
Any
individual, limited liability company, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
36
“Plan”:
Any
employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject
to
ERISA or Section 4975 of the Code.
“Policy”:
The
certificate guaranty insurance policy provided by the Class A Insurer with
respect to the Class A Certificates.
“Premium”:
The
premium payable to the Class A Certificate Insurer under the Policy on each
Distribution Date. The premium will be a per annum rate equal to 0.230%
calculated on an actual/360 basis of the Certificate Principal Balance of
the
Class A Certificates as of such Distribution Date (without giving effect
to any
distributions thereon on that Distribution Date).
“Prepayment
Assumption”:
A
prepayment rate of 100% PPC. The Prepayment Assumption is used solely for
determining the accrual of original issue discount on the Certificates for
federal income tax purposes. To assume 100% PPC is to assume (i) a per annum
prepayment rate of 10% of the then outstanding principal balance of the mortgage
loans in the first month of the life of the mortgage loans, (ii) an additional
1.6364% (precisely 18%/11) per annum in each month thereafter through the
eleventh month, (iii) building to a constant prepayment rate of 28% per annum
beginning in the twelfth month and remaining constant thereafter.
“Prepayment
Charge”:
With
respect to any Principal Prepayment, any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage
Loan pursuant to the terms of the related Mortgage Note.
“Prepayment
Charge Schedule”:
As of
any date, the list of Mortgage Loans providing for a Prepayment Charge included
in the Trust Fund on such date, attached hereto as Schedule
2
(including the prepayment charge summary attached thereto). The Depositor
shall
deliver or cause the delivery of the Prepayment Charge Schedule to the Servicer,
the Master Servicer and the Trustee on the Closing Date. The Prepayment Charge
Schedule shall set forth the following information with respect to each
Prepayment Charge:
(i) the
Mortgage Loan identifying number;
(ii) a
code
indicating the type of Prepayment Charge;
(iii) the
date
on which the first Monthly Payment was due on the related Mortgage
Loan;
(iv) the
term
of the related Prepayment Charge;
(v) the
original Stated Principal Balance of the related Mortgage Loan; and
37
(vi) the
Stated Principal Balance of the related Mortgage Loan as of the Cut-off
Date.
“Prepayment
Interest Shortfall”:
With
respect to any Distribution Date, for each such Mortgage Loan that was the
subject of a Principal Prepayment in full or in part during the portion of
the
related Prepayment Period occurring between the first day of the related
Prepayment Period and the last day of the calendar month preceding the month
in
which such Distribution Date occurs 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 Prepayment Period, an amount equal to interest
at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for
the
number of days commencing on the date on which the prepayment is applied
and
ending on the last day of the calendar month preceding such Distribution
Date.
The obligations of the Servicer and the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 3.23 and Section 4.19,
respectively of this Agreement.
“Prepayment
Period”:
For
any Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
“Principal
Distribution Amount”:
With
respect to any Distribution Date will be the sum of (i) the principal portion
of
all Monthly Payments on the Mortgage Loans received during the related Due
Period, the principal portion of the aggregate of any P&I Advances for such
Distribution Date made by the Servicer pursuant to Section 5.03 of this
Agreement and the principal portion of the aggregate of any P&I Advances
made by a successor to the Servicer (including the Master Servicer) for such
Distribution Date pursuant to Section 8.02 of this Agreement; (ii) the principal
portion of all proceeds received in respect of the repurchase of a Mortgage
Loan
or, in the case of a substitution, certain amounts representing a principal
adjustment, during the related Prepayment Period pursuant to or as contemplated
by Section 2.03, Section 3.13(c) and Section 10.01 of this Agreement; (iii)
the
principal portion of all other unscheduled collections, including Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and all Principal
Prepayments in full and in part, received during the related Prepayment Period,
to the extent applied as recoveries of principal on the Mortgage Loans (the
sum
of clauses (i), (ii) and (iii) above shall be net of payments or reimbursements
to the Trustee, the Custodian, the Master Servicer, the Securities
Administrator, the Servicer or the Credit Risk Manager in excess of the Interest
Remittance Amount for such Distribution Date) and (iv) the amount of any
Overcollateralization Increase Amount for such Distribution Date minus (v)
the
amount of any Overcollateralization Reduction Amount for such Distribution
Date.
“Principal
Prepayment”:
Any
voluntary payment of principal made by the Mortgagor on a Mortgage Loan which
is
received in advance of its scheduled Due Date and which is not accompanied
by an
amount of interest representing the full amount of scheduled interest due
on any
Due Date in any month or months subsequent to the month of
prepayment.
“Principal
Remittance Amount”:
With
respect to any Distribution Date, the sum of the amounts described in clauses
(i) through (iii) of the definition of Principal Distribution
Amount.
38
“Purchase
Price”:
With
respect to any Mortgage Loan or REO Property to be purchased pursuant to
or as
contemplated by Section 2.03, Section 3.13(c) or Section 10.01 of this
Agreement, and as confirmed by a certification of a Servicing Officer to
the
Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance
thereof as of the date of purchase (or such other price as provided in Section
10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such
Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time
to
time from the Due Date as to which interest was last covered by a payment
by the
Mortgagor or a P&I Advance by the Servicer, which payment or P&I Advance
had as of the date of purchase been distributed pursuant to Section 5.01,
through the end of the calendar month in which the purchase is to be effected
and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time
to
time from the Due Date as to which interest was last covered by a payment
by the
Mortgagor or a P&I Advance by the Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property
was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected,
net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and P&I Advances that as of the date of purchase had been distributed as or
to cover REO Imputed Interest pursuant to Section 5.01, (iii) any unreimbursed
Servicing Advances and P&I Advances (including Nonrecoverable P&I
Advances and Nonrecoverable Servicing Advances) and any unpaid Servicing
Fees
allocable to such Mortgage Loan or REO Property and (iv) in the case of a
Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Servicer or the Trustee in respect
of the breach or defect giving rise to the purchase obligation and any costs
and
damages incurred by the Trust Fund and the Trustee in connection with any
violation by any such Mortgage Loan of any predatory or abusive lending
law.
“Qualified
Substitute Mortgage Loan”:
A
mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms
of
this Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance, after application of all scheduled payments
of
principal and interest due during or prior to the month of substitution,
not in
excess of the Scheduled Principal Balance of the Deleted Mortgage Loan as
of the
Due Date in the calendar month during which the substitution occurs, (ii)
have a
Mortgage Rate not less than (and not more than one percentage point in excess
of) the Mortgage 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) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (v) have a Combined Loan-to-Value Ratio as of the
date of
substitution equal to or lower than the Combined Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (vi) be secured by the same lien priority
on the related Mortgaged Property as the Deleted Mortgage Loan, (vii) have
a
FICO score at least equal to the FICO score assigned on the Deleted Mortgage
Loan, (viii) be a “qualified mortgage” as defined in the REMIC Provisions and
(ix) conform to each representation and warranty set forth in Section 6 of
the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan.
In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described
in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the terms described in clause (iii) hereof shall be determined on
the
basis of weighted average remaining term to maturity, the Combined Loan-to-Value
Ratios described in clause (v) hereof shall be satisfied as to each such
mortgage loan, the FICO scores described in clause (vii) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (ix) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.
39
“Rate/Term
Refinancing”:
A
Refinanced Mortgage Loan, the proceeds of which are not more than a nominal
amount in excess of the existing first mortgage loan and any subordinate
mortgage loan on the related Mortgaged Property and related closing costs,
and
were used exclusively (except for such nominal amount) to satisfy the then
existing first mortgage loan and any subordinate mortgage loan of the Mortgagor
on the related Mortgaged Property and to pay related closing costs.
“Rating
Agency or Rating Agencies”:
▇▇▇▇▇’▇, S&P, DBRS or their successors. If such agencies or their successors
are no longer in existence, “Rating Agencies” shall be such nationally
recognized statistical rating agencies, or other comparable Persons, designated
by the Depositor, notice of which designation shall be given to the Trustee
and
the Servicer.
“Realized
Loss”:
With
respect to each Mortgage Loan as to which a Final Recovery Determination
has
been made, an amount (not less than zero), as reported by the Servicer to
the
Master Servicer (in substantially the form of Schedule 4 hereto) equal to
(i)
the unpaid principal balance of such Mortgage Loan as of the commencement
of the
calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by
the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest
was
then accruing on such Mortgage Loan and (B) on a principal amount equal to
the
Stated Principal Balance of such Mortgage Loan as of the close of business
on
the Distribution Date during such calendar month, plus (iii) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.09(a)(ix) and Section 3.13(b) of this Agreement,
minus (iv) the proceeds, if any, received in respect of such Mortgage Loan
during the calendar month in which such Final Recovery Determination was
made,
net of amounts that are payable therefrom to the Servicer with respect to
such
Mortgage Loan pursuant to Section 3.09(a)(iii) of this Agreement. Any Charged
Off Loan will give rise to a Realized Loss (calculated as if clause (iv)
of the
previous sentence is equal to zero) at the time it is charged off, as described
in Section 3.13(a)(iii) hereof.
With
respect to any REO Property as to which a Final Recovery Determination has
been
made, an amount (not less than zero) equal to (i) the unpaid principal balance
of the related Mortgage Loan as of the date of acquisition of such REO Property
on behalf of REMIC I, plus (ii) accrued interest from the Due Date as to
which
interest was last paid by the Mortgagor in respect of the related Mortgage
Loan
through the end of the calendar month immediately preceding the calendar
month
in which such REO Property was acquired, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual rate at
which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of the related Mortgage Loan
as of
the close of business on the Distribution Date during such calendar month,
plus
(iii) REO Imputed Interest for such REO Property for each calendar month
commencing with the calendar month in which such REO Property was acquired
and
ending with the calendar month in which such Final Recovery Determination
was
made, plus (iv) any amounts previously withdrawn from the Collection Account
in
respect of the related Mortgage Loan pursuant to Section 3.09(a)(ix) and
Section
3.13(b) of this Agreement, minus (v) the aggregate of all P&I Advances and
Servicing Advances (in the case of Servicing Advances, without duplication
of
amounts netted out of the rental income, Insurance Proceeds and Liquidation
Proceeds described in clause (vi) below) made by the Servicer in respect
of such
REO Property or the related Mortgage Loan for which the Servicer has been
or, in
connection with such Final Recovery Determination, will be reimbursed pursuant
to Section 3.22 of this Agreement out of rental income, Insurance Proceeds
and
Liquidation Proceeds received in respect of such REO Property, minus (vi)
the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection
with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.22 of this Agreement.
40
With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation.
With
respect to each Mortgage Loan which has become the subject of a Debt Service
Reduction, the portion, if any, of the reduction in each affected Monthly
Payment attributable to a reduction in the Mortgage Rate imposed by a court
of
competent jurisdiction. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
To
the
extent the Servicer receives Subsequent Recoveries with respect to any Mortgage
Loan, the amount of Realized Loss with respect to that Mortgage Loan will
be
reduced to the extent such recoveries are applied to reduce the Certificate
Principal Balance of any Class of Certificates on any Distribution
Date.
“Record
Date”:
With
respect to each Distribution Date and the Class A Certificates and the Mezzanine
Certificates, the Business Day immediately preceding such Distribution Date
for
so long as such Certificates are Book-Entry Certificates. With respect to
each
Distribution Date and any other Class of Certificates, including any Definitive
Certificates, the last day of the calendar month immediately preceding the
month
in which such Distribution Date occurs.
“Recovery
Fee(s)”:
An
amount equal to thirty percent (30%) of the net recoveries received in respect
of a Charged Off Loan payable to the Servicer.
“Reference
Banks”:
Barclays Bank PLC, The Tokyo Mitsubishi Bank and National Westminster Bank
PLC
and their successors in interest; provided, however, that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Securities Administrator which are engaged in transactions
in Eurodollar deposits in the International Eurocurrency market (i) with
an
established place of business in London, (ii) not controlling, under the
control
of or under common control with the Depositor or any Affiliate thereof and
(iii)
which have been designated as such by the Securities Administrator.
41
“Refinanced
Mortgage Loan”:
A
Mortgage Loan the proceeds of which were not used to purchase the related
Mortgaged Property.
“Regular
Certificate”:
Any
Class A Certificate, Mezzanine Certificate, Class CE Certificate or Class
P
Certificate.
“Regular
Interest”:
A
“regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the
Code.
“Regulation
AB”:
Means
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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 (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.
“Released
Loan”:
Any
Charged Off Loan that is released by the Servicer to the Class CE
Certificateholders pursuant to Section 3.13(a)(iv), on the date that is six
months after the later of (i) the date on which such Mortgage Loans were
charged
off and (ii) the date on which any collections are received on such Charged
Off
Loans. Any Released Loan will no longer be an asset of any Trust REMIC or
the
Trust Fund.
“Relevant
Servicing Criteria”:
Means
the Servicing Criteria applicable to the various parties, as set forth on
Exhibit E attached hereto. For clarification purposes, multiple parties can
have
responsibility for the same Relevant Servicing Criteria. With respect to
a
Servicing Function Participant engaged by the Master Servicer, the Securities
Administrator, the Trustee or the Servicer, the term “Relevant Servicing
Criteria” may refer to a portion of the Relevant Servicing Criteria applicable
to such parties.
“Relief
Act”:
The
Servicemembers Civil Relief Act, as amended, or similar state or local
laws.
“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 Relief Act.
“REMIC”:
A
“real estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
“REMIC
I”:
The
segregated pool of assets subject hereto, constituting the primary trust
created
hereby and to be administered hereunder, with respect to which a REMIC election
is to be made, consisting of: (i) such Mortgage Loans and Prepayment Charges
as
from time to time are subject to this Agreement, together with the Mortgage
Files relating thereto, and together with all collections thereon and proceeds
thereof; (ii) any REO Property, together with all collections thereon and
proceeds thereof; (iii) the Trustee’s rights with respect to the Mortgage Loans
under all insurance policies required to be maintained pursuant to this
Agreement and any proceeds thereof; (iv) the Depositor’s rights under the
Mortgage Loan Purchase Agreement (including any security interest created
thereby) and Assignment Agreement; and (v) the Collection Account, the
Distribution Account and any REO Account, and such assets that are deposited
therein from time to time and any investments thereof, together with any
and all
income, proceeds and payments with respect thereto. Notwithstanding the
foregoing, however, REMIC I specifically excludes (i) all payments and other
collections of principal and interest due on the Mortgage Loans on or before
the
Cut-off Date and all Prepayment Charges payable in connection with Principal
Prepayments made before the Cut-off Date; (ii) the Reserve Fund and any amounts
on deposit therein from time to time and any proceeds thereof; (iii) the
Swap
Agreement; and (iv) the Supplemental Interest Trust.
42
“REMIC
I Regular Interests”:
REMIC
I Regular Interest I and REMIC I Regular Interest I-1-A through REMIC I Regular
Interest I-53-B as designated in the Preliminary Statement hereto.
“REMIC
I Regular Interest”:
Any of
the separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a “regular interest” in REMIC I. Each REMIC I
Regular Interest shall accrue interest at the related REMIC I Remittance
Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
I Remittance Rate”:
With
respect to REMIC I Regular Interest I, a per annum rate equal to the weighted
average of the Net Mortgage Rates of the Mortgage Loans. With respect to
each
REMIC I Regular Interest ending with the designation “A”, a per annum rate equal
to the weighted average of the Net Mortgage Rates of the Mortgage Loans
multiplied by 2, subject to a maximum rate of 10.130%. With respect to each
REMIC I Regular Interest ending with the designation “B”, the greater of (x) a
per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted
average of the Net Mortgage Rates of the Mortgage Loans over (ii) 10.130%
and
(y) 0.00%.
“REMIC
II”:
The
segregated pool of assets consisting of all of the REMIC I Regular Interests
conveyed in trust to the Trustee, for the benefit of the REMIC II Regular
Interests pursuant to Section 2.07, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
“REMIC
II Interest Loss Allocation Amount”:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) the REMIC II Remittance Rate for REMIC II Regular Interest
AA minus the Marker Rate, divided by (b) 12.
“REMIC
II Overcollateralization Amount”:
With
respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
Balances of the REMIC II Regular Interests (other than REMIC II Regular Interest
P) minus (ii) the aggregate of the Uncertificated Balances of REMIC II Regular
Interest A, REMIC II Regular Interest M-1, REMIC II Regular Interest M-2,
REMIC
II Regular Interest M-3 and REMIC II Regular Interest M-4, in each case as
of
such date of determination.
43
“REMIC
II Principal Loss Allocation Amount”:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times
the
aggregate of the Uncertificated Balances of REMIC II Regular Interest A,
REMIC
II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular
Interest M-3 and REMIC II Regular Interest M-4 and the denominator of which
is
the aggregate of the Uncertificated Balances of REMIC II Regular Interest
A,
REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4 and REMIC II Regular Interest
ZZ.
“REMIC
II Regular Interest”:
Any of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a “regular interest” in REMIC II. Each REMIC II
Regular Interest shall accrue interest at the related REMIC II Remittance
Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC II Regular Interests
are set forth in the Preliminary Statement hereto.
“REMIC
II Regular Interest AA”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest AA shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Regular Interest A”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest A shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Regular Interest IO”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest IO shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time and shall not be entitled to distributions of
principal.
“REMIC
II Regular Interest M-1”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest M-1 shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
44
“REMIC
II Regular Interest M-2”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest M-2 shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Regular Interest M-3”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest M-3 shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Regular Interest M-4”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest M-4 shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Regular Interest P”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest P shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Regular Interest ZZ”:
One of
the separate non-certificated beneficial ownership interests in REMIC II
issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest ZZ shall accrue interest at the related REMIC II Remittance Rate
in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal
to its
initial Uncertificated Balance as set forth in the Preliminary Statement
hereto.
“REMIC
II Remittance Rate”:
With
respect to REMIC II Regular Interest AA, REMIC II Regular Interest A, REMIC
II
Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular Interest
M-3, REMIC II Regular Interest M-4, REMIC II Regular Interest ZZ and REMIC
II
Regular Interest P, a per annum rate (but not less than zero) equal to the
weighted average of: (w) with respect to REMIC I Regular Interest I, the
REMIC I
Remittance Rate for each such REMIC I Regular Interest for each such
Distribution Date, (x) with respect to each REMIC I Regular Interest ending
with
the designation “B”, the weighted average of the REMIC I Remittance Rates for
such REMIC I Regular Interests, weighted on the basis of the Uncertificated
Balances of such REMIC I Regular Interests for each such Distribution Date
and
(y) with respect to REMIC I Regular Interests ending with the designation
“A”,
for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC I Regular Interest listed below, weighted
on
the basis of the Uncertificated Balances of each such REMIC I Regular Interest
for each such Distribution Date:
45
|
Distribution
Date
|
REMIC
I Regular Interest
|
Rate
|
|
1
|
I-1-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
2
|
I-2-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
|
REMIC
I Remittance Rate
|
|
|
3
|
I-3-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
and I-2-A
|
REMIC
I Remittance Rate
|
|
|
4
|
I-4-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-3-A
|
REMIC
I Remittance Rate
|
|
|
5
|
I-5-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-4-A
|
REMIC
I Remittance Rate
|
|
|
6
|
I-6-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-5-A
|
REMIC
I Remittance Rate
|
|
|
7
|
I-7-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-6-A
|
REMIC
I Remittance Rate
|
|
|
8
|
I-8-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-7-A
|
REMIC
I Remittance Rate
|
|
|
9
|
I-9-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-8-A
|
REMIC
I Remittance Rate
|
|
|
10
|
I-10-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-9-A
|
REMIC
I Remittance Rate
|
|
|
11
|
I-11-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-10-A
|
REMIC
I Remittance Rate
|
|
|
12
|
I-12-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-11-A
|
REMIC
I Remittance Rate
|
|
|
13
|
I-13-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-12-A
|
REMIC
I Remittance Rate
|
|
|
14
|
I-14-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-13-A
|
REMIC
I Remittance Rate
|
|
46
|
Distribution
Date
|
REMIC
I Regular Interest
|
Rate
|
|
15
|
I-15-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-14-A
|
REMIC
I Remittance Rate
|
|
|
16
|
I-16-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-15-A
|
REMIC
I Remittance Rate
|
|
|
17
|
I-17-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-16-A
|
REMIC
I Remittance Rate
|
|
|
18
|
I-18-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-17-A
|
REMIC
I Remittance Rate
|
|
|
19
|
I-19-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-18-A
|
REMIC
I Remittance Rate
|
|
|
20
|
I-20-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-19-A
|
REMIC
I Remittance Rate
|
|
|
21
|
I-21-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-20-A
|
REMIC
I Remittance Rate
|
|
|
22
|
I-22-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-21-A
|
REMIC
I Remittance Rate
|
|
|
23
|
I-23-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-22-A
|
REMIC
I Remittance Rate
|
|
|
24
|
I-24-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-23-A
|
REMIC
I Remittance Rate
|
|
|
25
|
I-25-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-24-A
|
REMIC
I Remittance Rate
|
|
|
26
|
I-26-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-25-A
|
REMIC
I Remittance Rate
|
|
|
27
|
I-27-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-26-A
|
REMIC
I Remittance Rate
|
|
|
28
|
I-28-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-27-A
|
REMIC
I Remittance Rate
|
|
|
29
|
I-29-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-28-A
|
REMIC
I Remittance Rate
|
|
47
|
Distribution
Date
|
REMIC
I Regular Interest
|
Rate
|
|
30
|
I-30-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-29-A
|
REMIC
I Remittance Rate
|
|
|
31
|
I-31-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-30-A
|
REMIC
I Remittance Rate
|
|
|
32
|
I-32-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-31-A
|
REMIC
I Remittance Rate
|
|
|
33
|
I-33-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-32-A
|
REMIC
I Remittance Rate
|
|
|
34
|
I-34-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-33-A
|
REMIC
I Remittance Rate
|
|
|
35
|
I-35-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-34-A
|
REMIC
I Remittance Rate
|
|
|
36
|
I-36-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-35-A
|
REMIC
I Remittance Rate
|
|
|
37
|
I-37-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-36-A
|
REMIC
I Remittance Rate
|
|
|
38
|
I-38-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-37-A
|
REMIC
I Remittance Rate
|
|
|
39
|
I-39-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-38-A
|
REMIC
I Remittance Rate
|
|
|
40
|
I-40-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-39-A
|
REMIC
I Remittance Rate
|
|
|
41
|
I-41-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-40-A
|
REMIC
I Remittance Rate
|
|
|
42
|
I-42-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-41-A
|
REMIC
I Remittance Rate
|
|
|
43
|
I-43-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-42-A
|
REMIC
I Remittance Rate
|
|
|
44
|
I-44-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-43-A
|
REMIC
I Remittance Rate
|
|
48
|
Distribution
Date
|
REMIC
I Regular Interest
|
Rate
|
|
45
|
I-45-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-44-A
|
REMIC
I Remittance Rate
|
|
|
46
|
I-46-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-45-A
|
REMIC
I Remittance Rate
|
|
|
47
|
I-47-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-46-A
|
REMIC
I Remittance Rate
|
|
|
48
|
I-48-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-47-A
|
REMIC
I Remittance Rate
|
|
|
49
|
I-49-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-48-A
|
REMIC
I Remittance Rate
|
|
|
50
|
I-50-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-49-A
|
REMIC
I Remittance Rate
|
|
|
51
|
I-51-A
through I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-50-A
|
REMIC
I Remittance Rate
|
|
|
52
|
I-52-A
and I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-51-A
|
REMIC
I Remittance Rate
|
|
|
53
|
I-53-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of REMIC I
Remittance
Rate
|
|
I-1-A
through I-52-A
|
REMIC
I Remittance Rate
|
|
|
thereafter
|
I-1-A
through I-53-A
|
REMIC
I Remittance Rate
|
With
respect to REMIC II Regular Interest IO, and (i) the 1st Distribution Date
through the 53th Distribution Date, the excess of (x) the weighted average
of
the REMIC I Remittance Rates for REMIC I Regular Interests including the
designation “A”, over (y) 2 multiplied by Swap LIBOR and (iii) thereafter,
0.00%.
“REMIC
II Required Overcollateralization Amount”:
1.00%
of the Required Overcollateralization Amount.
“REMIC
III”:
The
segregated pool of assets consisting of all of the REMIC II Regular Interests
conveyed in trust to the Trustee, for the benefit of the REMIC III
Certificateholders pursuant to Section 2.07, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.
“REMIC
III Certificate”:
Any
Regular Certificate or Class R Certificate.
“REMIC
III Certificateholder”:
The
Holder of any REMIC III Certificate.
“REMIC
Provisions”:
Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Section 860A through 860G of the Code,
and
related provisions, and proposed, temporary and final regulations and published
rulings, notices and announcements promulgated thereunder, as the foregoing
may
be in effect from time to time.
49
“REMIC
Regular Interest”:
Any
REMIC I Regular Interest or REMIC II Regular Interest.
“REMIC
Remittance Rate”:
The
REMIC I Remittance Rate or the REMIC II Remittance Rate.
“Remittance
Report”:
A
report by the Servicer pursuant to Section 5.03(a) of this
Agreement.
“Rents
from Real Property”:
With
respect to any REO Property, gross income of the character described in Section
856(d) of the Code as being included in the term “rents from real
property.”
“REO
Account”:
The
account or accounts maintained, or caused to be maintained, by the Servicer
in
respect of an REO Property pursuant to Section 3.22 of this
Agreement.
“REO
Disposition”:
The
sale or other disposition of an REO Property on behalf of REMIC I.
“REO
Imputed Interest”:
As to
any REO Property, for any calendar month during which such REO Property was
at
any time part of REMIC I, one month’s interest at the applicable Net Mortgage
Rate on the Stated Principal Balance of such REO Property (or, in the case
of
the first such calendar month, of the related Mortgage Loan, if appropriate)
as
of the close of business on the Distribution Date in such calendar
month.
“REO
Principal Amortization”:
With
respect to any REO Property, for any calendar month, the excess, if any,
of (a)
the aggregate of all amounts received in respect of such REO Property during
such calendar month, whether in the form of rental income, sale proceeds
(including, without limitation, that portion of the Termination Price paid
in
connection with a purchase of all of the Mortgage Loans and REO Properties
pursuant to Section 10.01 of this Agreement that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable in
respect of the proper operation, management and maintenance of such REO Property
or (ii) payable or reimbursable to the Servicer pursuant to Section 3.22(d)
of
this Agreement for unpaid Servicing Fees in respect of the related Mortgage
Loan
and unreimbursed Servicing Advances and P&I Advances in respect of such REO
Property or the related Mortgage Loan, over (b) the REO Imputed Interest
in
respect of such REO Property for such calendar month.
“REO
Property”:
A
Mortgaged Property acquired by the Servicer or its nominee on behalf of REMIC
I
through foreclosure or deed-in-lieu of foreclosure, as described in Section
3.22
of this Agreement.
“Reportable
Event”:
Has
the meaning set forth in Section 5.06(b) of this Agreement.
50
“Required
Overcollateralization Amount”:
With
respect to any Distribution Date (i) prior to the Stepdown Date, the sum
of (1)
product of (A) 0.95% and (B) the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date and (2) the cumulative aggregate amount of Net
Monthly Excess Cashflow paid to the Class M-3 Certificates and Class M-4
Certificates pursuant to clause ninth
of
Section 5.01(c)(5)(ix) on all prior Distribution Dates, (ii) on or after
the
Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
the
sum of (A) 1.90% of the aggregate Stated Principal Balance of the Mortgage
Loans
(after giving effect to principal payments to be distributed on such
Distribution Date) and (B) the cumulative aggregate amount of Net Monthly
Excess
Cashflow paid to the Class M-3 Certificates and Class M-4 Certificates pursuant
to clause ninth
of
Section 5.01(c)(5)(ix) on all prior Distribution Dates and (y) an amount
equal
to the product of (A) 0.50% and (B) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date
and a Trigger Event is in effect, the Required Overcollateralization Amount
for
the immediately preceding Distribution Date. Notwithstanding the foregoing,
on
and after any Distribution Date following the reduction of the aggregate
Certificate Principal Balance of the Class A Certificates and Mezzanine
Certificates to zero, the Required Overcollateralization Amount shall be
zero.
“Reserve
Fund”:
A fund
created pursuant to Section 3.25 which shall be an asset of the Trust Fund
but
which shall not be an asset of any Trust REMIC.
“Reserve
Interest Rate”:
With
respect to any Interest Determination Date, the rate per annum that the
Securities Administrator determines to be either (i) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/16%) of
the
one-month U.S. dollar lending rates which New York City banks selected by
the
Securities Administrator, after consultation with the Depositor, are quoting
on
the relevant Interest Determination Date to the principal London offices
of
leading banks in the London interbank market or (ii) in the event that the
Securities Administrator can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by
the
Securities Administrator are quoting on such Interest Determination Date
to
leading European banks.
“Residential
Dwelling”:
Any
one of the following: (i) a attached, detached or semi-detached one to
four-family dwelling, (ii) a one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible
condominium project or (iii) a detached one-family dwelling in a planned
unit
development, none of which is a co-operative or mobile home.
“Residual
Certificate”:
Any
one of the Class R Certificates.
“Residual
Interest”:
The
sole class of “residual interests” in a REMIC within the meaning of Section
860G(a)(2) of the Code.
“Responsible
Officer”:
When
used with respect to the Trustee, any officer of the Trustee having direct
responsibility for the administration of this Agreement and, with respect
to a
particular matter, to whom such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject.
51
“Reuters
Screen LIBOR01 Page”:
The
display page currently so designated on the Reuters Monitor Money Rates Service
(or such other page as may replace that page on that service for the purpose
of
displaying comparable rates or prices).
“Rule
144A”:
Rule
144A under the Securities Act.
“S&P”:
Standard & Poor’s, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.
“▇▇▇▇▇▇▇▇-▇▇▇▇▇
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).
“▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification”:
A
written certification signed by an officer of the Master Servicer that complies
with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended from time to time, and
(ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
is
amended, (b) the Rules referred to in clause (ii) are modified or superseded
by
any subsequent statement, rule or regulation of the Commission or any statement
of a division thereof, or (c) any future releases, rules and regulations
are
published by the Commission from time to time pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act
of 2002, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable
judgment of the Master Servicer, materially more onerous that then form of
the
required certification as of the Closing Date, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
shall be as agreed to by the Master Servicer, the Depositor and the Sponsor
following a negotiation in good faith to determine how to comply with any
such
new requirements.
“Scheduled
Payments”:
With
respect to any Distribution Date with respect to the Insured Certificates
during
the Term of the Policy, (i) the Interest Distribution Amount distributable
in
respect of such Class on such Distribution Date (calculated without regard
to
any step-up following an optional termination date), (ii) if such
Distribution Date is not the Final Maturity Date, the amount, if any, by
which
the Certificate Principal Balance of the Insured Certificates (after giving
effect to all distributions to the Insured Certificates on such Distribution
Date) exceeds the aggregate principal balance of the Mortgage Loans as of
the
last day of the related Due Period, and (iii) for the Final Maturity Date,
the
Certificate Principal Balance of the Insured Certificates outstanding on
such
Distribution Date after giving effect to all distributions to the Insured
Certificates on such date, in each case, in accordance with the original
terms
of the Insured Certificates and this Agreement when the Insured Certificates
were issued and without regard to any subsequent amendment or modification
of
the Insured Certificates or this Agreement that has not been consented to
in
writing by the Class A Certificate Insurer. Notwithstanding the foregoing,
“Scheduled Payments” shall in no event include payments which become due on an
accelerated basis as a result of any optional termination, in whole or in
part,
or any other cause, unless the Class A Certificate Insurer elects, in its
sole
discretion, to pay such amounts in whole or in part (in which event Scheduled
Payments shall include such accelerated payments as, when, and to the extent
so
elected by the Class A Certificate Insurer). In the event that the Class
A
Certificate Insurer does not make such election, “Scheduled Payments” shall
include payments due in accordance with the original scheduled terms of the
Insured Certificates without regard to any acceleration. In addition, “Scheduled
Payments” shall not include, nor shall coverage be provided under the Policy in
respect of (i) any amounts due in respect of the Insured Certificates
attributable to any increase in interest rate, penalty or other sum payable
by
the Trust by reason of any default or event of default in respect of the
Insured
Certificates, or by reason of any deterioration of the creditworthiness of
the
Trust, (ii) any shortfalls in interest arising out of the application of
the
Relief Act or any similar state or local laws, regulations or ordinances,
(iii)
Prepayment Interest Shortfalls, (iv) Net WAC Rate Carryover Amounts,
(v) any portion of the Interest Distribution Amount for the Insured
Certificates payable as a result of an increase in the related Pass-Through
Rate
following the Optional Termination Date, or (vi) any taxes, withholding or
other
charge imposed by any governmental authority due in connection with the payment
of any Scheduled Payment to any holder or owner of an Insured
Certificate.
52
“Scheduled
Principal Balance”:
With
respect to any Mortgage Loan: (a) as of the Cut-off Date, the outstanding
principal balance of such Mortgage Loan as of such date, net of the principal
portion of all unpaid Monthly Payments, if any, due on or before such date;
(b)
as of any Due Date subsequent to the Cut-off Date up to and including the
Due
Date in the calendar month in which a Liquidation Event occurs with respect
to
such Mortgage Loan, the Scheduled Principal Balance of such Mortgage Loan
as of
the Cut-off Date, minus the sum of (i) the principal portion of each Monthly
Payment due on or before such Due Date but subsequent to the Cut-off Date,
whether or not received, (ii) all Principal Prepayments received before such
Due
Date but after the Cut-off Date, (iii) the principal portion of all Liquidation
Proceeds and Insurance Proceeds received before such Due Date but after the
Cut-off Date, net of any portion thereof that represents principal due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) on a Due Date occurring on or before the date on which such proceeds
were
received and (iv) any Realized Loss incurred with respect thereto as a result
of
a Deficient Valuation occurring before such Due Date, but only to the extent
such Realized Loss represents a reduction in the portion of principal of
such
Mortgage Loan not yet due (without regard to any acceleration of payments
under
the related Mortgage and Mortgage Note) as of the date of such Deficient
Valuation; and (c) as of any Due Date subsequent to the occurrence of a
Liquidation Event with respect to such Mortgage Loan, zero. With respect
to any
REO Property: (a) as of any Due Date subsequent to the date of its acquisition
on behalf of the Trust Fund up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such REO Property,
an
amount (not less than zero) equal to the Scheduled Principal Balance of the
related Mortgage Loan as of the Due Date in the calendar month in which such
REO
Property was acquired, minus the aggregate amount of REO Principal Amortization,
if any, in respect of REO Property for all previously ended calendar months;
and
(b) as of any Due Date subsequent to the occurrence of a Liquidation Event
with
respect to such REO Property, zero.
“Securities
Act”:
The
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
“Securities
Administrator”:
As of
the Closing Date, ▇▇▇▇▇ Fargo Bank, National Association and thereafter,
its
respective successors in interest that meet the qualifications of this
Agreement. The Securities Administrator and the Master Servicer shall at
all
times be the same Person or Affiliates.
53
“Senior
Interest Distribution Amount”:
With
respect to any Distribution Date, an amount equal to the sum of (i) the Interest
Distribution Amount for such Distribution Date for the Class A Certificates
and
(ii) the Interest Carry Forward Amount, if any, for such Distribution Date
for
the Class A Certificates.
“Servicer”:
GMAC
or any successor thereto appointed hereunder in connection with the servicing
and administration of the Mortgage Loans.
“Servicer
Event of Default”:
One or
more of the events described in Section 8.01(a).
“Servicer
Remittance Date”:
With
respect to any Distribution Date, by 12:00 p.m. New York time on the 18th
day of
the month in which such Distribution Date occurs; provided that if such 18th
day
of a given month is not a Business Day, the Servicer Remittance Date for
such
month shall be the Business Day immediately preceding such 18th day.
“Servicer
Report”:
A
report (substantially in the form of Schedule 5 hereto) or otherwise in form
and
substance acceptable to the Master Servicer and Securities Administrator
on an
electronic data file or tape prepared by the Servicer pursuant to Section
5.03(a) of this Agreement, with such additions, deletions and modifications
as
agreed to by the Master Servicer, the Securities Administrator and the
Servicer.
“Service(s)(ing)”:
Means,
in accordance with Regulation AB, the act of servicing and administering
the
Mortgage Loans or any other assets of the Trust by an entity that meets the
definition of “servicer” set forth in Item 1101 of Regulation AB and is subject
to the disclosure requirements set forth in Item 1108 of Regulation AB. For
clarification purposes, any uncapitalized occurrence of this term shall have
the
meaning commonly understood by participants in the residential mortgage-backed
securitization market.
“Servicing
Advances”:
The
customary and reasonable “out-of-pocket” costs and expenses incurred prior to or
on or after the Cut-off Date by the Servicer in connection with a default,
delinquency or other unanticipated event by the Servicer in the performance
of
its servicing obligations, including, but not limited to, the cost of (i)
the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including but not limited to foreclosures,
in respect of a particular Mortgage Loan, including any expenses incurred
in
relation to any such proceedings that result from the Mortgage Loan being
registered on the MERS® System, (iii) the management (including reasonable fees
in connection therewith) and liquidation of any REO Property, (iv) refunding
to
any Mortgagor the portion of any prepaid origination fees or finance charges
that are subject to reimbursement upon a principal prepayment of the related
Mortgage Loan to the extent such refund is required by applicable law; and
(v)
obtaining any legal documentation required to be included in the Mortgage
File
and/or correcting any outstanding title issues (i.e., any lien or encumbrance
on
the Mortgaged Property that prevents the effective enforcement of the intended
lien position) reasonably necessary for the Servicer to perform its obligations
under this Agreement. Servicing Advances also include any reasonable
“out-of-pocket” cost and expenses (including legal fees) incurred by the
Servicer in connection with executing and recording instruments of satisfaction,
deeds of reconveyance or Assignments to the extent not recovered from the
Mortgagor or otherwise payable under this Agreement. The Servicer shall not
be
required to make any Nonrecoverable Servicing Advances.
54
“Servicing
Advance Schedule”:
With
respect to any Servicing Advances incurred prior to the Cut-off Date, the
schedule or schedules provided by (a) the Servicer with respect to any Mortgage
Loans that were transferred to the Servicer prior to the Cut-off Date and/or
(b)
the Depositor with respect to any Mortgage Loans that were transferred to
the
Servicer after the Cut-off Date, as applicable, to the Master Servicer and,
if
such schedule is provided by the Depositor, to the Servicer, on the date
on
which the Servicer seeks reimbursement for a Servicing Advance made by the
Servicer, which schedule or schedules shall contain the information set forth
on
Schedule 6.
“Servicing
Criteria”:
Means
the criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as
such
may be amended from time to time.
“Servicing
Fee”:
With
respect to each Mortgage Loan and for any calendar month, an amount equal
to
one-twelfth of the product of the Servicing Fee Rate multiplied by the Scheduled
Principal Balance of the Mortgage Loans as of the Due Date in the preceding
calendar month. The Servicing Fee is payable solely from collections of interest
on the Mortgage Loans, except as otherwise provided in Section 3.09 of this
Agreement.
“Servicing
Fee Rate”:
0.50%
per annum.
“Servicing
Function Participant”:
Means
any Sub-Servicer, Subcontractor or any other Person, other than the Servicer,
the Master Servicer, the Custodian, the Trustee and the Securities
Administrator, that is determined to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, without regard to
any threshold referenced therein.
“Servicing
Officer”:
Any
officer of the Servicer or the Master Servicer involved in, or responsible
for,
the administration and servicing of Mortgage Loans, whose name and specimen
signature appear on a list of Servicing Officers furnished by the Servicer
or
the Master Servicer, to the Trustee, the Master Servicer (in the case of
the
Servicer), the Securities Administrator and the Depositor on the Closing
Date,
as such list may from time to time be amended.
“Servicing
Performance Standards”:
The
servicing performance standards applicable to the Servicer and set forth
on
Schedule 3 attached hereto.
“Single
Certificate”:
With
respect to any Class of Certificates (other than the Residual Certificates),
a
hypothetical Certificate of such Class evidencing a Percentage Interest for
such
Class corresponding to an initial Certificate Principal Balance of $1,000.
With
respect to the Residual Certificates, a hypothetical Certificate of such
Class
evidencing a 100% Percentage Interest in such Class.
“Special
Servicing Practices”:
With
regard to any Charged Off Loans, the servicing of such Charged Off Loans
using
specialized collection procedures (including foreclosure, if appropriate)
to
maximize recoveries.
55
“Sponsor”:
SunTrust Asset Funding, LLC or its successor in interest, in its capacity
as
seller under the Mortgage Loan Purchase Agreement.
“Startup
Day”:
With
respect to each Trust REMIC, the day designated as such pursuant to Section
11.01(b) hereof.
“Stated
Principal Balance”:
With
respect to any Mortgage Loan: (a) as of any date of determination up to but
not
including the Distribution Date on which the proceeds, if any, of a Liquidation
Event with respect to such Mortgage Loan would be distributed, the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, as shown
in the
Mortgage Loan Schedule, minus the sum of (i) the principal portion of each
Monthly Payment due on a Due Date subsequent to the Cut-off Date, to the
extent
received from the Mortgagor or advanced by the Servicer or a successor to
the
Servicer and distributed pursuant to Section 5.01 of this Agreement on or
before
such date of determination, (ii) all Principal Prepayments received after
the
Cut-off Date, to the extent distributed pursuant to Section 5.01 of this
Agreement on or before such date of determination, (iii) all Liquidation
Proceeds and Insurance Proceeds applied by the Servicer as recoveries of
principal in accordance with the provisions of Section 3.13 of this Agreement,
to the extent distributed pursuant to Section 5.01 of this Agreement on or
before such date of determination, and (iv) any Realized Loss incurred with
respect thereto as a result of a Deficient Valuation made during or prior
to the
Prepayment Period for the most recent Distribution Date coinciding with or
preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds,
if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property
would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property
was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month
of
acquisition, to the extent advanced by the Servicer or a successor to the
Servicer and distributed pursuant to Section 5.01 of this Agreement, on or
before such date of determination and (ii) the aggregate amount of REO Principal
Amortization in respect of such REO Property for all previously ended calendar
months, to the extent distributed pursuant to Section 5.01 of this Agreement
on
or before such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds,
if
any, of a Liquidation Event with respect to such REO Property would be
distributed, zero.
“Stepdown
Date”:
The
earlier to occur of (i) the later to occur of (a) the Distribution Date
occurring in May 2010 and (b) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Mortgage Loans, but prior to any
distribution of the Principal Distribution Amount to the holders of the
Certificates then entitled to distributions of principal on such Distribution
Date), is greater than or equal to 29.00% and (ii) the first Distribution
Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero.
“Subcontractor”:
Means
any vendor, subcontractor or other Person that is not responsible for the
overall servicing of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB (without regard to any threshold
percentage specified therein) with respect to Mortgage Loans under the direction
or authority of the Servicer (or a Sub-Servicer of the Servicer), the Master
Servicer, the Trustee, the Custodian or the Securities
Administrator.
56
“Subordinate
Certificates”:
Collectively, the Mezzanine Certificates and the Class CE
Certificates.
“Subsequent
Recoveries”:
As of
any Distribution Date, amounts received during the related Prepayment Period
by
the Servicer specifically related to a defaulted Mortgage Loan or disposition
of
an REO Property prior to the related Prepayment Period that resulted in a
Realized Loss, (i) with respect to a Charged Off Loan, after such Mortgage
Loan
has been charged off by the Servicer and prior to it being released from
the
Trust or (ii) with respect to a Liquidated Mortgage Loan, after the liquidation
or disposition of such defaulted Mortgage Loan, in each case net of any amounts
reimbursable to the Servicer relating to obtaining such Subsequent
Recovery.
“Sub-Servicer”:
Means
any Person that services Mortgage Loans on behalf of any Servicer and is
responsible for the performance (whether directly or through sub-servicers
or
Subcontractors) of a substantial portion of the material servicing functions
required to be performed under this Agreement or any related Sub-Servicing
Agreement that is identified in Item 1122(d) of Regulation AB.
“Sub-Servicing
Agreement”:
The
written contract between the Servicer and a Sub-Servicer relating to servicing
and administration of certain Mortgage Loans as provided in Section 3.02
of this
Agreement.
“Substitution
Shortfall Amount”:
As
defined in Section 2.03.
“Supplemental
Interest Trust”:
The
corpus of a trust created pursuant to Section 5.07 of this Agreement and
designated as the “Supplemental Interest Trust,” consisting of the Swap
Agreement, the Class IO Interest and the right to receive payments in respect
of
the Class IO Distribution Amount. For the avoidance of doubt, the Supplemental
Interest Trust does not constitute a part of the Trust Fund.
“Supplemental
Interest Trust Trustee”:
HSBC
Bank USA, National Association a national banking association, or its successor
in interest, or any successor supplemental interest trust trustee appointed
as
provided herein or in the Swap Agreement provided.
“Swap
Agreement”:
The
Interest Rate Swap Agreement, dated as of May 15, 2007, between the Supplemental
Interest Trust Trustee, and the Swap Provider, including any schedule,
confirmations, credit support annex or other credit support document relating
thereto, and attached hereto as Exhibit I.
“Swap
Credit Support Annex:
The
credit support annex, dated as of May 14, 2007, between the Supplemental
Interest Trust Trustee and the Swap Provider, which is annexed to and forms
part
of the Swap Agreement.
57
“Swap
LIBOR”:
LIBOR
as determined pursuant to the Swap Agreement.
“Swap
Notional Amount”:
For
each calculation period as defined in the Swap Agreement, the amount set
forth
below:
|
Distribution
Date
|
Swap
Notional Amount ($)
|
|
May
25, 2007
|
335,803,000.00
|
|
June
25, 2007
|
327,818,269.15
|
|
July
25, 2007
|
319,139,157.37
|
|
August
25, 2007
|
309,802,003.79
|
|
September
25, 2007
|
299,848,197.13
|
|
October
25, 2007
|
289,323,965.95
|
|
November
25, 2007
|
278,280,108.26
|
|
December
25, 2007
|
266,771,660.14
|
|
January
25, 2008
|
254,858,168.73
|
|
February
25, 2008
|
243,446,975.51
|
|
March
25, 2008
|
232,545,772.45
|
|
April
25, 2008
|
222,131,800.07
|
|
May
25, 2008
|
212,183,313.47
|
|
June
25, 2008
|
202,679,537.02
|
|
July
25, 2008
|
193,600,621.36
|
|
August
25, 2008
|
184,927,601.97
|
|
September
25, 2008
|
176,642,359.89
|
|
October
25, 2008
|
168,727,583.98
|
|
November
25, 2008
|
161,166,734.99
|
|
December
25, 2008
|
153,944,011.13
|
|
January
25, 2009
|
147,044,315.24
|
|
February
25, 2009
|
140,453,223.41
|
|
March
25, 2009
|
134,156,954.99
|
|
April
25, 2009
|
128,142,343.88
|
|
May
25, 2009
|
122,396,811.22
|
|
June
25, 2009
|
116,908,339.18
|
|
July
25, 2009
|
111,665,445.98
|
|
August
25, 2009
|
106,657,162.00
|
|
September
25, 2009
|
101,873,006.96
|
|
October
25, 2009
|
97,302,968.13
|
|
November
25, 2009
|
92,937,479.45
|
|
December
25, 2009
|
88,767,401.66
|
|
January
25, 2010
|
84,784,003.30
|
|
February
25, 2010
|
80,978,942.46
|
|
March
25, 2010
|
77,344,249.50
|
|
April
25, 2010
|
73,872,310.40
|
|
May
25, 2010
|
70,555,850.96
|
|
June
25, 2010
|
67,387,921.58
|
|
July
25, 2010
|
64,361,882.86
|
|
August
25, 2010
|
61,471,391.74
|
|
September
25, 2010
|
58,710,388.28
|
|
October
25, 2010
|
56,073,083.07
|
|
November
25, 2010
|
53,553,945.13
|
|
December
25, 2010
|
51,147,690.41
|
58
|
January
25, 2011
|
48,849,270.79
|
|
February
25, 2011
|
46,653,863.50
|
|
March
25, 2011
|
44,556,861.17
|
|
April
25, 2011
|
42,553,862.16
|
|
May
25, 2011
|
40,640,661.35
|
|
June
25, 2011
|
38,813,241.45
|
|
July
25, 2011
|
37,067,764.62
|
|
August
25, 2011
|
35,400,564.38
|
|
September
25, 2011
|
33,808,138.07
|
|
October
25, 2011 and thereafter
|
0.00
|
“Swap
Provider”:
The
swap provider under the Swap Agreement. Initially, the Swap Provider shall
be
Bear ▇▇▇▇▇▇▇ Financial Products Inc.
“Swap
Provider Trigger Event”:
A Swap
Provider Trigger Event shall have occurred if any of the following has occurred:
(i) an Event of Default under the Swap Agreement with respect to which the
Swap
Provider is a Defaulting Party (as defined in the Swap Agreement), (ii) a
Termination Event under the Swap Agreement with respect to which the Swap
Provider is the sole Affected Party (as defined in the Swap Agreement) or
(iii)
an Additional Termination Event under the Swap Agreement with respect to
which
the Swap Provider is the sole Affected Party.
“Swap
Termination Payment”:
Upon
the designation of an “Early Termination Date” as defined in the Swap Agreement,
the payment to be made by the Securities Administrator on behalf of the
Supplemental Interest Trust Trustee from the Supplemental Interest Trust
to the
Swap Provider, or by the Swap Provider to the Supplemental Interest Trust,
as
applicable, pursuant to the terms of the Swap Agreement.
“Tax
Returns”:
The
federal income tax return on Internal Revenue Service Form 1066, U.S. Real
Estate Mortgage Investment Conduit Income Tax Return, including Schedule
Q
thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income
or Net Loss Allocation, or any successor forms, to be filed on behalf of
the
Trust REMICs under the REMIC Provisions, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal,
state
or local tax laws.
“Termination
Price”:
As
defined in Section 10.01.
“Terminator”:
As
defined in Section 10.01.
“Term
of the Policy”:
The
period from and including the Closing Date to and including the first date
on
which (i) all Scheduled Payments have been paid that are required to be paid
under this Agreement; (ii) any period during which any Scheduled Payment
could
have been avoided in whole or in part as a preference payment under applicable
bankruptcy, insolvency, receivership or similar law has expired, and (iii)
if
any proceedings requisite to avoidance as a preference payment have been
commenced prior to the occurrence of (i) and (ii) above, a final and
nonappealable order in resolution of each such proceeding has been entered;
provided, further, that if the holders of Insured Certificates are required
to
return any Avoided Payment as a result of such Insolvency Proceeding, then
the
Term of the Policy shall terminate on the date on which the Class A Certificate
Insurer has made all payments required to be made under the terms of the
Policy
in respect of all such Avoided Payments.
59
“Transfer”:
Any
direct or indirect transfer, sale, pledge, hypothecation, or other form of
assignment of any Ownership Interest in a Certificate.
“Transferee”:
Any
Person who is acquiring by Transfer any Ownership Interest in a
Certificate.
“Transferor”:
Any
Person who is disposing by Transfer of any Ownership Interest in a
Certificate.
“Trigger
Event”:
With
respect to any Distribution Date, a Trigger Event is in effect if either
(x) the
Delinquency Percentage exceeds 4.50% or (y) 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 principal balance of the Mortgage Loans as
of
the Cut-off Date exceeds the applicable percentages set forth below with
respect
to such Distribution Date:
|
Distribution
Date
|
Percentages
|
|
|
May
2010 to April 2011
|
4.25%
plus 1/12 of 2.25% for each month thereafter
|
|
|
May
2011 to April 2012
|
6.50%
plus 1/12 of 0.75% for each month thereafter
|
|
|
May
2012 to April 2013
|
7.25%
plus 1/12 of 1.00% for each month thereafter
|
|
|
May
2013 and thereafter
|
8.25%
|
“Trust”:
SunTrust Acquisition Closed-End Seconds Trust, Series 2007-1, the trust created
hereunder.
“Trust
Fund”:
Collectively, all of the assets of REMIC I, REMIC II, REMIC III and the Reserve
Fund and any amounts on deposit therein and any proceeds thereof. For avoidance
of doubt, the Trust Fund does not include the Supplemental Interest
Trust.
“Trust
REMIC”:
REMIC
I, REMIC II or REMIC III.
“Trustee”:
HSBC
Bank USA, National Association, a national banking association, or its successor
in interest, or any successor trustee appointed as herein provided.
“Uncertificated
Balance”:
The
amount of the REMIC Regular Interests outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Balance of each
REMIC
Regular Interest shall equal the amount set forth in the Preliminary Statement
hereto as its initial uncertificated balance. On each Distribution Date,
the
Uncertificated Balance of the REMIC Regular Interest shall be reduced by
all
distributions of principal made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 5.01 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 5.04 and the Uncertificated Balance of REMIC
II
Regular Interest ZZ shall be increased by interest deferrals as provided
in
Section 5.01. The Uncertificated Balance of each REMIC Regular Interest shall
never be less than zero.
60
“Uncertificated
Interest”:
With
respect to any REMIC Regular Interest for any Distribution Date, one month’s
interest at the related REMIC Remittance Rate applicable to such REMIC Regular
Interest for such Distribution Date, accrued on the Uncertificated Balance
thereof immediately prior to such Distribution Date. Uncertificated Interest
in
respect of the REMIC Regular Interests shall accrue on the basis of a 360-day
year consisting of twelve 30-day months. Uncertificated Interest with respect
to
each Distribution Date, as to any REMIC Regular Interest, shall be reduced
by an
amount equal to the sum of (a) the aggregate Prepayment Interest Shortfall,
if
any, for such Distribution Date to the extent not covered by payments pursuant
to Section 3.23 or Section 4.19 of this Agreement and (b) the aggregate amount
of any Relief Act Interest Shortfall, if any allocated, in each case, to
such
REMIC Regular Interest or REMIC Regular Interest pursuant to Section 1.02.
In
addition, Uncertificated Interest with respect to each Distribution Date,
as to
any REMIC Regular Interest, shall be reduced by Realized Losses, if any,
allocated to such REMIC Regular Interest pursuant to Section 1.02 and Section
5.04.
“Uninsured
Cause”:
Any
cause of damage to a Mortgaged Property such that the complete restoration
of
such property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant to Section 3.11.
“United
States Person”:
A
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in, or under the laws of, the United States or
any
political subdivision thereof (except, in the case of a partnership, to the
extent provided in regulations) provided that, for purposes solely of the
restrictions on the transfer of any Class R Certificate, no partnership or
other
entity treated as a partnership for United States federal income tax purposes
shall be treated as a United States Person unless all persons that own an
interest in such partnership either directly or through any entity that is
not a
corporation for United States federal income tax purposes are required to
be
United States Persons, or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within
the
United States is able to exercise primary supervision over the administration
of
the trust and one or more United States persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, a trust which was in existence on August
20,
1996 (other than a trust treated as owned by the grantor under subpart E
of part
I of subchapter J of chapter I of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a
United
States person notwithstanding the previous sentence. The term “United States”
shall have the meaning set forth in Section 7701 of the Code.
“Value”:
With
respect to any Mortgaged Property, the lesser of (i) the lesser of (a) the
value
thereof as determined by an appraisal made for the related originator of
the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and (b) the
value
thereof as determined by a review appraisal conducted by the related originator
of the Mortgage Loan in accordance with the related originator’s underwriting
guidelines, and (ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan; provided, however,
(A)
in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property
is based solely upon the lesser of (1) the value determined by an appraisal
made
for the related originator of the Mortgage Loan of such Refinanced Mortgage
Loan
at the time of origination of such Refinanced Mortgage Loan by an appraiser
who
met the minimum requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and (2) the value
thereof as determined by a review appraisal conducted by the related originator
of the Mortgage Loan in accordance with the related originator’s underwriting
guidelines, and (B) in the case of a Mortgage Loan originated in connection
with
a “lease-option purchase,” such value of the Mortgaged Property is based on the
lower of the value determined by an appraisal made for the originator of
such
Mortgage Loan at the time of origination or the sale price of such Mortgaged
Property if the “lease option purchase price” was set less than 12 months prior
to origination, and is based on the value determined by an appraisal made
for
the related originator of such Mortgage Loan at the time of origination if
the
“lease option purchase price” was set 12 months or more prior to
origination.
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“Verification
Report”:
As
defined in Section 4.20.
“Voting
Rights”:
The
portion of the voting rights of all of the Certificates which is allocated
to
any such Certificate. With respect to any date of determination, 98% of all
Voting Rights will be allocated among the holders of the Class A Certificates,
the Mezzanine Certificates and the Class CE Certificates in proportion to
the
then outstanding Certificate Principal Balances of their respective
Certificates, 1% of all Voting Rights will be allocated among the holders
of the
Class P Certificates and 1% of all Voting Rights will be allocated among
the
holders of the Class R Certificates. The Voting Rights allocated to each
Class
of Certificate shall be allocated among Holders of each such Class in accordance
with their respective Percentage Interests as of the most recent Record Date.
Notwithstanding the foregoing, each Holder of a Class A Certificate and all
of the parties hereto agree that unless a Class A Certificate Insurer default
exists and is continuing under the Insurance Agreement, the Class A Certificate
Insurer will be entitled to exercise all voting, consent, direction or other
control rights of the holders of the Class A Certificates.
SECTION
1.02. Allocation
of Certain Interest Shortfalls.
For
purposes of calculating the amount of Accrued Certificate Interest and the
amount of the Interest Distribution Amount for the Class A Certificates,
the
Mezzanine Certificates and the Class CE Certificates for any Distribution
Date,
(1) the aggregate amount of any Prepayment Interest Shortfalls (to the extent
not covered by payments by the Servicer pursuant to Section 3.23 of this
Agreement or by the Master Servicer pursuant to Section 4.19 of this Agreement)
and any Relief Act Interest Shortfalls incurred in respect of the Mortgage
Loans
for any Distribution Date shall be allocated first, to the Class CE
Certificates, second, to the Class M-4 Certificates, third, to the Class
M-3
Certificates, fourth, to the Class M-2 Certificates, fifth, to the Class
M-1
Certificates and sixth, to the Class A Certificates, in each case based on,
and
to the extent of, one month’s interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance or Notional
Amount, as applicable, of each such Certificate and (2) the aggregate amount
of
any Realized Losses allocated to the Mezzanine Certificates and Net WAC Rate
Carryover Amounts paid to the Class A Certificates and the Mezzanine
Certificates incurred for any Distribution Date shall be allocated to the
Class
CE Certificates on a pro
rata
basis
based on, and to the extent of, one month’s interest at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance
or
Notional Amount thereof, as applicable.
62
For
purposes of calculating the amount of Uncertificated Interest for the REMIC
I
Regular Interests for any Distribution Date, the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by
the
Servicer pursuant to Section 3.23 of this Agreement or the Master Servicer
pursuant to Section 4.19) and any Relief Act Interest Shortfalls incurred
in
respect of Mortgage Loans shall be allocated first, to the REMIC I Regular
Interest I and to the REMIC I Regular Interests ending with the designation
“B”,
pro
rata
based
on, and to the extent of, one month’s interest at the then applicable respective
REMIC I Remittance Rates on the respective Uncertificated Balances of each
such
REMIC I Regular Interest, and then, to REMIC I Regular Interests ending with
the
designation “A”, pro rata based on, and to the extent of, one month’s interest
at the then applicable respective REMIC I Remittance Rates on the respective
Uncertificated Balances of each such REMIC I Regular Interest.
For
purposes of calculating the amount of Uncertificated Interest for the REMIC
II
Regular Interests for any Distribution Date: the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by
the
Servicer pursuant to Section 3.23 of this Agreement or the Master Servicer
pursuant to Section 4.19 of this Agreement) and any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution
Date
shall be allocated among REMIC II Regular Interest AA, REMIC II Regular Interest
A, REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II
Regular Interest M-3, REMIC II Regular Interest M-4 and REMIC II Regular
Interest ZZ pro rata based on, and to the extent of, one month’s interest at the
then applicable respective REMIC II Remittance Rate on the respective
Uncertificated Balance of each such REMIC II Regular Interest.
63
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
ORIGINAL
ISSUANCE OF CERTIFICATES
SECTION
2.01. Conveyance
of the Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, on behalf
of the
Trust, without recourse, for the benefit of the Certificateholders, all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under
the
Mortgage Loan Purchase Agreement and Assignment Agreement (including, but
not
limited to, the right to enforce the obligations of the other parties thereto
(including the Guarantor) thereunder), the right to any Net Swap Payment
and any
Swap Termination Payment made by the Swap Provider, and all other assets
included or to be included in REMIC I. Such assignment includes all interest
and
principal received by the Depositor and the Servicer on or with respect to
the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). Copies of the Mortgage Loan
Purchase Agreement and the Assignment Agreement are attached hereto as Exhibit
F-1 and Exhibit F-2, respectively.
In
connection with such transfer and assignment, the Depositor does hereby deliver
to, and deposit with the Custodian pursuant to the Custodial Agreement the
documents with respect to each Mortgage Loan as described under Section 2
of the
Custodial Agreement (the “Mortgage Loan Documents”). In connection with such
delivery and as further described in the Custodial Agreement, the Custodian
will
be required to review such Mortgage Loan Documents and deliver to the Trustee,
the Depositor, the Servicer and the Sponsor certifications (in the forms
attached to the Custodial Agreement) with respect to such review with exceptions
noted thereon. In addition, under the Mortgage Loan Purchase Agreement the
Sponsor will be required to cure certain defects with respect to the Mortgage
Loan Documents for the related Mortgage Loans after the delivery thereof
by the
Depositor to the Custodian as more particularly set forth therein.
Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge
that
the functions of the Trustee with respect to the custody, acceptance, inspection
and release of the Mortgage Files, including, but not limited to certain
insurance policies and documents contemplated by Section 4.11, and preparation
and delivery of the certifications shall be performed by the Custodian pursuant
to the terms and conditions of the Custodial Agreement.
The
Sponsor shall deliver or cause the Sponsor to deliver to the Servicer copies
of
all trailing documents required to be included in the Mortgage File at the
same
time the originals or certified copies thereof are delivered to the Trustee
or
Custodian, such documents including the mortgagee policy of title insurance
and
any Mortgage Loan Documents upon return from the recording office. The Servicer
shall not be responsible for any custodian fees or other costs incurred in
obtaining such documents and the Sponsor shall cause the Servicer to be
reimbursed for any such costs the Servicer may incur in connection with
performing its obligations under this Agreement.
64
The
Mortgage Loans permitted by the terms of this Agreement to be included in
the
Trust are limited to (i) Mortgage Loans (which the Depositor acquired pursuant
to the Assignment Agreement and the Mortgage Loan Purchase Agreement, which
contains, among other representations and warranties, a representation and
warranty of the Sponsor that no Mortgage Loan is a “High-Cost Home Loan” as
defined in the New Jersey Home Ownership Act effective November 27, 2003
or as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004,
as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana
Home
Loan Practices Act, effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1
through 24-9-9) or a “high risk home loan” under the Illinois High Risk Home
Loan Act, effective as of January 1, 2004) and (ii) Qualified Substitute
Mortgage Loans (which, by definition as set forth herein and referred to
in the
Mortgage Loan Purchase Agreement, are required to conform to, among other
representations and warranties, the representation and warranty of the Sponsor
that no Qualified Substitute Mortgage Loan is a “High-Cost Home Loan” as defined
in the New Jersey Home Ownership Act effective November 27, 2003 or as defined
in the New Mexico Home Loan Protection Act effective January 1, 2004, as
defined
in the Massachusetts Predatory Home Loan Practices Act, effective November
7,
2004 (Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices
Act, effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9)
or a “high risk home loan” under the Illinois High Risk Home Loan Act, effective
as of January 1, 2004). The Depositor, the Sponsor and the Trustee on behalf
of
the Trust understand and agree that it is not intended that any Mortgage
Loan be
included in the Trust that is a “High-Cost Home Loan” as defined in the New
Jersey Home Ownership Act effective November 27, 2003, as defined in the
New
Mexico Home Loan Protection Act effective January 1, 2004, as defined in
the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices
Act,
effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9)
or a
“high risk home loan” under the Illinois High Risk Home Loan Act, effective as
of January 1, 2004.
SECTION
2.02. Acceptance
of REMIC I by Trustee.
The
Trustee acknowledges receipt, subject to the provisions of Section 2.01 hereof
and Section 2 of the Custodial Agreement, of the Mortgage Loan Documents
and all
other assets included in the definition of “REMIC I” under clauses (i), (iii),
(iv) and (v) (to the extent of amounts deposited into the Distribution Account)
and declares that it holds (or the Custodian on its behalf holds) and will
hold
such documents and the other documents delivered to it constituting a Mortgage
Loan Document, and that it holds (or the Custodian on its behalf holds) or
will
hold all such assets and such other assets included in the definition of
“REMIC
I” in trust for the exclusive use and benefit of all present and future
Certificateholders.
SECTION
2.03. Repurchase
or Substitution of Mortgage Loans.
(a) Upon
discovery or receipt of notice of any materially defective document in, or
that
a document is missing from, a Mortgage File or of a breach by the Sponsor
of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan that materially and adversely affects the
value
of such Mortgage Loan or the interest therein of the Certificateholders or
the
Class A Certificate Insurer, the Trustee shall promptly notify the Sponsor,
the
Class A Certificate Insurer and the Servicer of such defect, missing document
or
breach and request that the Sponsor deliver such missing document, cure such
defect or breach within ninety (90) days from the date the Sponsor was notified
of such missing document, defect or breach, and if the Sponsor does not deliver
such missing document or cure such defect or breach in all material respects
during such period, the Trustee shall enforce the obligations of the Sponsor
under the Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan
from
REMIC I at the Purchase Price within ninety (90) days after the date on which
the Sponsor was notified of such missing document, defect or breach, if and
to
the extent that the Sponsor is obligated to do so under the Mortgage Loan
Purchase Agreement. Pursuant to the terms of the Mortgage Loan Purchase
Agreement, if the Sponsor fails to perform its repurchase obligations
thereunder, the Guarantor shall repurchase such Mortgage Loan at the Purchase
Price. The Purchase Price for the repurchased Mortgage Loan shall be remitted
to
the Servicer for deposit in the Collection Account and the Trustee, upon
receipt
of written certification from the Servicer of such deposit, shall release
or
cause the Custodian (upon receipt of a request for release in the form attached
to the Custodial Agreement) to release to the Sponsor the related Mortgage
File
and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as
the
Sponsor shall furnish to it and as shall be necessary to vest in the Sponsor
any
Mortgage Loan released pursuant hereto, and the Trustee shall not have any
further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in
the
Mortgage Loan Purchase Agreement, the Sponsor may cause such Mortgage Loan
to be
removed from REMIC I (in which case it shall become a Deleted Mortgage Loan)
and
substitute one or more Qualified Substitute Mortgage Loans in the manner
and
subject to the limitations set forth in Section 2.03(b). It is understood
and
agreed that the obligation of the Sponsor to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee and the
Certificateholders.
65
In
addition, promptly upon the earlier of discovery by the Servicer or receipt
of
notice by the Servicer of the breach of the representation or covenant of
the
Sponsor set forth in Section (qq) of Exhibit G of the Mortgage Loan Purchase
Agreement which materially and adversely affects the interests of the Holders
of
the Class P Certificates in any Prepayment Charge, the Servicer shall promptly
notify the Sponsor and the Trustee of such breach. The Trustee shall enforce
the
obligations of the Sponsor under the Mortgage Loan Purchase Agreement to
remedy
such breach to the extent and in the manner set forth in the Mortgage Loan
Purchase Agreement.
(b) Any
substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage
Loans
made pursuant to Section 2.03(a) must be effected prior to the date which
is two
years after the Startup Day for REMIC I.
As
to any
Deleted Mortgage Loan for which the Sponsor substitutes a Qualified Substitute
Mortgage Loan or Loans, such substitution shall be effected by the Sponsor
delivering to the Trustee or the Custodian on behalf of the Trustee, for
such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage,
the Assignment to the Trustee, and such other documents and agreements, with
all
necessary endorsements thereon, as are required by Section 2 of the Custodial
Agreement, as applicable, together with an Officers’ Certificate providing that
each such Qualified Substitute Mortgage Loan satisfies the definition thereof
and specifying the Substitution Shortfall Amount (as described below), if
any,
in connection with such substitution. The Custodian on behalf of the Trustee
shall acknowledge receipt of such Qualified Substitute Mortgage Loan or Loans
and, within ten (10) Business Days thereafter, review such documents and
deliver
to the Depositor, the Class A Certificate Insurer, the Trustee and the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans,
an
initial certification pursuant to the Custodial Agreement, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian on behalf of the Trustee shall deliver to the Depositor, the
Class A Certificate Insurer, the Trustee and the Servicer a final
certification pursuant to the Custodial Agreement with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans
in the
month of substitution are not part of REMIC I and will be retained by the
Sponsor. For the month of substitution, distributions to Certificateholders
will
reflect the Monthly Payment due on such Deleted Mortgage Loan on or before
the
Due Date in the month of substitution, and the Sponsor shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Servicer shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement
and
the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee and
the
Servicer. Upon such substitution, such Qualified Substitute Mortgage Loan
or
Loans shall constitute part of the Trust Fund and shall be subject in all
respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement, including all applicable representations and warranties thereof
included herein or in the Mortgage Loan Purchase Agreement.
66
For
any
month in which the Sponsor substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Servicer will determine
the
amount (the “Substitution Shortfall Amount”), if any, by which the aggregate
Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate of,
as
to each such Qualified Substitute Mortgage Loan, the Scheduled Principal
Balance
thereof as of the date of substitution, together with one month’s interest on
such Scheduled Principal Balance at the applicable Net Mortgage Rate, plus
all
outstanding P&I Advances and Servicing Advances (including Nonrecoverable
P&I Advances and Nonrecoverable Servicing Advances) related thereto. On the
date of such substitution, the Sponsor will deliver or cause to be delivered
to
the Servicer for deposit in the Collection Account an amount equal to the
Substitution Shortfall Amount, if any, and the Trustee or the Custodian on
behalf of the Trustee, upon receipt of the related Qualified Substitute Mortgage
Loan or Loans, upon receipt of a request for release in the form attached
to the
Custodial Agreement, certification by the Servicer of such deposit and absent
any objection by the Class A Certificate Insurer, shall release to the
Sponsor the related Mortgage File or Files and the Trustee shall execute
and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as the Sponsor shall deliver to it
and as
shall be necessary to vest therein any Deleted Mortgage Loan released pursuant
hereto.
In
addition, the Sponsor shall obtain at its own expense and deliver to the
Trustee
an Opinion of Counsel to the effect that such substitution will not cause
(a)
any federal tax to be imposed on any Trust REMIC, including without limitation,
any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of
the Code or on “contributions after the startup date” under Section 860G(d)(1)
of the Code, or (b) any Trust REMIC to fail to qualify as a REMIC at any
time
that any Certificate is outstanding.
67
(c) Upon
discovery by the Depositor, the Sponsor, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code, the party discovering such fact shall within
two
(2) Business Days give written notice thereof to the other parties and the
Class A Certificate Insurer. In connection therewith, the Sponsor shall
repurchase or substitute one or more Qualified Substitute Mortgage Loans
for the
affected Mortgage Loan within ninety (90) days of the earlier of discovery
or
receipt of such notice with respect to such affected Mortgage Loan. Any such
repurchase or substitution shall be made in the same manner as set forth
in
Section 2.03(a). The Trustee shall reconvey to the Sponsor the Mortgage Loan
to
be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
(d) With
respect to a breach of the representations made pursuant to Section (qq) of
Exhibit G of the Mortgage Loan Purchase Agreement that materially and adversely
affects the value of such Mortgage Loan or the interest therein of the Class
A
Certificate Insurer, the Certificateholders, the Sponsor shall be required
to
take the actions set forth in Section 3.03 of the Mortgage Loan Purchase
Agreement.
(e) Within
ninety (90) days of the earlier of discovery by the Servicer or receipt of
notice by the Servicer of the breach of any representation, warranty or covenant
of the Servicer set forth in Section 2.05 which materially and adversely
affects
the Mortgage Loans, the interests of the Class A Certificate Insurer or the
interests of the Certificateholders in any Mortgage Loan or Prepayment Charge,
the Servicer shall cure such breach in all material respects.
SECTION
2.04. Representations
and Warranties of the Master Servicer.
The
Master Servicer hereby represents, warrants and covenants to the Sponsor,
the
Servicer, the Depositor, the Class A Certificate Insurer and the Trustee,
for the benefit of each of the Trustee and the Certificateholders, that as
of
the Closing Date or as of such date specifically provided herein:
(i) The
Master Servicer is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is
duly
authorized and qualified to transact any and all business contemplated by
this
Agreement to be conducted by the Master Servicer;
(ii) The
Master Servicer has the full power and authority to conduct its business
as
presently conducted by it and to execute, deliver and perform, and to enter
into
and consummate, all transactions contemplated by this Agreement. The Master
Servicer has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity;
68
(iii) The
execution and delivery of this Agreement by the Master Servicer, the
consummation by the Master Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in
the ordinary course of business of the Master Servicer and will not (A) result
in a breach of any term or provision of the charter and by-laws of the Master
Servicer or (B) conflict with, result in a breach, violation or acceleration
of,
or result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may be
bound,
or any statute, order or regulation applicable to the Master Servicer of
any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a party
to, bound by, or in breach or violation of any indenture or other agreement
or
instrument, or subject to or in violation of any statute, order or regulation
of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the Master
Servicer’s knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or
assets of the Master Servicer taken as a whole;
(iv) The
Master Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant made by it and contained
in this Agreement;
(v) No
litigation is pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement
or
the ability of the Master Servicer to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vi) There
are
no actions or proceedings against, or investigations known to it of, the
Master
Servicer before any court, administrative or other tribunal (A) that might
prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the
Master
Servicer of its obligations under, or validity or enforceability of, this
Agreement;
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Master
Servicer of, or compliance by the Master Servicer with, this Agreement or
the
consummation by it of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been
obtained prior to the Closing Date; and
(viii) There
are
no affiliations, relationships or transactions relating to the Master Servicer
of a type that are described under Item 1119 of Regulation AB with the
Custodian, the Depositor, the Sponsor, the Servicer, the Credit Risk Manager,
the Swap Provider, American Home Mortgage Corp., the Class A Certificate
Insurer
or the Trustee.
69
It
is
understood and agreed that the representations, warranties and covenants
set
forth in this Section 2.04 shall survive the resignation or termination of
the
parties hereto and the termination of this Agreement and shall inure to the
benefit of the Trustee, the Depositor, the Class A Certificate Insurer and
the
Certificateholders.
SECTION
2.05. Representations,
Warranties and Covenants of the Servicer.
(a) The
Servicer hereby represents, warrants and covenants to the Sponsor, the Master
Servicer, the Securities Administrator, the Depositor, the Class A
Certificate Insurer and the Trustee, for the benefit of each of such Persons
and
the Certificateholders that as of the Closing Date or as of such date
specifically provided herein:
(i) The
Servicer is a limited liability company duly organized and validly existing
under the laws of the jurisdiction of its formation, and is duly authorized
and
qualified to transact any and all business contemplated by this Agreement
to be
conducted by the Servicer in any state in which a Mortgaged Property is located
or is otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any such
State, to the extent necessary to ensure its ability to enforce each Mortgage
Loan and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(ii) The
Servicer has the full power and authority to conduct its business as presently
conducted by it and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement. the Servicer
has
duly authorized the execution, delivery and performance of this Agreement,
has
duly executed and delivered this Agreement, and this Agreement, assuming
due
authorization, execution and delivery by the other parties hereto, constitutes
a
legal, valid and binding obligation of the Servicer, enforceable against
it in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of
equity;
(iii) The
execution and delivery of this Agreement by the Servicer, the servicing of
the
Mortgage Loans by the Servicer hereunder, the consummation by the Servicer
of
any other of the transactions herein contemplated, and the fulfillment of
or
compliance with the terms hereof are in the ordinary course of business of
the
Servicer and will not (A) result in a breach of any term or provision of
the
Servicer’s formation documents or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of
any
other material agreement or instrument to which the Servicer is a party or
by
which it may be bound, or any statute, order or regulation applicable to
the
Servicer of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Servicer; and the Servicer is not a party
to,
bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation
of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's knowledge, would in the future materially and adversely affect,
(x)
the ability of the Servicer to perform its obligations under this Agreement,
(y)
the business, operations, financial condition, properties or assets of the
Servicer taken as a whole or (z) the legality, validity or enforceability
of
this Agreement;
70
(iv) The
Servicer does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant made by it and contained in this
Agreement;
(v) No
litigation is pending against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Servicer to service the Mortgage Loans or to perform any of
its
other obligations hereunder in accordance with the terms hereof;
(vi) There
are
no actions or proceedings against, or investigations known to it of, the
Servicer before any court, administrative or other tribunal (A) that might
prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability of,
this
Agreement;
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Servicer
of,
or compliance by the Servicer with, this Agreement or the consummation by
it of
the transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior
to
the Closing Date;
(viii) The
Servicer has fully furnished and will continue 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
or
their successors on a monthly basis;
(ix) The
Servicer is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS; and
(x) The
Servicer will not waive any Prepayment Charge other than in accordance with
the
standard set forth in Section 3.01.
(b) Notwithstanding
anything to the contrary contained in this Agreement, if the covenant of
the
Servicer set forth in Section 2.05(a)(x) above is breached, the Servicer
will
pay the amount of such waived Prepayment Charge, from its own funds without
any
right of reimbursement, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account within
90
days of the earlier of discovery by the Servicer or receipt of notice by
the
Servicer of such breach; provided, however, the Servicer shall not have any
obligation to pay the amount of any uncollected Prepayment Charge under this
Section 2.05 if the Servicer did not have a copy of the related Mortgage
Note,
the Servicer requested a copy of the same from the Custodian in accordance
with
the terms of the Custodial Agreement and the Custodian failed to provide
such
copy within the time frame set forth in the Custodial Agreement. Furthermore,
notwithstanding any other provisions of this Agreement, any payments made
by the
Servicer in respect of any waived Prepayment Charges pursuant to this paragraph
shall be deemed to be paid outside of the Trust Fund.
71
(c) It
is
understood and agreed that the representations, warranties and covenants
set
forth in this Section 2.05 shall survive the resignation or termination of
the
parties hereto, the termination of this Agreement and the delivery of the
Mortgage Files to the Custodian and shall inure to the benefit of the Trustee,
the Master Servicer, the Securities Administrator, the Servicer, the Depositor,
the Certificateholders and the Class A Certificate Insurer. Upon discovery
by any such Person or the Servicer of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely
affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein
of
the Class A Certificate Insurer or the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event
later
than two (2) Business Days following such discovery) to the Trustee.
SECTION
2.06. Issuance
of the REMIC I Regular Interests and the Class R-I Interest.
The
Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
to the Custodian on its behalf of the Mortgage Loan Documents, subject to
the
provisions of Section 2.01 and Section 2.02 hereof and Section 2 of the
Custodial Agreement, together with the assignment to it of all other assets
included in REMIC I, the receipt of which is hereby acknowledged. The interests
evidenced by the Class R-I Interest, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC I.
The
rights of the Holders of the Class R-I Interest and REMIC I (as holder of
the
REMIC I Regular Interests) to receive distributions from the proceeds of
REMIC I
in respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the
Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in
this
Agreement.
SECTION
2.07. Conveyance
of the REMIC I Regular Interests; Acceptance of REMIC II and REMIC III by
the
Trustee.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, without recourse
all the right, title and interest of the Depositor in and to the REMIC I
Regular
Interests for the benefit of the Class R-II Interest and REMIC II (as holder
of
the REMIC I Regular Interests). The Trustee acknowledges receipt of the REMIC
I
Regular Interests and declares that it holds and will hold the same in trust
for
the exclusive use and benefit of all present and future Holders of the Class
R-II Interest and REMIC II (as holder of the REMIC I Regular Interests).
The
rights of the Holder of the Class R-II Interest and REMIC II (as holder of
the
REMIC I Regular Interests) to receive distributions from the proceeds of
REMIC
II in respect of the Class R-II Interest and the REMIC II Regular Interests,
respectively, and all ownership interests evidenced or constituted by the
Class
R-II Interest and the REMIC II Regular Interests, shall be as set forth in
this
Agreement. The Class R-II Interest and the REMIC II Regular Interests shall
constitute the entire beneficial ownership interest in REMIC II. The Trustee
acknowledges receipt of the REMIC II Regular Interests and declares that
it
holds and will hold the same in trust for the exclusive use and benefit of
all
present and future Holders of the Class R-III Interest and REMIC III (as
holder
of the REMIC II Regular Interests). The rights of the Holder of the Class
R-III
Interest and REMIC III (as holder of the REMIC II Regular Interests) to receive
distributions from the proceeds of REMIC III in respect of the Class R-III
Interest and the Regular Certificates, respectively, and all ownership interests
evidenced or constituted by the Class R-III Interest and the Regular
Certificates, shall be as set forth in this Agreement. The Class R-III Interest
and the Regular Certificates shall constitute the entire beneficial ownership
interest in REMIC III.
72
SECTION
2.08. Issuance
of the Residual Certificates.
The
Trustee acknowledges the assignment to it of the REMIC I Regular Interests
and,
concurrently therewith and in exchange therefor, pursuant to the written
request
of the Depositor executed by an officer of the Depositor, the Securities
Administrator has executed and authenticated and the Trustee has delivered
to or
upon the order of the Depositor, the Class R Certificates in authorized
denominations. The Class R Certificates evidence ownership in the Class R-I
Interest, the Class R-II Interest and the Class R-III Interest.
SECTION
2.09. Establishment
of the Trust.
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 to be known,
for convenience, as “SunTrust Acquisition Closed-End Seconds Trust, Series
2007-1 ” and does hereby appoint HSBC Bank USA, National Association as Trustee
in accordance with the provisions of this Agreement.
SECTION
2.10. Purpose
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
payments on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith to the extent
not
inconsistent with the other provisions of this Agreement; and
73
(e) subject
to compliance with this Agreement, to engage in such other activities as
may be
required in connection with conservation of the Trust Fund and the making
of
distributions to the Certificateholders.
The
trust
is hereby authorized to engage in the foregoing activities. It is understood
that it is the intent of the parties to this Agreement to limit the Trust
in
such a way as to be in compliance with Qualifying Special Purpose Entity
treatment under Statement of Financial Accounting Standard No. 140 within
U.S.
generally accepted accounting principles. The Trustee shall not cause the
trust
to engage in any activity other than in connection with the foregoing or
other
than as required or authorized by the terms of this Agreement (or those
ancillary thereto) while any Certificate is outstanding, and this Section
2.10
may not be amended, without the consent of the Certificateholders evidencing
51%
or more of the aggregate voting rights of the Certificates.
SECTION
2.11. Representations
and Warranties of the Trustee.
The
Trustee hereby represents and warrants to the Sponsor and the Depositor,
for the
benefit of each of the Certificateholders, that as of the Closing
Date:
(a) There
are
no affiliations relating to the Trustee of a type that are described under
Item
1119(a) of Regulation AB; and
(b) There
are
no legal proceedings pending or contemplated, including legal proceedings
pending or contemplated by governmental authorities, against the Trustee
that
could be material to the Certificateholders.
74
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
THE
MORTGAGE LOANS; ACCOUNTS
SECTION
3.01. The
Servicer to Act as Servicer.
From
and
after the Closing Date, the Servicer shall service and administer the Mortgage
Loans on behalf of the Trust Fund and in the best interests of and for the
benefit of the Class A Certificate Insurer and the Certificateholders (as
determined by the Servicer in its reasonable judgment) in accordance with
the
terms of this Agreement and the Mortgage Loans and all applicable law and
regulations and, to the extent consistent with such terms, in the same manner
in
which it services and administers similar mortgage loans for its own portfolio,
giving due consideration to customary and usual standards of practice of
prudent
mortgage lenders and loan servicers administering similar mortgage loans
but
without regard to:
(i) any
relationship that the Servicer or any Affiliate of the Servicer may have
with
the related Mortgagor;
(ii) the
ownership of any Certificate by the Servicer or any Affiliate of the
Servicer;
(iii) the
Servicer’s obligation to make P&I Advances or Servicing Advances;
or
(iv) the
Servicer’s right to receive compensation for its services
hereunder.
To
the
extent consistent with the foregoing, the Servicer shall also seek to maximize
the timely and complete recovery of principal and interest on the related
Mortgage Notes and shall waive (or permit a Sub-Servicer to waive) a Prepayment
Charge only under the following circumstances: (i) such waiver is standard
and
customary in servicing similar Mortgage Loans and such waiver is related
to a
default or reasonably foreseeable default and would, in the reasonable judgment
of the Servicer, maximize recovery of total proceeds taking into account
the
value of such Prepayment Charge and the related Mortgage Loan and, if such
waiver is made in connection with a refinancing of the related Mortgage Loan,
such refinancing is related to a default or a reasonably foreseeable default,
(ii) such Prepayment Charge is unenforceable in accordance with applicable
law
or the collection of such related Prepayment Charge would otherwise violate
applicable law or (iii) the collection of such Prepayment Charge would be
considered “predatory” pursuant to written guidance published or issued by any
applicable federal, state or local regulatory authority acting in its official
capacity and having jurisdiction over such matters. In addition, the Servicer
shall not impose a Prepayment Charge in any instance when the related Mortgage
Loan is accelerated or where the Mortgagor has made a Principal Prepayment
in
full in connection with the workout of a delinquent Mortgage Loan or due
to a
default by the Mortgagor. Notwithstanding any provision in this Agreement
to the
contrary, in the event the Prepayment Charge payable under the terms of the
Mortgage Note is less than the amount of the Prepayment Charge set forth
in the
Prepayment Charge Schedule or other information provided to the Servicer,
neither the Servicer nor the Master Servicer shall have any liability or
obligation with respect to such difference (including any obligation to
recalculate any Prepayment Charges), and in addition shall not have any
liability or obligation to pay the amount of any uncollected Prepayment Charge
if the failure to collect such amount is the direct result of inaccurate
or
incomplete information on the Prepayment Charge Schedule.
75
In
the
event any Servicer waives a Prepayment Charge in connection with clauses
(ii) or
(iii) of the preceding paragraph, the Servicer shall provide a written
explanation of the Servicer’s determination to the Master Servicer, and the
Master Servicer shall provide a copy of such writing to the Sponsor and the
Depositor.
Subject
only to the above-described servicing standards (the “Accepted Servicing
Practices”) and the terms of this Agreement and of the related Mortgage Loans,
the Servicer shall have full power and authority, to do or cause to be done
any
and all things in connection with such servicing and administration which
it may
deem necessary or desirable with the goal of maximizing proceeds of the related
Mortgage Loan. Without limiting the generality of the foregoing, the Servicer
in
its own name is hereby authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment, to execute and deliver, on
behalf
of the Trust Fund, the Certificateholders and the Trustee or any of them,
and
upon written notice to the Trustee, any and all instruments of satisfaction
or
cancellation, or of partial or full release or discharge or subordination,
and
all other comparable instruments, with respect to the related Mortgage Loans
and
the related Mortgaged Properties and to institute foreclosure proceedings
or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on
behalf
of the Trustee, for the benefit of the Trust Fund and the Certificateholders.
The Servicer shall service and administer the related Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable
rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.14, the Trustee shall execute, at the written request
of
any Servicer, and furnish to the Servicer a power of attorney in the form
of
Exhibit D hereto and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder and
furnished to the Trustee by the Servicer, and the Trustee shall not be liable
for the actions of the Servicer under such powers of attorney and shall be
indemnified by the Servicer for any cost, liability or expense incurred by
the
Trustee in connection with the Servicer’s use or misuse of any such power of
attorney.
The
Servicer is hereby authorized and empowered in its own name or in the name
of
the Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may
be,
believes it is appropriate in its best judgment to register any Mortgage
Loan on
the MERS® System, or cause the removal from the registration of any Mortgage
Loan on the MERS® System, to execute and deliver, on behalf of the Trustee and
the Certificateholders or any of them, 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 Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with
the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS® System,
shall be reimbursable by the Trust Fund to the Servicer.
76
In
accordance with Accepted Servicing Practices, the Servicer shall make or
cause
to be made Servicing Advances as necessary for the purpose of effecting the
payment of taxes and assessments on the related Mortgaged Properties (to
the
extent the Servicer has been notified that such taxes or assessments have
not
been paid by the related Mortgagor, owner or servicer of the related First
Mortgage Loan), which Servicing Advances shall be reimbursable in the first
instance from related collections from the related Mortgagors pursuant to
Section 3.07, and further as provided in Section 3.09; provided,
however, the Servicer shall only make such Servicing Advance if the related
Mortgagor has not made such payment and if the failure to make such Servicing
Advance would result in the loss of the related Mortgaged Property due to
a tax
sale or foreclosure as result of a tax lien; provided, however, that the
Servicer shall be required to make such Servicing Advances only to the extent
that such Servicing Advances, in the good faith judgment of the Servicer,
will
be recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds,
or otherwise out of the proceeds of the related Mortgage Loan. Any cost incurred
by the Servicer in effecting the payment of taxes and assessments on a Mortgaged
Property shall not, for the purpose of calculating the Stated Principal Balance
of such Mortgage Loan or distributions to Certificateholders, be added to
the
unpaid principal balance of the related Mortgage Loan, notwithstanding that
the
terms of such Mortgage Loan so permit. The parties to this Agreement acknowledge
that Servicing Advances shall be reimbursable pursuant to Section 3.09 of
this Agreement, and agree that no Servicing Advance shall be rejected or
disallowed by any party unless it has been shown that such Servicing Advance
was
not made in accordance with the terms of this Agreement. Notwithstanding
the
foregoing, the parties understand and agree that, with respect to any Mortgage
Loan (1) the Master Servicer shall not approve the reimbursement of any
Servicing Advance made with respect to such Mortgage Loan prior to the Cut-off
Date (each, a “Pre-Cut-off Date Advance”) unless and until it has received a
Servicing Advance Schedule listing the amount of Pre-Cut-off Date Advances
made
in respect of such Mortgage Loan from (a) the Servicer with respect to any
Mortgage Loans that were transferred to the Servicer prior to the Cut-off
Date
and/or (b) the Sponsor with respect to any Mortgage Loans that were transferred
to the Servicer after the Cut-off Date, as applicable, (2) the aggregate
Pre-Cut-off Date Advances reimbursable hereunder with respect to such Mortgage
Loan shall not exceed the amount of Pre-Cut-off Date Advances for such Mortgage
Loan shown on the Servicing Advance Schedule delivered to the Master Servicer,
(3) the Sponsor shall be deemed to have agreed with and approved the Pre-Cut-off
Date Advances shown on any Servicing Advance Schedule furnished to the Master
Servicer, and (4) the Master Servicer will have no liability to the Depositor,
the Sponsor, the Servicer or any other Person, including any Certificateholder,
for approving reimbursement of related Pre-Cut-off Date Advances so long
as the
aggregate amount of such advances reimbursed hereunder does not exceed of
the
amount of Pre-Cut-off Date Advances for such Mortgage Loan shown on the
Servicing Advance Schedule.
The
Servicer, in such capacity, may consent to the refinancing of a First Mortgage
Loan on a Mortgaged Property, provided that the following requirements are
met:
(i) the
resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no higher
than
the Combined Loan-to-Value Ratio prior to such refinancing;
77
(ii) the
interest rate for the loan evidencing the refinanced First Mortgage Loan
is no
more than 2.0% higher than the interest rate on the loan evidencing the existing
First Mortgage Loan immediately prior to the date of such refinancing;
and
(iii) the
mortgage loan evidencing the refinanced First Mortgage Loan is not subject
to
negative amortization.
The
Servicer shall inspect the Mortgaged Properties related to Mortgage Loans
serviced by the Servicer as often as deemed necessary by the Servicer in
the
Servicer’s sole discretion, to assure itself that the value of such Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than
60
days delinquent, the Servicer shall conduct subsequent inspections in accordance
with Accepted Servicing Practices. The Servicer shall keep a written or
electronic report of each such inspection.
Notwithstanding
anything in this Agreement to the contrary, the Servicer may not make any
future
advances with respect to a Mortgage Loan and the Servicer shall not permit
any
modification with respect to any related Mortgage Loan that would change
the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity
date
on such related Mortgage Loan (unless, as provided in Section 3.06, the related
Mortgagor is in default with respect to the related Mortgage Loan or such
default is, in the judgment of the Servicer, reasonably foreseeable) or any
modification, waiver or amendment of any term of any related Mortgage Loan
that
would both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC created hereunder to
fail
to qualify as a REMIC under the Code or the imposition of any tax on “prohibited
transactions” or “contributions after the startup date” under the REMIC
Provisions.
In
the
event that the Mortgage Loan Documents relating to a Mortgage Loan contain
provisions requiring the related Mortgagor to arbitrate disputes (at the
option
of the Trustee, on behalf of the Trust), the Trustee hereby authorizes the
Servicer to waive the Trustee’s right or option to arbitrate disputes and to
send written notice of such waiver to the Mortgagor, although the Mortgagor
may
still require arbitration at its option.
From
and
after the Closing Date, the Servicer will 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 or
their
successors on a monthly basis.
SECTION
3.02. Sub-Servicing
Agreements Between the Servicer and Sub-Servicers.
(a) The
Servicer may arrange for the subservicing of any Mortgage Loan by a Sub-Servicer
pursuant to a Sub-Servicing Agreement; provided that such sub-servicing
arrangement and the terms of the related Sub-Servicing Agreement must provide
for the servicing of such Mortgage Loans in a manner consistent with the
servicing arrangements contemplated hereunder and the Servicer shall cause
any
Sub-Servicer to comply with the provisions of this Agreement (including,
without
limitation, to provide the information required to be delivered under Sections
3.17, 3.18 and 3.20 hereof), to the same extent as if such Sub-Servicer were
the
Servicer. The Servicer shall be responsible for obtaining from each Sub-Servicer
and delivering to the Master Servicer any annual statement of compliance,
assessment of compliance, attestation report and Sarbanes Oxley related
certification as and when required to be delivered. Each Sub-Servicer shall
be
(i) authorized to transact business in the state or states where the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Sub-Servicer to perform its obligations
hereunder and under the Sub-Servicing Agreement and (ii) a ▇▇▇▇▇▇▇ Mac or
▇▇▇▇▇▇
Mae approved mortgage servicer. Notwithstanding the provisions of any
Sub-Servicing Agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between any Servicer or a Sub-Servicer or reference
to actions taken through the Servicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee, the Class A Certificate
Insurer and the Certificateholders for the servicing and administration of
the
related Mortgage Loans in accordance with the provisions of this Agreement
without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification
from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the related Mortgage
Loans. Every Sub-Servicing Agreement entered into by the Servicer shall contain
a provision giving the successor servicer the option to terminate such agreement
in the event a successor servicer is appointed. All actions of each Sub-Servicer
performed pursuant to the related Sub-Servicing Agreement shall be performed
as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer.
78
(b) Notwithstanding
the foregoing, the Servicer shall be entitled to outsource one or more separate
servicing functions to a Subcontractor that does not meet the eligibility
requirements for a Sub-Servicer, so long as such outsourcing does not constitute
the delegation of the Servicer’s obligation to perform all or substantially all
of the servicing of the related Mortgage Loans to such Subcontractor. The
Servicer shall promptly, upon request, provide to the Master Servicer, the
Trustee, the Class A Certificate Insurer and the Depositor a written
description (in form and substance satisfactory to the Master Servicer, the
Trustee, the Class A Certificate Insurer and the Depositor) of the role and
function of each Subcontractor utilized by the Servicer, specifying (i) the
identity of each such Subcontractor “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 subsection;
provided, however, that the Servicer shall not be required to provide the
information in clauses (i) or (ii) of this subsection until such time that
the
applicable assessment of compliance is due pursuant to Section 3.18 of this
Agreement. The use by the Servicer of any such Subcontractor shall not release
the Servicer from any of its obligations hereunder and the Servicer shall
remain
responsible hereunder for all acts and omissions of such Subcontractor as
fully
as if such acts and omissions were those of the Servicer, and the Servicer
shall
pay all fees and expenses of the Subcontractor from the Servicer’s own
funds.
(c) 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 Servicer shall cause any such Subcontractor used by the
Servicer for the benefit of the Master Servicer, the Trustee, the Class A
Certificate Insurer and the Depositor to comply with the provisions of Sections
3.18 and 3.20 of this Agreement to the same extent as if such Subcontractor
were
the Servicer. The Servicer shall be responsible for obtaining from each such
Subcontractor and delivering to the Master Servicer and any Depositor any
assessment of compliance, attestation report and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ related
certification required to be delivered by such Subcontractor under Sections
3.18
and 3.20, in each case as and when required to be delivered.
79
(d) For
purposes of this Agreement, the Servicer shall be deemed to have received
any
collections, recoveries or payments with respect to the related Mortgage
Loans
that are received by a Sub-Servicer regardless of whether such payments are
remitted by the Sub-Servicer to the Servicer.
SECTION
3.03. Successor
Sub-Servicers.
Any
Sub-Servicing Agreement shall provide that the Servicer shall be entitled
to
terminate any Sub-Servicing Agreement and to either itself directly service
the
related Mortgage Loans or enter into a Sub-Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 3.02. Any Sub-Servicing Agreement
shall include the provision that such agreement may be immediately terminated
as
soon as is reasonably possible by any successor to the Servicer without fee
in
accordance with the terms of this Agreement, in the event that the Servicer
(or
any successor to the Servicer) shall, for any reason, no longer be the Servicer
of the related Mortgage Loans (including termination due to a Servicer Event
of
Default). The Servicer shall be entitled to enter into an agreement with
its
Sub-Servicer and Subcontractor for indemnification of the Servicer or
Subcontractor, as applicable, by such Sub-Servicer and nothing contained
in this
Agreement shall be deemed to limit or modify such indemnification.
SECTION
3.04. No
Contractual Relationship Between Sub-Servicer, Subcontractor, Trustee or
the
Certificateholders.
Any
Sub-Servicing Agreement and any other transactions or services relating to
the
Mortgage Loans involving a Sub-Servicer or the Subcontractor, as applicable,
shall be deemed to be between the Sub-Servicer or Subcontractor, as applicable,
and the Servicer alone and the Master Servicer, Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no
claims,
rights, obligations, duties or liabilities with respect to any Sub-Servicer
or
the Subcontractor except as set forth in Section 3.05.
SECTION
3.05. Assumption
or Termination of Sub-Servicing Agreement by Successor Servicer.
In
connection with the assumption of the responsibilities, duties and liabilities
and of the authority, power and rights of the Servicer hereunder by a successor
servicer pursuant to Section 8.02, it is understood and agreed that the
Servicer’s rights and obligations under any Sub-Servicing Agreement then in
force between the Servicer and a Sub-Servicer shall be assumed simultaneously
by
such successor servicer without act or deed on the part of such successor
servicer; provided, however, that any successor servicer may terminate the
Sub-Servicer.
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The
Servicer shall, upon the reasonable request of the Master Servicer, but at
its
own expense, deliver to the assuming party documents and records relating
to
each Sub-Servicing Agreement and an accounting of amounts collected and held
by
it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Sub-Servicing Agreements to the assuming party.
The
Servicing Fee payable to any such successor servicer shall be payable from
payments received on the Mortgage Loans in the amount and in the manner set
forth in this Agreement.
SECTION
3.06. Collection
of Certain Mortgage Loan Payments.
The
Servicer shall make reasonable efforts to collect all payments called for
under
the terms and provisions of the Mortgage Loans, and shall, to the extent
such
procedures shall be consistent with this Agreement, Accepted Servicing Practices
and the Servicing Performance Standards, follow such collection procedures
as it
would follow with respect to mortgage loans comparable to the Mortgage Loans
and
held for its own account. Consistent with the foregoing, the Servicer may
in its
discretion waive any late payment charge or, if applicable, penalty interest;
provided that any such waiver, modification, postponement or indulgence granted
to a Mortgagor by the Servicer in connection with its servicing of the related
First Mortgage Loan shall not be considered relevant to a determination of
whether the Servicer has acted consistently with the terms and standards
of this
Agreement, so long as in the Servicer’s determination such action is not
materially adverse to the value of the Mortgage Loans or the interests of
the
Class A Certificate Insurer or the Certificateholders. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with Accepted Servicing Practices may waive, modify or vary any
term
of such Mortgage Loan (including, but not limited to, modifications that
change
the Mortgage Rate, forgive the payment of principal or interest or extend
the
final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
if
in the Servicer’s determination such waiver, modification, postponement or
indulgence is not materially adverse to the value of the Mortgage Loans or
the
interests of the Class A Certificate Insurer or the Certificateholders or
the Class A Certificate Insurer (taking into account any estimated Realized
Loss
that might result absent such action); provided, however, that if the aggregate
principal balance of the Mortgage Loans subject to modification is greater
than
5% of the initial aggregate principal balance of the Mortgage Loans as
determined by the Servicer, such modification shall only be permitted with
the
prior written consent of the Class A Certificate Insurer, so long as a default
by the Class A Certificate Insurer has not occurred and is not continuing,
rather than proceeding with foreclosure. The Servicer shall not be required
to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public
or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
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SECTION
3.07. Collection
of Taxes, Assessments and Similar Items; Servicing Accounts.
In
connection with an Escrow Mortgage Loan or a Mortgage Loan that in accordance
with Accepted Servicing Practices becomes an Escrow Mortgage Loan, the Servicer
shall establish and maintain one or more accounts (the “Servicing Accounts”),
into which all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, fire, flood, and hazard
insurance premiums, and comparable items for the account of the Mortgagors
(“Escrow Payments”) shall be deposited and retained. Servicing Accounts shall be
Eligible Accounts. The Servicer shall deposit in the clearing account in
which
it customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer’s receipt thereof, all Escrow
Payments collected on account of the related Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event later
than
the second Business Day after the deposit of good funds into the clearing
account, and retain therein, all Escrow Payments collected on account of
the
Mortgage Loans, for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts
from
a Servicing Account may be made by the Servicer only to (i) effect timely
payment of taxes, assessments, fire, flood, and hazard insurance premiums,
and
comparable items; (ii) reimburse itself out of related collections for any
Servicing Advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.11 (with respect to fire, flood and hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) for application to restore or repair the related Mortgaged
Property in accordance with Section 3.11; (v) pay interest, if required and
as
described below, to Mortgagors on balances in the Servicing Account; or,
only to
the extent not required to be paid to the related Mortgagors, to pay itself
interest on balances in the Servicing Account; or (vi) clear and terminate
the
Servicing Account at the termination of the Servicer’s obligations and
responsibilities in respect of the related Mortgage Loans under this Agreement
in accordance with Article X. As part of its servicing duties, the Servicer
shall pay to the Mortgagors interest on funds in Servicing Accounts, to the
extent required by law and, to the extent that interest earned on funds in
the
Servicing Accounts is insufficient, to pay such interest from its own funds,
without any reimbursement therefor. Notwithstanding the foregoing, the Servicer
shall not be obligated to collect Escrow Payments if the related Mortgage
Loan
does not require such payments but the Servicer shall nevertheless be obligated
to make Servicing Advances as provided in Section 3.01 and Section 3.11.
In the
event the Servicer shall deposit in the Servicing Accounts any amount not
required to be deposited therein, it may at any time withdraw such amount
from
the Servicing Accounts, any provision to the contrary
notwithstanding.
With
respect to Escrow Mortgage Loans, the Servicer shall ascertain and estimate
Escrow Payments and all other charges that will become due and payable with
respect to the related Mortgage Loans and the Mortgaged Properties, 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. To the extent that a Mortgage
does not provide for Escrow Payments, the Servicer (i) shall determine whether
any such payments are made by the Mortgagor in a manner and at a time that
is
necessary to avoid the loss of the Mortgaged Property due to a tax sale or
the
foreclosure as a result of a tax lien and (ii) shall ensure that all insurance
required to be maintained on the Mortgaged Property pursuant to this Agreement
is maintained. If any such payment has not been made and the Servicer receives
notice of a tax lien with respect to the Mortgage Loan being imposed, the
Servicer shall, promptly and to the extent required to avoid loss of the
Mortgaged Property, advance or cause to be advanced funds necessary to discharge
such lien on the Mortgaged Property unless the Servicer determines the advance
to be nonrecoverable. The Servicer assumes full responsibility for the payment
of all such bills and shall effect payments of all such bills irrespective
of
the Mortgagor’s faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances to effect such payments
subject to its determination of recoverability.
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SECTION
3.08. Collection
Account and Distribution Account.
(a) On
behalf
of the Trust Fund, the Servicer shall establish and maintain one or more
“Collection Accounts”, held in trust for the benefit of the Trustee, the
Certificateholders and the Class A Certificate Insurer. On behalf of the
Trust
Fund, the Servicer shall deposit or cause to be deposited in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer’s receipt
thereof, and shall thereafter deposit in the Collection Account, in no event
later than two Business Days after the deposit of good funds into the clearing
account, as and when received or as otherwise required hereunder, the following
payments and collections received or made by it on or subsequent to the Cut-off
Date other than amounts attributable to a Due Date on or prior to the Cut-off
Date:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest (net of the Servicing Fee) on each Mortgage
Loan;
(iii) all
Insurance Proceeds and Liquidation Proceeds (other than proceeds collected
in
respect of any particular REO Property) and all Subsequent Recoveries with
respect to the Mortgage Loans;
(iv) any
amounts required to be deposited by the Servicer pursuant to Section 3.10
in
connection with any losses realized on Permitted Investments with respect
to
funds held in the Collection Account;
(v) any
amounts required to be deposited by the Servicer pursuant to the second
paragraph of Section 3.11(a) in respect of any blanket policy
deductibles;
(vi) any
Purchase Price or Substitution Shortfall Amount delivered to the Servicer
and
all proceeds (net of amounts payable or reimbursable to the Servicer, the
Master
Servicer, the Trustee, the Custodian or the Securities Administrator) of
Mortgage Loans purchased in accordance with Section 2.03, Section 3.13 or
Section 10.01; and
83
(vii) any
Prepayment Charges collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans or amounts required to be deposited
by
the Servicer in connection with a breach of its obligations under Section
2.05(a)(x).
The
foregoing requirements for deposit in the Collection Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, Ancillary Income and payments in the nature of late payment charges,
assumption fees or other similar fees need not be deposited by the Servicer
in
the Collection Account and may be retained by the Servicer as additional
servicing compensation. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may
at
any time withdraw such amount from the Collection Account, any provision
herein
to the contrary notwithstanding.
(b) On
behalf
of the Trust Fund, the Securities Administrator shall establish and maintain
one
or more accounts (such account or accounts, the “Distribution Account”), held in
trust for the benefit of the Trustee, the Trust Fund and the Certificateholders
and the Class A Certificate Insurer. On behalf of the Trust Fund, the Servicer
shall deliver to the Securities Administrator in immediately available funds
for
deposit in the Distribution Account on or before 12:00 noon New York time
on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for
the
related Distribution Date then on deposit in the Collection Account and the
amount of all Prepayment Charges collected by the Servicer in connection
with
the Principal Prepayment of any of the Mortgage Loans then on deposit in
the
Collection Account and the amount of any funds reimbursable to an Advance
Financing Person pursuant to Section 3.26. If the balance on deposit in the
Collection Account exceeds $100,000 as of the commencement of business on
any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of “Eligible Account,” the Servicer
shall, on or before 5:00 p.m. New York time on such Business Day, withdraw
from
the Collection Account any and all amounts payable or reimbursable to the
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Sponsor pursuant to Section 3.09 and shall pay such
amounts
to the Persons entitled thereto or shall establish a separate Collection
Account
(which shall also be an Eligible Account) and withdraw from the existing
Collection Account the amount on deposit therein in excess of $100,000 and
deposit such excess in the newly created Collection Account.
With
respect to any remittance received by the Securities Administrator after
the
Servicer Remittance Date on which such payment was due, the Securities
Administrator shall send written notice thereof to the Servicer. The Servicer
shall pay to the Securities Administrator interest on any such late payment
by
the Servicer at an annual rate equal to Prime Rate (as defined in The
Wall Street Journal)
plus
one percentage point, but in no event greater than the maximum amount permitted
by applicable law. Such interest shall be paid by the Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the day following the Servicer Remittance Date and ending
with
the Business Day on which such payment is made, both inclusive. The payment
by
the Servicer of any such interest, or the failure of the Securities
Administrator to notify the Servicer of such interest, shall not be deemed
an
extension of time for payment or a waiver of any Event of Default by the
Servicer.
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(c) Funds
in
the Collection Account and funds in the Distribution Account may be invested
in
Permitted Investments in accordance with the provisions set forth in Section
3.10. The Servicer shall give notice to the Trustee, the Sponsor, the Securities
Administrator and the Master Servicer of the location of the Collection Account
when established and prior to any change thereof. The Securities Administrator
shall give notice to the Servicer, the Sponsor and the Depositor of the location
of the Distribution Account when established and prior to any change
thereof.
(d) Funds
held in the Collection Account at any time may be delivered by the Servicer
in
immediately available funds to the Securities Administrator for deposit in
the
Distribution Account. In the event any Servicer shall deliver to the Securities
Administrator for deposit in the Distribution Account any amount not required
to
be deposited therein, it may at any time request that the Securities
Administrator withdraw such amount from the Distribution Account and remit
to it
any such amount, any provision herein to the contrary notwithstanding. In
no
event shall the Securities Administrator incur liability as a result of
withdrawals from the Distribution Account at the direction of the Servicer
in
accordance with the immediately preceding sentence. In addition, the Servicer
shall deliver to the Securities Administrator no later than the Servicer
Remittance Date the amounts set forth in clauses (i) through (iv)
below:
(i) any
P&I Advances, as required pursuant to Section 5.03;
(ii) any
amounts required to be deposited pursuant to Section 3.22(d) or 3.21(f) in
connection with any related REO Property;
(iii) any
amounts to be paid in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 10.01; and
(iv) any
amounts required to be deposited pursuant to Section 3.23 in connection with
any
Prepayment Interest Shortfalls.
SECTION
3.09. Withdrawals
from the Collection Account and Distribution Account.
(a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 5.03:
(i) to
remit
to the Securities Administrator for deposit in the Distribution Account the
amounts required to be so remitted pursuant to Section 3.08(b) or permitted
to
be so remitted pursuant to the first sentence of Section 3.08(d);
(ii) subject
to Section 3.13(d), to reimburse itself (including any successor Servicer)
for
P&I Advances made by it, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of Monthly
Payments or rental and other income from the related REO Property on related
Mortgage Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 5.03;
85
(iii) subject
to Section 3.13(d), to pay itself any unpaid Servicing Fees and reimburse
itself
any unreimbursed Servicing Advances with respect to each related Mortgage
Loan,
but only to the extent of any Liquidation Proceeds and Insurance Proceeds
received with respect to such related Mortgage Loan or rental or other income
from the related REO Property;
(iv) to
pay to
itself as servicing compensation (in addition to the Servicing Fee or any
portion thereof payable to the Servicer) on the Servicer Remittance Date
any
interest or investment income earned on funds deposited in the Collection
Account;
(v) to
pay to
itself or the Sponsor, as the case may be, with respect to each Mortgage
Loan
serviced by the Servicer that has previously been purchased or replaced pursuant
to Section 2.03 or Section 3.13(c) all amounts received thereon not included
in
the Purchase Price or the Substitution Shortfall Amount;
(vi) to
reimburse itself (including any successor to the Servicer) for any P&I
Advance or Servicing Advance previously made by it which the Servicer has
determined to be a Nonrecoverable P&I Advance or a Nonrecoverable Servicing
Advance in accordance with the provisions of Section 5.03;
(vii) to
reimburse itself or the Depositor for expenses incurred by or reimbursable
to
itself or the Depositor, as the case may be, pursuant to Section 3.01 or
Section
7.03;
(viii) to
reimburse itself or the Trustee, as the case may be, for expenses reasonably
incurred in respect of the breach or defect giving rise to the purchase
obligation under Section 2.03 of this Agreement that were included in the
Purchase Price of the related Mortgage Loan, including any expenses arising
out
of the enforcement of the purchase obligation;
(ix) to
pay,
or to reimburse itself for advances in respect of, expenses incurred in
connection with any related Mortgage Loan pursuant to Section 3.13(b);
(x) to
pay to
itself any Recovery Fees in respect of net recoveries received on any Charged
Off Loans pursuant to Section 3.13; and
(xi) to
clear
and terminate the Collection Account pursuant to
Section 10.01.
The
Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (v), (vi), (vii), (viii), (ix) and (x)
above.
86
(b) The
Securities Administrator shall, from time to time, make withdrawals from
the
Distribution Account, for any of the following purposes, without
priority:
(i) to
make
distributions to Certificateholders and the Class A Certificate Insurer in
accordance with Section 5.01;
(ii) to
pay to
itself, the Custodian and the Master Servicer amounts to which it is entitled
pursuant to Section 9.05 or any other provision of this Agreement and any
Extraordinary Trust Fund Expenses;
(iii) to
reimburse itself or the Master Servicer pursuant to Section 8.02;
(iv) to
pay
any Net Swap Payment or Swap Termination Payment payable to the Supplemental
Interest Trust owed to the Swap Provider;
(v) to
pay
any amounts in respect of taxes pursuant to Section 11.01(g)(v);
(vi) to
pay
the Master Servicing Fee to the Master Servicer;
(vii) to
pay
the Credit Risk Management Fee to the Credit Risk Manager; and
(viii) to
clear
and terminate the Distribution Account pursuant to Section 10.01.
SECTION
3.10. Investment
of Funds in the Investment Accounts.
(a) The
Servicer may direct, by means of written directions (which may be standing
directions), any Depository Institution maintaining the Collection Account
to
invest the funds in the Collection Account (for purposes of this Section
3.10,
an “Investment Account”) in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand, (i) 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 a Person
other
than the Securities Administrator is the obligor thereon, and (ii) no later
than
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Securities Administrator is the obligor
on
such Permitted Investment. Amounts in the Distribution Account may be invested
in Permitted Investments as directed in writing by the Master Servicer and
maturing, unless payable on demand, (i) 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 a Person other than the
Securities Administrator is the obligor thereon, and (ii) no later than the
date
on which such funds are required to be withdrawn from such account pursuant
to
this Agreement, if the Securities Administrator is the obligor thereon. All
such
Permitted Investments shall be held to maturity, unless payable on demand.
Any
investment of funds shall be made in the name of the Trustee (in its capacity
as
such) or in the name of a nominee of the Trustee. The Securities Administrator
shall be entitled to sole possession over each such investment in the
Distribution Account and, subject to subsection (b) below, the income thereon,
and any certificate or other instrument evidencing any such investment shall
be
delivered directly to the Securities Administrator or its agent, together
with
any document of transfer necessary to transfer title to such investment to
the
Trustee or its nominee. In the event amounts on deposit in the Collection
Account are at any time invested in a Permitted Investment payable on demand,
the party with investment discretion over such Investment Account
shall:
87
(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 promptly upon receipt by such party
of
written notice from the Servicer 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
Collection Account shall be for the benefit of the Servicer and shall be
subject
to its withdrawal in accordance with Section 3.09. The Servicer shall deposit
into the Collection Account the amount of any loss incurred in respect of
any
such Permitted Investment made with funds in such account immediately upon
realization of such loss. All earnings and gain realized from the investment
of
funds deposited in the Distribution Account shall be for the benefit of the
Master Servicer. The Master Servicer shall remit from its own funds for deposit
into the Distribution Account the amount of any loss incurred on Permitted
Investments in the Distribution Account.
(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
may and, subject to Section 9.01 and Section 9.02(a)(v), shall, at the written
direction of the Servicer, take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
(d) The
Trustee, the Master Servicer or their respective Affiliates are permitted
to
receive additional compensation that could be deemed to be in the Trustee’s or
the Master Servicer’s economic self-interest for (i) serving as investment
adviser, administrator, shareholder servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates
to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not
be
considered an amount that is reimbursable or payable to the Trustee or the
Master Servicer pursuant to Section 3.09 or 3.10 or otherwise payable in
respect
of Extraordinary Trust Fund Expenses. Such additional compensation shall
not be
an expense of the Trust Fund.
88
SECTION
3.11. Maintenance
of Hazard Insurance, Errors and Omissions and Fidelity Coverage and Primary
Mortgage Insurance.
(a) The
terms
of each Mortgage Note require the related Mortgagor to maintain fire, flood
and
hazard insurance policies. To the extent such policies are not maintained
by the
related Mortgagor, owner or servicer of the related First Mortgage Loan and
the
Servicer has been notified that such policies are not maintained, the Servicer
shall cause to be maintained for each Mortgaged Property fire and hazard
insurance with extended coverage as is customary in the area where the Mortgaged
Property is located in an amount which is at least equal to the lesser of
the
current principal balance of the related Mortgage Loan and the amount necessary
to compensate fully for any damage or loss to the improvements which are
a part
of such property on a replacement cost basis, in each case in an amount not
less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Servicer shall
also
cause to be maintained fire and hazard insurance on each REO Property with
extended coverage as is customary in the area where the Mortgaged Property
is
located in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and
(ii)
the sum of the outstanding principal balance of the related Mortgage Loan
and
the related First Mortgage Loan at the time it became an REO Property, in
each
case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer will comply in the performance of this Agreement with
all
reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Servicer under any such policies
remaining after application of any such amounts to any related First Mortgage
Loan and application of amounts to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor
in
accordance with Accepted Servicing Practices, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited
into
the Collection Account, subject to withdrawal pursuant to Section 3.09, if
received in respect of a Mortgage Loan, or in the REO Account, subject to
withdrawal pursuant to Section 3.22, if received in respect of an REO Property.
Any cost incurred by the Servicer in maintaining any such insurance shall
not,
for the purpose of calculating distributions to Certificateholders, be added
to
the unpaid principal balance of the related Mortgage Loan, notwithstanding
that
the terms of such Mortgage Loan so permit. It is understood and agreed that
no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any
time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, the Servicer will cause to be maintained a flood insurance policy
in
respect thereof. Such flood insurance shall be in an amount equal to the
lesser
of (i) the unpaid principal balance of the related Mortgage Loan and (ii)
the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which
such
Mortgaged Property is located is participating in such program), in each
case in
an amount not less than such amount as is necessary to avoid the application
of
any coinsurance clause contained in the related hazard insurance
policy.
In
the
event that any Servicer shall obtain and maintain a blanket policy with an
insurer having a General Policy Rating of B:VI or better in Best’s Key Rating
Guide or otherwise acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac insuring against
hazard losses on all of the related Mortgage Loans, it shall conclusively
be
deemed to have satisfied its obligations to cause fire and hazard insurance
to
be maintained on the Mortgaged Properties, it being understood and agreed
that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with this Section 3.11, and there
shall have been one or more losses which would have been covered by such
policy,
deposit into the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the related
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of
itself,
the Trustee, the Trust Fund, the Class A Certificate Insurer, the
Certificateholders, claims under any such blanket policy in a timely fashion
in
accordance with the terms of such policy.
89
(b) The
Servicer shall keep in force during the term of this Agreement a policy or
policies of insurance covering errors and omissions for failure in the
performance of its respective obligations under this Agreement, which policy
or
policies shall be in such form and amount that would meet the requirements
of
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the related Mortgage
Loans, unless the Servicer, has obtained a waiver of such requirements from
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a fidelity bond
in
the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, unless the Servicer, has obtained a waiver of such requirements from
▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall be deemed to have complied with this
provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such
errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty (30) days’ prior written notice to the Trustee.
(c) The
Servicer need not obtain the approval of the Master Servicer prior to releasing
any Insurance 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. At a minimum, the Servicer shall comply with the following
conditions in connection with any such release of Insurance Proceeds in excess
of $10,000:
(i) the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Servicer 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; and
(iii) pending
repairs or restoration, the Servicer shall place the Insurance Proceeds in
the
related Escrow Account, if any.
If
the
Trustee is named as an additional loss payee, the Servicer is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Trustee.
90
SECTION
3.12. Enforcement
of Due-on-Sale Clauses; Assumption Agreements
The
Servicer shall, to the extent it has knowledge of any conveyance of any related
Mortgaged Property by any related Mortgagor (whether by absolute conveyance
or
by contract of sale, and whether or not the Mortgagor remains or is to remain
liable under the Mortgage Note and/or the Mortgage), exercise its rights
to
accelerate the maturity of such Mortgage Loan under the “due-on-sale” clause, if
any, applicable thereto; provided, however, that the Servicer shall not exercise
any such rights if prohibited by law from doing so. If the Servicer reasonably
believes that it is unable under applicable law to enforce such “due-on-sale”
clause, or if any of the other conditions set forth in the proviso to the
preceding sentence apply, the Servicer shall enter into an assumption and
modification agreement from or with the person to whom such property has
been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable
state
law, the Mortgagor remains liable thereon. The Servicer is also authorized
to
enter into a substitution of liability agreement with such person, pursuant
to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the then current underwriting criteria of the Servicer for mortgage
loans similar to the related Mortgage Loans. In connection with any assumption
or substitution, the Servicer shall apply such underwriting standards and
follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected
by
the Servicer in respect of an assumption or substitution of liability agreement
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of
the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Servicer shall notify the Trustee (or
the
Custodian) that any such substitution or assumption agreement has been completed
by forwarding to the Trustee (or the Custodian) the executed original of
such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding
the foregoing paragraph or any other provision of this Agreement, the Servicer
shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or by the terms of the Mortgage Note or any assumption which
the Servicer may be restricted by law from preventing, for any reason whatever.
For purposes of this Section 3.12, the term “assumption” is deemed to also
include a sale (of the Mortgaged Property) subject to the Mortgage that is
not
accompanied by an assumption or substitution of liability
agreement.
91
SECTION
3.13. Realization
Upon Defaulted Mortgage Loans.
(a) (i) The
Servicer shall use its commercially reasonable efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into
and
continue in default and as to which no satisfactory arrangements can be made
for
collection of delinquent payments pursuant to Section 3.06. With respect
to such
of the Mortgage Loans as come into and continue in default, the Servicer
will
decide whether to (i) foreclose upon the Mortgaged Properties securing such
Mortgage Loans, (ii) write off the unpaid principal balance of the Mortgage
Loans as bad debt, (iii) take a deed in lieu of foreclosure, (iv) accept
a short
sale (a payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate a sale of the Mortgaged Property
by
the Mortgagor) or permit a short refinancing (a payoff of the Mortgage Loan
for
an amount less than the total amount contractually owed in order to facilitate
refinancing transactions by the Mortgagor not involving a sale of the Mortgaged
Property), (v) arrange for a repayment plan, or (vi) agree to a modification
in
accordance with this Agreement. In connection with such decision, the Servicer
shall take such action as (i) the Servicer would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (ii) shall be consistent with Accepted Servicing Practices
and
the Servicing Performance Standards, (iii) the Servicer shall determine
consistently with Accepted Servicing Practices to be in the best interest
of the
Trustee and Certificateholders, provided, that actions taken by the Servicer
in
connection with its servicing of the related First Mortgage Loan shall not
be
considered relevant to a determination of whether the Servicer has met the
standard set forth in this clause (iii) so long as in the Servicer’s
determination, such action is not materially adverse to the value of the
Mortgage Loans or to the interests of the Class A Certificate Insurer or
the Certificateholders and (iv) is consistent with the requirements of the
insurer under any insurance policy required to be maintained under this
Agreement; provided, however, that the Servicer shall not be required to
expend
its own funds in connection with any foreclosure or towards the restoration
of
any property unless it shall determine in its sole discretion (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation
of the
related Mortgage Loan after reimbursement to itself of such expenses and
(ii)
that such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from
the
Collection Account). The Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that
such
costs and expenses will be recoverable as Servicing Advances by the Servicer
as
contemplated in Sections 3.09 and 3.22. The foregoing is subject to the
provision that, in any case in which a Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Servicer shall not be required to expend
its
own funds toward the restoration of such property unless it shall determine
in
its discretion that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan after reimbursement to itself for such expenses.
Notwithstanding any provision in this Agreement to the contrary, except in
the
case of Charged Off Loans, the Servicer shall not be permitted to sell the
Mortgage Loans to third parties for loss mitigation or other reasons, provided,
however, that this prohibition does not preclude the Servicer from repurchasing
defaulted Mortgage Loans pursuant to Section 3.13(d) or the repurchase of
Mortgage Loans in the event of breaches of representations and warranties
pursuant to Section 3.03 of the Mortgage Loan Purchase Agreement or the
termination of the Trust pursuant to Section 10.01.
92
(ii) [Reserved].
(iii) The
Servicer will be obligated to charge off a Mortgage Loan at the time such
Mortgage Loan becomes 180 days delinquent under the OTS Method. Once a Mortgage
Loan has been charged off, the Servicer will discontinue making P&I
Advances, the Servicer will not be entitled to any additional servicing
compensation (except as described in paragraph (a)(iv) of this Section 3.13)
or
reimbursement of expenses, the Charged Off Loan will give rise to a Realized
Loss, and the Servicer will follow the procedures described in paragraph
(a)(iv)
below.
(iv) Any
Mortgage Loan that becomes a Charged Off Loan will continue to be serviced
by
the Servicer for the Certificateholders using Special Servicing Practices.
For
as long as such Charged Off Loan remains part of the Trust, the Servicer
will be
entitled to retain the Recovery Fee in respect of such Charged Off Loan;
provided, that the Servicer will not be entitled to any other servicing fees
or
reimbursement of expenses in connection with such Charged Off Loan after
the
date of charge off. Any such Mortgage Loans serviced in accordance with the
Special Servicing Practices will be serviced until six months following the
later of (i) the date on which such Mortgage Loans were charged off and (ii)
the
date on which any collections are received on such Mortgage Loans (the “Mortgage
Loan Release Date”). Any net recoveries (less the Recovery Fee paid to the
Servicer) received on such Charged Off Loans during such period will be treated
as Subsequent Recoveries and included in the Interest Remittance Amount,
to the
extent allocable to interest payments, and to the Principal Remittance Amount,
to the extent allocable to principal payments.
On
the
Mortgage Loan Release Date, such Charged Off Loan will be released from the
Trust Fund, will no longer be an asset of any REMIC, and will be transferred
to
the Class CE Certificateholders, without recourse, and thereafter (i) the
Class
CE Certificateholders will be entitled to any amounts subsequently received
in
respect of any such Released Loans, (ii) the Holders of a majority in Percentage
Interest in the Class CE Certificates may designate any servicer to service
any
such Released Loan and (iii) the Holders of a majority in Percentage Interest
in
the Class CE Certificates may sell any such Released Loan to a third party.
The
Servicer shall notify the Master Servicer and Securities Administrator on
each
Mortgage Loan Release Date of each Charged Off Loan being released from the
Trust Fund, and shall thereafter remit any amounts collected on such Charged
Off
Loan to the Class CE Certificateholder net of any fees and expenses pursuant
to
the terms of a receivable collections agreement to be entered into between
the
Class CE Certificateholder and the Servicer. The Master Servicer shall not
be
responsible for collecting any payments on a Charged Off Loan after such
Charged
Off Loan is released from the Trust Fund on the related Mortgage Loan Release
Date.
Notwithstanding
the foregoing, the procedures described above in this clause (iv) relating
to
the treatment of Charged Off Loans may be modified at any time at the discretion
of the Holders of a majority in Percentage Interest in the Class CE
Certificates, with the consent of the Servicer and the Class A Certificate
Insurer; provided,
however,
that in
no event shall the Holders of a majority in Percentage Interest in the Class
CE
Certificates or the Class A Certificate Insurer change the fee structure
relating to Charged Off Loans in a manner that would cause fees to be paid
to
the Servicer other than from recoveries on Charged Off Loans.
93
The
Master Servicer shall track collections received by the Servicer on any Charged
Off Loans based upon loan level data provided to the Master Servicer by the
Servicer on the date on which the Servicer provides its Servicer Report pursuant
to Section 5.03(a), identifying the Charged Off Loans as of the related Due
Period that the Servicer will continue to service until the related Mortgage
Loan Release Date using Special Servicing Practices. On each Distribution
Date,
the Master Servicer shall verify, based on the recovery and expense information
provided by the Servicer (i) the amount of Subsequent Recoveries on such
Charged
Off Loans for such Distribution Date and (ii) the aggregate amount of Recovery
Fees to be paid to the Servicer in respect of such Charged Off Loans as of
the
related Due Period. The Master Servicer shall be entitled to rely, without
independent verification, on the loan level data provided by the Servicer
that
identifies the recovery amounts on any Charged Off Loan in order to verify
the
amount in clause (i) of the previous sentence. The Master Servicer will be
responsible for independently verifying the aggregate amount of the Recovery
Fees described in clause (ii) of the second preceding sentence to be paid
to the
Servicer.
(b) Notwithstanding
the foregoing provisions of this Section 3.13 or any other provision of this
Agreement, with respect to any Mortgage Loan as to which the Servicer has
received actual notice of, or has actual knowledge of, the presence of any
toxic
or hazardous substance on the related Mortgaged Property, the Servicer shall
not, on behalf of the Trust Fund, either (i) obtain title to such Mortgaged
Property as a result of or in lieu of foreclosure or otherwise, or (ii)
otherwise acquire possession of, or take any other action with respect to,
such
Mortgaged Property, if, as a result of any such action, the Trust Fund, the
Trustee or the Certificateholders would be considered to hold title to, to
be a
“mortgagee-in-possession” of, or to be an “owner” or “operator” of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time,
or any comparable law, unless the Servicer has also previously determined,
based
on its reasonable judgment and a prudent report prepared by an Independent
Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Trust Fund to
take
such actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any
federal, state or local law or regulation, or that if any such materials
are
present for which such action could be required, that it would be in the
best
economic interest of the Trust Fund to take such actions with respect to
the
affected Mortgaged Property.
94
The
cost
of the environmental audit report contemplated by this Section 3.13 shall
be
advanced by the Servicer, subject to the Servicer’s right to be reimbursed
therefor from the Collection Account as provided in Section 3.09(a)(ix),
such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.
If
the
Servicer determines, as described above, that it is in the best economic
interest of the Trust Fund to take such actions as are necessary to bring
any
such Mortgaged Property into compliance with applicable environmental laws,
or
to take such action with respect to the containment, clean-up or remediation
of
hazardous substances, hazardous materials, hazardous wastes, or petroleum-based
materials affecting any such Mortgaged Property, then the Servicer shall
take
such action as it deems to be in the best economic interest of the Trust
Fund.
The cost of any such compliance, containment, cleanup or remediation shall
be
advanced by the Servicer, subject to its right to be reimbursed therefor
from
the Collection Account as provided in Sections 3.09(a)(iii) or 3.09(a)(ix),
such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.
(c) Proceeds
received in connection with any Final Recovery Determination, as well as
any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds, in respect of any Mortgage Loan (other than a Charged
Off
Loan), will be applied in the following order of priority: first, to reimburse
the Servicer for any related unreimbursed Servicing Advances and P&I
Advances, pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued
and
unpaid interest on the related Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which
such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the related Mortgage
Loan. If the amount of the recovery so allocated to interest is less than
the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount
of such recovery will be allocated by the Servicer as follows: first, to
unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Servicer pursuant to Section 3.09(a)(iii). The portion
of the
recovery allocated to interest (net of unpaid Servicing Fees) and the portion
of
the recovery allocated to principal of the related Mortgage Loan shall be
applied as follows: first, to reimburse the Servicer for any related
unreimbursed Servicing Advances or P&I Advances in accordance with Section
3.09(a)(ii) and any other amounts reimbursable to the Servicer pursuant to
Section 3.09, and second, as part of the amounts to be transferred to the
Distribution Account in accordance with Section 3.08(b). Excess proceeds,
if
any, from the liquidation of a Liquidated Mortgage Loan will be retained
by the
Servicer as additional servicing compensation pursuant to Section
3.15.
(d) The
Servicer shall have the right to purchase from REMIC I any defaulted Mortgage
Loan that is 90 days or more delinquent (which purchase shall occur within
the
three month period following the date on which such Mortgage Loan becomes
delinquent) up to an aggregate principal balance of such repurchased Mortgage
Loans of 2.00% of the aggregate principal balance of the Mortgage Loans as
of
the Cut-off Date (or a greater amount solely with the prior written consent
of
the Class A Certificate Insurer), which the Servicer determines in good faith
will otherwise become subject to foreclosure proceedings (evidence of such
determination to be delivered in writing to the Trustee, in form and substance
satisfactory to the Servicer and the Trustee prior to purchase), at a price
equal to the Purchase Price. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Collection Account, and the Trustee,
upon
receipt of written certification from the Servicer of such deposit, shall
release or cause to be released to the Servicer the related Mortgage File
and
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as
the
Servicer shall furnish and as shall be necessary to vest in the Servicer
title
to any Mortgage Loan released pursuant hereto.
95
SECTION
3.14. Trustee
to Cooperate; Release of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by
the Servicer of a notification that payment in full has been escrowed in
a
manner customary for such purposes for payment to Certificateholders on the
next
Distribution Date, the Servicer will promptly furnish to the Custodian, on
behalf of the Trustee, two copies of a request for release substantially
in the
form attached to the Custodial Agreement signed by a Servicing Officer or
in a
mutually agreeable electronic format which will, in lieu of a signature on
its
face, originate from a Servicing Officer (which certification shall include
a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Collection Account have
been or
will be so deposited) and shall request that the Custodian, on behalf of
the
Trustee, deliver to the Servicer the related Mortgage File. Upon receipt
of such
certification and request, the Custodian, on behalf of the Trustee, shall
within
five (5) Business Days release the related Mortgage File to the Servicer
and the
Trustee and the Custodian shall have no further responsibility with regard
to
such Mortgage File. Upon any such payment in full, the Servicer is authorized,
to give, as agent for the Trustee, as the mortgagee under the Mortgage that
secured the Mortgage Loan, an instrument of satisfaction (or assignment of
mortgage without recourse) regarding the Mortgaged Property subject to the
Mortgage, which instrument of satisfaction or assignment, as the case may
be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment,
as
the case may be, shall be chargeable to the Collection Account, unless it
shall
represent a Servicing Advance.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by the Servicer (in form reasonably acceptable to
the
Trustee) and as are necessary to the prosecution of any such proceedings.
The
Custodian, on behalf of the Trustee, shall, upon the request of the Servicer,
and delivery to the Custodian, on behalf of the Trustee, of two copies of
a
request for release signed by a Servicing Officer substantially in the form
attached to the Custodial Agreement (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release within five (5) Business Days the related Mortgage
File held in its possession or control to the Servicer. Such trust receipt
shall
obligate the Servicer to return the Mortgage File to the Custodian on behalf
of
the Trustee, when the need therefor by the Servicer no longer exists unless
the
related Mortgage Loan shall be liquidated, in which case, upon receipt of
a
certificate of a Servicing Officer similar to that hereinabove specified,
the
Mortgage File shall be released by the Custodian, on behalf of the Trustee,
to
the Servicer.
96
Notwithstanding
the foregoing, in connection with a Principal Prepayment in full of any Mortgage
Loan, the Master Servicer may request release of the related Mortgage File
from
the Custodian, in accordance with the provisions of the Custodial Agreement,
in
the event the Servicer fails to do so.
Upon
written certification of a Servicing Officer, the Trustee shall execute and
deliver to the Servicer, any court pleadings, requests for trustee’s sale or
other documents prepared and delivered to the Trustee and reasonably acceptable
to it and necessary to the foreclosure or trustee’s sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against
any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note
or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will
not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee’s sale.
So long as no Servicer Event of Default shall have occurred and be continuing,
the Servicer shall have the right to execute any and all such court pleadings,
requests and other documents as attorney-in-fact for, and on behalf of the
Trustee. Notwithstanding the preceding sentence, the Trustee shall in no
way be
liable or responsible for the willful malfeasance of the Servicer, or for
any
wrongful or negligent actions taken by the Servicer, while the Servicer is
acting in its capacity as attorney-in-fact for and on behalf of the
Trustee.
SECTION
3.15. Servicing
Compensation.
As
compensation for its activities hereunder, the Servicer shall be entitled
to the
Servicing Fee with respect to each Mortgage Loan payable solely from payments
of
interest in respect of such Mortgage Loan, subject to Section 3.23. In addition,
the Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section
3.09(a)(iii), Section 3.09(a)(vi) and out of amounts derived from the operation
and sale of an REO Property to the extent permitted by Section 3.22. The
right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of the Servicer’s responsibilities and
obligations under this Agreement to the extent permitted herein.
Additional
servicing compensation in the form of Ancillary Income (other than Prepayment
Charges) shall be retained by the Servicer only to the extent such fees or
charges are received by the Servicer. The Servicer shall also be entitled
pursuant to Section 3.09(a)(iv) to withdraw from the Collection Account and
pursuant to Section 3.22(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.10. In addition, the Servicer shall be entitled to retain
or withdraw from the Collection Account, pursuant to Section 3.09(a)(x),
any
Recovery Fees in respect of recoveries on Charged Off Loans as additional
servicing compensation. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and
shall
not be entitled to reimbursement therefor except as specifically provided
herein.
97
SECTION
3.16. Collection
Account Statements.
Upon
request, not later than fifteen (15) days after each Distribution Date, the
Servicer shall forward to the Master Servicer, the Class A Certificate
Insurer, the Securities Administrator and the Depositor, a statement prepared
by
the institution at which the Collection Account is maintained setting forth
the
status of the Collection Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement,
the
aggregate amount of deposits into and withdrawals from the Collection Account.
Copies of such statement and any similar statements provided by the Servicer
shall be provided by the Securities Administrator to any Certificateholder
and
to any Person identified to the Securities Administrator as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Securities
Administrator.
SECTION
3.17. Annual
Statement as to Compliance.
(a) The
Servicer shall deliver (and shall cause any Sub-Servicer engaged by it to
deliver) to the Master Servicer, the Class A Certificate Insurer and to the
Depositor on or before March 15 of each year, commencing in March 2008, an
Officer’s Certificate stating, as to the signer thereof, that (A) a review of
such party’s activities during the preceding calendar year or portion thereof
and of the Servicer’s performance under this Agreement, or such other applicable
agreement in the case of a Sub-Servicer, has been made under such officer’s
supervision and (B) to the best of such officer’s knowledge, based on such
review, such party has fulfilled all its obligations under this Agreement,
or
such other applicable agreement in the case of a Sub-Servicer, in all material
respects throughout such year or portion thereof, or, if there has been a
failure to fulfill any such obligation in any material respect, specifying
each
such failure known to such officer and the nature and status thereof. Promptly
after receipt of each such Officer’s Certificate from the Servicer, any
Sub-Servicer engaged by the Servicer, the Depositor shall review such Officer’s
Certificate and, if applicable, consult with each such party, as applicable,
as
to the nature of any failures by such party, in the fulfillment of any of
the
Servicer’s obligations hereunder or, in the case of a Sub-Servicer, under such
other applicable agreement.
(b) Failure
of the Servicer to comply timely with this Section 3.17 shall be deemed a
Servicer Event of Default as to the Servicer, automatically, without notice
and
without any cure period, and the Master Servicer may, in addition to whatever
rights the Master Servicer may have under this Agreement and at law or in
equity
or to damages, including injunctive relief and specific performance, terminate
all the rights and obligations of the Servicer under this Agreement and in
and
to the related Mortgage Loans and the proceeds thereof without compensating
the
Servicer for the same (other than the Servicer’s right to reimbursement of
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances and Servicing Advances and accrued and unpaid
Servicing Fees in the manner provided in this Agreement). This paragraph
shall
supersede any other provision in this Agreement or any other agreement to
the
contrary.
(c) In
the
event the Servicer or any Sub-Servicer engaged by the Servicer is terminated,
assigns its rights and obligations under or resigns pursuant to the terms
of
this Agreement, or any applicable agreement in the case of a Sub-Servicer,
as
the case may be, such party shall provide an Officer’s Certificate with respect
to the related year pursuant to this Section 3.17(c) or to such other applicable
agreement, as the case may be, notwithstanding any such termination, assignment
or resignation for the related year.
98
SECTION
3.18. Assessments
of Compliance and Attestation Reports.
(a) By
March
15 of each year, commencing in March 2008, the Servicer, at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged
by it
to furnish, each at its own expense, to the Master Servicer, a report on
an
assessment of compliance with the Relevant Servicing Criteria that contains
(A)
a statement by such party of its responsibility for assessing compliance
with
the Relevant Servicing Criteria, (B) a statement that such party used the
Relevant Servicing Criteria to assess compliance with the Relevant Servicing
Criteria, (C) such party’s assessment of compliance with the Relevant Servicing
Criteria as of and for the fiscal year covered by the Form 10-K required
to be
filed pursuant to Section 5.06(d), including, if there has been any material
instance of noncompliance with the Relevant 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
party’s assessment of compliance with the Relevant Servicing Criteria as of and
for such period. Notwithstanding the foregoing, neither the Servicer nor
any
Servicing Function Participant engaged by the Servicer shall be required
to
deliver any assessments until March 31st in any given year so long as it
has not
received written confirmation from the Depositor that a Form 10-K is required
to
be filed in respect of the Trust for the preceding calendar year; provided
however that, notwithstanding the foregoing, no Subcontractor will be required
to deliver any assessments in any given year in which the Form 10-K is not
required to be filed.
(b) By
March
15 of each year, commencing in March 2008, the Servicer, at its own expense,
shall cause, and the Servicer shall cause any Servicing Function Participant
engaged by it to cause, each at its own expense, a registered public accounting
firm (which may also render other services to the Servicer or such other
Servicing Function Participants, as the case may be) and that is a member
of the
American Institute of Certified Public Accountants to furnish a report to
the
Master Servicer, to the effect that (i) it has obtained a representation
regarding certain matters from the management of such party, which includes
an
assertion that such party has complied with the Relevant Servicing Criteria,
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, it
is
expressing an opinion as to whether such party’s compliance with the Relevant
Servicing Criteria was fairly stated in all material respects, or it cannot
express an overall opinion regarding such party’s assessment of compliance with
the Relevant Servicing Criteria. 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. Such report must be available for
general use and not contain restricted use language. Notwithstanding the
foregoing, neither the Servicer nor any Servicing Function Participant engaged
by the Servicer shall be required to deliver or cause the delivery of such
reports until March 31st in any given year so long as the Servicer has not
received written confirmation from the Depositor that a Form 10-K is required
to
be filed in respect of the Trust for the preceding fiscal year; provided
however
that, notwithstanding the foregoing, no Subcontractor will be required to
deliver any reports in any given year in which the Form 10-K is not required
to
be filed.
99
(c) Failure
of the Servicer to comply timely with this Section 3.18 shall be deemed a
Servicer Event of Default as to the Servicer, automatically, without notice
and
without any cure period, and the Master Servicer may, in addition to whatever
rights the Master Servicer may have under this Agreement and at law or in
equity
or to damages, including injunctive relief and specific performance, terminate
all the rights and obligations of the Servicer under this Agreement and in
and
to the related Mortgage Loans and the proceeds thereof without compensating
the
Servicer for the same (other than the Servicer’s right to reimbursement of
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances and Servicing Advances and accrued and unpaid
Servicing Fees in the manner provided for in this Agreement). This paragraph
shall supersede any other provision in this Agreement or any other agreement
to
the contrary.
(d) In
the
event the Servicer or any Servicing Function Participant engaged by the Servicer
is terminated, assigns its rights and obligations under, or resigns pursuant
to
the terms of this Agreement, or any applicable agreement in the case of a
Servicing Function Participant, as the case may be, such party shall provide
a
report on assessment of compliance with respect to the related year pursuant
to
this Section 3.18(d) or to such other applicable agreement, notwithstanding
any
such termination, assignment or resignation for the related year.
SECTION
3.19. [Reserved].
SECTION
3.20. Annual
Certification; Additional Information.
(a) The
Servicer shall and shall cause any Servicing Function Participant engaged
by it
to, provide to the Person who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the
“Certifying Person”), by March 15 of each year in which the Trust is subject to
the reporting requirements of the Exchange Act, a certification (each, a
“Back-Up Certification”), in the form attached hereto as Exhibit C, upon which
the Certifying Person, the entity for which the Certifying Person acts as
an
officer, and such entity’s officers, directors and Affiliates (collectively with
the Certifying Person, “Certification Parties”) can reasonably rely. The officer
of the Master Servicer in charge of the master servicing function shall serve
as
the Certifying Person on behalf of the Trust. In the event the Servicer or
any
Servicing Function Participant engaged by it is terminated or resigns pursuant
to the terms of this Agreement, or any applicable Sub-Servicing agreement,
as
the case may be, such party shall provide a Back-Up Certification to the
Certifying Person pursuant to this Section 3.20 with respect to the period
of
time it was subject to this Agreement or any applicable Sub-Servicing Agreement,
as the case may be.
(b) The
Servicer shall indemnify and hold harmless the Master Servicer, the Securities
Administrator, the Trustee, the Class A Certificate Insurer, the Depositor
and their respective officers, directors, agents and affiliates from and
against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees
and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.20 or the Servicer’s
negligence, bad faith or willful misconduct in connection therewith. Such
indemnity shall survive the termination or resignation of the parties hereto
or
the termination of this Agreement. If the indemnification provided for herein
is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator, the Class A Certificate Insurer, the Trustee and the
Depositor, then the Servicer agrees that it shall contribute to the amount
paid
or payable by the Master Servicer, the Securities Administrator, the Trustee
and
the Depositor as a result of the losses, claims, damages or liabilities of
the
Master Servicer, the Securities Administrator, the Trustee and the Depositor
in
such proportion as is appropriate to reflect the relative fault of the Master
Servicer, the Securities Administrator, the Trustee and the Depositor on
the one
hand and the Servicer on the other in connection with a breach of the Servicer’s
obligations under this Section 3.20.
100
(c) The
Servicer shall provide to the Master Servicer and the Class A Certificate
Insurer prompt notice of the occurrence of any of the following:
(i) any
Servicer Event of Default under the terms of this Agreement, any merger,
consolidation or sale of substantially all of the assets of the Servicer,
the
Servicer’s engagement of any Sub-Servicer to perform or assist in the
performance of any of the Servicer’s obligations under this Agreement, any
material litigation involving the Servicer that is material to the
Certificateholders, and to the extent disclosure is required under Regulation
AB, any affiliation or other significant relationship between the Servicer
and,
American Home Mortgage Corp., the Class A Certificate Insurer, the Sponsor,
the
Depositor, the Master Servicer, the Securities Administrator, the Trustee,
the
Custodian and the Swap Provider.
(ii) if
the
Servicer has knowledge of the occurrence of any of the events described in
this
clause (ii), then no later than ten days prior to the deadline for the filing
of
any Distribution Report on Form 10-D in respect of the Trust, the Servicer
shall
provide to the Master Servicer and the Class A Certificate Insurer notice
of the occurrence of any of the following events along with all information,
data, and materials related thereto as may be required to be included in
the
related Distribution Report on Form 10-D (as specified in the provisions
of
Regulation AB referenced below):
(A) any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively
become material over time (Item 1121(a)(11) of Regulation AB);
(B) material
breaches of pool asset representations or warranties or transaction covenants
(Item 1121(a)(12) of Regulation AB); and
(C) any
material pool asset changes (such as, additions, substitutions or repurchases)
relating to the Mortgage Loans serviced by the Servicer (Item 1121(a)(14)
of
Regulation AB).
(d) The
Servicer shall provide to the Securities Administrator and Master Servicer
such
additional information as the Securities Administrator and the Master Servicer
may reasonably request, including evidence of the authorization of the person
signing any certification or statement, financial information and reports
and of
the fidelity bond and errors and omissions insurance policy required to be
maintained by the Servicer pursuant to this Agreement, and such other
information related to the Servicer or its performance hereunder.
101
SECTION
3.21. Access
to
Certain Documentation.
The
Servicer shall provide to the Office of Thrift Supervision, the FDIC, and
any
other federal or state banking or insurance regulatory authority that may
exercise authority over any Certificate Owner, access to the documentation
regarding the related Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it. Nothing in this Section 3.21 shall limit the
obligation of the Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section. Nothing in this
Section 3.21 shall require the Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual course of
business. The Servicer shall not be required to make copies of or ship documents
to any Person unless provisions have been made for the reimbursement of the
costs thereof.
SECTION
3.22. Title,
Management and Disposition of REO Property.
(a) The
deed
or certificate of sale of any REO Property related to a Mortgage Loan shall
be
taken in the name of the Trustee, or its nominee, on behalf of the Trust
Fund
and for the benefit of the Certificateholders. The Servicer, on behalf of
REMIC
I, shall either sell any REO Property by the close of the third calendar
year
following the calendar year in which REMIC I acquires ownership of such REO
Property for purposes of Section 860(a)(8) of the Code or request from the
Internal Revenue Service, no later than sixty (60) days before the day on
which
the three-year grace period would otherwise expire, an extension of the
three-year grace period, unless the Servicer had delivered to the Trustee
and
the Class A Certificate Insurer an Opinion of Counsel, addressed to the
Trustee, the Class A Certificate Insurer and the Depositor, to the effect
that the holding by REMIC I of such REO Property subsequent to three (3)
years
after its acquisition will not result in the imposition on any Trust REMIC
created hereunder of taxes on “prohibited transactions” thereof, as defined in
Section 860F of the Code, or cause any Trust REMIC hereunder to fail to qualify
as a REMIC under Federal law at any time that any Certificates are outstanding.
The Servicer shall manage, conserve, protect and operate each REO Property
for
the Certificateholders solely for the purpose of its prompt disposition and
sale
in a manner which does not cause such REO Property to fail to qualify as
“foreclosure property” within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC created hereunder of any “income from
non-permitted assets” within the meaning of Section 860F(a)(2)(B) of the Code,
or any “net income from foreclosure property” which is subject to taxation under
the REMIC Provisions.
(b) The
Servicer shall segregate and hold all funds collected and received in connection
with the operation of any REO Property separate and apart from its own funds
and
general assets and shall establish and maintain with respect to REO Properties
an account held in trust for the Trustee, on behalf of the Trust Fund and
for
the benefit of the Certificateholders (the “REO Account”), which shall be an
Eligible Account. The Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to the maintenance of separate
ledgers for each REO Property. The Servicer shall be entitled to retain or
withdraw any interest income paid on funds deposited in the REO
Account.
102
(c) The
Servicer shall have full power and authority, subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things
in
connection with any REO Property related to a Mortgage Loan serviced by it
as
are consistent with the manner in which the Servicer manages and operates
similar property owned by it or any of its Affiliates, all on such terms
and for
such period as the Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Servicer shall deposit,
or
cause to be deposited in the clearing account in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage
loan
servicing activities on a daily basis, and in no event more than one (1)
Business Day after the Servicer’s receipt thereof, and shall thereafter deposit
in the REO Account, in no event more than two (2) Business Days after the
deposit of good funds into the clearing account, all revenues received by
it
with respect to an REO Property related to a Mortgage Loan serviced by it
and
shall withdraw therefrom funds necessary for the proper operation, management
and maintenance of such REO Property including, without limitation:
(i) all
insurance premiums due and payable in respect of such REO Property;
(ii) all
real
estate taxes and assessments in respect of such REO Property that may result
in
the imposition of a lien thereon; and
(iii) all
costs
and expenses necessary to maintain such REO Property.
To
the
extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Servicer shall advance
from
its own funds such amount as is necessary for such purposes if, but only
if, the
Servicer would make such advances if the Servicer owned the REO Property
and if
in the Servicer’s judgment, the payment of such amounts will be recoverable from
the rental or sale of the REO Property.
Subject
to compliance with applicable laws and regulations as shall at any time be
in
force, and notwithstanding the foregoing, the Servicer, on behalf of the
Trust
Fund, shall not:
(i) enter
into, renew or extend any New Lease with respect to any REO Property, if
the New
Lease by its terms will give rise to any income that does not constitute
Rents
from Real Property;
(ii) permit
any amount to be received or accrued under any New Lease other than amounts
that
will constitute Rents from Real Property;
(iii) authorize
or permit any construction on any REO Property, other than the completion
of a
building or other improvement thereon, and then only if more than ten percent
of
the construction of such building or other improvement was completed before
default on the related Mortgage Loan became imminent, all within the meaning
of
Section 856(e)(4)(B) of the Code; or
(iv) allow
any
Person to Directly Operate any REO Property on any date more than ninety
(90)
days after its date of acquisition by the Trust Fund.
103
The
Servicer may contract with any Independent Contractor for the operation and
management of any REO Property, provided that:
(i) the
terms
and conditions of any such contract shall not be inconsistent
herewith;
(ii) any
such
contract shall require, or shall be administered to require, that the
Independent Contractor pay all costs and expenses incurred in connection
with
the operation and management of such REO Property, including those listed
above
and remit all related revenues (net of such costs and expenses) to the Servicer
as soon as practicable, but in no event later than thirty (30) days following
the receipt thereof by such Independent Contractor;
(iii) none
of
the provisions of this Section 3.22(c) relating to any such contract or to
actions taken through any such Independent Contractor shall be deemed to
relieve
the Servicer of any of its duties and obligations to the Trustee on behalf
of
the Trust Fund and for the benefit of the Certificateholders with respect
to the
operation and management of any such REO Property; and
(iv) the
Servicer shall be obligated with respect thereto to the same extent as if
it
alone were performing all duties and obligations in connection with the
operation and management of such REO Property.
The
Servicer shall be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations
hereunder for indemnification of the Servicer by such Independent Contractor,
and nothing in this Agreement shall be deemed to limit or modify such
indemnification. The Servicer shall be solely liable for all fees owed by
it to
any such Independent Contractor, irrespective of whether the Servicer’s
compensation pursuant to Section 3.15 is sufficient to pay such fees. Any
such
agreement shall include a provision that such agreement may be immediately
terminated by any successor Servicer without fee, in the event the Servicer
shall for any reason, no longer be the Servicer of the related Mortgage Loans
(including termination due to a Servicer Event of Default).
(d) In
addition to the withdrawals permitted under Section 3.22(c), the Servicer
may
from time to time make withdrawals from the REO Account for any REO Property:
(i) to pay itself unpaid Servicing Fees in respect of the related Mortgage
Loan;
and (ii) to reimburse itself or any Sub-Servicer for unreimbursed Servicing
Advances and Advances made in respect of such REO Property or the related
Mortgage Loan. On the Servicer Remittance Date, the Servicer shall withdraw
from
each REO Account and deposit into the Distribution Account in accordance
with
Section 3.08(d)(ii), for distribution on the related Distribution Date in
accordance with Section 5.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to
Section
3.22(c) or this Section 3.22(d).
(e) Subject
to the time constraints set forth in Section 3.22(a), each REO Disposition
shall
be carried out by the Servicer at such price and upon such terms and conditions
as the Servicer shall deem necessary or advisable, as shall be normal and
usual
in accordance with Accepted Servicing Practices.
104
(f) The
proceeds from the REO Disposition, net of any amount required by law to be
remitted to the Mortgagor under the related Mortgage Loan and net of any
payment
or reimbursement to the Servicer as provided above, shall be deposited in
the
Distribution Account in accordance with Section 3.08(d)(ii) on the Servicer
Remittance Date in the month following the receipt thereof for distribution
on
the related Distribution Date in accordance with Section 5.01. Any REO
Disposition shall be for cash only (unless changes in the REMIC Provisions
made
subsequent to the Startup Day allow a sale for other
consideration).
(g) The
Servicer shall file information returns (and shall provide a certification
of a
Servicing Officer to the Master Servicer that such filings have been made)
with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property
as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
SECTION
3.23. Obligations
of the Servicer in Respect of Prepayment Interest Shortfalls; Relief Act
Interest Shortfalls.
The
Servicer shall deliver to the Securities Administrator for deposit into the
Distribution Account on or before 12:00 noon New York time on the Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate amount of the Prepayment Interest Shortfalls attributable to Principal
Prepayments in full on the related Mortgage Loans for the related Distribution
Date resulting solely from voluntary Principal Prepayments received by the
Servicer during the related Prepayment Period and (ii) the aggregate amount
of
the related Servicing Fees payable to the Servicer on such Distribution Date
with respect to the Mortgage Loans. The Servicer shall not have the right
to
reimbursement for any amounts remitted to the Securities Administrator in
respect of this Section 3.23. The Servicer shall not be obligated to pay
the
amounts set forth in this Section 3.23 with respect to shortfalls resulting
from
the application of the Relief Act.
SECTION
3.24. Obligations
of the Servicer in Respect of Mortgage Rates and Monthly Payments.
In
the
event that a shortfall in any collection on or liability with respect to
any
Mortgage Loan results from or is attributable to adjustments to Mortgage
Rates,
Monthly Payments or Stated Principal Balances that were made by the Servicer
in
a manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Securities Administrator for deposit in
the
Distribution Account from its own funds the amount of any such shortfall
and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Securities
Administrator, the Master Servicer, the Depositor, the Class A Certificate
Insurer and any successor servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.24 shall not limit the ability
of
the Servicer to seek recovery of any such amounts from the related Mortgagor
under the terms of the related Mortgage Note and Mortgage, to the extent
permitted by applicable law.
105
SECTION
3.25. Reserve
Fund.
(a) No
later
than the Closing Date, the Securities Administrator shall establish and maintain
a separate, segregated trust account entitled, “Reserve Fund, ▇▇▇▇▇ Fargo Bank,
National Association, in trust for the registered holders of SunTrust
Acquisition Closed-End Seconds Trust, Series ▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through
Certificates.” On the Closing Date, the Depositor will deposit, or cause to be
deposited, into the Reserve Fund $1,000.
(b) On
each
Distribution Date, the Securities Administrator shall deposit into the Reserve
Fund the amounts described in Section 5.01(c)(5)(v), rather than distributing
such amounts to the Class CE Certificateholders pursuant to Section
5.01(c)(5)(x). On each such Distribution Date, the Securities Administrator
shall hold all such amounts for the benefit of the Holders of the Class A
Certificates and the Mezzanine Certificates and will distribute such amounts
to
the Holders of the Class A Certificates and the Mezzanine Certificates, in
the
amounts and priorities set forth in Section 5.01(c). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Securities
Administrator shall deposit, into the Reserve Fund on behalf of the Class
CE
Certificateholders, from amounts otherwise distributable to the Class CE
Certificateholders, an amount such that when added to other amounts already
on
deposit in the Reserve Fund, the aggregate amount on deposit therein is equal
to
$1,000.
(c) The
Reserve Fund constitutes an “outside reserve fund” within the meaning of
Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC. It is the
intention of the parties hereto that, for federal and state income and state
and
local franchise tax purposes, the Reserve Fund be disregarded as an entity
separate from the Holder of the Class CE Certificates unless and until the
date
when either (a) there is more than one Class CE Certificateholder or (b)
any
Class of Certificates in addition to the Class CE Certificates is
recharacterized as an equity interest in the Reserve Fund for federal income
tax
purposes, in which case it is the intention of the parties hereto that, for
federal and state income and state and local franchise tax purposes, the
Reserve
Fund be treated as a partnership. The Master Servicer shall not be required
to
prepare and file partnership tax returns in respect of such partnership unless
it receives additional reasonable compensation (not to exceed $10,000 per
year)
for the preparation of such filings, written notification recognizing the
creation of a partnership agreement or comparable documentation evidencing
the
partnership. All amounts deposited into the Reserve Fund (other than the
initial
deposit therein of $1,000) shall be treated as amounts distributed by REMIC
III
to the Holders of the Class CE Certificates. Upon the termination of the
Trust
Fund, or the payment in full of the Class A Certificates and the Mezzanine
Certificates, all amounts remaining on deposit in the Reserve Fund will be
released by the Trust Fund and distributed to the Class CE Certificateholders
or
their designees. The Reserve Fund will be part of the Trust Fund but not
part of
any REMIC and any payments to the Holders of the Class A Certificates or
the
Mezzanine Certificates of Net WAC Rate Carryover Amounts will not be payments
with respect to a “regular interest” in a REMIC within the meaning of Code
Section 860(G)(a)(1).
106
(d) By
accepting a Class CE Certificate, each Class CE Certificateholder hereby
agrees
that the Securities Administrator will deposit into the Reserve Fund the
amounts
described above on each Distribution Date rather than distributing such amounts
to the Class CE Certificateholders. By accepting a Class CE Certificate,
each
Class CE Certificateholder further agrees that its agreement to such action
by
the Securities Administrator is given for good and valuable consideration,
the
receipt and sufficiency of which is acknowledged by such
acceptance.
(e) At
the
direction of the Holders of a majority in Percentage Interest in the Class
CE
Certificates, the Securities Administrator shall direct any Depository
Institution maintaining the Reserve Fund to invest the funds in such account
in
one or more Permitted Investments bearing interest or sold at a discount,
and
maturing, unless payable on demand, (i) 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 a Person other than the
Securities Administrator or an Affiliate manages or advises such investment,
and
(ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator
or
an Affiliate manages or advises such investment. All income and gain earned
upon
such investment shall be deposited into the Reserve Fund. In no event shall
the
Securities Administrator be liable for any investments made pursuant to this
clause (e). If the Holders of a majority in Percentage Interest in the Class
CE
Certificates fail to provide investment instructions, funds on deposit in
the
Reserve Fund shall be held uninvested by the Securities Administrator without
liability for interest or compensation.
(f) For
federal tax return and information reporting, the right of the Class A
Certificateholders and the Mezzanine Certificateholders to receive payments
from
the Reserve Fund and the Supplemental Interest Trust in respect of any Net
WAC
Rate Carryover Amount shall be assigned a value of $324,019.
SECTION
3.26. Advance
Facility.
(a) Notwithstanding
anything to the contrary contained herein, (i) the Servicer is hereby authorized
to enter into an advance facility (“Advance Facility”) but no more than two
Advance Facilities without the prior written consent of the Trustee, which
consent shall not be unreasonably withheld, under which (A) the Servicer
sells,
assigns or pledges to an advancing person (an “Advance Financing Person”) its
rights under this Agreement to be reimbursed for any P&I Advances or
Servicing Advances and/or (B) an Advance Financing Person agrees to finance
some
or all P&I Advances or Servicing Advances required to be made by the
Servicer pursuant to this Agreement and (ii) the Servicer is hereby authorized
to assign its rights to the Servicing Fee (which rights shall terminate upon
the
resignation, termination or removal of the Servicer pursuant to the terms
of
this Agreement) or pledge its servicing rights; it being understood that
neither
the Trust Fund nor any party hereto shall have a right or claim (including
without limitation any right of offset) to any amounts for reimbursement
of
P&I Advances or Servicing Advances so assigned or to the portion of the
Servicing Fee so assigned or the servicing rights so pledged. Subject to
the
provisions of the first sentence of this Section 3.26(a), no consent of the
Depositor, Trustee, Master Servicer, Certificateholders or any other party
is
required before the Servicer may enter into an Advance Facility, but the
Servicer shall provide notice to the Depositor, the Class A Certificate
Insurer, Master Servicer and the Trustee of the existence of any such Advance
Facility promptly upon the consummation thereof stating (a) the identity
of the
Advance Financing Person and (b) the identity of any Person (“Servicer’s
Assignee”) who has the right to receive amounts in reimbursement of previously
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances. Notwithstanding the
existence of any Advance Facility under which an advancing person agrees
to
finance P&I Advances and/or Servicing Advances on the Servicer’s behalf, the
Servicer shall remain obligated pursuant to this Agreement to make P&I
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.
107
(b) Reimbursement
amounts (“Advance Reimbursement Amounts”) shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
related Mortgage Loans for which the Servicer would be permitted to reimburse
itself in accordance with this Agreement, assuming the Servicer had made
the
related P&I Advance(s) and/or Servicing Advance(s).
(c) The
Servicer shall maintain and provide to any successor Servicer (with, upon
request, a copy to the Trustee and/or the Class A Certificate Insurer) a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advance Financing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for
any
errors in such information.
(d) Reimbursement
amounts distributed with respect to each Mortgage Loan shall be allocated
to
outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances (as the case may
be) made with respect to that Mortgage Loan on a “first-in, first out” (FIFO)
basis. The documentation establishing any Advance Facility shall require
the
Servicer to provide to the related Advance Financing Person or its designee
loan-by-loan information with respect to each such reimbursement amount
distributed to such Advance Financing Person or Advance Facility trustee
on each
Distribution Date, to enable the Advance Financing Person or Advance Facility
trustee to make the FIFO allocation of each such reimbursement amount with
respect to each Mortgage Loan. The Servicer shall remain entitled to be
reimbursed by the Advance Financing Person or Advance Facility trustee for
all
P&I Advances and Servicing Advances funded by the Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or
pledged
to an Advance Financing Person.
(e) Any
amendment to this Section 3.26 or to any other provision of this Agreement
that
may be necessary or appropriate to effect the terms of an Advance Facility
as
described generally in this Section 3.26, including amendments to add provisions
relating to a successor Servicer, may be entered into by the Trustee, the
Depositor, and the Servicer with the prior written consent of the Class A
Certificate Insurer but without the consent of any Certificateholder,
notwithstanding anything to the contrary in this Agreement, provided, that
the
Trustee has been provided an Opinion of Counsel that such amendment is
authorized hereunder and has no material adverse effect on the
Certificateholders (without regard to the Policy), 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; 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 (instead of obtaining an Opinion of Counsel to such
effect) stating that the amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates (without
regard to the Policy); it being understood and agreed that any such rating
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. Prior to entering into an Advance Facility,
the Servicer shall notify the lender under such facility in writing that:
(a)
the P&I Advances and/or Servicing Advances financed by and/or pledged to the
lender are obligations owed to the Servicer on a non-recourse basis payable
only
from the cash flows and proceeds received under this Agreement for reimbursement
of P&I Advances and/or Servicing Advances only to the extent provided
herein, and none of the Master Servicer, the Securities Administrator, the
Trustee, the Class A Certificate Insurer or the Trust are otherwise
obligated or liable to repay any P&I Advances and/or Servicing Advances
financed by the lender; (b) the Servicer will be responsible for remitting
to
the lender the applicable amounts collected by it as Servicing Fees and as
reimbursement for P&I Advances and/or Servicing Advances funded by the
lender, as applicable, subject to the restrictions and priorities created
in
this Agreement; and (c) none of the Master Servicer, the Securities
Administrator, the Class A Certificate Insurer or the Trustee shall have
any responsibility to calculate any amount payable under an Advance Facility
or
to track or monitor the administration of the financing arrangement between
the
Servicer and the lender or the payment of any amount under an Advance
Facility.
108
(f) The
Servicer shall indemnify the Master Servicer, the Securities Administrator,
the
Trustee, the Class A Certificate Insurer and the Trust Fund for any cost,
liability or expense relating to the Advance Facility including, without
limitation, a claim, pending or threatened, by an Advance Financing
Person.
SECTION
3.27. Indemnification.
The
Servicer agrees to indemnify the Trustee, Master Servicer, the Class A
Certificate Insurer and the Securities Administrator, from, and hold the
Trustee, Master Servicer and the Securities Administrator harmless against,
any
loss, liability or expense (including reasonable attorney’s fees and expenses)
incurred by any such Person by reason of the Servicer’s willful misfeasance, bad
faith or gross negligence in the performance of its duties under this Agreement
or by reason of the Servicer’s reckless disregard of its obligations and duties
under this Agreement. Such indemnity shall survive the termination or discharge
of this Agreement and the resignation or removal of the Servicer, the Trustee,
the Master Servicer and the Securities Administrator. Any payment hereunder
made
by the Servicer to any such Person shall be from the Servicer’s own funds,
without reimbursement from REMIC I therefor.
109
ARTICLE
IV
ADMINISTRATION
AND MASTER SERVICING
OF
THE
MORTGAGE LOANS BY THE MASTER SERVICER
SECTION
4.01. Master
Servicer.
The
Master Servicer shall, from and after the Closing Date supervise, monitor
and
oversee the obligations of the Servicer under this Agreement to service and
administer the Mortgage Loans in accordance with the terms of this Agreement
and
shall have full power and authority to do any and all things which it may
deem
necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with the Servicer
as
necessary from time-to-time to carry out the Master Servicer’s obligations
hereunder, shall receive, review and evaluate all reports, information and
other
data provided to the Master Servicer by the Servicer and shall cause the
Servicer to perform and observe the covenants, obligations and conditions
to be
performed or observed by the Servicer under this Agreement. The Master Servicer
shall independently and separately monitor the Servicer’s servicing activities
with respect to each Mortgage Loan, reconcile the results of such monitoring
with such information provided in the previous sentence on a monthly basis
and
coordinate corrective adjustments to the Servicer’s and Master Servicer’s
records, and based on such reconciled and corrected information, prepare
the
statements specified in Section 5.03 and any other information and statements
required to be provided by the Master Servicer hereunder. The Master Servicer
shall reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer to the Distribution Account pursuant to the terms
hereof based on information provided to the Master Servicer by the
Servicer.
The
Trustee shall furnish the Servicer and the Master Servicer with any limited
powers of attorney and other documents in form acceptable to it necessary
or
appropriate to enable the Servicer and the Master Servicer to service and
administer the Mortgage Loans and REO Properties. The Trustee shall have
no
responsibility for any action of the Master Servicer or the Servicer pursuant
to
any such limited power of attorney and shall be indemnified by the Master
Servicer or the Servicer, as applicable, for any cost, liability or expense
incurred by the Trustee in connection with such Person’s misuse of any such
power of attorney.
The
Trustee, the Custodian and the Securities Administrator shall provide access
to
the records and documentation in possession of the Trustee, the Custodian
or the
Securities Administrator regarding the Mortgage Loans and REO Property and
the
servicing thereof to the Class A Certificate Insurer, the
Certificateholders, the FDIC, and the supervisory agents and examiners of
the
FDIC, such access being afforded only upon reasonable prior written request
and
during normal business hours at the office of the Trustee, the Custodian
or the
Securities Administrator; provided, however, that, unless otherwise required
by
law, none of the Trustee, the Custodian or the Securities Administrator shall
be
required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Trustee,
the Custodian and the Securities Administrator shall allow representatives
of
the above entities to photocopy any of the records and documentation and
shall
provide equipment for that purpose at a charge that covers the Trustee’s, the
Custodian’ or the Securities Administrator’s actual costs.
110
The
Trustee shall execute and deliver to the Servicer or the Master Servicer
upon
request any court pleadings, requests for trustee’s sale or other documents
necessary or desirable to (i) the foreclosure or trustee’s sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or any other Mortgage Loan Document; (iii)
obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other
rights or remedies provided by the Mortgage Note or any other Mortgage Loan
Document or otherwise available at law or equity.
SECTION
4.02. REMIC-Related
Covenants.
For
as
long as each REMIC shall exist, the Trustee and the Securities Administrator
shall act in accordance herewith to treat such REMIC as a REMIC, and the
Trustee
and the Securities Administrator shall comply with any directions of the
Sponsor, the Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit 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 repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section
2.03 of
this Agreement, as applicable, accept any contribution to any REMIC after
the
Startup Day without receipt of an Opinion of Counsel stating that such
contribution will not result in an Adverse REMIC Event as defined in Section
11.01(f).
SECTION
4.03. Monitoring
of Servicer.
(a) The
Master Servicer shall be responsible for monitoring the compliance by the
Servicer with its duties under this Agreement. In the review of the Servicer’s
activities, the Master Servicer may rely upon an Officer’s Certificate of the
Servicer with regard to the Servicer’s compliance with the terms of this
Agreement. In the event that the Master Servicer, in its judgment, determines
that the Servicer should be terminated in accordance with the terms hereof
or
that a notice should be sent pursuant to the terms hereof with respect to
the
occurrence of an event that, unless cured, would constitute a Servicer Event
of
Default, the Master Servicer shall notify the Servicer, the Sponsor, the
Class A Certificate Insurer and the Trustee thereof and the Master Servicer
shall issue such notice or take such other action as it deems
appropriate.
(b) The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of the Servicer under this Agreement and shall,
in
the event that the Servicer fails to perform its obligations in accordance
with
this Agreement, subject to this Section and Article VIII, notify the Trustee
and
the Class A Certificate Insurer and the Trustee may, with the prior written
consent of the Class A Certificate Insurer or shall, at the prior written
direction of the Class A Certificate Insurer, terminate the rights and
obligations of the Servicer hereunder in accordance with the provisions of
Article VIII. In the event the rights and obligations of the Servicer (or
any
successor thereto) are terminated, the Master Servicer shall act as servicer
of
the related Mortgage Loans or a successor servicer shall be appointed in
accordance with the provisions of Article VIII. Such enforcement, including,
without limitation, the legal prosecution of claims and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the Mortgage Loans. The Master Servicer
shall
pay the costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except
to
the extent that the Master Servicer shall have received reasonable indemnity
for
its costs and expenses in pursuing such action.
111
(c) The
Master Servicer shall be entitled to be reimbursed by the Servicer (or from
amounts on deposit in the Distribution Account if the Servicer is unable
to
fulfill its obligations hereunder) for all reasonable out-of-pocket or third
party costs associated with the transfer of servicing from the predecessor
Servicer (or if the predecessor Servicer is the Master Servicer, from the
Servicer immediately preceding the Master Servicer), including without
limitation, any reasonable out-of-pocket or third party costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
successor servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the successor servicer to service the related
Mortgage Loans properly and effectively, upon presentation of reasonable
documentation of such costs and expenses.
(d) The
Master Servicer shall require the Servicer to comply with the remittance
requirements and other obligations set forth in this Agreement.
(e) If
the
Master Servicer acts as a successor to the Servicer, it will not assume any
liability for the representations and warranties of the terminated
Servicer.
SECTION
4.04. Fidelity
Bond.
The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy, affording coverage with
respect to all directors, officers, employees and other Persons acting on
such
Master Servicer’s behalf, and covering errors and omissions in the performance
of the Master Servicer’s obligations hereunder. The errors and omissions
insurance policy and the fidelity bond shall be in such form and amount
generally acceptable for entities serving as master servicers or
trustees.
SECTION
4.05. Power
to
Act; Procedures.
The
Master Servicer shall master service the Mortgage Loans and shall have full
power and authority, subject to the REMIC Provisions and the provisions of
Article XI, to do any and all things that it may deem necessary or desirable
in
connection with the master servicing and administration of the Mortgage Loans,
including but not limited to the power and authority (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers
of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages,
(iii) to collect any Insurance Proceeds and Liquidation Proceeds, and (iv)
to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan, in each case, in accordance with the
provisions of this Agreement; provided, however, that the Master Servicer
shall
not (and, consistent with its responsibilities under Section 4.03, shall
not
permit the Servicer to) knowingly or intentionally 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, would cause REMIC
I,
REMIC II or REMIC III to fail to qualify as a REMIC or result in the imposition
of a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless
the
Master Servicer has received an Opinion of Counsel (but not at the expense
of
the Master Servicer) to the effect that the contemplated action will not
cause
REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC or result in
the
imposition of a tax upon REMIC I, REMIC II or REMIC III, as the case may
be. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney prepared and delivered to it and reasonably
acceptable to it by empowering the Master Servicer or the Servicer to execute
and deliver instruments of satisfaction or cancellation, or of partial or
full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating
to the
Mortgage Loans or the Mortgaged Property, in accordance with this Agreement,
and
the Trustee shall execute and deliver such other documents prepared and
delivered to it and reasonably acceptable to it, as the Master Servicer or
the
Servicer may request, to enable the Master Servicer to master service and
administer the Mortgage Loans and carry out its duties hereunder, in each
case
in accordance with Accepted Master Servicing Practices (and the Trustee shall
have no liability for misuse of any such powers of attorney by the Master
Servicer or the Servicer and shall be indemnified by the Master Servicer
or the
Servicer, as applicable, for any cost, liability or expense incurred by the
Trustee in connection with such Person’s use or misuse of any such power of
attorney). If the Master Servicer or the Trustee has been advised that it
is
likely that the laws of the state in which action is to be taken prohibit
such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the “doing business” or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee
in
the appointment of a co-trustee pursuant to Section 9.10. In the performance
of
its duties hereunder, the Master Servicer shall be an independent contractor
and
shall not, except in those instances where it is taking action in the name
of
the Trustee, be deemed to be the agent of the Trustee.
112
SECTION
4.06. Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicer to enforce such clauses in accordance with
this Agreement. If applicable law prohibits the enforcement of a due-on-sale
clause or such clause is otherwise not enforced in accordance with this
Agreement and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this
Agreement.
SECTION
4.07. Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
(a) The
Master Servicer shall transmit to the Trustee or the Custodian such documents
and instruments coming into the possession of the Master Servicer from time
to
time as are required by the terms hereof to be delivered to the Trustee or
the
Custodian. Any funds received by the Master Servicer in respect of any Mortgage
Loan or which otherwise are collected by the Master Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be remitted
to the Securities Administrator for deposit in the Distribution Account.
The
Master Servicer shall, and, subject to Section 3.21 of this Agreement, shall
cause the Servicer to, provide access to information and documentation regarding
the related Mortgage Loans to the Trustee, its agents and accountants at
any
time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory
agents
and examiners of such Office and Corporation or examiners of any other federal
or state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority,
such access to be afforded without charge but only upon reasonable request
in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request the Master Servicer shall
not be
responsible for determining the sufficiency of such information.
113
(b) All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, shall be remitted to the Securities Administrator for deposit in
the
Distribution Account.
SECTION
4.08. Standard
Hazard Insurance and Flood Insurance Policies.
For
each
Mortgage Loan, the Master Servicer shall enforce the obligation of the Servicer
under this Agreement to maintain or cause to be maintained standard fire
and
casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set
forth
in Section 3.11 of this Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require
such
additional insurance.
SECTION
4.09. Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall enforce the Servicer’s obligations under this Agreement to
prepare and present on behalf of the Trustee, the Class A Certificate
Insurer and the Certificateholders all claims under any insurance policies
and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured’s claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to the Servicer and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Distribution
Account upon receipt, except that any amounts realized that are to be applied
to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable insurance policy need not be so deposited or
remitted.
114
SECTION
4.10. Reserved.
SECTION
4.11. Trustee
to Retain Possession of Certain Insurance Policies and Documents.
The
Trustee or the Custodian, shall retain possession and custody of the originals
(to the extent available) of any primary mortgage insurance policies, or
certificate of insurance if applicable, and any certificates of renewal as
to
the foregoing as may be issued from time to time as contemplated by this
Agreement. Until all amounts distributable in respect of the Certificates
have
been distributed in full and the Master Servicer and the Servicer have otherwise
fulfilled their respective obligations under this Agreement the Trustee or
the
Custodian shall also retain possession and custody of each Mortgage File
in
accordance with and subject to the terms and conditions of this Agreement
and
the Custodial Agreement. The Master Servicer shall promptly deliver or cause
to
be delivered to the Trustee or the Custodian, upon the execution or receipt
thereof the originals of any primary mortgage insurance policies, any
certificates of renewal, and such other documents or instruments that constitute
Mortgage Loan Documents that come into the possession of the Master Servicer
from time to time.
SECTION
4.12. Realization
Upon Defaulted Mortgage Loans.
The
Master Servicer shall cause the Servicer to foreclose upon, repossess or
otherwise comparably convert the ownership of Mortgaged Properties securing
such
of the Mortgage Loans serviced by the Servicer as come into and continue
in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with this Agreement.
SECTION
4.13. Compensation
for the Master Servicer.
As
compensation for the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to the Master Servicing Fee and the income from
investment of or earnings on the funds from time to time in the Distribution
Account, as provided in Section 3.10. The compensation payable to the Master
Servicer in respect of any Distribution Date shall be reduced in accordance
with
Section 4.19. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its activities hereunder and shall not be entitled
to
reimbursement therefor except as provided in this Agreement.
SECTION
4.14. REO
Property.
(a) In
the
event the Trust Fund acquires ownership of any REO Property in respect of
any
Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee,
or to its nominee, on behalf of the related Certificateholders. The Master
Servicer shall cause the Servicer to sell, any REO Property as expeditiously
as
possible and in accordance with the provisions of this Agreement. Further,
the
Master Servicer shall cause the Servicer to sell any REO Property prior to
three
years after the end of the calendar year of its acquisition by REMIC I unless
(i) the Trustee and the Class A Certificate Insurer shall have been
supplied by the Servicer with an Opinion of Counsel to the effect that the
holding by the Trust Fund of such REO Property subsequent to such three-year
period will not result in the imposition of taxes on “prohibited transactions”
of any REMIC hereunder as defined in section 860F of the Code or cause any
REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificates
are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel)
or
(ii) the Servicer shall have applied for, prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the Servicer to protect and conserve, such REO Property in the
manner and to the extent required by this Agreement in accordance with the
REMIC
Provisions and in a manner that does not result in a tax on “net income from
foreclosure property” or cause such REO Property to fail to qualify as
“foreclosure property” within the meaning of Section 860G(a)(8) of the
Code.
115
(b) The
Master Servicer shall cause the Servicer to deposit all funds collected and
received in connection with the operation of any REO Property into the related
REO Account.
SECTION
4.15. Master
Servicer Annual Statement of Compliance.
(a) The
Master Servicer and the Securities Administrator shall deliver (or otherwise
make available) (and the Master Servicer and Securities Administrator shall
cause any Additional Servicer or Servicing Function Participant engaged by
it to
deliver) to the Depositor, the Class A Certificate Insurer and the
Securities Administrator on or before March 15 of each year, commencing in
March
2008, an Officer’s Certificate stating, as to the signer thereof, that (A) a
review of such party’s activities during the preceding calendar year or portion
thereof and of such party’s performance under this Agreement, or such other
applicable agreement in the case of an Additional Servicer or Servicing Function
Participant, has been made under such officer’s supervision and (B) to the best
of such officer’s knowledge, based on such review, such party has fulfilled all
its obligations under this Agreement, or such other applicable agreement
in the
case of an Additional Servicer or Servicing Function Participant, in all
material respects throughout such year or portion thereof, or, if there has
been
a failure to fulfill any such obligation in any material respect, specifying
each such failure known to such officer and the nature and status thereof.
(b) The
Master Servicer shall include all annual statements of compliance received
by it
with its own annual statement of compliance to be submitted to the Securities
Administrator pursuant to this Section 4.15.
(c) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by the parties is terminated, assigns its rights
and obligations under, or resigns pursuant to the terms of this Agreement,
or
any applicable agreement in the case of a Servicing Function Participant,
as the
case may be, such party shall provide an Officer’s Certificate pursuant to this
Section 4.15 or to such applicable agreement, as the case may be,
notwithstanding any such termination, assignment or resignation.
(d) Failure
of the Master Servicer to comply timely with this Section 4.15 shall be deemed
a
Master Servicer Event of Default, automatically, without notice and without
any
cure period, and the Trustee may, in addition to whatever rights the Trustee
may
have under this Agreement and at law or in equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
116
(e) Copies
of
such Master Servicer annual statements of compliance shall be provided to
any
Certificateholder upon request, by the Master Servicer or by the Trustee
at the
Master Servicer’s expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee
with
such statement or (ii) the Trustee shall be unaware of the Master Servicer’s
failure to provide such statement).
SECTION
4.16. Master
Servicer Assessments of Compliance.
(a) By
March
15 of each year, commencing in March 2008, the Master Servicer and the
Securities Administrator, each at its own expense, shall furnish, or otherwise
make available, and each such party shall cause any Servicing Function
Participant engaged by it to furnish, each at its own expense, to the Securities
Administrator and the Depositor, a report on an assessment of compliance
with
the Relevant Servicing Criteria that contains (A) a statement by such party
of
its responsibility for assessing compliance with the Relevant Servicing
Criteria, (B) a statement that such party used the Relevant Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such party’s
assessment of compliance with the Relevant Servicing Criteria as of and for
the
fiscal year covered by the Form 10-K required to be filed pursuant to Section
5.06(d), including, if there has been any material instance of noncompliance
with the Relevant 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 party’s assessment of
compliance with the Relevant Servicing Criteria as of and for such period.
(b) No
later
than the end of each fiscal year for the Trust for which a 10-K is required
to
be filed, the Master Servicer shall forward to the Securities Administrator
and
to the Depositor the name of each Servicing Function Participant engaged
by it
and what Relevant Servicing Criteria will be addressed in the report on
assessment of compliance prepared by such Servicing Function Participant
(provided,
however,
that
the Master Servicer need not provide such information to the Securities
Administrator so long as the Master Servicer and the Securities Administrator
are the same Person). When the Master Servicer and the Securities Administrator
(or any Servicing Function Participant engaged by them) submit their assessments
to the Securities Administrator, such parties will also at such time include
the
assessment (and attestation pursuant to Section 4.17) of each Servicing Function
Participant engaged by it.
(c) Promptly
after receipt of each such report on assessment of compliance, (i) the Depositor
shall review each such report and, if applicable, consult with the Master
Servicer, the Securities Administrator and any Servicing Function Participant
engaged by such parties as to the nature of any material instance of
noncompliance with the Relevant Servicing Criteria by each such party, and
(ii)
the Securities Administrator shall confirm that the assessments, taken as
a
whole, address all of the Servicing Criteria and taken individually address
the
Relevant Servicing Criteria for each party as set forth on Exhibit E and
notify
the Depositor of any exceptions.
117
(d) The
Master Servicer shall include all annual reports on assessment of compliance
received by it from the Servicer with its own assessment of compliance to
be
submitted to the Securities Administrator pursuant to this Section 4.16.
(e) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by the parties is terminated, assigns its rights
and obligations under, or resigns pursuant to the terms of this Agreement,
or
any other applicable agreement in the case of a Servicing Function Participant,
as the case may be, such party shall provide a report on assessment of
compliance pursuant to this Section 4.16 or to such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
(f) Failure
of the Master Servicer to comply timely with this Section 4.16 shall be deemed
a
Master Servicer Event of Default, automatically, without notice and without
any
cure period, and the Trustee may, in addition to whatever rights the Trustee
may
have under this Agreement and at law or in equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
(g) Delivery
under this Section 4.16 of such reports, information and documents to the
Trustee is for informational purposes only, and the Trustee’s receipt of such
shall not constitute constructive notice of any information contained therein
or
determinable from information contained therein, including the Master Servicer’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely exclusively on an Officer’s
Certificate).
SECTION
4.17. Master
Servicer Attestation Reports.
(a) By
March
15 of each year, commencing in March 2008, the Master Servicer and the
Securities Administrator, each at its own expense, shall cause, and each
such
party shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Securities Administrator,
or
such other Servicing Function Participants, as the case may be) and that
is a
member of the American Institute of Certified Public Accountants to furnish
an
attestation report to the Securities Administrator and the Depositor, to
the
effect that (i) it has obtained a representation regarding certain matters
from
the management of such party, which includes an assertion that such party
has
complied with the Relevant Servicing Criteria, 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, it is expressing an opinion as
to
whether such party’s compliance with the Relevant Servicing Criteria was fairly
stated in all material respects, or it cannot express an overall opinion
regarding such party’s assessment of compliance with the Relevant Servicing
Criteria. 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. Such report must be available for general use
and
not contain restricted use language.
118
(b) Promptly
after receipt of such assessment of compliance and attestation report from
the
Master Servicer, the Securities Administrator or any Servicing Function
Participant engaged by such parties, the Securities Administrator shall confirm
that each assessment submitted pursuant to Section 4.16 is coupled with an
attestation meeting the requirements of this Section and notify the Depositor
of
any exceptions.
(c) The
Master Servicer shall include each such attestation furnished to it from
the
Servicer with its own attestation to be submitted to the Securities
Administrator pursuant to this Section 4.17.
(d) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by the parties is terminated assigns its rights
and
duties under, or resigns pursuant to the terms of this Agreement, or any
applicable custodial agreement or servicing or sub-servicing agreement in
the
case of a Servicing Function Participant, as the case may be, such party
shall
cause a registered public accounting firm to provide an attestation pursuant
to
this Section 4.17, or such other applicable agreement, notwithstanding any
such
termination, assignment or resignation.
(e) Failure
of the Master Servicer to comply timely with this Section 4.17 shall be deemed
a
Master Servicer Event of Default, automatically, without notice and without
any
cure period, and the Trustee may, in addition to whatever rights the Trustee
may
have under this Agreement and at law or in equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
SECTION
4.18. Annual
Certification.
(a) Each
Form
10-K required to be filed for the Trust pursuant to Section 5.06 shall include
a
certification (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification”) required to be included
therewith pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. Each of the Master Servicer
and
the Securities Administrator shall provide, and shall cause any Servicing
Function Participant engaged by it to provide to the Person who signs the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the “Certifying Person”), by March 15 of each year
in which the Trust is subject to the reporting requirements of the Exchange
Act
and otherwise within a reasonable period of time upon request, a certification
(each, a “Back-Up Certification”), in the form attached hereto as Exhibit C,
upon which the Certifying Person, the entity for which the Certifying Person
acts as an officer, and such entity’s officers, directors and Affiliates
(collectively with the Certifying Person, “Certification Parties”) can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf
of the
Trust. Such officer of the Certifying Person can be contacted by e-mail at
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile at ▇▇▇-▇▇▇-▇▇▇▇. In
the
event any such party or any Servicing Function Participant engaged by any
such
party is terminated, assigns its rights or duties under, or resigns pursuant
to
the terms of this Agreement, or any applicable sub-servicing agreement, as
the
case may be, such party shall provide a Back-Up Certification to the Certifying
Person pursuant to this Section 4.18 with respect to the period of time it
was
subject to this Agreement or any applicable sub-servicing agreement, as the
case
may be. Notwithstanding the foregoing, (i) the Master Servicer and the
Securities Administrator shall not be required to deliver a Back-Up
Certification to each other if both are the same Person and the Master Servicer
is the Certifying Person and (ii) the Master Servicer shall not be obligated
to
sign the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification in the event that it does not receive
any
Back-Up Certification required to be furnished to it pursuant to this
Section.
119
SECTION
4.19. Obligation
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
In
the
event of any Prepayment Interest Shortfalls, the Master Servicer shall deposit
into the Distribution Account not later than the related Distribution Date
an
amount equal to the lesser of (i) the aggregate amounts required to be paid
by
the Servicer with respect to Prepayment Interest Shortfalls attributable
to
Principal Prepayments in full on the Mortgage Loans for the related Distribution
Date, and not so paid by the Servicer and (ii) the aggregate amount of the
compensation payable to the Master Servicer for such Distribution Date in
accordance with Section 4.13, without reimbursement therefor.
SECTION
4.20. Prepayment
Penalty Verification.
On
or
prior to the Servicer Remittance Date, the Servicer shall provide in an
electronic format acceptable to the Master Servicer the data necessary for
the
Master Servicer to perform its verification duties set forth in this Section
4.20. The Master Servicer or a third party reasonably acceptable to the Master
Servicer and the Depositor (the “Verification Agent”) will perform such
verification duties and will use its best efforts to issue its findings in
a
report (the “Verification Report”) delivered to the Master Servicer and the
Depositor within ten (10) Business Days following the related Distribution
Date;
provided, however, that if the Verification Agent is unable to issue the
Verification Report within ten (10) Business Days following the Distribution
Date, the Verification Agent may issue and deliver to the Master Servicer
and
the Depositor the Verification Report upon the completion of its verification
duties. The Master Servicer shall forward the Verification Report to the
Servicer and shall notify the Servicer if the Master Servicer has determined
that the Servicer did not deliver the appropriate Prepayment Charge to the
Securities Administrator in accordance with this Agreement. Such written
notification from the Master Servicer shall include the loan number, prepayment
penalty code and prepayment penalty amount as calculated by the Master Servicer
or the Verification Agent, as applicable, of each Mortgage Loan for which
there
is a discrepancy. If the Servicer agrees with the verified amounts, the Servicer
shall adjust the immediately succeeding Servicer Report and the amount remitted
to the Securities Administrator with respect to prepayments accordingly.
If the
Servicer disagrees with the determination of the Master Servicer, the Servicer
shall, within five (5) Business Days of its receipt of the Verification Report,
notify the Master Servicer of such disagreement and provide the Master Servicer
with detailed information to support its position. The Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and the Servicer will indicate
the effect of such resolution on the Servicer Report and shall adjust the
amount
remitted with respect to prepayments on the Servicer Remittance Date
accordingly.
120
During
such time as the Servicer and the Master Servicer are resolving discrepancies
with respect to the Prepayment Charges, no payments in respect of any disputed
Prepayment Charges will be remitted to the Securities Administrator for deposit
in the Distribution Account and the Master Servicer shall not be obligated
to
deposit such payments, unless otherwise required pursuant to Section 8.01
hereof. In connection with such duties, the Master Servicer shall be able
to
rely solely on the information provided to it by the Servicer in accordance
with
this Section. The Master Servicer shall not be responsible for verifying
the
accuracy of any of the information provided to it by the Servicer.
121
ARTICLE
V
PAYMENTS
TO CERTIFICATEHOLDERS
SECTION
5.01. Distributions.
(a) On
each
Distribution Date, the following amounts, in the following order of priority,
shall be distributed by REMIC I to REMIC II on account of the REMIC I Regular
Interests and distributed to the holders of the Class R Certificates (in
respect
of the Class R-I Interest), as the case may be:
(i) to
Holders of REMIC I Regular Interest I and REMIC I Regular Interest I-1-A
through
I-53-B, pro
rata,
in an
amount equal to (A) Uncertificated Interest for such REMIC I Regular Interests
for such Distribution Date, plus (B) any amounts payable in respect thereof
remaining unpaid from previous Distribution Dates;
(ii) to
the
extent of amounts remaining after the distributions made pursuant to clause
(i)
above, to the Holders of REMIC I Regular Interest I, an amount of principal
shall be distributed to such Holders until the Uncertificated Balance of
REMIC I
Regular Interest I is reduced to zero; and
(iii) to
the
extent of amounts remaining after distributions made pursuant to clauses
(i) and
(ii) above, payments of principal shall be allocated to REMIC I Regular
Interests I-1-A through I-53-B starting with the lowest numerical denomination
until the Uncertificated Balance of each such REMIC I Regular Interest is
reduced to zero, provided that, for REMIC I Regular Interests with the same
numerical denomination, such payments of principal shall be allocated
pro
rata
between
such REMIC I Regular Interests.
(b) to
the
Holders of REMIC I Regular Interest I-53-B, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period.
(c) (1)
On
each Distribution Date, the following amounts, in the following order of
priority, shall be distributed by REMIC II to REMIC III on account of the
REMIC
II Regular Interests or withdrawn from the Distribution Account and distributed
to the Holders of the Class R Certificates (in respect of the Class R-II
Interest), as the case may be:
(i) first
to
the Holders of REMIC II Regular Interest IO, in an amount equal to (A)
Uncertificated Interest for such REMIC II Regular Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates and second, to the Holders of REMIC II Regular Interest
AA,
REMIC II Regular Interest A, REMIC II Regular Interest M-1, REMIC II Regular
Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest M-4,
REMIC II Regular Interest ZZ and REMIC II Regular Interest P, pro
rata,
in an
amount equal to (A) the Uncertificated Interest for such Distribution Date,
plus
(B) any amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Interest in respect of REMIC II
Regular
Interest ZZ shall be reduced when the REMIC II Overcollateralization Amount
is
less than the REMIC II Required Overcollateralization Amount, by the lesser
of
(x) the amount of such difference and (y) the Maximum ZZ Uncertificated Interest
Deferral Amount and such amount will be payable to the Holders of REMIC II
Regular Interest A, REMIC II Regular Interest M-1, REMIC II Regular Interest
M-2, REMIC II Regular Interest M-3 and REMIC II Regular Interest M-4 in the
same
proportion as the Overcollateralization Increase Amount is allocated to the
Corresponding Certificates and the Uncertificated Balance of REMIC II Regular
Interest ZZ shall be increased by such amount;
122
(ii) to
the
Holders of REMIC II Regular Interests, in an amount equal to the remainder
of
available funds for such Distribution Date after the distributions made pursuant
to clause (i) above, allocated as follows:
(A) 98.00%
of
such remainder to the Holders of REMIC II Regular Interest AA, until the
Uncertificated Balance of such REMIC II Regular Interest is reduced to
zero;
(B) 2.00%
of
such remainder, first, to the Holders of REMIC II Regular Interest A, REMIC
II
Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular Interest
M-3 and REMIC II Regular Interest M-4, 1% of and in the same proportion as
principal payments are allocated to the Corresponding Certificates, until
the
Uncertificated Balances of such REMIC II Regular Interests are reduced to
zero
and second to the Holders of REMIC II Regular Interest ZZ, until the
Uncertificated Balance of such REMIC II Regular Interest is reduced to
zero;
(C) to
the
Holders of REMIC II Regular Interest P, (1) 100% of the Prepayment Charges
deemed distributed on REMIC I Regular Interest I-53-B and (2) on the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution
Date
thereafter until $100 has been distributed pursuant to this clause;
then
(D) any
remaining amount to the Holders of the Class R Certificate, in respect of
the
Class R-II Interest;
provided,
however, that 98.00% and 2.00% of any principal payments that are attributable
to an Overcollateralization Reduction Amount shall be allocated to Holders
of
REMIC II Regular Interest AA and REMIC II Regular Interest ZZ,
respectively.
(iii) Notwithstanding
the distributions described in Section 5.01(c)(1), distributions of funds
shall
be made to Certificateholders only in accordance with Section 5.01(c)(2)
through
(8) and Section 5.01(e).
(2) On
each
Distribution Date, the Securities Administrator shall withdraw from the
Distribution Account to the extent on deposit therein an amount equal to
the
Interest Remittance Amount and make the following disbursements and transfers
in
the order of priority described below, in each case to the extent of the
Interest Remittance Amount remaining for such Distribution Date:
123
first,
to the
Class A Certificate Insurer, the Premium for such Distribution Date;
second,
to the
Supplemental Interest Trust, an amount equal to the sum of any Net Swap Payment
owed to the Swap Provider and any Swap Termination Payment owed to the Swap
Provider not due to a Swap Provider Trigger Event (to the extent such amount
has
not been paid by the Securities Administrator from any upfront payment received
pursuant to any related replacement interest rate swap agreement that may
be
entered into by the Supplemental Interest Trust Trustee);
third,
to the
Holders of the Class A Certificates, the Senior Interest Distribution Amount
allocable to the Class A Certificates;
fourth,
to the
Class A Certificate Insurer, any reimbursement amounts owed to the Class
A
Certificate Insurer under the Insurance Agreement, the Policy or this Agreement;
fifth,
sequentially,
to the Holders of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4
Certificates, in that order, to the extent of the Interest Distribution Amount
allocable to each such Class; and
sixth,
any
such
Interest Remittance Amount remaining after application pursuant to clauses
first,
second, third,
fourth
and
fifth
above
will be applied as part of Net Monthly Excess Cashflow for such Distribution
Date pursuant to Section 5.01(b)(5).
(3) On
each
Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger
Event
is in effect, the Securities Administrator shall withdraw from the Distribution
Account to the extent on deposit therein an amount equal to the Principal
Distribution Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:
first,
to the
Class A Certificate Insurer, the amount owing to the Class A Certificate
Insurer
under the Insurance Agreement for the Premium to the extent not paid from
the
Interest Remittance Amount on such Distribution Date;
second,
to the
Supplemental Interest Trust, an amount equal to the sum of any Net Swap Payment
owed to the Swap Provider and any Swap Termination Payment owed to the Swap
Provider not due to a Swap Provider Trigger Event to the extent not paid
from
the Interest Remittance Amount on such Distribution Date (to the extent such
amount has not been paid by the Securities Administrator from any upfront
payment received pursuant to any related replacement interest rate swap
agreement that may be entered into by the Supplemental Interest Trust
Trustee);
third,
to the
Holders of the Class A Certificates until the Certificate Principal Balance
of
the Class A Certificates has been reduced to zero;
124
fourth,
to the
Class A Certificate Insurer, to the extent not paid from the Interest Remittance
Amount on such Distribution Date, any reimbursement amounts owed to the Class
A
Certificate Insurer under the Insurance Agreement, the Policy or this Agreement;
and
fifth,
sequentially,
to the Holders of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4
Certificates, in that order, until the Certificate Principal Balance of each
such Class has been reduced to zero.
(4) On
each
Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger
Event is not in effect, the Securities Administrator shall withdraw from
the
Distribution Account to the extent on deposit therein an amount equal to
the
Principal Distribution Amount and distribute to the Certificateholders the
following amounts, in the following order of priority:
first,
to the
Class A Certificate Insurer, the amount owing to the Class A Certificate
Insurer
under the Insurance Agreement for the Premium to the extent not paid from
the
Interest Remittance Amount on such Distribution Date;
second,
to the
Supplemental Interest Trust, an amount equal to the sum of any Net Swap Payment
owed to the Swap Provider and any Swap Termination Payment owed to the Swap
Provider not due to a Swap Provider Trigger Event to the extent not paid
from
the Interest Remittance Amount on such Distribution Date (to the extent such
amount has not been paid by the Securities Administrator from any upfront
payment received pursuant to any related replacement interest rate swap
agreement that may be entered into by the Supplemental Interest Trust
Trustee);
third,
to the
holders of the Class A Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Class A Certificate Insurer under clause first
above
and to the Supplemental Interest Trust under clause second
above,
and (y) the Class A Principal Distribution Amount, until the Certificate
Principal Balance of the Class A Certificates has been reduced to
zero;
fourth,
to the
Class A Certificate Insurer, to the extent not paid from the Interest Remittance
Amount on such Distribution Date, any reimbursement amounts owed to the Class
A
Certificate Insurer under the Insurance Agreement, the Policy or this Agreement;
fifth,
to the
holders of the Class M-1 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Class A Certificate Insurer under clause first
above,
to the Supplemental Interest Trust under clause second
above,
to the holders of the Class A Certificates under clause third
above
and to the Class A Certificate Insurer under clause fourth
above,
and (y) the Class M-1 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-1 Certificates has been reduced to
zero;
125
sixth,
to the
holders of the Class M-2 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Class A Certificate Insurer under clause first
above,
to the Supplemental Interest Trust under clause second
above,
to the holders of the Class A Certificates under clause third
above,
to the Class A Certificate Insurer under clause fourth
above
and to the holders of the Class M-1 Certificates under clause fifth
above,
and (y) the Class M-2 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced to zero;
seventh,
to the
holders of the Class M-3 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Class A Certificate Insurer under clause first
above,
to the Supplemental Interest Trust under clause second
above,
to the holders of the Class A Certificates under clause third
above,
to the Class A Certificate Insurer under clause fourth
above,
to the holders of the Class M-1 Certificates under clause fifth
above
and to the holders of the Class M-2 Certificates under clause sixth
above,
and (y) the Class M-3 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to zero;
and
eighth,
to the
holders of the Class M-4 Certificates, the lesser of (x) the excess of (i)
the
Principal Distribution Amount over (ii) the sum of the amounts distributed
to
the Class A Certificate Insurer under clause first
above,
to the Supplemental Interest Trust under clause second
above,
to the holders of the Class A Certificates under clause third
above,
to the Class A Certificate Insurer under clause fourth
above,
to the holders of the Class M-1 Certificates under clause fifth
above,
to the holders of the Class M-2 Certificates under clause sixth
above
and to the holders of the Class M-3 Certificates under clause seventh
above,
and (y) the Class M-4 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-4 Certificates has been reduced to
zero.
(5) On
each
Distribution Date, the Net Monthly Excess Cashflow shall be distributed as
follows:
(i) first,
to
the
Holders of the Class or Classes of Certificates then entitled to receive
distributions in respect of principal, in an amount equal to the
Overcollateralization Increase Amount, payable to such Holders, to be paid
as
part of the Principal Distribution Amount;
(ii) second,
concurrently,
to the holders of the Class A Certificates, in an amount equal to the Senior
Interest Distribution Amount remaining undistributed;
(iii) third,
sequentially, to the holders of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class
M-4 Certificates, in that order, in an amount equal to the Interest Distribution
Amount and Interest Carry Forward Amount allocable to each such
Class;
126
(iv) fourth,
sequentially,
to the Holders of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4
Certificates, in that order, in an amount equal to the Allocated Realized
Loss
Amount allocable to each such Class;
(v) fifth,
to
the
Reserve Fund, the amount by which the Net WAC Rate Carryover Amounts, if
any,
with respect to the Class A Certificates and Mezzanine Certificates exceeds
any
amounts in the Reserve Fund that were not distributed on prior Distribution
Dates;
(vi) sixth,
to
the
holders of the Class A Certificates, in an amount equal to such certificates’
allocated share of any Prepayment Interest Shortfalls and any shortfalls
resulting from the application of the Relief Act or similar state or local
law
or the Bankruptcy Code with respect to the related Mortgage Loans;
(vii) seventh,
sequentially, to the holders of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class
M-4 Certificates, in that order, in an amount equal to each such Certificates’
allocated share of any Prepayment Interest Shortfalls and any shortfalls
resulting from the application of the Relief Act or similar state or local
law
or the Bankruptcy Code with respect to the Mortgage Loans;
(viii) eighth
to the
Supplemental Interest Trust, an amount equal to any Swap Termination Payment
owed to the Swap Provider, due to a Swap Provider Trigger Event pursuant
to the
Swap Agreement;
(ix) ninth,
sequentially, to pay the Class M-4 Certificates and the Class M-3 Certificates,
in that order, 90% of the amount of any Net Monthly Excess Cashflow remaining
after payments pursuant to clauses first through eighth above, in each case
in
reduction of the Certificate Principal Balance of such Class until it is
reduced
to zero;
(x) tenth,
to
the
Holders of the Class CE Certificates the Interest Distribution Amount and
any
Overcollateralization Reduction Amount for such Distribution Date;
and
(xi) eleventh,
to
the
Holders of the Class R Certificates, in respect of the Class R-III Interest,
any
remaining amounts; provided that if such Distribution Date is the Distribution
Date immediately following the expiration of the latest Prepayment Charge
term
as identified on the Mortgage Loan Schedule or any Distribution Date thereafter,
then any such remaining amounts will be distributed first, to the Holders
of the
Class P Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero and second, to the Holders of the Class R
Certificates.
The
Class
CE Certificates are intended to receive all principal and interest received
by
the Trust on the Mortgage Loans that is not otherwise distributable to any
other
Class of Regular Certificates or REMIC Regular Interests. If the Securities
Administrator determines that the Residual Certificates are entitled to any
distributions on any Distribution Date other than the final Distribution
Date,
the Securities Administrator, prior to any such distribution to any Residual
Certificate, shall notify the Sponsor of such impending distribution. Upon
such
notification, the Sponsor will prepare and request that the other parties
hereto
enter into an amendment to this Agreement pursuant to Section 12.01, to
revise such mistake in the distribution provisions.
127
On
each
Distribution Date, after making the distributions of the Available Distribution
Amount as set forth above, the Securities Administrator will withdraw from
the
Reserve Fund all income from the investment of funds in the Reserve Fund
and
distribute such amount to the Holders of the Class CE Certificates. With
respect
to any amounts deposited in the Reserve Fund from the Net Monthly Excess
Cashflow under Section 5.01(c)(5)(v) above and not distributed pursuant to
the
preceding sentence, first, concurrently, to the Holders of the Class A
Certificates, the related Net WAC Rate Carryover Amount remaining unpaid
for
such Distribution Date; second, sequentially, to the Holders of the Class
▇-▇,
▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates, in that order, in respect
of
the related Net WAC Rate Carryover Amount remaining unpaid for each such
Class
for such Distribution Date; and third, to the Class CE
Certificates.
(d) As
described in Section 5.01(c)(2), (3) and (4) above, Net Swap Payments and
Swap Termination Payments (other than Swap Termination Payments resulting
from a
Swap Provider Trigger Event) payable by the Supplemental Interest Trust to
the
Swap Provider pursuant to the Swap Agreement (to the extent not paid by the
Securities Administrator from any upfront payment received pursuant to any
replacement interest rate swap agreement that may be entered into by the
Supplemental Interest Trust Trustee) shall be deducted from the Interest
Remittance Amount, and to the extent of any such remaining amounts due, from
the
Principal Remittance Amount, prior to any distributions to the
Certificateholders.
Amounts
payable by the Trust to the Securities Administrator in respect of Net Swap
Payments and Swap Termination Payments other than Swap Termination Payments
resulting from a Swap Provider Trigger Event (and to the extent not paid
by the
Securities Administrator from any upfront payment received pursuant to any
replacement interest rate swap agreement that may be entered into by the
Supplemental Interest Trust Trustee) will be deducted from related available
funds before distributions to the holders of the Offered Certificates. On
or
before each Distribution Date, such amounts will be distributed to the
Supplemental Interest Trust and paid by the Securities Administrator to the
Swap
Provider as follows:
first,
to make
any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement
for such Distribution Date; and
second,
to make
any Swap Termination Payment (not due to a Swap Provider Trigger Event) owed
to
the Swap Provider pursuant to the Swap Agreement for such Distribution Date
(to
the extent not paid by the Securities Administrator from any upfront payment
received pursuant to any replacement interest rate swap agreement that may
be
entered into by the Supplemental Interest Trust Trustee).
Any
Swap
Termination Payment triggered by a Swap Provider Trigger Event owed to the
Swap
Provider pursuant to the Swap Agreement will be subordinated to distributions
to
the Holders of the Offered Certificates and shall be paid pursuant to Section
5.01(c)(5)(viii).
128
(e) On
each
Distribution Date commencing on the Distribution Date occurring in May 2007
and
ending immediately following the Distribution Date in September 2011, to
the
extent required, following the distribution of the Net Monthly Excess Cashflow
and withdrawals from the Reserve Fund, any Net Swap Payments payable to the
Securities Administrator on behalf of the Supplemental Interest Trust by
the
Swap Provider will be distributed on the related Distribution Date in the
following order of priority:
first,
to the
Class A Certificates, the Senior Interest Distribution Amount remaining
undistributed after the distributions of the Interest Remittance Amount and
the
Net Monthly Excess Cashflow;
second,
sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates,
in that order, the related Interest Distribution Amount and Interest Carry
Forward Amount, to the extent remaining undistributed after the distributions
of
the Interest Remittance Amount and the Net Monthly Excess Cashflow;
third,
to the
Class A Certificate Insurer, any remaining amounts owed to it under the
Insurance Agreement or this Agreement or as reimbursement for draws on the
Policy;
fourth,
to the
holders of the Class or Classes of Certificates then entitled to receive
distributions in respect of principal, in an amount necessary to maintain
or
restore the Required Overcollateralization Amount after taking into account
distributions made pursuant to Section 5.01(c)(5)(i) above;
fifth,
sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates,
in that order, in each case up to the related Allocated Realized Loss Amount
related to such Certificates for such Distribution Date remaining undistributed
after distribution of the Net Monthly Excess Cashflow;
sixth,
to the
Class A Certificates, the related Net WAC Rate Carryover Amount, to the extent
remaining undistributed after distributions of amounts received by the
Securities Administrator in respect of the Net Monthly Excess Cashflow on
deposit in the Reserve Fund;
seventh,
sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates,
in that order, the related Net WAC Rate Carryover Amount, to the extent
remaining undistributed after distributions of Net Monthly Excess Cashflow
on
deposit in the Reserve Fund;
eighth,
to the
Swap Provider, an amount equal to any Swap Termination Payment owed to the
Swap
Provider due to a Swap Provider Trigger Event pursuant to the Swap Agreement;
and
ninth,
to the
Class CE Certificates, any remaining amounts.
(f) On
each
Distribution Date, the Securities Administrator shall withdraw any amounts
then
on deposit in the Distribution Account that represent Prepayment Charges
and
shall distribute such amounts to the Class P Certificateholders as described
above.
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(g) All
distributions made with respect to each Class of Certificates on each
Distribution Date shall be allocated pro
rata
among
the outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of
record
on the related Record Date (except as otherwise provided in Section 5.01(i)
or
Section 10.01 respecting the final distribution on such Class), based on
the
aggregate Percentage Interest represented by their respective Certificates,
and
shall be made by wire transfer of immediately available funds to the account
of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator
in
writing at least five (5) Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Certificates
having an initial aggregate Certificate Principal Balance that is in excess
of
the lesser of (i) $5,000,000 or (ii) two-thirds of the initial Certificate
Principal Balance of such Class of Certificates, or otherwise by check mailed
by
first class mail to the address of such Holder 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
Corporate Trust Office of the Securities Administrator or such other location
specified in the notice to Certificateholders of such final
distribution.
Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, as Holder thereof, and the Depository shall be responsible for
crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a “brokerage firm” or “indirect participating firm”) for which
it acts as agent. Each brokerage firm shall be responsible for disbursing
funds
to the Certificate Owners that it represents. None of the Trustee, the
Depositor, the Servicer, the Securities Administrator or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(h) The
rights of the Certificateholders to receive distributions in respect of the
Certificates, and all interests of the Certificateholders in such distributions,
shall be as set forth in this Agreement. None of the Holders of any Class
of
Certificates, the Trustee, the Servicer, the Securities Administrator, the
Class A Certificate Insurer or the Master Servicer shall in any way be
responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the
Certificates.
(i) Except
as
otherwise provided in Section 10.01, whenever the Securities Administrator
expects that the final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Securities Administrator
shall,
no later than three (3) days before the related Distribution Date, mail to
each
Holder on such date of such Class of Certificates a notice to the effect
that:
(i) the
Securities Administrator expects that the final distribution with respect
to
such Class of Certificates will be made on such Distribution Date but only
upon
presentation and surrender of such Certificates at the office of the Securities
Administrator therein specified, and
130
(ii) no
interest shall accrue on such Certificates from and after the end of the
related
Interest Accrual Period.
Any
funds
not distributed to any Holder or Holders of Certificates of such Class on
such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust by
the
Securities Administrator and credited to the account of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has
been
given pursuant to this Section 5.01(i) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Securities Administrator shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto.
If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Securities Administrator shall, directly
or through an agent, mail a final notice to the remaining non-tendering
Certificateholders concerning surrender of their Certificates but shall continue
to hold any remaining funds for the benefit of non-tendering Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting
such
Certificateholders shall be paid out of the assets remaining in such trust
fund.
If within one year after the final notice any such Certificates shall not
have
been surrendered for cancellation, the Securities Administrator shall pay
to the
Depositor all such amounts, and all rights of non-tendering Certificateholders
in or to such amounts shall thereupon cease. No interest shall accrue or
be
payable to any Certificateholder on any amount held in trust by the Securities
Administrator as a result of such Certificateholder’s failure to surrender its
Certificate(s) on the final Distribution Date for final payment thereof in
accordance with this Section 5.01(i). Any such amounts held in trust by the
Securities Administrator shall be held uninvested in an Eligible
Account.
(j) Notwithstanding
anything to the contrary herein, (i) in no event shall the Certificate Principal
Balance of a Class A Certificate or a Mezzanine Certificate be reduced more
than
once in respect of any particular amount both (a) allocated to such Certificate
in respect of Realized Losses pursuant to Section 5.04 and (b) distributed
to
the Holder of such Certificate in reduction of the Certificate Principal
Balance
thereof pursuant to this Section 5.01 from Net Monthly Excess Cashflow and
(ii)
in no event shall the Uncertificated Balance of a REMIC Regular Interest
be
reduced more than once in respect of any particular amount both (a) allocated
to
such REMIC Regular Interest in respect of Realized Losses pursuant to Section
5.04 and (b) distributed on such REMIC Regular Interest in reduction of the
Uncertificated Balance thereof pursuant to this Section 5.01.
SECTION
5.02. Statements
to Certificateholders.
On
each
Distribution Date, the Securities Administrator (based on the information
set
forth in the Servicer Reports for such Distribution Date and information
provided by the Swap Provider under the Swap Agreement with respect to payments
made pursuant to the Swap Agreement) shall make available to each Holder
of the
Certificates, the Swap Provider, the Class A Certificate Insurer, the Servicer
and the Credit Risk Manager, a statement as to the distributions made on
such
Distribution Date setting forth:
131
(i) the
applicable Interest Accrual Periods and general Distribution Dates;
(ii)
the
total cash flows received and the general sources thereof;
(iii) the
aggregate Servicing Fee received by the Servicer and Master Servicing Fee
received by the Master Servicer during the related Due Period;
(iv) the
amount, if any, of other fees or expenses accrued and paid, with an
identification of the payee and the general purpose of such fees;
(v) the
amount of the related distribution to Holders of the Certificates (by class)
allocable to principal, separately identifying (A) the aggregate amount of
any
Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein and (C) any Overcollateralization
Increase Amount included therein;
(vi) the
amount of such distribution to Holders of the Certificates (by class) allocable
to interest and the portion thereof, if any, provided by the Swap Agreement
in
the aggregate;
(vii) the
Interest Carry Forward Amounts and any Net WAC Rate Carryover Amounts for
the
related Certificates (if any);
(viii) the
aggregate amount of Advances included in the distributions on the Distribution
Date (including the general purpose of such Advances);
(ix) the
number and aggregate principal balance of any Mortgage Loans (not including
a
Liquidated Mortgage Loan as of the end of the Prepayment Period) that were
delinquent (exclusive of Mortgage Loans in foreclosure) using the “OTS” method
(1) one scheduled payment is delinquent, (2) two scheduled payments are
delinquent, (3) three scheduled payments are delinquent and (4) foreclosure
proceedings have been commenced, and loss information for the
period;
(x) the
number, aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the related
Due
Date;
(xi) with
respect to any Mortgage Loan that was liquidated during the preceding calendar
month, the loan number and Scheduled Principal Balance of, and Realized Loss
on,
such Mortgage Loan as of the end of the related Prepayment Period;
(xii) the
total
number and principal balance of any real estate owned, or REO Properties,
as of
the end of the related Prepayment Period;
(xiii) whether
the Stepdown Date has occurred and whether Trigger Event is in
effect;
132
(xiv) the
cumulative Realized Losses through the end of the preceding month;
(xv) the
aggregate amount of Extraordinary Trust Fund Expenses withdrawn from the
Distribution Account for such Distribution Date;
(xvi) the
Certificate Principal Balance of the related Certificates before and after
giving effect to the distribution of principal and allocation of Allocated
Realized Loss Amounts on such Distribution Date;
(xvii) the
number and Scheduled Principal Balance of all the Mortgage Loans for the
following Distribution Date;
(xviii) the
three-month rolling average of the percent equivalent of a fraction, the
numerator of which is the aggregate Scheduled Principal Balance of the Mortgage
Loans that are 60 days or more delinquent or are in bankruptcy or foreclosure
or
are REO Properties, and the denominator of which is the Scheduled Principal
Balances of all of the Mortgage Loans;
(xix) the
Certificate Factor for each such Class of Certificates applicable to such
Distribution Date;
(xx) the
Interest Distribution Amount in respect of the Class A Certificates, the
Mezzanine Certificates and the Class CE Certificates for such Distribution
Date
and the Interest Carry Forward Amount, if any, with respect to the Class
A
Certificates and the Mezzanine Certificates on such Distribution Date, and
in
the case of the Class A Certificates and the Mezzanine Certificates separately
identifying any reduction thereof due to allocations of Prepayment Interest
Shortfalls and interest shortfalls including the Relief Act Interest Shortfalls
and Net WAC Rate Carryover Amounts;
(xxi) the
aggregate amount of any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by payments by the Servicer pursuant to
Section 3.23 of this Agreement, the Master Servicer pursuant to
Section 4.19 of this Agreement;
(xxii) the
aggregate amount of Relief Act Interest Shortfalls for such Distribution
Date;
(xxiii) the
amount of, if any, of Net Monthly Excess Cashflow or excess spread and the
application of such Net Monthly Excess Cashflow;
(xxiv) the
Required Overcollateralization Amount and the Credit Enhancement Percentage
for
such Distribution Date;
(xxv) the
Overcollateralization Increase Amount, if any, for such Distribution
Date;
133
(xxvi) the
Overcollateralization Reduction Amount, if any, for such Distribution
Date;
(xxvii) the
Pass-Through Rate for each class of Certificates for such Distribution
Date;
(xxviii)
the
amount of any deposit to the Reserve Fund contemplated by
Section 3.25(b);
(xxix) the
balance of the Reserve Fund prior to the deposit or withdrawal of any amounts
on
such Distribution Date;
(xxx) the
amount of any deposit to the Reserve Fund pursuant to
Section 5.01(c)(7)(vii);
(xxxi) the
Aggregate Loss Severity Percentage;
(xxxii) the
amount of the Prepayment Charges remitted by the Servicer;
(xxxiii) the
amount of any Net Swap Payment payable to the Trust, any related Net Swap
Payment payable to the Swap Provider, any Swap Termination Payment payable
to
the Trust and any related Swap Termination Payment payable to the Swap Provider;
and
(xxxiv) the
Credit Risk Management Fee received by the Credit Risk Manager.
The
Securities Administrator will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to the Certificateholders, the Class A Certificate
Insurer and the Rating Agencies via the Securities Administrator’s internet
website. The Securities Administrator’s internet website shall initially be
located at http:\\▇▇▇.▇▇▇▇▇▇▇.▇▇▇ and assistance in using the website can
be
obtained by calling the Securities Administrator’s customer service desk at
1-866-846-4526. Parties that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by
calling
the customer service desk and indicating such. The Securities Administrator
shall have the right to change the way such statements are distributed in
order
to make such distribution more convenient and/or more accessible to the above
parties and the Securities Administrator shall provide timely and adequate
notification to all above parties regarding any such changes.
In
the
case of information furnished pursuant to subclauses (i) and (ii) above,
the
amounts shall be expressed as a dollar amount per Single Certificate of the
relevant Class.
Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall furnish upon request to each Person who at any time during
the calendar year was a Holder of a Regular Certificate a statement containing
the information set forth in subclauses (i) through (iii) above, aggregated
for
such calendar year or applicable portion thereof during which such person
was a
Certificateholder. Such obligation of the Securities Administrator shall
be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to
any
requirements of the Code as from time to time are in force.
134
Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall furnish upon request to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
The
Securities Administrator shall, upon request, furnish to each Certificateholder
and the Class A Certificate Insurer during the term of this Agreement, such
periodic, special, or other reports or information, whether or not provided
for
herein, as shall be reasonable with respect to the Certificateholder or the
Class A Certificate Insurer, as applicable, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder or the Class A Certificate Insurer,
as applicable, in accordance with such reasonable and explicit instructions
and
directions as the Certificateholder or the Class A Certificate Insurer, as
applicable, may provide.
On
each
Distribution Date the Securities Administrator shall provide Bloomberg Financial
Markets, L.P. (“Bloomberg”) CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable
to
the Securities Administrator and Bloomberg.
SECTION
5.03. Servicer
Reports; P&I Advances.
(a) On
or
before 12:00 noon New York time on the 18th calendar day of the month, and
if
the 18th calendar day is not a Business Day, the immediately following Business
Day, the Servicer shall deliver to the Master Servicer and the Securities
Administrator by telecopy or electronic mail (or by such other means as the
Servicer, the Master Servicer and the Securities Administrator may agree
from
time to time) a remittance report containing such information with respect
to
the related Mortgage Loans and the related Distribution Date as is reasonably
available to the Servicer as the Master Servicer or the Securities Administrator
may reasonably require so as to enable the Master Servicer to master service
the
Mortgage Loans and oversee the servicing by the Servicer and the Securities
Administrator to fulfill its obligations hereunder with respect to securities
and tax reporting.
(b) The
amount of P&I Advances to be made by the Servicer on any Distribution Date
shall equal, subject to Section 5.03(d), (i) the aggregate amount of Monthly
Payments (net of the related Servicing Fees), due during the related Due
Period
in respect of the Mortgage Loans serviced by the Servicer, which Monthly
Payments were delinquent as of the close of business on the related
Determination Date and (ii) with respect to each REO Property, which was
acquired during or prior to the related Prepayment Period and as to which
an REO
Disposition did not occur during the related Prepayment Period, an amount
equal
to the excess, if any, of the REO Imputed Interest on such REO Property for
the
most recently ended calendar month, over the net income from such REO Property
deposited in the Collection Account pursuant to Section 3.22 of this Agreement
for distribution on such Distribution Date; provided, however, the Servicer
shall not be required to make P&I Advances with respect to Relief Act
Interest Shortfalls, shortfalls due to bankruptcy proceedings or with respect
to
Prepayment Interest Shortfalls in excess of its obligations under Section
3.23.
For purposes of the preceding sentence, the Monthly Payment on each Balloon
Mortgage Loan with a delinquent Balloon Payment is equal to the assumed monthly
payment that would have been due on the related Due Date based on the original
principal amortization schedule for such Balloon Mortgage Loan.
135
By
12:00
noon New York time on the Servicer Remittance Date, the Servicer shall remit
in
immediately available funds to the Securities Administrator for deposit in
the
Distribution Account an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the related Mortgage Loans for
the
related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of any Amounts Held For Future Distribution
on
deposit therein (in which case it will cause to be made an appropriate entry
in
the records of the Collection Account that Amounts Held For Future Distribution
have been, as permitted by this Section 5.03, used by the Servicer in discharge
of any such P&I Advance) or (iii) in the form of any combination of (i) and
(ii) aggregating the total amount of P&I Advances to be made by the Servicer
with respect to the Mortgage Loans. In addition, the Servicer shall have
the
right to reimburse itself for any outstanding P&I Advance made from its own
funds from Amounts Held for Future Distribution. Any Amounts Held For Future
Distribution used by the Servicer to make P&I Advances or to reimburse
itself for outstanding P&I Advances shall be appropriately reflected in the
Servicer’s records and replaced by the Servicer by deposit in the Collection
Account no later than the close of business on the Servicer Remittance Date
immediately following the Due Period or Prepayment Period for which such
amounts
relate. The Securities Administrator will notify the Servicer and the Master
Servicer by the close of business on the Business Day prior to the Distribution
Date in the event that the amount remitted by the Servicer to the Securities
Administrator on such date is less than the P&I Advances required to be made
by the Servicer for the related Distribution Date.
In
addition, the Servicer will be obligated to advance or cause to be advanced
to
the Master Servicer, from time to time, from (i) from its own funds or (ii)
from
the Collection Account, to the extent of any Amounts Held For Future
Distribution on deposit therein (in which case it will cause to be made an
appropriate entry in the records of the Collection Account that Amounts Held
For
Future Distribution have been, as permitted by this Section 5.03, used by
the Servicer in discharge of any such Servicing Advance) or (iii) in the
form of
any combination of (i) and (ii), Servicing Advances. Any Amounts Held For
Future
Distribution used by the Servicer to make Servicing Advances shall be
appropriately reflected in the Servicer’s records and replaced by the Servicer
by deposit in the Collection Account no later than the close of business
on the
Servicer Remittance Date immediately following the Due Period or Prepayment
Period for which such amounts relate.
(c) The
obligation of the Servicer to make such P&I Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d)
below,
and, with respect to any related Mortgage Loan or REO Property, shall continue
until a Final Recovery Determination in connection therewith or the removal
thereof from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.
136
(d) Notwithstanding
anything herein to the contrary, no P&I Advance or Servicing Advance shall
be required to be made hereunder by the Servicer if such P&I Advance or
Servicing Advance would, if made, constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively. The determination by the
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable
Servicing Advance or that any proposed P&I Advance or Servicing Advance, if
made, would constitute a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance, respectively, shall be evidenced by a certification of
a
Servicing Officer delivered to the Master Servicer.
(e) In
the
event that the Servicer (or any successor thereto) fails to make a required
P&I Advance, the Master Servicer (in its capacity as successor to the
Servicer) will be required to make such P&I Advance on the Distribution Date
on which the Servicer was required to make such P&I Advance, subject to its
determination of recoverability.
SECTION
5.04. Allocation
of Realized Losses.
(a) Prior
to
the Determination Date, the Servicer shall determine as to each Mortgage
Loan
serviced by the Servicer and any related REO Property and include in the
monthly
remittance report provided to the Master Servicer and the Securities
Administrator (substantially in the form of Schedule 4 hereto) such information
as is reasonably available to the Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the related Mortgage Loans and oversee the servicing
by the Servicer and the Securities Administrator to fulfill its obligations
hereunder with respect to securities and tax reporting, which shall include,
but
not be limited to: (i) the total amount of Realized Losses, if any, incurred
in
connection with any Final Recovery Determinations made during the related
Prepayment Period; and (ii) the respective portions of such Realized Losses
allocable to interest and allocable to principal. Prior to each Determination
Date, the Servicer shall also determine as to each related Mortgage Loan:
(i)
the total amount of Realized Losses, if any, incurred in connection with
any
Deficient Valuations made during the related Prepayment Period; and (ii)
the
total amount of Realized Losses, if any, incurred in connection with Debt
Service Reductions in respect of Monthly Payments due during the related
Due
Period.
Any
Realized Losses on the Mortgage Loans will first,
reduce
the Net Monthly Excess Cashflow and second,
reduce
the Overcollateralization Amount. If on any Distribution Date, after all
distributions of interest and principal on the Certificates are made, the
aggregate Certificate Principal Balance of the Class A Certificates and the
Mezzanine Certificates exceeds the aggregate principal balance of the Mortgage
Loans as of the close of business on the Due Date in the month in which that
Distribution Date occurs, after giving effect to principal prepayments received
during the Prepayment Period that included such Due Date, such excess will
be
allocated first,
to the
Class M-4 Certificates until the Certificate Principal Balance of the Class
M-4
Certificates has been reduced to zero, second,
to the
Class M-3 Certificates until the Certificate Principal Balance of the Class
M-3
Certificates has been reduced to zero, third,
to the
Class M-2 Certificates until the Certificate Principal Balance of the Class
M-2
Certificates has been reduced to zero and fourth,
to the
Class M-1 Certificates until the Certificate Principal Balance of the Class
M-1
Certificates has been reduced to zero. All Realized Losses to be allocated
to
the Certificate Principal Balances of all Classes on any Distribution Date
shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance
of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class
of
Certificates, on such Distribution Date. All Realized Losses and all other
losses allocated to a Class of Certificates hereunder will be allocated among
the, Certificates of such Class in proportion to the Percentage Interests
evidenced thereby.
137
Any
allocation of Realized Losses to a Mezzanine Certificate on any Distribution
Date shall be made by reducing the Certificate Principal Balance thereof
by the
amount so allocated; any allocation of Realized Losses to a Class CE Certificate
shall be made by reducing the amount otherwise payable in respect thereof
pursuant to Section 5.01(c)(5)(x). No allocations of any Realized Losses
shall
be made to the Certificate Principal Balances of the Class A Certificates
or
Class P Certificates.
In
addition, in the event that any Servicer receives any Subsequent Recoveries
with
respect to a Mortgage Loan serviced by it, the Servicer shall deposit such
funds
into the Collection Account pursuant to Section 3.08. If, after taking into
account such Subsequent Recoveries, the amount of a Realized Loss is reduced,
the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Mezzanine Certificates with
the
highest payment priority to which Realized Losses have been allocated, but
not
by more than the amount of Realized Losses previously allocated to that Class
of
Mezzanine Certificates pursuant to this Section 5.04 and not previously
reimbursed to such Class of Mezzanine Certificates with Net Monthly Excess
Cashflow pursuant to Section 5.01(c)(5). The amount of any remaining Subsequent
Recoveries will be applied to sequentially increase the Certificate Principal
Balance of the Mezzanine Certificates, beginning with the Class of Mezzanine
Certificates with the next highest payment priority, up to the amount of
such
Realized Losses previously allocated to such Class of Mezzanine Certificates
pursuant to this Section 5.04 and not previously reimbursed to such Class
of
Mezzanine Certificates with Net Monthly Excess Cashflow pursuant to Section
5.01(c)(5)(iv). Holders of such Certificates will not be entitled to any
payment
in respect of current interest on the amount of such increases for any Interest
Accrual Period preceding the Distribution Date on which such increase occurs.
Any such increases shall be applied to the Certificate Principal Balance
of each
Mezzanine Certificate of such Class in accordance with its respective Percentage
Interest.
(b)
(i) All
Realized Losses on the Mortgage Loans shall be allocated on each Distribution
Date first to REMIC I Regular Interest I until the Uncertificated Balance
of
such REMIC I Regular Interest has been reduced to zero and second, to REMIC
I
Regular Interest I-1-A through REMIC I Regular Interest I-53-B, starting
with
the lowest numerical denomination until such REMIC I Regular Interest has
been
reduced to zero, provided that, for REMIC I Regular Interests with the same
numerical denomination, such Realized Losses shall be allocated pro
rata
between
such REMIC I Regular Interests.
(ii) All
Realized Losses on the Mortgage Loans shall be allocated by the Securities
Administrator, on each Distribution Date to the following REMIC II Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Interest payable to the REMIC II Regular Interest AA and REMIC II Regular
Interest ZZ up to an aggregate amount equal to the REMIC II Interest Loss
Allocation Amount, 98.00% and 2.00%, respectively; second, to the Uncertificated
Balances of the REMIC II Regular Interest AA and REMIC II Regular Interest
ZZ up
to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount,
98.00% and 2.00%, respectively; third, to the Uncertificated Balances of
REMIC
II Regular Interest AA, REMIC II Regular Interest M-4 and REMIC II Regular
Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC II Regular Interest M-4 has been reduced to zero; fourth,
to
the Uncertificated Balances of REMIC II Regular Interest AA, REMIC II Regular
Interest M-3 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest
M-3
has been reduced to zero; fifth, to the Uncertificated Balances of REMIC
II
Regular Interest AA, REMIC II Regular Interest M-2 and REMIC II Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance
of
REMIC II Regular Interest M-2 has been reduced to zero and sixth, to the
Uncertificated Balances of REMIC II Regular Interest AA, REMIC II Regular
Interest M-1 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest
M-1
has been reduced to zero.
138
SECTION
5.05. Compliance
with Withholding Requirements.
Notwithstanding
any other provision of this Agreement, the Securities Administrator shall
comply
with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Securities
Administrator reasonably believes are applicable under the Code. The consent
of
Certificateholders shall not be required for such withholding. In the event
the
Securities Administrator does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant
to
federal withholding requirements, the Securities Administrator shall indicate
the amount withheld to such Certificateholders.
SECTION
5.06. Reports
Filed with Securities and Exchange Commission.
(a) (i) Within
15
days after each Distribution Date (subject to permitted extensions under
the
Exchange Act), the Securities Administrator shall prepare and file on behalf
of
the Trust any Form 10-D required by the Exchange Act, in form and substance
as
required by the Exchange Act. The Securities Administrator 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 by the
parties set forth on Exhibit G to the Depositor and the Securities Administrator
and directed and approved by the Depositor pursuant to the following paragraph,
and the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except
as
set forth in the next paragraph.
(ii) As
set
forth on Exhibit G hereto, within 5 calendar days after the related Distribution
Date, (A) certain parties to the SunTrust Acquisition Closed-End Seconds
Trust,
Series 2007-1 transaction shall be required to provide to the Securities
Administrator and the Depositor, to the extent known by a responsible officer
thereof, in ▇▇▇▇▇-compatible form, or in such other form as otherwise agreed
upon by the Securities Administrator and such party, the form and substance
of
any Additional Form 10-D Disclosure, if applicable, together with an Additional
Disclosure Notification in the form of Exhibit H hereto (an “Additional
Disclosure Notification”) and (B) 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 Sponsor will be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph.
139
(iii) After
preparing the Form 10-D, the Securities Administrator shall upon request,
forward electronically a copy of the Form 10-D to the Depositor (provided
that
such Form 10-D includes any Additional Form 10-D Disclosure). Within two
(2)
Business Days after receipt of such copy but no later than the 12th
calendar
day after the Distribution Date, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 10-D. In the absence of receipt of any written
changes or approval by the due date specified herein, or if the Depositor
does
not request a copy of a Form 10-D, the Securities Administrator shall be
entitled to assume that such Form 10-D is in final form and the Securities
Administrator may proceed with the execution and filing of the Form 10-D.
A duly
authorized representative of the Master Servicer shall sign the Form 10-D.
If a
Form 10-D cannot be filed on time or if a previously filed Form 10-D needs
to be
amended, the Securities Administrator will follow the procedures set forth
in
Section 5.06(c)(ii). Promptly (but no later than 1 Business Day) after filing
with the Commission, the Securities Administrator will make available on
its
internet website a final executed copy of each Form 10-D prepared and filed
by
the Securities Administrator. Each party to this Agreement acknowledges that
the
performance by the Securities Administrator and the Master Servicer of their
duties under this Section 5.06(a) related to the timely preparation, execution
and filing of Form 10-D is contingent upon such parties strictly observing
all
applicable deadlines in the performance of their duties as set forth in this
Agreement. Neither the Master Servicer nor the Securities Administrator shall
have any liability for any loss, expense, damage, claim arising out of or
with
respect to any failure to properly prepare, execute and/or timely file such
Form
10-D, where such failure results from the Securities Administrator’s inability
or failure to receive, on a timely basis, any information from any other
party
hereto needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or willful misconduct.
(b) (i) Within
four (4) Business Days after the occurrence of an event requiring disclosure
on
Form 8-K (each such event, a “Reportable Event”), and if requested by the
Depositor, the Securities Administrator shall prepare and file on behalf
of the
Trust a 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 by the parties
set forth on Exhibit G to the Depositor and the Securities Administrator
and
directed and approved by the Depositor pursuant to the following paragraph,
and
the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or
any
Form 8-K, except as set forth in the next paragraph. In addition, in connection
with the Sponsor’s reporting obligations under Item 6.03 of Form 8-K “Change in
Credit Enhancement or Other External Support”, to the extent that the Securities
Administrator has knowledge, the Securities Administrator shall notify the
Sponsor upon the occurrence of any termination of any enhancement, the addition
of an enhancement or a material change in the enhancement provided.
140
(ii) As
set
forth on Exhibit G hereto, for so long as the Trust is subject to the Exchange
Act reporting requirements, no later than the close of business New York
City
time on the 2nd Business Day after the occurrence of a Reportable Event (i)
the
parties to the SunTrust Acquisition Closed-End Seconds Trust, Series 2007-1
transaction shall be required to provide to the Securities Administrator
and
Depositor, to the extent known by a responsible officer thereof, in
▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by
the
Securities Administrator and such party, the form and substance of any Form
8-K
Disclosure Information, if applicable, together with an Additional Disclosure
Notification and (ii) the Depositor will approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information. The Depositor will be responsible for any reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection
with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this
paragraph.
(iii) After
preparing the Form 8-K, the Securities Administrator shall upon request,
forward
electronically a copy of the Form 8-K to the Depositor. Promptly, but no
later
than the close of business on the third Business Day after the Reportable
Event,
the Depositor shall notify the Securities Administrator in writing (which
may be
furnished electronically) of any changes to or approval of such Form 8-K.
In the
absence of receipt of any written changes or approval by the third Business
Day,
or if the Depositor does not request a copy of a Form 8-K, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final
form
and the Securities Administrator may proceed with the execution and filing
of
the Form 8-K. A duly authorized representative of the Master Servicer shall
sign
each Form 8-K. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 5.06(c)(ii). Promptly (but no later than
1
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website a final executed copy of each
Form
8-K that has been prepared and filed by the Securities Administrator. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their duties under this Section
5.06(b) related to the timely preparation, execution and filing of Form 8-K
is
contingent upon such parties strictly observing all applicable deadlines
in the
performance of their duties under this Agreement. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 8-K, where such failure results from
the
Securities Administrator’s inability or failure to receive, on a timely basis,
any information from any other party hereto needed to prepare, execute or
arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(c) (i) On
or
prior to January 30th of the first year in which the Securities Administrator
is
able to do so under applicable law, the Securities Administrator shall prepare
and file a Form 15 suspension notification relating to the automatic suspension
of reporting in respect of the Trust under the Exchange Act.
141
(ii) In
the
event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by 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 or for any other reason, the Securities Administrator will
promptly electronically notify the Depositor. In the case of Form 10-D and
10-K,
the parties to this Agreement will cooperate to prepare and file a Form 12b-25
and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of
all required Form 8-K Disclosure Information and upon the approval and direction
of the Depositor, include such disclosure information on the next Form 10-D.
In
the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended
and such amendment includes any Additional Form 10-D Disclosure (other than
for
the purposes of restating any Monthly Report), any Additional Form 10-K
Disclosure or any Form 8-K Disclosure Information or any amendment to such
disclosure, the Securities Administrator will electronically notify the
Depositor only if the amendment pertains to an additional reporting item
being
revised and/or amended on such form, but not if an amendment is being filed
as a
result of a Remittance Report revision, and the Depositor will cooperate
with
the Securities Administrator in preparing any necessary 8-KA, 10-DA or 10-KA.
Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall
be
signed by a duly authorized representative, or senior officer in charge of
master servicing, as applicable, of the Master Servicer. The parties to this
Agreement acknowledge that the performance by the Securities Administrator
and
the Master Servicer of their duties under this Section 5.06(c) related to
the
timely preparation, execution and filing of Form 15, a Form 12b-25 or any
amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
performing its duties under this Agreement. Neither the Master Servicer nor
the
Securities Administrator shall have any liability for any loss, expense,
damage,
claim arising out of or with respect to any failure to properly prepare,
execute
and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms
8-K,
10-D or 10-K, where such failure results from the Securities Administrator’s
inability or failure to receive, on a timely basis, any information from
any
other party hereto needed to prepare, execute or 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.
(d) (i) On
or
prior to the 90th
day
after the end of each fiscal year of the Trust or such earlier date as may
be
required by the Exchange Act (the “10-K Filing Deadline”) (it being understood
that the fiscal year for the Trust ends on December 31st of each year),
commencing in March 2008, the Securities Administrator shall prepare and
file on
behalf of the Trust a Form 10-K, in form and substance as required by the
Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, the Mortgage
Loan
Purchase Agreement and Assignment Agreement, and the Custodial Agreement,
(i) an
annual compliance statement for the Servicer, each Additional Servicer, the
Master Servicer and the Securities Administrator and any Servicing Function
Participant engaged by such parties (each, a “Reporting Servicer”) as described
under Section 3.17 and Section 4.15 and in such other agreements, (ii)(A)
the
annual reports on assessment of compliance with servicing criteria for each
Reporting Servicer, as described under Section 3.18 and Section 4.16 and
in such
other agreements, and (B) if each Reporting Servicer’s report on assessment of
compliance with servicing criteria described under Section 3.18 and Section
4.16
identifies any material instance of noncompliance, disclosure identifying
such
instance of noncompliance, or if each Reporting Servicer’s report on assessment
of compliance with servicing criteria described under Section 3.18 and Section
4.16 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 each
Reporting Servicer, as described under Section 3.18 and Section 4.17, or
in such
other agreement and (B) if any registered public accounting firm attestation
report described under Section 3.18 and Section 4.17 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 as described in Section 3.20 and Section
4.18 (provided, however, that the Securities Administrator, at its discretion,
may omit from the Form 10-K any annual compliance statement, assessment of
compliance or attestation report that is not required to be filed with such
Form
10-K pursuant to Regulation AB). 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 by the parties set forth on Exhibit G
to the Depositor and the Securities Administrator and directed and approved
by
the Depositor pursuant to the following paragraph, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth
in
the next paragraph.
142
(ii) As
set
forth on Exhibit G hereto, no later than March 15 of each year that the Trust
is
subject to the Exchange Act reporting requirements, commencing in 2008, (i)
parties to the SunTrust Acquisition Closed-End Seconds Trust, Series 2007-1
transaction shall be required to provide to the Securities Administrator
and
Depositor, to the extent known, by a responsible officer thereof, in
▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by
the
Securities Administrator and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, together with an Additional
Disclosure Notification and (ii) 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 Depositor will be responsible for
any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph.
(iii) After
preparing the Form 10-K, the Securities Administrator shall upon request,
forward electronically a copy of the Form 10-K to the Depositor. Within three
(3) Business Days after receipt of such copy, but in no event later than
March
25th
of each
year that the Trust is subject to Exchange Act reporting requirements, the
Depositor shall notify the Securities Administrator in writing (which may
be
furnished electronically) of any changes to or approval of such Form 10-K.
In
the absence of receipt of any written changes or approval by March 25th,
or if
the Depositor does not request a copy of a Form 10-K, the Securities
Administrator shall be entitled to assume that such Form 10-K is in final
form
and the Securities Administrator may proceed with the execution and filing
of
the Form 10-K. A senior officer of the Master Servicer in charge of the master
servicing function shall sign the Form 10-K. If a Form 10-K cannot be filed
on
time or if a previously filed Form 10-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 5.06(c)(ii).
Promptly (but no later than 1 Business Day) after filing with the Commission,
the Securities Administrator will make available on its internet website
a final
executed copy of each Form 10-K prepared and filed by the Securities
Administrator. The parties to this Agreement acknowledge that the performance
by
the Master Servicer and the Securities Administrator of their respective
duties
under this Section 5.06(d) related to the timely preparation, execution and
filing of Form 10-K is contingent upon such parties (and any Additional Servicer
or Servicing Function Participant) strictly observing all applicable deadlines
in the performance of their duties under this Section 5.06(d), Section 3.17,
Section 3.18, Section 3.20, Section 4.16, Section 4.17 and Section 4.18.
Neither
the Master Servicer nor the Securities Administrator shall have any liability
for any loss, expense, damage or claim arising out of or with respect to
any
failure to properly prepare, execute and/or timely file such Form 10-K, where
such failure results from the Securities Administrator’s inability or failure to
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-K, not resulting from
its
own negligence, bad faith or willful misconduct.
143
(e) Each
of
Form 10-D and 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
represents to the Securities Administrator that the Depositor has filed all
such
required reports during the preceding 12 months and that it has been subject
to
such filing requirement for the past 90 days. The Depositor shall notify
the
Securities Administrator in writing, no later than the fifth calendar day
after
the related Distribution Date with respect to the filing of a report on Form
10-D and no later than March 15th with respect to the filing of a report
on Form
10-K, if the answer to the question should be “no” as a result of filings that
relate to other securitization transactions of the Depositor for which the
Securities Administrator does not have the obligation to prepare and file
Exchange Act reports.
(f) The
Securities Administrator shall indemnify and hold harmless the Depositor,
the
Trustee and their respective officers, directors 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 a breach of the Securities Administrator’s obligations under
this Section 5.06 or the Securities Administrator’s negligence, bad faith or
willful misconduct in connection therewith.
(g) Notwithstanding
the provisions of Section 12.01, this Section 5.06 may be amended without
the
consent of the Certificateholders.
SECTION
5.07. Supplemental
Interest Trust.
(a) On
the
Closing Date, the Securities Administrator shall establish and maintain in
the
name of the Trustee a separate account for the benefit of the holders of
the
Offered Certificates (the “Supplemental Interest Trust”). The Supplemental
Interest Trust 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
monies, including, without limitation, other monies of the Trustee or of
the
Securities Administrator held pursuant to this Agreement.
144
(b) On
the
Business Day prior to each Distribution Date, the Securities Administrator
shall
deposit into the Supplemental Interest Trust amounts distributable to the
Swap
Provider by the Supplemental Interest Trust pursuant to Section 5.01 of
this Agreement and shall distribute such amounts on the Business Day prior
to
such Distribution Date in accordance with the foregoing sections.
(c) On
the
Business Day prior to each Distribution Date, the Securities Administrator
shall
deposit into the Supplemental Interest Trust amounts received by it from
the
Swap Provider and shall distribute from the Supplemental Interest Trust on
the
Distribution Date an amount equal to the amount of any Net Swap Payment received
from the Swap Provider under the Swap Agreement in the order of priority
set
forth in Section 5.01.
(d) The
Supplemental Interest Trust constitutes an “outside reserve fund” within the
meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC.
The Holders of the Class CE Certificates shall be the beneficial owner of
the
Supplemental Interest Trust, subject to the power of the Securities
Administrator to transfer amounts under this Agreement. The Securities
Administrator shall keep records that accurately reflect the funds on deposit
in
the Supplemental Interest Trust. The Securities Administrator shall, at the
written direction of the majority of the Class CE Certificateholders, invest
amounts on deposit in the Supplemental Interest Trust in Permitted Investments.
In the absence of written direction to the Securities Administrator from
the
majority of the Class CE Certificateholders, all funds in the Supplemental
Interest Trust shall remain uninvested. On each Distribution Date, the
Securities Administrator shall distribute, not in respect of any REMIC, any
interest earned on the Supplemental Interest Trust to the Holders of the
Class
CE Certificates.
(e) For
federal income tax purposes, amounts paid to the Supplemental Interest Trust
on
each Distribution Date pursuant to Section 5.01 shall first be deemed paid
to
the Supplemental Interest Trust in respect of the Class IO Interest to the
extent of the amount distributable on such Class IO Interest on such
Distribution Date, and any remaining amount shall be deemed paid to the
Supplemental Interest Trust in respect of a Class IO Distribution Amount.
It is
the intention of the parties hereto that, for federal and state income and
state
and local franchise tax purposes, the Supplemental Interest Trust be disregarded
as an entity separate from the Holder of the Class CE Certificates unless
and
until the date when either (a) there is more than one Class CE Certificateholder
or (b) any Class of Certificates in addition to the Class CE Certificates
is
recharacterized as an equity interest in the Supplemental Interest Trust
for
federal income tax purposes, in which case it is the intention of the parties
hereto that, for federal and state income and state and local franchise tax
purposes, the Supplemental Interest Trust be treated as a partnership. The
Master Servicer shall not be required to prepare and file partnership tax
returns in respect of such partnership unless it receives additional reasonable
compensation (not to exceed $10,000 per year) for the preparation of such
filings, written notification recognizing the creation of a partnership
agreement or comparable documentation evidencing the partnership.
(f) The
Securities Administrator shall treat the Holders of Certificates (other than
the
Class P, Class CE and Class R Certificates) as having entered into a notional
principal contract with respect to the Holders of the Class CE Certificates.
Pursuant to each such notional principal contract, all Holders of Certificates
(other than the Class P, Class CE and Class R Certificates) shall be treated
as
having agreed to pay, on each Distribution Date, to the Holder of the Class
CE
Certificates an aggregate amount equal to the excess, if any, of (i) the
amount
payable on such Distribution Date on the REMIC III Regular Interest ownership
of
which is represented by such Class of Certificates over (ii) the amount payable
on such Class of Certificates on such Distribution Date (such excess, a “Class
IO Distribution Amount”). A Class IO Distribution Amount payable from interest
collections shall be allocated pro rata among such Certificates based on
the
amount of interest otherwise payable to such Certificates, and a Class IO
Distribution Amount payable from principal collections shall be allocated
to the
most subordinate Class of such Certificates with an outstanding principal
balance to the extent of such balance. In addition, pursuant to such notional
principal contract, the Holder of the Class CE Certificates shall be treated
as
having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the
Certificates (other than the Class CE, Class P and Class R Certificates)
in
accordance with the terms of this Agreement. Any payments to such Certificates
from amounts deemed received in respect of this notional principal contract
shall not be payments with respect to a Regular Interest in a REMIC within
the
meaning of Code Section 860G(a)(1). However, any payment from the Certificates
(other than the Class CE, Class P and Class R Certificates) of a Class IO
Distribution Amount shall be treated for tax purposes as having been received
by
the Holders of such Certificates in respect of the REMIC III Regular Interest
ownership of which is represented by such Certificates, and as having been
paid
by such Holders to the Supplemental Interest Trust pursuant to the notional
principal contract. Thus, each Certificate (other than the Class P Certificates
and Class R Certificates) shall be treated as representing not only ownership
of
a Regular Interest in REMIC III, but also ownership of an interest in, and
obligations with respect to, a notional principal contract.
145
(g) For
federal tax return and information reporting, the right of the Class A
Certificateholders and the Mezzanine Certificateholders to receive payments
from
the Supplemental Interest Trust and the Reserve Fund in respect of any Net
WAC
Rate Carryover Amount shall be assigned a value of $324,019.
(h) Upon
a
Swap Early Termination other than in connection with the optional termination
of
the trust, the Securities Administrator on behalf of the Supplemental Interest
Trust, at the direction of the Depositor (upon instruction by the Sponsor),
will
use reasonable efforts to appoint a successor swap provider to enter into
a new
interest rate swap agreement on terms substantially similar to the Swap
Agreement, with a successor swap provider meeting all applicable eligibility
requirements. If the Securities Administrator receives a Swap Termination
Payment from the Swap Provider in connection with such Swap Early Termination,
the Securities Administrator will apply such Swap Termination Payment to
any
upfront payment required to appoint the successor swap provider. If the
Securities Administrator is required to pay a Swap Termination Payment to
the
Swap Provider in connection with such Swap Early Termination, the Securities
Administrator will apply any upfront payment received from the successor
swap
provider to pay such Swap Termination Payment.
If
the
Securities Administrator is unable to appoint a successor swap provider within
30 days of the Swap Early Termination, then the Securities Administrator
will
deposit any Swap Termination Payment received from the original Swap Provider
into a separate, non-interest bearing reserve account and will, on each
subsequent Distribution Date, withdraw from the amount then remaining on
deposit
in such reserve account an amount equal to the Net Swap Payment, if any,
that
would have been paid to the Securities Administrator by the original Swap
Provider calculated in accordance with the terms of the original Swap Agreement,
and distribute such amount in accordance with the terms of this
Agreement.
146
(i) In
the
event that the Swap Provider fails to perform any of its obligations under
the
Swap Agreement (including, without limitation, its obligation to make any
payment or transfer collateral), or breaches any of its representations and
warranties thereunder, or in the event that an Event of Default, Termination
Event, or Additional Termination Event (each as defined in the Swap Agreement)
occurs with respect to the Swap Agreement, the Securities Administrator on
behalf of the Supplemental Interest Trust Trustee shall immediately, but
no
later than the next Business Day following such failure or breach, notify
the
Sponsor and send any notices and make any demands, on behalf of the Supplemental
Interest Trust, in accordance with the Swap Agreement.
(j) In
the
event that the Swap Provider’s obligations are guaranteed by a third party under
a guaranty relating to the Swap Agreement (such guaranty the “Swap Guaranty” and
such third party the “Swap Guarantor”), then to the extent that the Swap
Provider fails to make any payment by the close of business on the day it
is
required to make payment under the terms of the Swap Agreement, the Securities
Administrator on behalf of the Supplemental Interest Trust Trustee shall,
as
soon as practicable, but no later than two (2) business days after the Swap
Provider’s failure to pay, demand that the Swap Guarantor make any and all
payments then required to be made by the Swap Guarantor pursuant to such
Swap
Guaranty; provided, that the Securities Administrator shall in no event be
liable for any failure or delay in the performance by the Swap Provider or
any
Swap Guarantor of its obligations hereunder or pursuant to the Swap Agreement
and the Swap Guaranty, nor for any special, indirect or consequential loss
or
damage of any kind whatsoever (including but not limited to lost profits)
in
connection therewith.
SECTION
5.08. Tax
Treatment of Swap Payments and Swap Termination Payments.
(a) For
federal income tax purposes, each holder of an Offered Certificate is deemed
to
own an undivided beneficial ownership interest in a REMIC Regular Interest
and
the right to receive payments from either the Reserve Fund or the Supplemental
Interest Trust in respect of any Net WAC Rate Carryover Amounts or the
obligation to make payments to the Supplemental Interest Trust. For federal
income tax purposes, the Securities Administrator will account for payments
to
each Offered Certificate as follows: each Offered Certificate will be treated
as
receiving their entire payment from REMIC III (regardless of any Swap
Termination Payment or obligation under the Swap Agreement) and subsequently
paying their portion of any Swap Termination Payment in respect of each such
Class’s obligation under the Swap Agreement. In the event that any such Class is
resecuritized in a REMIC, the obligation under the Swap Agreement to pay
any
such Swap Termination Payment (or any shortfall in Net Swap Payment), will
be
made by one or more of the REMIC Regular Interests issued by the
resecuritization REMIC subsequent to such REMIC Regular Interest receiving
its
full payment from any such Offered Certificate.
(b) The
REMIC
Regular Interest corresponding to an Offered Certificate will be entitled
to
receive interest and principal payments at the times and in the amounts equal
to
those made on the certificate to which it corresponds, except that (i) the
maximum interest rate of that REMIC regular interest will equal the Net WAC
Pass-Through Rate computed for this purpose by limiting the Swap Notional
Amount
of the Swap Agreement to the aggregate Stated Principal Balance of the Mortgage
Loans and (ii) any Swap Termination Payment will be treated as being payable
solely from amounts otherwise payable to the Class CE Certificates. As a
result
of the foregoing, the amount of distributions and taxable income on the REMIC
Regular Interest corresponding to an Offered Certificate may exceed the actual
amount of distributions on the Offered Certificate.
147
SECTION
5.09. Swap
Collateral Account.
The
Securities Administrator is hereby directed to perform the obligations of
the
Custodian as defined under the Swap Credit Support Annex (the “Swap Custodian”).
On
or
before the Closing Date, the Swap Custodian shall establish a Swap Collateral
Account. The Swap Collateral Account shall be held in the name of the Swap
Custodian in trust for the benefit of the Offered Certificates. The Swap
Collateral Account shall be an Eligible Account and shall be entitled “Swap
Collateral Account, ▇▇▇▇▇ Fargo Bank, National Association for the benefit
of
holders of SunTrust Acquisition Closed-End Seconds Trust, Series ▇▇▇▇-▇,
▇▇▇▇▇
Backed Pass-Through Certificates.”
The
Swap
Custodian shall credit to the Swap Collateral Account all collateral (whether
in
the form of cash or securities) posted by the Swap Provider to secure the
obligations of the Swap Provider in accordance with the terms of the Swap
Agreement. If no investment direction is provided, funds shall remain
uninvested. Except for investment earnings, the Swap Provider shall not have
any
legal, equitable or beneficial interest in the Swap Collateral Account other
than in accordance with the Swap Agreement and applicable law. The Swap
Custodian shall maintain and apply all collateral and earnings thereon on
deposit in the Swap Collateral Account in accordance with Swap Credit Support
Annex.
Cash
collateral posted by the Swap Provider in accordance with the Swap Credit
Support Annex shall be invested at the direction of the Swap Provider in
Permitted Investments in accordance with the requirements of the Swap Credit
Support Annex. All amounts earned on amounts on deposit in the Swap Collateral
Account (whether cash collateral or securities) shall be for the account
of and
taxable to the Swap Provider.
Upon
the
occurrence of an Event of Default or Specified Condition (each as defined
in the
Swap Agreement) with respect to the Swap Provider or upon occurrence or
designation of an Early Termination Date (as defined in the Swap Agreement)
as a
result of any such Event of Default or Specified Condition with respect to
the
Swap Provider, and, in either such case, unless the Swap Provider has paid
in
full all of its Obligations (as defined in the Swap Credit Support Annex)
that
are then due, then any collateral posted by the Swap Provider in accordance
with
the Swap Credit Support Annex shall be applied to the payment of any Obligations
due to Party B (as defined in the Swap Agreement) in accordance with the
Swap
Credit Support Annex. Any excess amounts held in such Swap Collateral Account
after payment of all amounts owing to Party B under the Swap Agreement shall
be
withdrawn from the Swap Collateral Account and paid to the Swap Provider
in
accordance with the Swap Credit Support Annex.
148
SECTION
5.10. The
Policy.
(a) The
Class
A Certificate Insurer will issue the Policy for the benefit of the holders
of
the Insured Certificates. The Class A Certificate Insurer, in consideration
of
the payment of a premium and subject to the terms of the Policy, unconditionally
guarantees the payment of Insured Amounts and Avoided Payments to the Securities
Administrator on behalf of the holders of the Insured Certificates. The Class
A
Certificate Insurer will pay Insured Amounts which are due for payment to
the
Securities Administrator on the later of (1) the Distribution Date the Insured
Amount is distributable to the holders of the Insured Certificates under
this
Agreement, and (2) the Business Day following the Business Day on which the
Class A Certificate Insurer shall have received notice by facsimile,
simultaneously confirmed by telephone and subsequently confirmed in writing,
or
written notice delivered to the Class A Certificate Insurer at its office
specified in the Policy, from the Securities Administrator specifying that
an
Insured Amount is due in accordance with the terms of the Policy (a “Notice”);
provided that, if such Notice is received after 10:00 a.m., New York City
time,
on such business day, it shall be deemed to be received at 9:00 a.m. New
York
City time on the following business day.
(b) Pursuant
to the Policy, the Class A Certificate Insurer will pay any Avoided Payment
on
the Business Day next following receipt on a Business Day by the Class A
Certificate Insurer of (i) a certified copy of a final order of a court or
other
body exercising jurisdiction in an Insolvency Proceeding to the effect that
the
Securities Administrator or holder of an Insured Certificate, as applicable,
is
required to return such Avoided Payment paid during the Term of the Policy
because such Avoided Payment was avoided under applicable law, with respect
to
which order the appeal period has expired without an appeal having been filed
(the “Final Order”), (ii) an assignment (in the form provided in the Policy)
properly completed and executed by the holder of an Insured Certificate,
irrevocably assigning to the Class A Certificate Insurer all rights and claims
of such holder relating to or arising under such Avoided Payment and (iii)
a
notice (in the form provided in the Policy) appropriately completed and executed
by the Securities Administrator on the Trustee’s behalf; provided that, if such
documents are received after 10:00 a.m. New York City time on such business
day,
they will be deemed to be received at 9:00 a.m. New York City time on the
following business day. All payments made by the Class A Certificate Insurer
in
respect of Avoided Payments will be disbursed to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order, and
not
to the Securities Administrator or the holders of the Insured Certificates
directly, unless the holder has previously paid such Avoided Payment to such
receiver, conservator, debtor-in-possession or trustee in bankruptcy named
in
the Final Order, in which case the Class A Certificate Insurer will pay the
Securities Administrator on behalf of such holder, subject to the delivery
of
(a) the items referred to in clauses (i), (ii), and (iii) above to the Class
A
Certificate Insurer and (b) evidence satisfactory to the Class A Certificate
Insurer that payment has been made to such receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order.
(c) The
Class
A Certificate Insurer will not be obligated to make any payment in respect
of
any Insured Amount or Avoided Payment representing a payment of principal
on any
Insured Certificate prior to the time the Class A Certificate Insurer would
have
been required to make a payment in respect of such principal pursuant to
the
Policy.
149
(d) The
Class
A Certificate Insurer’s obligation under the Policy will be discharged to the
extent that funds are received by the Securities Administrator for payment
to
the holders of the Insured Certificates whether or not those funds are properly
distributed by the Securities Administrator. Payments of Insured Amounts
and
Policy payments in respect of Avoided Payments will be made only at the times
for such payments set forth in the Policy, and no payments which become due
on
an accelerated basis for any reason, including an optional termination, will
be
made regardless of any acceleration of the Insured Certificates, unless the
Class A Certificate Insurer elects, in its sole discretion, to pay such amounts
in whole or in part (in which case the Insured Amounts will include such
accelerated payments as, when, and to the extent so elected by the Class
A
Certificate Insurer).
(e) For
purposes of the Policy, a holder does not and may not include any of the
Trustee, the Depositor, the Servicer, the Master Servicer, the Sponsor, the
Securities Administrator or any of their respective affiliates. No person
other
than the Securities Administrator on the Trustee’s behalf will be entitled to
present the Notice. The Class A Certificate Insurer will be subrogated to
the
rights of each holder of the Insured Certificates to the extent of any payment
by the Class A Certificate Insurer under the Policy. The Class A Certificate
Insurer has agreed that if it is subrogated to the rights of the holders
of the
Insured Certificates, the rights of subrogation will be subordinate and junior
in right of payment to the prior indefeasible payment in full of any Insured
Amounts due the holders on account of payments due under the Insured
Certificates. In so doing, the Class A Certificate Insurer does not waive
its
rights to seek full payment of all Insurer Reimbursement Amounts owed to
it
under the Insurance Agreement and this Agreement.
(f) The
Policy will not cover Net WAC Rate Carryover Amounts, Prepayment Interest
Shortfalls or any shortfalls resulting from the application of the Relief
Act or
similar state or local laws, regulations or ordinances allocated to the Insured
Certificates, nor does the Policy guarantee to the holders of the Insured
Certificates any particular rate of principal payment. In addition, the Policy
does not cover shortfalls, if any, attributable to the liability of the Trust,
any Certificateholder, any REMIC, the Securities Administrator for withholding
taxes, if any (including interest and penalties in respect of any liability
for
withholding taxes), nor any risk other than Nonpayment of Scheduled Payments,
including the failure of the Securities Administrator to make any distribution
required under this Agreement to the holders of the Insured Certificates.
(g) The
Policy will not be cancelable. The premium on the Policy will not be refundable
for any reason including payment, or provision being made for payment, prior
to
maturity of the Insured Certificates.
(h) The
Policy and the obligations of the Class A Certificate Insurer thereunder
will
terminate without any action on the part of the Class A Certificate Insurer
or
any other person on the last date of the Term of the Policy. Upon termination
of
the Policy, the Securities Administrator on behalf of the Trustee is required
to
deliver the original of the Policy to the Class A Certificate
Insurer.
150
(i) All
notices, statements, reports, certificates or opinions required by this
Agreement to be sent to the Rating Agencies or the Class A
Certificateholders shall also be sent at such time to the Class A
Certificate Insurer at the notice address set forth in
Section 12.05.
(j) All
references herein to the ratings assigned to the Certificates and all references
herein to the interests of the Certificateholders shall be without regard
to the
Policy.
SECTION
5.11. Class
A
Certificate Insurer Default; Termination of Class A Certificate Insurer’s
Rights.
(a) Notwithstanding
anything elsewhere in this Agreement to the contrary, for so long as a Class
A
Certificate Insurer default exists, the provisions of this Article V and
all
other provisions of this Agreement which (i) permit the Class A Certificate
Insurer to exercise rights of the Certificateholders, (ii) restrict the ability
of the Certificateholders or the Trustee to act without the consent of approval
of the Class A Certificate Insurer, (iii) provide that a particular act or
thing
must be acceptable to the Class A Certificate Insurer, (iv) permit the Class
A
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee or the Certificateholders, (v) provide that any action or omission
taken
with the consent, approval or authorization or the Class A Certificate Insurer
shall be authorized hereunder or shall not subject the party taking or omitting
to take such action to any liability hereunder or (vi) which shall have a
similar effect, shall be of no force and effect and the Trustee shall administer
the Trust and perform its obligations hereunder solely for the benefit of
the
Certificateholders.
(b) Notwithstanding
anything to the contrary in this Agreement, all rights of the Class A
Certificate Insurer shall permanently cease to be operable upon the date
upon
which the Certificate Principal Balance of the Class A Certificates has
been reduced to zero and all Scheduled Payments have been made and the payment
in full the Class A Certificate Insurer of all amounts paid under the
Policy plus interest at the Late Payment Rate thereon from the date such
payment
was made and any other amounts owing the Class A Certificate Insurer under
the Insurance Agreement.
151
ARTICLE
VI
THE
CERTIFICATES
SECTION
6.01. The
Certificates.
(a) The
Certificates in the aggregate will represent the entire beneficial ownership
interest in the Mortgage Loans and all other assets included in REMIC I,
REMIC
II and REMIC III.
The
Certificates will be substantially in the forms annexed hereto as Exhibits
A-1
through A-5. The Certificates of each Class will be issuable in registered
form
only, in denominations of authorized Percentage Interests as described in
the
definition thereof. Each Certificate will share ratably in all rights of
the
related Class.
Upon
original issue, the Certificates shall be executed and authenticated by the
Securities Administrator and delivered by the Trustee to and upon the written
order of the Depositor. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trust by the Securities Administrator
by an
authorized signatory. Certificates bearing the manual or facsimile signatures
of
individuals who were at any time the proper officers of the Securities
Administrator shall bind the Trust, notwithstanding that such individuals
or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of
such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided herein
executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
(b) The
Class
A Certificates and the Mezzanine Certificates shall initially be issued as
one
or more Certificates held by the Book-Entry Custodian or, if appointed to
hold
such Certificates as provided below, the Depository and registered in the
name
of the Depository or its nominee and, except as provided below, registration
of
such Certificates may not be transferred by the Securities Administrator
except
to another Depository that agrees to hold such Certificates for the respective
Certificate Owners with Ownership Interests therein. The Certificate Owners
shall hold their respective Ownership Interests in and to such Certificates
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to definitive, fully registered Certificates
(“Definitive Certificates”) in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in
the
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 the Ownership
Interests in the 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. The Securities Administrator is hereby initially
appointed as the Book-Entry Custodian and hereby agrees to act as such in
accordance herewith and in accordance with the agreement that it has with
the
Depository authorizing it to act as such. The Book-Entry Custodian may, and,
if
it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Servicer
and,
if the Trustee is not the Book-Entry Custodian, the Trustee, any other transfer
agent (including the Depository or any successor Depository) to act as
Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of
its
duties or responsibilities by reason of any such appointment of other than
the
Depository. If the Securities Administrator resigns or is removed in accordance
with the terms hereof, the successor Securities Administrator or, if it so
elects, the Depository shall immediately succeed to its predecessor’s duties as
Book-Entry Custodian. The Depositor and the Sponsor shall have the right
to
inspect, and to obtain copies of, any Certificates held as Book-Entry
Certificates by the Book-Entry Custodian.
152
(c) The
Class
CE and Class P Certificates will be issued as Definitive
Certificates.
(d) The
Class
M-4 Certificates offered and sold to Qualified Institutional Buyers in reliance
on Rule 144A under the Securities Act (“Rule 144A”) will be issued in the form
of Book-Entry Certificates.
(e) The
Trustee, the Servicer, the Securities Administrator, the Master Servicer
and the
Depositor may for all purposes (including the making of payments due on the
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the Book-Entry
Certificates shall be limited to those established by law and agreements
between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from,
and
votes of, the Depository as Holder of the Book-Entry Certificates with respect
to any particular matter shall not be deemed inconsistent if they are made
with
respect to different Certificate Owners. The Securities Administrator may
establish a reasonable record date in connection with solicitations of consents
from or voting by Certificateholders and shall give notice to the Depository
of
such record date.
If
(i)(A)
the Depositor, at the direction of the Sponsor, advises the Securities
Administrator in writing that the Depository is no longer willing or able
to
properly discharge its responsibilities as Depository, and (B) the Depositor,
at
the direction of the Sponsor, is unable to locate a qualified successor,
(ii)
the Depositor (at the direction of the Sponsor) at its option advises the
Securities Administrator in writing that it elects to terminate the book-entry
system through the Depository with the prior written consent to the Class A
Certificate Insurer or (iii) after the occurrence of a Servicer Event of
Default, the Class A Certificate Insurer, or during a continuing the
Class A Certificate Insurer default under the Insurance Agreement, the
Certificate Owners representing in the aggregate not less than 51% of the
Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of
a
book-entry system through the Depository is no longer in the best interests
of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Securities Administrator of the
Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, the Securities Administrator shall cause the Definitive Certificates
to be issued. Such Definitive Certificates will be issued in minimum
denominations of $10,000 except that any beneficial ownership that was
represented by a Book-Entry Certificate in an amount less than $10,000
immediately prior to the issuance of a Definitive Certificate shall be issued
in
a minimum denomination equal to the amount represented by such Book-Entry
Certificate. None of the Depositor, the Sponsor, the Servicer, the Master
Servicer, the Securities Administrator or the Trustee shall be liable for
any
delay in the delivery of such instructions and may conclusively rely on,
and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon
or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Securities Administrator, to the extent applicable with respect to
such
Definitive Certificates, and the Securities Administrator shall recognize
the
Holders of the Definitive Certificates as Certificateholders
hereunder.
153
SECTION
6.02. Registration
of Transfer and Exchange of Certificates.
(a) The
Securities Administrator shall cause to be kept at one of the offices or
agencies to be appointed by the Securities Administrator in accordance with
the
provisions of Section 9.11, a Certificate Register for the Certificates in
which, subject to such reasonable regulations as it may prescribe, the
Securities Administrator shall provide for the registration of Certificates
and
of transfers and exchanges of Certificates as herein provided.
(b) No
transfer of any Class M-4 Certificate, Class CE Certificate, Class P Certificate
or Residual Certificate shall be made unless that transfer is made pursuant
to
an effective registration statement under the Securities Act, and effective
registration or qualification under applicable state securities laws, or
is made
in a transaction that does not require such registration or qualification.
In
the event that such a transfer of a Class M-4 Certificate, Class CE Certificate,
Class P Certificate or Residual Certificate is to be made without registration
or qualification (other than in connection with the initial transfer of any
such
Certificate by the Depositor), the Securities Administrator shall require
receipt of: (i) if such transfer is purportedly being made in reliance upon
Rule
144A under the Securities Act, written certifications from the Certificateholder
desiring to effect the transfer and from such Certificateholder’s prospective
transferee, substantially in the form attached hereto as Exhibit B-1; (ii)
if
such transfer is purportedly being made in reliance upon Rule 501(a) under
the
Securities Act, written certifications from the Certificateholder desiring
to
effect the transfer and from such Certificateholder’s prospective transferee,
substantially in the form attached hereto as Exhibit B-2; and (iii) in all
other
cases, an Opinion of Counsel satisfactory to the Securities Administrator
that
such transfer may be made without such registration or qualification (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Master Servicer, the Securities Administrator
or the
Servicer), together with copies of the written certification(s) of the
Certificateholder desiring to effect the transfer and/or such
Certificateholder’s prospective transferee upon which such Opinion of Counsel is
based, if any. Neither of the Depositor nor the Securities Administrator
is
obligated to register or qualify any such Certificates under the Securities
Act
or any other securities laws or to take any action not otherwise required
under
this Agreement to permit the transfer of such Certificates without registration
or qualification. Any Certificateholder desiring to effect the transfer of
any
such Certificate shall, and does hereby agree to, indemnify the Trustee,
the
Depositor, the Sponsor, the Master Servicer, the Securities Administrator
and
the Servicer against any liability that may result if the transfer is not
so
exempt or is not made in accordance with such federal and state
laws.
154
(c) No
transfer of a Class CE Certificate, Class P Certificate or a Residual
Certificate or any interest therein shall be made to any Plan, any Person
acting, directly or indirectly, on behalf of any Plan or any Person acquiring
such Certificates with “Plan Assets” of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. § 2510.3-101 (“Plan
Assets”) unless the Securities Administrator is provided with an Opinion of
Counsel on which the Depositor, the Master Servicer, the Securities
Administrator, the Trustee, the Class A Certificate Insurer and the
Servicer may rely, which establishes to the satisfaction of the Securities
Administrator that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor,
the
Servicer, the Trustee, the Master Servicer, the Securities Administrator,
the
Class A Certificate Insurer or the Trust Fund to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975
of
the Code) in addition to those undertaken in this Agreement, which Opinion
of
Counsel shall not be an expense of the Depositor, the Servicer, the Trustee,
the
Master Servicer, the Securities Administrator, the Class A Certificate
Insurer or the Trust Fund. An Opinion of Counsel will not be required in
connection with the initial transfer of any such Certificate by the Depositor
to
the Sponsor or an affiliate of the Sponsor (in which case, the Sponsor or
any
affiliate thereof shall have deemed to have represented that such affiliate
is
not a Plan or a Person investing Plan Assets) and the Securities Administrator
shall be entitled to conclusively rely upon a representation (which, upon
the
request of the Securities Administrator, shall be a written representation)
from
the Sponsor of the status of such transferee as an affiliate of the
Sponsor.
For
so
long as the Supplemental Interest Trust is in existence, each beneficial
owner
of a Offered Certificate or any interest therein, shall be deemed to have
represented, by virtue of its acquisition or holding of the Offered Certificate,
or interest therein, that either (i) it is not a Plan or (ii)(A) it is an
accredited investor within the meaning of Prohibited Transaction Exemption
2002-41, as amended from time to time (the “Exemption”) and (B) the acquisition
and holding of such Certificate and the separate right to receive payments
from
the Supplemental Interest Trust are eligible for the exemptive relief available
under Prohibited Transaction Class Exemption (“PTCE”) 84-14 (for transactions by
independent “qualified professional asset managers”), 91-38 (for transactions by
bank collective investment funds), 90-1 (for transactions by insurance company
pooled separate accounts), 95-60 (for transactions by insurance company general
accounts) or 96-23 (for transactions effected by “in-house asset managers”), in
the case of an Offered Certificate other than a Class M-4 Certificate, or,
in the case of a Class M-4 Certificate, PTE 95-60.
Each
Transferee of a Mezzanine Certificate or any interest therein that is acquired
after the termination of the Supplemental Interest Trust shall certify or
will
be deemed to have represented by virtue of its purchase or holding of such
Certificate (or interest therein) that either (a) such Transferee is not
a Plan
or purchasing such Certificate with Plan Assets, (b) other than in the case
of
the Class M-4 Certificates, it has acquired and is holding such Certificate
in reliance on Prohibited Transaction Exemption (“PTE”) 94-84 59 Fed. Reg. 65400
(December 19, 1994) or Final Authorization Number (FAN) 97-03E (December
9,
1996), as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE 2000-58,
65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41, 67 Fed. Reg. 54487
(August 22, 2002) and PTE 2007-05, 72 Fed. Reg. 13130 (the “Exemption”), and
that it understands that there are certain conditions to the availability
of
such exemption including that such Certificate must be rated, at the time
of
purchase, not lower than “BBB-” (or its equivalent) by a Rating Agency
authorized under the Exemption or (c) the following conditions are satisfied:
(i) such Transferee is an insurance company, (ii) the source of funds used
to
purchase or hold such Certificate (or interest therein) is an “insurance company
general account” (as defined in PTCE 95-60), and (iii) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied.
155
If
any
Certificate or any interest therein is acquired or held in violation of the
conditions described in this Section 6.02(c), the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate,
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any certificate
or
interest therein was effected in violation of the conditions described in
this
Section 6.02(c) shall indemnify and hold harmless the Depositor, the Trustee,
the Servicer, the Master Servicer, the Securities Administrator, the
Class A Certificate Insurer and the Trust Fund from and against any and all
liabilities, claims, costs or expenses incurred by those parties as a result
of
that acquisition or holding.
(d)
(i)
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 to have irrevocably
authorized the Securities Administrator or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute
all
instruments of Transfer and to do all other things necessary in connection
with
any such sale. The rights of each Person acquiring any Ownership Interest
in a
Residual Certificate are expressly subject to the following
provisions:
(A) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status as a Permitted
Transferee.
(B) In
connection with any proposed Transfer of any Ownership Interest in a Residual
Certificate, the Securities Administrator shall require delivery to it, and
shall not register the Transfer of any Residual Certificate until its receipt
of, an affidavit and agreement (a “Transfer Affidavit and Agreement,” in the
form attached hereto as Exhibit B-3) from the proposed Transferee, in form
and
substance satisfactory to the Securities Administrator, representing and
warranting, among other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in the Residual Certificate
that
is the subject of the proposed Transfer as a nominee, trustee or agent for
any
Person that is not a Permitted Transferee, that for so long as it retains
its
Ownership Interest in a Residual Certificate, it will endeavor to remain
a
Permitted Transferee, and that it has reviewed the provisions of this Section
6.02(d) and agrees to be bound by them.
156
(C) Notwithstanding
the delivery of a Transfer Affidavit and Agreement by a proposed Transferee
under clause (B) above, if an authorized officer of the Securities Administrator
who is assigned to this transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest in
a
Residual Certificate and (y) not to transfer its Ownership Interest unless
it
provides a Transferor Affidavit (in the form attached hereto as Exhibit B-2)
to
the Securities Administrator stating that, among other things, it has no
actual
knowledge that such other Person is not a Permitted Transferee.
(E) Each
Person holding or acquiring an Ownership Interest in a Residual Certificate,
by
purchasing an Ownership Interest in such Certificate, agrees to give the
Securities Administrator written notice that it is a “pass-through interest
holder” within the meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a
Residual Certificate, if it is, or is holding an Ownership Interest in a
Residual Certificate on behalf of, a “pass-through interest
holder.”
(ii) The
Securities Administrator will register the Transfer of any Residual Certificate
only if it shall have received the Transfer Affidavit and Agreement and all
of
such other documents as shall have been reasonably required by the Securities
Administrator as a condition to such registration. In addition, no Transfer
of a
Residual Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such Certificate
to
the effect that such Transferee is a Permitted Transferee.
(iii) (A)
If
any purported Transferee shall become a Holder of a Residual Certificate
in
violation of the provisions of this Section 6.02(d), then the last preceding
Permitted Transferee shall be restored, to the extent permitted by law, to
all
rights as holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. The Securities Administrator shall
be
under no liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 6.02(d) or for
making
any payments due on such Certificate to the holder thereof or for taking
any
other action with respect to such holder under the provisions of this
Agreement.
(B) If
any
purported Transferee shall become a holder of a Residual Certificate in
violation of the restrictions in this Section 6.02(d) and to the extent that
the
retroactive restoration of the rights of the holder of such Residual Certificate
as described in clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Securities Administrator shall have the right, without
notice to the holder or any prior holder of such Residual Certificate, to
sell
such Residual Certificate to a purchaser selected by the Securities
Administrator on such terms as the Securities Administrator may choose. Such
purported Transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the Securities Administrator.
Such purchaser may be the Securities Administrator itself or any Affiliate
of
the Securities Administrator. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Securities Administrator or
its
Affiliates), expenses and taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and conditions of any
sale
under this clause (iii)(B) shall be determined in the sole discretion of
the
Securities Administrator, and the Securities Administrator shall not be liable
to any Person having an Ownership Interest in a Residual Certificate as a
result
of its exercise of such discretion.
157
(iv) The
Securities Administrator shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions all information necessary
to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is a Disqualified Organization,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the “excess inclusions” of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that holds an
Ownership Interest in a Residual Certificate having as among its record holders
at any time any Person which is a Disqualified Organization. Reasonable
compensation for providing such information may be charged or collected by
the
Securities Administrator.
(v) The
provisions of this Section 6.02(d) set forth prior to this subsection (v)
may be
modified, added to or eliminated, provided that there shall have been delivered
to the Securities Administrator at the expense of the party seeking to modify,
add to or eliminate any such provision the following:
(A) written
notification from each Rating Agency to the effect that the modification,
addition to or elimination of such provisions will not cause such Rating
Agency
to downgrade its then-current ratings of any Class of Certificates without
regard to the Policy; and
(B) an
Opinion of Counsel, in form and substance satisfactory to the Securities
Administrator upon which the Class A Certificate Insurer shall be entitled
to rely, to the effect that such modification of, addition to or elimination
of
such provisions will not cause any Trust REMIC to cease to qualify as a REMIC
and will not cause any Trust REMIC, as the case may be, to be subject to
an
entity-level tax caused by the Transfer of any Residual Certificate to a
Person
that is not a Permitted Transferee or a Person other than the prospective
transferee to be subject to a REMIC-tax caused by the Transfer of a Residual
Certificate to a Person that is not a Permitted Transferee.
158
(e) Subject
to the preceding subsections, upon surrender for registration of transfer
of any
Certificate at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11, the Securities Administrator shall
execute, authenticate and deliver, in the name of the designated Transferee
or
Transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest.
(f) At
the
option of the Holder thereof, any Certificate may be exchanged for other
Certificates of the same Class with authorized denominations and a like
aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Securities Administrator maintained
for
such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer
in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, with
respect to each Class R Certificate, the holder thereof may exchange, in
the
manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest
in
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest,
respectively, in each case that was evidenced by the Class R Certificate
being
exchanged.
(g) No
transfer of any Class CE Certificate shall be made unless the proposed
transferee of such Class CE Certificate (1) provides to the Securities
Administrator the appropriate tax certification forms that would eliminate
any
withholding or deduction for taxes from amounts payable by the Swap Provider
to
the Securities Administrator pursuant to the Swap Agreement (i.e., IRS Form
W-9
or IRS Form ▇-▇▇▇▇, ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8ECI, as applicable (or any successor
form thereto), together with any applicable attachments) and (2) agrees to
update such forms (a) upon expiration of any such form, (b) as required under
then applicable U.S. Treasury regulations and (c) promptly upon learning
that
any such form has become obsolete or incorrect, each as a condition to such
transfer so long as they are in physical form. In addition, no transfer of
any
Class CE Certificate shall be made if such transfer would cause the Supplemental
Interest Trust to be beneficially owned by two or more persons for federal
income tax purposes, or continue to be so treated, unless (i) each proposed
transferee of such Class CE Certificate complies with the foregoing conditions,
(ii) the proposed majority holder of the Class CE Certificates (or each holder,
if there is or would be no majority holder) (A) provides, or causes to be
provided, on behalf of the Supplemental Interest Trust, if applicable, the
appropriate tax certification form that would be required from the Supplemental
Interest Trust to eliminate any withholding or deduction for taxes from amounts
payable by the Swap Provider to the Securities Administrator pursuant the
Swap
Agreement (i.e., IRS Form W-9 or IRS Form ▇-▇▇▇▇, ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8ECI,
as
applicable (or any successor form thereto), together with any applicable
attachments) and (B) agrees to update such forms (x) upon expiration of any
such
form, (y) as required under then applicable U.S. Treasury regulations and
(z)
promptly upon learning that any such form has become obsolete or incorrect.
If,
under applicable U.S. Treasury regulations, such tax certification form may
only
be signed by a trustee acting on behalf of the Supplemental Interest Trust,
then
the Securities Administrator, the Trustee or the Supplemental Interest Trust
Trustee, as appropriate, shall sign such certification form if so requested
by a
holder of the Class CE Certificates. Upon receipt of any tax certification
form
pursuant to the preceding conditions from a proposed transferee of any Class
CE
Certificate, the Securities Administrator shall forward each tax certification
form attributable to the Swap Agreement to the Swap Provider so long as the
Securities Administrator is permitted to provide such tax certification form.
Each holder of a Class CE Certificate and each transferee thereof shall be
deemed to have consented to the Securities Administrator forwarding to Swap
Provider any 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 the requirements
of
this paragraph shall be deemed null and void under this Agreement. In the
event
that the Securities Administrator is unable to provide a tax certification
pursuant to this paragraph, it shall immediately notify the Sponsor, the
Depositor and the Swap Provider.
159
(h) No
service charge to the Certificateholders shall be made for any transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(i) All
Certificates surrendered for transfer and exchange shall be canceled and
destroyed by the Securities Administrator in accordance with its customary
procedures.
SECTION
6.03. Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(i)
any mutilated Certificate is surrendered to the Securities Administrator,
or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof,
and
(ii) there is delivered to each of the Securities Administrator and the
Class A Certificate Insurer such security or indemnity as may be required
by it to save it harmless, then, in the absence of actual knowledge by the
Securities Administrator that such Certificate has been acquired by a protected
purchaser, the Securities Administrator, shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or
stolen Certificate, a new Certificate of the same Class and of like denomination
and Percentage Interest. Upon the issuance of any new Certificate under this
Section, the Securities Administrator may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
relation thereto and any other expenses (including the fees and expenses
of the
Securities Administrator) connected therewith. Any replacement Certificate
issued pursuant to this Section shall constitute complete and indefeasible
evidence of ownership in the applicable REMIC created hereunder, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION
6.04. Persons
Deemed Owners.
The
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator, the Class A Certificate Insurer and any agent of any of them
may treat the Person in whose name any Certificate is registered as the owner
of
such Certificate for the purpose of receiving distributions pursuant to Section
5.01 and for all other purposes whatsoever, and none of the Depositor, the
Servicer, the Trustee, the Master Servicer, the Securities Administrator,
the
Class A Certificate Insurer or any agent of any of them shall be affected
by notice to the contrary.
160
SECTION
6.05. Certain
Available Information.
On
or
prior to the date of the first sale of any Class CE Certificate, Class P
Certificate or Residual Certificate to an Independent third party, the Depositor
shall provide to the Securities Administrator ten copies of any private
placement memorandum or other disclosure document used by the Depositor in
connection with the offer and sale of such Certificate. In addition, if any
such
private placement memorandum or disclosure document is revised, amended or
supplemented at any time following the delivery thereof to the Securities
Administrator, the Depositor promptly shall inform the Securities Administrator
of such event and shall deliver to the Securities Administrator ten copies
of
the private placement memorandum or disclosure document, as revised, amended
or
supplemented. The Securities Administrator shall maintain at its office as
set
forth in Section 12.05 hereof and shall make available free of charge during
normal business hours for review by any Holder of a Certificate or any Person
identified to the Securities Administrator as a prospective transferee of
a
Certificate, originals or copies of the following items: (i) in the case
of a
Holder or prospective transferee of a Class CE Certificate, Class P Certificate
or Residual Certificate, the related private placement memorandum or other
disclosure document relating to such Class of Certificates, in the form most
recently provided to the Securities Administrator; and (ii) in all cases,
(A)
this Agreement and any amendments hereof entered into pursuant to Section
12.01,
(B) all monthly statements required to be delivered to Certificateholders
of the
relevant Class pursuant to Section 5.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Class A Certificate Insurer and/or the Certificateholders of the relevant
Class pursuant to this Agreement since the Closing Date and (C) any copies
of
all Officers’ Certificates of the Servicer since the Closing Date delivered to
the Master Servicer to evidence such Person’s determination that any P&I
Advance or Servicing Advance was, or if made, would be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance. Copies and mailing of any and
all
of the foregoing items will be available from the Securities Administrator
upon
request at the expense of the Person requesting the same.
161
ARTICLE
VII
THE
DEPOSITOR, THE SERVICER AND THE MASTER SERVICER
SECTION
7.01. Liability
of the Depositor, the Servicer and the Master Servicer.
The
Depositor, the Servicer and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor,
Servicer and Master Servicer and undertaken hereunder by the Depositor, the
Servicer and the Master Servicer herein.
SECTION
7.02. Merger
or
Consolidation of the Depositor, the Servicer or the Master Servicer.
Subject
to the following paragraph, the Depositor will keep in full effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation. Subject to the following paragraph, the
Servicer will keep in full effect its existence, rights and franchises as
a
limited liability company under the laws of the jurisdiction of its formation.
Subject to the following paragraph, the Master Servicer will keep in full
effect
its existence, rights and franchises as a national banking association. The
Depositor, the Servicer and the Master Servicer each will obtain and preserve
its qualification to do business as a foreign entity in each jurisdiction
in
which such qualification is or shall be necessary to protect the validity
and
enforceability of this Agreement, the Certificates or any of the Mortgage
Loans
and to perform its respective duties under this Agreement.
The
Depositor, the Servicer or the Master Servicer may be merged or consolidated
with or into any Person, or transfer all or substantially all of its assets
to
any Person, in which case any Person resulting from any merger or consolidation
to which the Depositor, the Servicer or the Master Servicer shall be a party,
or
any Person succeeding to the business of the Depositor, the Servicer or the
Master Servicer, shall be the successor of the Depositor, the Servicer or
the
Master Servicer, as the case may be, hereunder, without the execution or
filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that
any
successor to the Servicer or the Master Servicer shall meet the eligibility
requirements set forth in clauses (i) and (iii) of the last paragraph of
Section
8.02(a) or Section 7.06, as applicable.
SECTION
7.03. Limitation
on Liability of the Depositor, the Servicer, the Master Servicer and
Others.
None
of
the Depositor, the Servicer, the Securities Administrator, the Master Servicer
or any of the directors, officers, employees or agents of the Depositor,
the
Servicer or the Master Servicer shall be under any liability to the Trust
Fund
or the Certificateholders for any action taken or for refraining from the
taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer, the Securities Administrator, the Master Servicer
or
any such person against any breach of warranties, representations or covenants
made herein or against any specific liability imposed on any such Person
pursuant hereto or against any liability which would otherwise be imposed
by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder. The Depositor, the Servicer, the Securities Administrator, the
Master
Servicer and any director, officer, employee or agent of the Depositor, the
Servicer, the Securities Administrator and the Master Servicer may rely in
good
faith on any document of any kind which, prima facie, is properly executed
and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Servicer, the Securities Administrator, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Servicer, the
Securities Administrator or the Master Servicer shall be indemnified and
held
harmless by the Trust Fund against any loss, liability or expense incurred
in
connection with any legal action relating to this Agreement, the Certificates,
the Mortgage Loan Purchase Agreement, the Assignment Agreement or any Credit
Risk Management Agreement or any loss, liability or expense incurred other
than
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 and with respect to the Servicer, the Master
Servicer and the Securities Administrator, up to an aggregate total amount
as
set forth below. None of the Depositor, the Servicer, the Securities
Administrator or the Master Servicer shall be under any obligation to appear
in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, in its opinion, does not involve
it
in any expense or liability; provided, however, that each of the Depositor,
the
Servicer, the Securities Administrator and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Class A Certificate Insurer and/or the
Certificateholders hereunder. In such event, the legal expenses and costs
of
such action and any liability resulting therefrom (except 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) shall be expenses, costs and liabilities
of
the Trust Fund, the Depositor, the Servicer, the Securities Administrator
and
the Master Servicer shall be entitled to be reimbursed therefor from the
Collection Account or the Distribution Account as and to the extent provided
in
Article III and Article IV, and with respect to the Servicer, the Master
Servicer and the Securities Administrator, up to an aggregate total amount
as
set forth below, any such right of reimbursement being prior to the rights
of
the Certificateholders to receive any amount in the Collection Account and
the
Distribution Account. The cumulative aggregate amount to be distributed pursuant
to this Section 7.03 with respect to the Servicer, the Master Servicer and
the
Securities Administrator and pursuant to Section 9.05 with respect to the
Trustee, shall not exceed $500,000 per annum; provided, that, if the
indemnification expenses in any given year exceed $500,000, such excess amount
shall be carried forward to the following year and any subsequent year(s)
thereafter until the indemnified party or parties are reimbursed in
full.
162
Notwithstanding
anything to the contrary contained herein, the Servicer shall not be liable
for
any actions or inactions prior to the Cut-off Date of any prior servicer
of the
related Mortgage Loans and the Master Servicer shall not be liable for any
action or inaction of the Servicer, except to the extent expressly provided
herein, or the Credit Risk Management Agreement.
163
SECTION
7.04. Limitation
on Resignation of the Servicer.
(a) Except
as
expressly provided herein, the Servicer shall not assign all or substantially
all of its rights under this Agreement or the servicing hereunder nor delegate
all or substantially all of its duties hereunder or sell or otherwise dispose
of
all or substantially all of its property or assets without, in each case,
the
prior written consent of the Master Servicer and the Class A Certificate
Insurer, which consent shall not be unreasonably withheld; provided, that
in
each case, there must be delivered to the Trustee, the Master Servicer and
the
Class A Certificate Insurer a letter from each Rating Agency to the effect
that such transfer of servicing or sale or disposition of assets will not
result
in a qualification, withdrawal or downgrade of the then-current rating of
any of
the Certificates without regard to the Policy (the “Rating Condition”).
Notwithstanding the foregoing, the Servicer, without the consent of the Trustee,
the Master Servicer or the Class A Certificate Insurer, may retain
third-party contractors to perform certain servicing and loan administration
functions, including without limitation hazard insurance administration,
tax
payment and administration, flood certification and administration, collection
services and similar functions, provided, however, that the retention of
such
contractors by the Servicer shall not limit the obligation of the Servicer
to
service the related Mortgage Loans pursuant to the terms and conditions of
this
Agreement. No Servicer shall resign from the obligations and duties hereby
imposed on it except (i) upon determination that its duties hereunder are
no
longer permissible under applicable law or (ii) upon the Servicer’s written
proposal of a successor servicer reasonably acceptable to each of the Sponsor,
the Depositor, the Class A Certificate Insurer and the Master Servicer. No
such resignation under clause (i) above shall become effective unless evidenced
by an Opinion of Counsel to such effect obtained at the expense of the Servicer
and delivered to the Trustee, the Class A Certificate Insurer and the
Rating Agencies. No such resignation of the Servicer under clause (ii) shall
be
effective unless:
(i) the
proposed successor Servicer is (1) an affiliate of the Master Servicer that
services mortgage loans similar to the Mortgage Loans in the jurisdictions
in
which the related Mortgaged Properties are located or (2) the proposed successor
Servicer has a rating of at least “Above Average” by S&P and either a rating
of at least “RPS2” by Fitch or a rating of at least “SQ2” by
▇▇▇▇▇’▇;
(ii) the
Rating Agencies have confirmed to the Trustee and the Class A Certificate
Insurer that the appointment of the proposed successor servicer as the servicer
under this Agreement will not result in the reduction or withdrawal of the
then
current ratings of any of the Certificates (without regard to the Policy);
and
(iii) the
proposed successor servicer has a net worth of at least
$25,000,000.
Notwithstanding
anything to the contrary, no resignation of the Servicer shall become effective
until the Master Servicer or a successor servicer shall have assumed the
Servicer’s responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under
this
Agreement and, if such successor is appointed during the period in which
the
Trust is subject to the Exchange Act reporting requirements, the successor
servicer shall have provided any disclosure or other information required
under
Regulation AB. The Master Servicer shall notify the Credit Risk Manager of
any
transfer of servicing pursuant to this Section 7.04.
164
(b) Except
as
expressly provided herein, no Servicer shall assign or transfer any of its
rights, benefits or privileges hereunder to any other Person, or delegate
to or
subcontract with, or authorize or appoint any other Person to perform any
of the
duties, covenants or obligations to be performed by the Servicer hereunder.
The
foregoing prohibition on assignment shall not prohibit the Servicer from
designating a Sub-Servicer as payee of any indemnification amount payable
to the
Servicer hereunder; provided, however, that as provided in Section 3.02,
no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto
shall not be required to recognize any Sub-Servicer as an indemnitee under
this
Agreement.
SECTION
7.05. Limitation
on Resignation of the Master Servicer.
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall
be
evidenced by an Opinion of Counsel to such effect obtained at the expense
of the
Master Servicer and delivered to the Trustee, the Class A Certificate
Insurer and the Rating Agencies. No resignation of the Master Servicer shall
become effective until the Trustee or a successor Master Servicer meeting
the
criteria specified in Section 7.06 shall have assumed the Master Servicer’s
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.
SECTION
7.06. Assignment
of Master Servicing.
The
Master Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement; provided,
however, that: (i) the purchaser or transferee accept in writing such assignment
and delegation and assume the obligations of the Master Servicer hereunder
(a)
shall have a net worth of not less than $25,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (b) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee)
and satisfactory to the Class A Certificate Insurer (as evidenced in a
writing signed by the Class A Certificate Insurer); and (c) shall execute
and deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person
of the
due and punctual performance and observance of each covenant and condition
to be
performed or observed by it as master servicer under this Agreement, any
custodial agreement from and after the effective date of such agreement;
(ii)
each Rating Agency shall be given prior written notice of the identity of
the
proposed successor to the Master Servicer and each Rating Agency’s rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded, qualified or withdrawn as a result of such assignment,
sale and delegation (without regard to the Policy), as evidenced by a letter
to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver
to the
Trustee and the Class A Certificate Insurer an Officer’s Certificate and an
Opinion of Independent counsel, each stating that all conditions precedent
to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising out
of
acts or omissions prior to the effective date thereof.
165
SECTION
7.07. Rights
of
the Depositor in Respect of the Servicer and the Master Servicer.
Each
of
the Master Servicer and the Servicer shall afford (and any Sub-Servicing
or
sub-contracting agreement shall provide that each Sub-Servicer or Subcontractor,
as applicable shall afford) the Depositor, the Class A Certificate Insurer
and the Trustee, upon reasonable notice, during normal business hours, access
to
all records maintained by the Master Servicer or the Servicer (and any such
Sub-Servicer or Subcontractor, as applicable) in respect of the Servicer’s
rights and obligations hereunder and access to officers of the Master Servicer
or the Servicer (and those of any such Sub-Servicer or Subcontractor, as
applicable) responsible for such obligations, and the Master Servicer shall
have
access to all such records maintained by the Servicer and any Sub-Servicer
or
Subcontractors. Upon request, each of the Master Servicer and the Servicer
shall
furnish to the Depositor, the Class A Certificate Insurer and the Trustee
its (and any such Sub-Servicer’s or Subcontractor’s) most recent financial
statements and such other information relating to the Master Servicer’s or the
Servicer’s capacity to perform its obligations under this Agreement as it
possesses (and that any such Sub-Servicer or Subcontractor possesses). To
the
extent that the Master Servicer or the Servicer informs the Depositor, the
Class A Certificate Insurer and the Trustee that such information is not
otherwise available to the public, the Depositor, the Class A Certificate
Insurer and the Trustee shall not disseminate any information obtained pursuant
to the preceding two sentences without the Master Servicer’s or the Servicer’s
written consent, except as required pursuant to this Agreement or to the
extent
that it is appropriate to do so (i) to its legal counsel, auditors, taxing
authorities or other governmental agencies and the Certificateholders, (ii)
pursuant to any law, rule, regulation, order, judgment, writ, injunction
or
decree of any court or governmental authority having jurisdiction over the
Depositor, the Class A Certificate Insurer and the Trustee or the Trust
Fund, and in any case, the Depositor, the Class A Certificate Insurer or
the Trustee, (iii) disclosure of any and all information that is or becomes
publicly known, or information obtained by the Trustee or the Class A
Certificate Insurer from sources other than the Depositor, the Servicer or
the
Master Servicer, (iv) disclosure as required pursuant to this Agreement or
(v)
disclosure of any and all information (A) in any preliminary or final offering
circular, registration statement or contract or other document pertaining
to the
transactions contemplated by the Agreement approved in advance by the Depositor,
the Class A Certificate Insurer, the Servicer or the Master Servicer or (B)
to any affiliate, independent or internal auditor, agent, employee or attorney
of the Trustee or the Class A Certificate Insurer having a need to know the
same, provided that the Trustee or the Class A Certificate Insurer advises
such recipient of the confidential nature of the information being disclosed,
shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. Nothing in this Section 7.07 shall limit
the obligation of the Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section 7.07 as a result of
such
obligation shall not constitute a breach of this Section. Nothing in this
Section 7.07 shall require the Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual course of
business. The Servicer shall not be required to make copies of or ship documents
to any party unless provisions have been made for the reimbursement of the
costs
thereof. The Depositor and the Sponsor, each, may, but is not obligated to,
enforce the obligations of the Master Servicer and the Servicer under this
Agreement and may, but is not obligated to, perform, or cause a designee
to
perform, any defaulted obligation of the Master Servicer or the Servicer
under
this Agreement or exercise the rights of the Master Servicer or the Servicer
under this Agreement; provided that neither the Master Servicer nor the Servicer
shall be relieved of any of its obligations under this Agreement by virtue
of
such performance by the Depositor, the Sponsor or their designees. Neither
the
Depositor nor the Sponsor shall have any responsibility or liability for
any
action or failure to act by the Master Servicer or the Servicer and is not
obligated to supervise the performance of the Master Servicer or the Servicer
under this Agreement or otherwise.
166
SECTION
7.08. Duties
of
the Credit Risk Manager.
For
and
on behalf of the Depositor and the Sponsor, the Credit Risk Manager will
provide
reports and recommendations concerning certain delinquent and defaulted Mortgage
Loans, and as to the collection of any Prepayment Charges with respect to
the
Mortgage Loans. Such reports and recommendations will be based upon information
provided to the Credit Risk Manager pursuant to the Credit Risk Management
Agreements, and the Credit Risk Manager shall look solely to the Servicer
and/or
Master Servicer for all information and data (including loss and delinquency
information and data) relating to the servicing of the related Mortgage Loans.
SECTION
7.09. Limitation
Upon Liability of the Credit Risk Manager.
Neither
the Credit Risk Manager, nor any of its directors, officers, employees, or
agents shall be under any liability to the Trustee, the Certificateholders,
or
the Depositor for any action taken or for refraining from the taking of any
action made in good faith pursuant to this Agreement, in reliance upon
information provided by the Servicer or the Master Servicer under the related
Credit Risk Management Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Credit Risk Manager or any such
person
against liability that would otherwise be imposed by reason of willful
malfeasance or bad faith in its performance of its duties. The Credit Risk
Manager and any director, officer, employee, or agent of the Credit Risk
Manager
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, and
may
rely in good faith upon the accuracy of information furnished by the Servicer
or
the Master Servicer pursuant to the related Credit Risk Management Agreement
in
the performance of its duties thereunder and hereunder.
SECTION
7.10. Removal
of the Credit Risk Manager.
167
The
Credit Risk Manager may be removed as Credit Risk Manager by the Class A
Certificate Insurer or if there has been a continuing Class A Certificate
Insurer default under the Insurance Agreement by Certificateholders holding
not
less than 66 2/3% of the Voting Rights in the Trust Fund, in the exercise
of its
or their sole discretion. The Class A Certificate Insurer, shall provide
written
notice of the Credit Risk Manager’s removal to the Trustee. Upon receipt of such
notice and in the instance of removal of the Credit Risk Manager by
certificateholders as described above, the Trustee shall provide written
notice
to the Credit Risk Manager of its removal, which shall be effective upon
receipt
of such notice by the Credit Risk Manager, with a copy to the Sponsor, the
Securities Administrator, the Master Servicer, the Servicer, the Class A
Certificate Insurer and each Rating Agency. Notwithstanding the foregoing,
the
termination of the Credit Risk Manager pursuant to this Section shall not
become
effective until the appointment of a successor Credit Risk Manager.
168
ARTICLE
VIII
DEFAULT
SECTION
8.01. Servicer
Events of Default.
(a) “Servicer
Event of Default,” wherever used herein, means any one of the following
events:
(i) any
failure by the Servicer to remit to the Securities Administrator for
distribution to the Certificateholders any payment (other than a P&I Advance
required to be made from its own funds on any Servicer Remittance Date pursuant
to Section 5.03 of this Agreement) required to be made by the Servicer under
the
terms of the Certificates and this Agreement which continues unremedied until
3:00 p.m. New York time on the Business Day immediately following the date
upon
which written notice of such failure, requiring the same to be remedied,
shall
have been given to the Servicer by the Depositor, the Sponsor, the Securities
Administrator or the Trustee (in which case notice shall be provided by
telecopy), or to the Servicer, the Depositor, the Sponsor and the Trustee
by the
Holders of Certificates entitled to at least 25% of the Voting Rights;
or
(ii) any
failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer
contained in this Agreement, or the material breach by the Servicer of any
representation and warranty contained in Section 2.05, 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 Servicer by the Depositor, the Sponsor or the Trustee or to the Servicer,
the Depositor, the Sponsor, and the Trustee by the Holders of Certificates
entitled to at least 25% of the Voting Rights; provided, however, that in
the
case of a failure that cannot be cured within thirty (30) days, the cure
period
may be extended for an additional thirty (30) days if the Servicer can
demonstrate to the reasonable satisfaction of the Trustee that the Servicer
is
diligently pursuing remedial action; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator
or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and
such decree or order shall have remained in force undischarged or unstayed
for a
period of ninety (90) days; or
(iv) the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings of or relating to it or of or relating
to all
or substantially all of its property; or
169
(v) the
Servicer shall admit in writing its inability to pay its debts generally
as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations;
(vi) failure
by the Servicer to duly perform, within the required time period, its
obligations under Sections 3.17, 3.18 or 3.20; or
(vii) any
failure of the Servicer to make any P&I Advance on any Servicer Remittance
Date required to be made from its own funds pursuant to Section 5.03 which
continues unremedied until 3:00 p.m. New York time on the Business Day
immediately following the Servicer Remittance Date; or
(viii) failure
of the Servicer to maintain at least an “average” rating from the Rating
Agencies.
If
a
Servicer Event of Default described in clauses (i) through (vi) or (viii)
of
this Section shall occur, then, and in each and every such case, so long
as the
Servicer Event of Default shall not have been remedied, the Depositor (at
the
Sponsor’s written direction) or the Trustee may, in each such case with the
prior written consent of the Class A Certificate Insurer or the Trustee,
shall,
at the prior written direction of the Class A Certificate Insurer, in each
case,
so long as a default by the Class A Certificate Insurer has not occurred
and is
not continuing or, if a Class A Certificate Insurer default has occurred
and is
continuing, at the written direction of the Holders of Certificates entitled
to
at least 51% of Voting Rights, the Trustee shall, by notice in writing to
the
defaulting Servicer (and to the Class A Certificate Insurer, the Sponsor
and the
Depositor if given by the Trustee or to the Trustee if given by the Depositor)
with a copy to the Master Servicer and each Rating Agency, terminate all
of the
rights and obligations of the defaulting Servicer in its capacity as the
Servicer under this Agreement, to the extent permitted by law, and in and
to the
related Mortgage Loans and the proceeds thereof. If a Servicer Event of Default
described in clause (vii) hereof shall occur, the Trustee shall, by notice
in
writing to the defaulting Servicer, the Depositor, the Sponsor, the Class A
Certificate Insurer and the Master Servicer, terminate all of the rights
and
obligations of the defaulting Servicer in its capacity as the Servicer under
this Agreement and in and to the related Mortgage Loans and the proceeds
thereof. Subject to Section 8.02, on or after the receipt by the defaulting
Servicer of such written notice, all authority and power of the defaulting
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall
pass to and be vested in the Master Servicer pursuant to and under this Section,
and, without limitation, the Master Servicer is hereby authorized and empowered,
as attorney-in-fact or otherwise, to execute and deliver, on behalf of and
at
the expense of the defaulting Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether
to
complete the transfer and endorsement or assignment of the Mortgage Loans
and
related documents, or otherwise. The defaulting Servicer agrees promptly
(and in
any event no later than ten (10) Business Days subsequent to such notice)
to
provide the Master Servicer with all documents and records requested by it
to
enable it to assume the defaulting Servicer’s functions under this Agreement,
and to cooperate with the Master Servicer in effecting the termination of
the
defaulting Servicer’s responsibilities and rights under this Agreement,
including, without limitation, the transfer within one (1) Business Day to
the
Master Servicer for administration by it of all cash amounts which at the
time
shall be or should have been credited by the defaulting Servicer to the
Collection Account held by or on behalf of the defaulting Servicer or thereafter
be received with respect to the related Mortgage Loans or any related REO
Property (provided, however, that the defaulting Servicer shall continue
to be
entitled to receive all amounts accrued or owing to it under this Agreement
on
or prior to the date of such termination, whether in respect of P&I
Advances, Servicing Advances, accrued and unpaid Servicing Fees or otherwise,
and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior
to
such termination). Reimbursement of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, Servicing
Advances and accrued and unpaid Servicing Fees shall be made on a first in,
first out (“FIFO”) basis no later than the Servicer Remittance Date. For
purposes of this Section 8.01(a), the Trustee shall not be deemed to have
knowledge of a Servicer Event of Default unless a Responsible Officer of
the
Trustee assigned to and working in the Trustee’s Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in
fact
such a Servicer Event of Default is received by the Trustee at its Corporate
Trust Office and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Master Servicer, the
Class A Certificate Insurer and the Rating Agencies of the occurrence of a
Servicer Event of Default of which it has knowledge as provided
above.
170
The
Master Servicer shall be entitled to be reimbursed by the defaulting Servicer
(or from amounts on deposit in the Distribution Account if the defaulting
Servicer is unable to fulfill its obligations hereunder) for all reasonable
out-of-pocket or third party costs associated with the transfer of servicing
from the defaulting Servicer, including without limitation, any reasonable
out-of-pocket or third party costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation
of
such servicing data as may be required by the Master Servicer to correct
any
errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer to service the related Mortgage Loans properly and effectively,
upon presentation of reasonable documentation of such costs and
expenses.
(b) “Master
Servicer Event of Default,” wherever used herein, means any one of the following
events:
(i) any
failure on the part of the Master Servicer duly to observe or perform in
any
material respect any other of the covenants or agreements on the part of
the
Master Servicer contained in this Agreement, or the breach by the Master
Servicer of any representation and warranty contained in Section 2.04, which
continues unremedied for a period of 30 days after the date on which written
notice of such failure, or after such other period as set forth in this
Agreement, requiring the same to be remedied, shall have been given to the
Master Servicer by the Depositor, the Sponsor or the Trustee or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates entitled
to at least 25% of the Voting Rights; or
(ii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator
or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force undischarged or unstayed
for a period of 90 days; or
171
(iii) the
Master Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings of or relating to it or of or relating
to all
or substantially all of its property; or
(iv) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its
creditors, or voluntarily suspend payment of its obligations; or
(v) failure
by the Master Servicer to duly perform, within the required time period,
its
obligations under Sections 4.15, 4.16, 4.17 or 4.18.
If
a
Master Servicer Event of Default shall occur, then, and in each and every
such
case, so long as such Master Servicer Event of Default shall not have been
remedied, the Depositor (at the Sponsor’s written direction) or the Trustee may,
in each such case with the written consent of the Class A Certificate Insurer
and the Trustee shall at the written direction of the Class A Certificate
Insurer or, if a Class A Certificate Insurer default has occurred and is
continuing, the Holders of Certificates entitled to at least 51% of the Voting
Rights, by notice in writing to the Master Servicer (and to the Class A
Certificate Insurer, the Sponsor and the Depositor if given by the Trustee
or to
the Trustee if given by the Depositor), with a copy to each Rating Agency,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement, to the extent permitted
by
law, and in and to the Mortgage Loans and the proceeds thereof. On or after
the
receipt by the Master Servicer of such written notice, all authority and
power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage
Loans
or otherwise including, without limitation, the compensation payable to the
Master Servicer under this Agreement, shall pass to and be vested in the
Trustee
pursuant to and under this Section, and, without limitation, the Trustee
is
hereby authorized and empowered, as attorney-in-fact or otherwise, to execute
and deliver, on behalf of and at the expense of the Master Servicer, any
and all
documents and other instruments and to do or accomplish all other acts or
things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer agrees promptly
(and in any event no later than ten Business Days subsequent to such notice)
to
provide the Trustee with all documents and records requested by it to enable
it
to assume the Master Servicer’s functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer’s
responsibilities and rights under this Agreement (provided, however, that
the
Master Servicer shall continue to be entitled to receive all amounts accrued
or
owing to it under this Agreement on or prior to the date of such termination
and
shall continue to be entitled to the benefits of Section 7.03, notwithstanding
any such termination, with respect to events occurring prior to such
termination). For purposes of this Section 8.01(b), the Trustee shall not be
deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee’s
Corporate Trust Office has actual knowledge thereof or unless written notice
of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust or
this
Agreement. The Trustee shall promptly notify the Rating Agencies and the
Class A Certificate Insurer of the occurrence of a Master Servicer Event of
Default of which it has knowledge as provided above.
172
On
and
after the time the Master Servicer receives a notice of termination, the
Trustee
shall be the successor in all respects to the Master Servicer (and, if
applicable, the Securities Administrator) in its capacity as Master Servicer
(and, if applicable, the Securities Administrator) under this Agreement and
the
transactions set forth or provided for herein, and all the responsibilities,
duties and liabilities relating thereto and arising thereafter shall be assumed
by the Trustee (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03 and the obligation to deposit amounts in respect
of
losses pursuant to Section 3.10) by the terms and provisions hereof including,
without limitation, but subject to the Master Servicer’s and Trustee’s
determination of recoverability, the Master Servicer’s obligations to make
P&I Advances no later than each Distribution Date pursuant to Section 5.03;
provided, however, that if the Trustee is prohibited by law or regulation
from
obligating itself to make advances regarding delinquent mortgage loans, then
the
Trustee shall not be obligated to make P&I Advances pursuant to Section
5.03; and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer’s failure to provide information
required by Section 8.01 shall not be considered a default by the Trustee
as
successor to the Master Servicer hereunder and neither the Trustee nor any
other
successor master servicer shall be liable for any acts or omissions of the
terminated master servicer. As compensation therefor, the Trustee shall be
entitled to the Master Servicing Fee and all funds relating to the Loans,
investment earnings on the Distribution Account and all other remuneration
to
which the Master Servicer would have been entitled if it had continued to
act
hereunder.
To
the
extent that the costs and expenses of the Trustee related to the termination
of
the Master Servicer, appointment of a successor Master Servicer or the transfer
and assumption of the master servicing by the Trustee (including, without
limitation, (i) all legal costs and expenses and all due diligence costs
and
expenses associated with an evaluation of the potential termination of the
Master Servicer as a result of a Master Servicer Event of Default and (ii)
all
costs and expenses associated with the complete transfer of the master
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor Master Servicer to correct any errors or insufficiencies
in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully
and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account up to an aggregate total amount of $500,000 per annum; provided,
that,
if such costs and expenses relating to any master servicing transfer exceed
$500,000 in any given year, such excess amount will be carried forward to
the
following year and any subsequent year(s) thereafter until the Trustee is
reimbursed in full.
Notwithstanding
the foregoing, the Trustee may, if it shall be unwilling to continue to act,
or
shall, if it is unable to so act, appoint, or petition a court of competent
jurisdiction to appoint on its own behalf, any established housing and home
finance institution servicer, master servicer, servicing or mortgage servicing
institution (provided, the appointment of such institution shall be subject
to
the prior written consent of the Class A Certificate Insurer, which consent
shall not be unreasonably withheld) having a net worth of not less than
$25,000,000 and meeting such other standards for a successor master servicer
as
are set forth in this Agreement, as the successor to such Master Servicer
in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer.
173
Neither
the Trustee nor any other successor master 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 Master Servicer to deliver or provide, or any
delay
in delivering or providing, any cash, information, documents or records to
it.
SECTION
8.02. Master
Servicer to Act; Appointment of Successor.
(a) Subject
to the following paragraph, on and after the time the Servicer receives a
notice
of termination, the Master Servicer shall be the successor in all respects
to
the Servicer in its capacity as the Servicer under this Agreement and the
transactions set forth or provided for herein, and all the responsibilities,
duties and liabilities relating thereto and arising thereafter shall be assumed
by the Master Servicer (except for any representations or warranties of the
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03 and the obligation to deposit amounts in respect
of
losses pursuant to Section 3.10(b)) by the terms and provisions hereof
including, without limitation, the Servicer’s obligations to make P&I
Advances pursuant to Section 5.03 of this Agreement; provided, however, that
if
the Master Servicer is prohibited by law or regulation as evidenced in an
opinion of counsel provided to the Trustee and the Class A Certificate
Insurer from obligating itself to make advances regarding delinquent mortgage
loans, then the Master Servicer shall not be obligated to make P&I Advances
pursuant to Section 5.03 of this Agreement; and provided further, that any
failure to perform such duties or responsibilities caused by the Servicer’s
failure to provide information required by Section 8.01 shall not be considered
a default by the Master Servicer as successor to the Servicer hereunder;
provided, however, that while all advancing obligations shall begin immediately
(1) it is understood and acknowledged by the parties hereto that there will
be a
period of transition (not to exceed 120 days) before the actual servicing
functions can be fully transferred to the Master Servicer or any successor
servicer appointed in accordance with the following provisions and (2) any
failure to perform such duties or responsibilities caused by the Servicer’s
failure to provide information required by Section 8.01 of this Agreement
shall
not be considered a default by the Master Servicer as successor to the Servicer.
As compensation therefor, the Master Servicer shall be entitled to the Servicing
Fee and all funds relating to the Mortgage Loans to which the terminated
Servicer would have been entitled if it had continued to act hereunder.
Notwithstanding the above and subject to the immediately following paragraph,
the Master Servicer may, if it shall be unwilling to so act, or shall, if
it is
unable to so act promptly appoint or petition a court of competent jurisdiction
to appoint, a Person that satisfies the eligibility criteria set forth below
as
the successor to the terminated Servicer under this Agreement in the assumption
of all or any part of the responsibilities, duties or liabilities of the
terminated Servicer under this Agreement.
174
Notwithstanding
anything herein to the contrary, in no event shall the Trustee or the Master
Servicer be liable for any Servicing Fee or Master Servicing Fee, as applicable,
or for any differential in the amount of the Servicing Fee or Master Servicing
Fee, as applicable, or paid hereunder and the amount necessary to induce
any
successor Servicer or successor Master Servicer to act as successor Servicer
or
successor Master Servicer under this Agreement and the transactions set forth
or
provided for herein.
Any
successor servicer appointed under this Agreement must (i) be an established
mortgage loan servicing institution that is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
approved seller/servicer, (ii) be approved by each Rating Agency by a written
confirmation from each Rating Agency that the appointment of such successor
servicer would not result in the reduction or withdrawal of the then current
ratings of any outstanding Class of Certificates, (iii) have a net worth
of not
less than $25,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the Servicer (other than liabilities of the Servicer hereunder
incurred prior to termination of the Servicer under Section 8.01 herein)
under
this Agreement as if originally named as a party to this Agreement.
(b) (1)
All
servicing transfer costs (including, without limitation, servicing transfer
costs of the type described in Section 8.02(a) and incurred by the Trustee,
the
Master Servicer and any successor servicer under paragraph (b)(2) below)
in
connection with the termination of the Servicer shall be paid by the terminated
Servicer upon presentation of reasonable documentation of such costs, and
if
such predecessor or initial Servicer, as applicable, defaults in its obligation
to pay such costs, the successor servicer, the Master Servicer and the Trustee
shall be entitled to reimbursement therefor from the assets of the Trust
Fund up
to an aggregate total amount of $500,000 per annum; provided, that, if such
servicing transfer costs exceed $500,000 in any given year, such excess will
be
carried forward to the following year and any subsequent year(s) thereafter
until the Master Servicer and/or Trustee are reimbursed in full.
(2)
No
appointment of a successor to the Servicer under this Agreement shall be
effective until the assumption by the successor of all of the Servicer’s
responsibilities, duties and liabilities hereunder. In connection with such
appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on the
related Mortgage Loans as it and such successor shall agree; provided, however,
that no such compensation shall be in excess of 50 basis points. The Depositor
(at the written direction of the Sponsor), the Trustee and such successor
shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Pending appointment of a successor to the
Servicer under this Agreement, the Master Servicer shall act in such capacity
as
hereinabove provided.
SECTION
8.03. Notification
to Certificateholders.
(a) Upon
any
termination of any Servicer or the Master Servicer pursuant to Section 8.01(a)
or (b) or any appointment of a successor to the Servicer or the Master Servicer
pursuant to Section 8.02, the Trustee shall give prompt written notice thereof
to the Certificateholders at their respective addresses appearing in the
Certificate Register.
175
(b) Not
later
than the later of sixty (60) days after the occurrence of any event, which
constitutes or which, with notice or lapse of time or both, would constitute
a
Servicer Event of Default or a Master Servicer Event of Default or five (5)
days
after a Responsible Officer of the Trustee becomes aware of the occurrence
of
such an event, the Trustee shall transmit by mail to the Class A
Certificate Insurer and all Holders of Certificates notice of each such
occurrence, unless such default or Servicer Event of Default or Master Servicer
Event of Default shall have been cured or waived.
SECTION
8.04. Waiver
of
Events of Default.
Prior
to
and after the curing of a Class A Certificate Insurer, default under the
Insurance Agreement, the Class A Certificate Insurer shall have the sole
right to waive any Servicer Event of Default or Master Servicer Event of
Default. During the continuance of a Class A Certificate Insurer default
under the Insurance Agreement, the Holders representing at least 66% of the
Voting Rights evidenced by all Classes of Certificates affected by any default,
Servicer Event of Default or Master Servicer Event of Default hereunder may
waive such default, Servicer Event of Default or Master Servicer Event of
Default; provided, however, that a Servicer Event of Default under clause
(i) or
(vii) of Section 8.01(a) may be waived only by all of the Holders of the
Regular
Certificates. Upon any such waiver of a default, Servicer Event of Default
or
Master Servicer Event of Default, such default, Servicer Event of Default
or
Master Servicer Event of Default shall cease to exist and shall be deemed
to
have been remedied for every purpose hereunder. No such waiver shall extend
to
any subsequent or other default, Servicer Event of Default or Master Servicer
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
176
ARTICLE
IX
CONCERNING
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
SECTION
9.01. Duties
of
Trustee and Securities Administrator.
The
Trustee, prior to the occurrence of a Master Servicer Event of Default and
after
the curing or waiver of all Master Servicer Events of Default which may have
occurred, and the Securities Administrator each undertake to perform such
duties
and only such duties as are specifically set forth in this Agreement as duties
of the Trustee and the Securities Administrator, respectively. During the
continuance of a Master Servicer Event of Default, 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 its exercise as a prudent person would exercise
or
use under the circumstances in the conduct of such person’s own affairs. Any
permissive right of the Trustee enumerated in this Agreement shall not be
construed as a duty.
Each
of
the Trustee and the Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to it, which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement
in a
material manner, the Trustee or the Securities Administrator, as the case
may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
The
Trustee shall promptly remit to the Servicer any complaint, claim, demand,
notice or other document (collectively, the “Notices”) delivered to the Trustee
as a consequence of the assignment of any Mortgage Loan hereunder and relating
to the servicing of the Mortgage Loans; provided than any such notice (i)
is
delivered to the Trustee at its Corporate Trust Office, (ii) contains
information sufficient to permit the Trustee to make a determination that
the
real property to which such document relates is a Mortgaged Property. The
Trustee shall have no duty hereunder with respect to any Notice it may receive
or which may be alleged to have been delivered to or served upon it unless
such
Notice is delivered to it or served upon it at its Corporate Trust Office
and
such Notice contains the information required pursuant to clause (ii) of
the
preceding sentence.
No
provision of this Agreement shall be construed to relieve the Trustee, the
Supplemental Interest Trust Trustee or the Securities Administrator from
liability for its own negligent action, its own negligent failure to act
or its
own misconduct; provided, however, that:
(i) Prior
to
the occurrence of a Master Servicer Event of Default and after the curing
or
waiver of all such Master Servicer Events of Default which may have occurred
with respect to the Trustee and at all times with respect to the Securities
Administrator, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, neither the Trustee nor
the
Securities Administrator shall be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against
the
Trustee or the Securities Administrator and, in the absence of bad faith
on the
part of the Trustee or the Securities Administrator, respectively, the Trustee
or the Securities Administrator, respectively, 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 or the Securities
Administrator, respectively, that conform to the requirements of this
Agreement;
177
(ii) Neither
the Trustee nor the Securities Administrator shall be liable for an error
of
judgment made in good faith by a Responsible Officer or Responsible Officers
of
the Trustee or an officer or officers of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the pertinent
facts;
and
(iii) Neither
the Trustee nor the Securities Administrator shall 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 entitled to at least 25%
of
the Voting Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator or exercising any trust or power conferred upon the Trustee
or the
Securities Administrator under this Agreement.
SECTION
9.02. Certain
Matters Affecting Trustee and Securities Administrator.
(a) Except
as
otherwise provided in Section 9.01:
(i) Before
taking any action hereunder, the Trustee and the Securities Administrator
may
request and rely upon and shall be protected in acting or refraining from
acting
upon any resolution, Officers’ Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed by
it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) The
Trustee and the Securities Administrator may consult with counsel of its
selection and any advice of such counsel or 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;
(iii) Neither
the Trustee nor the Securities Administrator shall be under any obligation
to
exercise any of the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto
at
the request, order or direction of any of the Certificateholders, pursuant
to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee or the Securities Administrator, as the case may be,
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of a Master Servicer Event of Default (which has not been cured
or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to 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;
178
(iv) Neither
the Trustee nor the Securities Administrator shall be liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by
this Agreement;
(v) Prior
to
the occurrence of a Master Servicer Event of Default hereunder and after
the
curing or waiver of all Master Servicer Events of Default which may have
occurred with respect to the Trustee and at all times with respect to the
Securities Administrator, neither the Trustee nor the Securities Administrator
shall be bound to make any investigation into the facts or matters stated
in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Holders of Certificates entitled to
at
least 25% of the Voting Rights; provided, however, that if the payment within
a
reasonable time to the Trustee or the Securities Administrator of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Securities Administrator,
as applicable, not reasonably assured to the Trustee or the Securities
Administrator by such Certificateholders, the Trustee or the Securities
Administrator, as applicable, may require reasonable indemnity satisfactory
to
it against such expense, or liability from such Certificateholders as a
condition to taking any such action;
(vi) The
Trustee may execute any of the trusts or powers hereunder or perform any
duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of
any
agent or attorney appointed with due care by it hereunder;
(vii) The
Trustee shall not be liable for any loss resulting from (a) the investment
of
funds held in the Collection Account, (b) the investment of funds held in
the
Distribution Account, (c) the investment of funds held in the Reserve Fund
or
(d) the redemption or sale of any such investment as therein
authorized;
(viii) The
Trustee shall not be deemed to have notice of any default, Master Servicer
Event
of Default or Servicer Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event
which
is in fact such a default is received by a Responsible Officer of the Trustee
at
the Corporate Trust Office of the Trustee, and such notice references the
Certificates and this Agreement;
(ix) The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended
to, and
shall be enforceable by, each agent, custodian and other Person employed
to act
hereunder; and
179
(x) 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 Sponsor
with reasonable further instructions.
(xi) No
provision of this Agreement shall require the Trustee (regardless of the
capacity in which it is acting) to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against
risk or liability is not reasonably assured to it.
(xii) The
Trustee shall not have any duty to conduct any affirmative investigation
as to
the occurrence of any condition requiring the repurchase of any Mortgage
Loan by
the Sponsor pursuant to this Agreement or the Mortgage Loan Purchase Agreement,
as applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
(b) All
rights of action under this Agreement or under any of the Certificates,
enforceable by the Trustee, may be enforced by it without the possession
of any
of the Certificates, or the production thereof at the trial or other proceeding
relating thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all the Holders of
such
Certificates, subject to the provisions of this Agreement.
(c) The
Trustee, not in its individual capacity but solely in its separate capacity
as
Supplemental Interest Trust Trustee, is hereby directed to exercise the rights,
perform the obligations, and make any representations to be exercised,
performed, or made by the Supplemental Interest Trust Trustee, as described
herein. The Supplemental Interest Trust Trustee is hereby directed to execute
and deliver the Swap Agreement on behalf of Party B (as defined therein)
and to
exercise the rights, perform the obligations, and make the representations
of
Party B thereunder, solely in its capacity as Supplemental Interest Trust
Trustee on behalf of Party B (as defined therein) and not in its individual
capacity.
The
Servicer, the Sponsor, the Depositor and the Certificateholders (by acceptance
of their Certificates) acknowledge and agree that:
(i) the
Supplemental Interest Trust Trustee shall execute and deliver the Swap Agreement
on behalf of Party B (as defined therein),
(ii) the
Supplemental Interest Trust Trustee shall exercise the rights, perform the
obligations, and make the representations of Party B thereunder, solely in
its
capacity as Supplemental Interest Trust Trustee on behalf of Party B (as
defined
therein) and not in its individual capacity, and
(iii) the
Securities Administrator shall also be entitled to exercise the rights and
obligated to perform the obligations of Party B under the Swap
Agreement.
180
Every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Supplemental Interest Trust Trustee shall
apply to the Supplemental Interest Trust Trustee’s execution of the Swap
Agreement, and the performance of its duties and satisfaction of its obligations
thereunder.
Every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Securities Administrator shall apply to
the
Securities Administrator’s performance of its duties and satisfaction of its
obligations under the Swap Agreement.
(d) None
of
the Securities Administrator, the Master Servicer, the Servicer, the Sponsor,
the Depositor, the Custodian or the Trustee shall be responsible for the
acts or
omissions of the others or the Swap Provider, it being understood that this
Agreement shall not be construed to render those partners joint venturers
or
agents of one another.
SECTION
9.03. Trustee
and Securities Administrator not Liable for Certificates or Mortgage
Loans.
The
recitals contained herein and in the Certificates (other than the signature
of
the Securities Administrator, the authentication of the Securities Administrator
on the Certificates, the acknowledgments of the Trustee contained in Article
II
and the representations and warranties of the Trustee in Section 9.12) shall
be
taken as the statements of the Depositor and neither the Trustee nor the
Securities Administrator assumes any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representations
or warranties as to the validity or sufficiency of this Agreement (other
than as
specifically set forth in Section 9.12), the Swap Agreement or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of
any
Mortgage Loan or related document. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of any
of
the Certificates or of the proceeds of such Certificates, or for the use
or
application of any funds paid to the Depositor or the Master Servicer in
respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Servicer, other than with respect to the Securities Administrator
any
funds held by it or on behalf of the Trustee in accordance with Sections
3.24,
3.25 and 5.07 of this Agreement.
SECTION
9.04. Trustee
and Securities Administrator May Own Certificates.
Each
of
the Trustee and the Securities Administrator in its individual capacity or
any
other capacity may become the owner or pledgee of Certificates and may transact
business with other interested parties and their Affiliates with the same
rights
it would have if it were not Trustee or the Securities
Administrator.
SECTION
9.05. Fees
and
Expenses of Trustee, Custodian and Securities Administrator.
The
fees
of the Trustee and the Securities Administrator hereunder, of the Custodian
under the Custodial Agreement shall be paid in accordance with a side letter
agreement with the Master Servicer and at the sole expense of the Master
Servicer. In addition, to the extent such amounts are not paid by the Master
Servicer or the Sponsor as set forth below, the Trustee, the Securities
Administrator, the Custodian and any director, officer, employee or agent
of the
Trustee, the Securities Administrator and the Custodian shall be indemnified
by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney’s fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator in connection with any claim or legal action
or
any pending or threatened claim or legal action arising out of or in connection
with the acceptance or administration of its respective obligations and duties
under this Agreement, including the Swap Agreement and any and all other
agreements related hereto; provided, however, that the Trustee’s and the
Securities Administrator’s right to indemnification shall be limited as provided
in the last sentence of the first paragraph of Section 7.03, other than any
loss, liability or expense, as applicable (i) for which the Trustee is
indemnified by the Master Servicer or the Servicer, (ii) that constitutes
a
specific liability of the Trustee or the Securities Administrator pursuant
to
Section 11.01(g) or (iii) any loss, liability or expense incurred by reason
of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder by the Trustee or the Securities Administrator or by reason of
reckless disregard of obligations and duties hereunder. In no event shall
the
Trustee, the Custodian, the Master Servicer or the Securities Administrator
be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form
of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold
the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney’s fees and expenses) incurred by the Trustee by reason of the Master
Servicer’s willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer’s
reckless disregard of its obligations and duties under this Agreement. In
addition, the Sponsor agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of,
or in
connection with, the provisions set forth in the last paragraph of Section
2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating
to the
provisions of such paragraph. The indemnities in this Section 9.05 shall
survive
the termination or discharge of this Agreement and the resignation or removal
of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment under this Section 9.05 made by the Master Servicer to the Trustee
in respect of the Trustee’s fees or the Master Servicer’s indemnification
obligation to the Trustee shall be from the Master Servicer’s own funds, without
reimbursement from REMIC I therefor.
181
SECTION
9.06. Eligibility
Requirements for Trustee and Securities Administrator.
The
Trustee and the Securities Administrator shall at all times be a corporation
or
an association (other than the Depositor, the Sponsor, the Master Servicer
or
any Affiliate of the foregoing) organized and doing business under the laws
of
any 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 (or a member of a bank holding company whose capital and
surplus is at least $50,000,000) and subject to supervision or examination
by
federal or state authority. If such corporation or association publishes
reports
of conditions at least annually, pursuant to law or to the requirements of
the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its
most
recent report of conditions so published. In case at any time the Trustee
or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and
with
the effect specified in Section 9.07.
182
Additionally,
the Securities Administrator (i) may not be an originator, Servicer, the
Depositor or an affiliate of the Depositor unless the Securities Administrator
is in an institutional trust department, (ii) must be authorized to exercise
corporate trust powers under the laws of its jurisdiction of organization,
(iii)
must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency, or the
equivalent rating by S&P (or such rating acceptable to Fitch pursuant to a
rating confirmation) and (iv) must be acceptable to the Class A Certificate
Insurer. If no successor securities administrator shall have been appointed
and
shall have accepted appointment within 60 days after ▇▇▇▇▇ Fargo Bank, National
Association, as Securities Administrator, ceases to be the securities
administrator pursuant to this Section 9.06, then the Trustee shall petition
any
court of competent jurisdiction, at the expense of the Trust, for the
appointment of a successor securities administrator which satisfies the
eligibility criteria set forth herein. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator.
SECTION
9.07. Resignation
and Removal of Trustee and Securities Administrator.
The
Trustee and the Securities Administrator may at any time resign and be
discharged from the trust hereby created by giving written notice thereof
to the
Depositor, to the Master Servicer, to the Securities Administrator (or the
Trustee, if the Securities Administrator resigns), to the Class A
Certificate Insurer and to the Certificateholders. Upon receiving such notice
of
resignation, the Depositor (at the Sponsor’s written direction) shall promptly
appoint a successor trustee or successor securities administrator by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee or Securities Administrator, as applicable, and to the successor
trustee
or successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Depositor, the Trustee,
the
Securities Administrator, to the Class A Certificate Insurer and the Master
Servicer by the successor trustee or securities administrator. If no successor
trustee or successor securities administrator shall have been so appointed
and
have accepted appointment within thirty (30) days after the giving of such
notice of resignation, the resigning Trustee or Securities Administrator,
as the
case may be, may, at the expense of the Trust Fund, petition any court of
competent jurisdiction for the appointment of a successor trustee, successor
securities administrator, Trustee or Securities Administrator, as
applicable.
If
at any
time the Trustee or the Securities Administrator shall cease to be eligible
in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee
or the
Securities Administrator shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or the Securities
Administrator or of its property shall be appointed, or any public officer
shall
take charge or control of the Trustee or the Securities Administrator or
of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor (at the Sponsor’s written direction) may, with
the prior written consent of the Class A Certificate Insurer, or shall, at
the
prior written direction of the Class A Certificate Insurer, in each case,
so
long as a default by the Class A Certificate Insurer has not occurred and
is not
continuing, remove the Trustee or the Securities Administrator, as applicable
and appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in duplicate, which instrument shall be
delivered to the Trustee or the Securities Administrator so removed and to
the
successor trustee or successor securities administrator. A copy of such
instrument shall be delivered to the Certificateholders, the Trustee, the
Securities Administrator, the Depositor and the Master Servicer by the successor
trustee or securities administrator, as applicable.
183
The
Class
A Certificate Insurer may, and during the continuance of a Class A
Certificate Insurer default under the Insurance Agreement, the Holders of
Certificates entitled to at least 51% of the Voting Rights may, at any time
remove the Trustee or the Securities Administrator and appoint a successor
trustee or successor securities administrator by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered
to the
Depositor and the Sponsor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed.
A
copy of such instrument shall be delivered to the Certificateholders, the
Depositor, the Trustee (in the case of the removal of the Securities
Administrator), the Securities Administrator (in the case of the removal
of the
Trustee) and the Master Servicer by the successor trustee or securities
administrator, as applicable.
Any
resignation or removal of the Trustee or the Securities Administrator and
appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall not become effective
until acceptance of appointment by the successor trustee or successor securities
administrator, as applicable, as provided in Section 9.08.
Any
Person appointed as successor trustee pursuant to Section 9.07 shall also
be
required to serve as successor supplemental interest trust trustee.
Notwithstanding
anything to the contrary contained herein, the Master Servicer and the
Securities Administrator shall at all times be the same Person.
SECTION
9.08. Successor
Trustee or Securities Administrator.
Any
successor trustee or successor securities administrator appointed as provided
in
Section 9.07 shall execute, acknowledge and deliver to the Depositor, the
Sponsor and its predecessor trustee or predecessor securities administrator
an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee or predecessor securities administrator
shall become effective and such successor trustee or successor securities
administrator without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or securities
administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Mortgage Loan Documents and related documents and statements
to the extent held by it hereunder, as well as all monies, held by it hereunder,
and the Depositor, the Sponsor and the predecessor trustee or predecessor
securities administrator shall execute and deliver such instruments and do
such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee or successor securities administrator
all such rights, powers, duties and obligations.
184
No
successor trustee or successor securities administrator shall accept appointment
as provided in this Section unless at the time of such acceptance such successor
trustee or successor securities administrator shall be eligible under the
provisions of Section 9.06 and the appointment of such successor trustee
or
successor securities administrator shall not result in a downgrading of any
Class of Certificates by any Rating Agency, as evidenced by a letter from
each
Rating Agency.
Upon
acceptance of appointment by a successor trustee, successor supplemental
interest trust trustee or successor securities administrator as provided
in this
Section, the related successor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown
in
the Certificate Register, the Depositor and the Swap Provider.
SECTION
9.09. Merger
or
Consolidation of Trustee or Securities Administrator.
Any
corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated
or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall
be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee
or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 9.06, without the execution
or
filing of any paper or any further act on the part of any of the parties
hereto,
anything herein to the contrary notwithstanding.
SECTION
9.10. Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any
legal
requirements of any jurisdiction in which any part of the REMIC I or property
securing the same 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
approved by the Trustee to act as co-trustee or co-trustees, jointly with
the
Trustee, or separate trustee or separate trustees, of all or any part of
REMIC
I, and to vest in such Person or Persons, in such capacity, and for the benefit
of the Holders of the Certificates, such title to REMIC I, or any part thereof,
and, subject to the other provisions of this Section 9.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required
to meet
the terms of eligibility as a successor trustee under Section 9.06 hereunder
and
no notice to Holders of Certificates of the appointment of co-trustee(s)
or
separate trustee(s) shall be required under Section 9.08 hereof.
185
In
the
case of any appointment of a co-trustee or separate trustee pursuant to this
Section 9.10 all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or performed
by the Trustee and such separate trustee or co-trustee jointly, except to
the
extent that under any law of any jurisdiction in which any particular act
or
acts are to be performed by the Trustee (whether as Trustee hereunder or
as
successor to a defaulting Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
REMIC
I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to
have
been given to each of the then separate trustees and co-trustees, 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
IX.
Each separate trustee and co-trustee, upon its acceptance of the trust
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee, or separately,
as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct
of, affecting the liability of, or affording protection to, the Trustee.
Every
such instrument shall be filed with the Trustee.
Any
separate trustee or co-trustee may, at any time, constitute the Trustee,
its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on
its behalf and in its name. 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 or co-trustee.
SECTION
9.11. Appointment
of Office or Agency.
The
Certificates may be surrendered for registration of transfer or exchange
at the
Securities Administrator’s office located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and presented for final distribution at the
Corporate Trust Office of the Securities Administrator where notices and
demands
to or upon the Securities Administrator in respect of the Certificates and
this
Agreement may be served.
SECTION
9.12. Representations
and Warranties.
The
Trustee hereby represents and warrants to the Master Servicer, the Securities
Administrator, the Servicer and the Depositor as applicable, as of the Closing
Date, that:
(i) It
is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States of America.
(ii) The
execution and delivery of this Agreement by it, and the performance and
compliance with the terms of this Agreement by it, will not violate its articles
of association or bylaws or constitute a default (or an event which, with
notice
or lapse of time, or both, would constitute a default) under, or result in
the
breach of, any material agreement or other instrument to which it is a party
or
which is applicable to it or any of its assets.
186
(iii) It
has
the full power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution, delivery
and
performance of this Agreement, and has duly executed and delivered this
Agreement.
(iv) This
Agreement, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid, legal and binding obligation of it,
enforceable against it in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, receivership, reorganization, moratorium
and
other laws affecting the enforcement of creditors’ rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) It
is not
in violation of, and its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not constitute
a violation of, any law, any order or decree of any court or arbiter, or
any
order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in its good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of it
to perform its obligations under this Agreement or its financial
condition.
(vi) No
litigation is pending or, to the best of its knowledge, threatened against
it,
which would prohibit it from entering into this Agreement or, in its good
faith
reasonable judgment, is likely to materially and adversely affect either
the
ability of it to perform its obligations under this Agreement or its financial
condition.
187
ARTICLE
X
TERMINATION
▇▇▇▇▇▇▇
▇▇.▇▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Liquidation of All Mortgage Loans.
(a) Subject
to Section 10.02, the respective obligations and responsibilities under this
Agreement of the Depositor, the Master Servicer, the Securities Administrator,
the Servicer and the Trustee (other than the obligations of the Master Servicer
to the Trustee pursuant to Section 9.05 and of the Servicer to make remittances
to the Securities Administrator and the Securities Administrator to make
payments in respect of the REMIC I Regular Interests, REMIC I Regular Interests
or the Classes of Certificates as hereinafter set forth) shall terminate
upon
payment to the Certificateholders and the deposit of all amounts held by
or on
behalf of the Trustee and required hereunder to be so paid or deposited on
the
Distribution Date coinciding with or following the earlier to occur of (i)
the
purchase by the Terminator (as defined below) of all Mortgage Loans and each
REO
Property remaining in REMIC I and (ii) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in REMIC I; provided, however, that in no event shall the trust
created hereby continue beyond the earlier of (i) the expiration of 21 years
from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
the
late ambassador of the United States to the Court of St. ▇▇▇▇▇, living on
the
date hereof and (ii) the Last Scheduled Distribution Date. The purchase by
the
Terminator of all Mortgage Loans and each REO Property remaining in REMIC
I
shall be at a price (the “Termination Price”) equal to the sum of (i) the
aggregate Purchase Price of all the Mortgage Loans included in REMIC I, plus
the
appraised value of each REO Property, if any, included in REMIC I, such
appraisal to be conducted by an appraiser mutually agreed upon by the Terminator
and the Trustee in their reasonable discretion, (ii) any amounts due and
owing
to the Swap Provider under the Swap Agreement and any previous swap provider
as
of the termination date (including a Swap Termination Payment owed to the
Swap
Provider in connection with such optional termination) plus (iii) any amounts
due the Servicer and the Master Servicer in respect of unpaid Servicing Fees,
Master Servicing Fees and outstanding P&I Advances and Servicing Advances.
(b) The
Servicer or, if the Servicer fails to exercise such optional termination
right
within 90 days after the first date that it is able to exercise such right,
the
Master Servicer (either the Servicer or Master Servicer, the “Terminator”) also
shall have the right to purchase all of the Mortgage Loans and each REO Property
remaining in REMIC I pursuant to clause (i) of the preceding paragraph no
later
than the Determination Date in the month immediately preceding the Distribution
Date on which the Certificates will be retired; provided, however, that the
Terminator may elect to purchase all of the Mortgage Loans on a servicing
retained basis and each REO Property remaining in REMIC I pursuant to clause
(i)
above only if the aggregate Scheduled Principal Balance of the Mortgage Loans
and each REO Property remaining in the Trust Fund at the time of such election
is reduced to less than or equal to 10% of the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the Cut-off Date. If either the Servicer
or
Master Servicer exercises such optional termination right, such party will
be
required to obtain the consent of the Class A Certificate Insurer if (i)
any
amounts are owed to the Class A Certificate Insurer under the Insurance
Agreement or this Agreement or (ii) the optional termination would result
in a
draw on the Policy. By acceptance of the Residual Certificates, the Holder
of
the Residual Certificates agrees, in connection with any termination hereunder,
to assign and transfer any portion of the Termination Price in excess of
par,
and to the extent received in respect of such termination, to pay any such
amounts to the Holders of the Class CE Certificates. Notwithstanding the
foregoing, the optional termination right may only be exercised by the Master
Servicer if (1) the Master Servicer receives written notification from the
Servicer that the Servicer will not exercise such optional termination right
or
(2) the Master Servicer does not receive such written notification from the
Servicer, and the Servicer fails to exercise its optional termination right
by
the third Distribution Date following the date such right became exercisable.
In
the event the optional termination right is exercised by the Master Servicer,
the Servicer shall remain the servicer of record of the related Mortgage
Loan
unless the Servicer was terminated as Servicer prior to the exercise of such
optional termination right.
188
(c) In
connection with any optional termination, four Business Days prior to the
final
Distribution Date specified in the notice required pursuant to Section 10.01(f),
the Securities Administrator shall, no later than 4:00 pm New York City time
on
such day, request in writing (in accordance with the applicable provision
of the
Swap Agreement and by phone from the Swap Provider the amount of the Estimated
Swap Termination Payment (as defined in the Swap Agreement). The Swap Provider
shall, no later than 2:00 pm on the following Business Day, notify in writing
(which may be done in electronic format) the Securities Administrator of
the
amount of the Estimated Swap Termination Payment; the Securities Administrator
shall promptly on the same day notify the Terminator of the amount of the
Estimated Swap Termination Payment.
(d) Two
Business Days prior to the final Distribution Date specified in the notice
required pursuant to Section 10.01(f), (i) the Terminator shall, no
later than 1:00 pm New
York
City time on such day, deposit funds in the Distribution Account in an amount
equal to the sum of the Termination Price (other than the Swap Termination
Payment) and the Estimated Swap Termination Payment, and (ii) if the Securities
Administrator shall have determined that the aggregate Stated Principal Balance
of all of the Mortgage Loans as of the related Determination Date is
not
more than 10% of the aggregate Principal Balance of the Mortgage
Loans
as of
the Cut-off Date and that all other requirements of the optional termination
have been met, including without limitation, the deposit required pursuant
to
the immediately preceding clause (i) as well as the requirements specified
in
Section 10.03, then the Securities Administrator shall, on the same Business
Day, provide written notice to the Depositor, the Sponsor, the Master Servicer,
the Servicer, the Supplemental Interest Trust Trustee, the Trustee and the
Swap
Provider confirming (in accordance with the applicable provisions of the
Swap
Agreement) (a) its receipt of the Termination Price (other than the Swap
Termination Payment) and the Estimated Swap Termination Payment and (b) that
all
other requirements of the optional termination have been met. Upon the
Securities Administrator’s providing the notice described in the preceding
sentence, the optional termination shall become irrevocable, the notice to
Certificateholders of such optional termination provided pursuant to the
Section
10.01(f) shall become unrescindable, the Swap Provider shall determine the
Swap
Termination Payment in accordance with the Swap Agreement, and the Swap Provider
shall provide to the Securities Administrator written notice of the amount
of
the Swap Termination Payment not later than one Business Day prior to the
final
Distribution Date specified in the notice required pursuant to Section 10.01(f).
189
(e) In
connection with any optional termination, only an amount equal to the
Termination Price less any Swap Termination Payment shall be made available
for
distribution to the Regular Certificates. Any Estimated Swap Termination
Payment
deposited into the Distribution Account by the Terminator shall be withdrawn
by
the Securities Administrator from the Distribution Account on the related
final
Distribution Date and distributed as follows: (i) to the Supplemental Interest
Trust for payment to the Swap Provider in accordance with Section 5.07, an
amount equal to the Swap Termination Payment calculated pursuant to the Swap
Agreement, provided that in no event shall the amount distributed to the
Swap
Provider in respect of the Swap Termination Payment exceed the Estimated
Swap
Termination Payment, and (ii) to the Terminator an amount equal to the excess,
if any, of the Estimated Swap Termination Payment over the Swap Termination
Payment. The Swap Termination Payment shall not be part of any REMIC and
shall
not be paid into any account which is part of any REMIC.
(f) Notice
of
the liquidation of the Certificates shall be given promptly by the Securities
Administrator by letter to the Class A Certificate Insurer and the
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Master
Servicer, not earlier than the 15th day and not later than the 25th day of
the
month next preceding the month of the final distribution on the Certificates
or
(b) otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and the final payment in respect
of the REMIC I Regular Interests or the Certificates will be made upon
presentation and surrender of the related Certificates at the office of the
Securities Administrator therein designated, (ii) the amount of any such
final
payment, (iii) that no interest shall accrue in respect of the REMIC I Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record
Date
otherwise applicable to such Distribution Date is not applicable, payments
being
made only upon presentation and surrender of the Certificates at the office
of
the Securities Administrator. In the event such notice is given in connection
with the purchase of all of the Mortgage Loans and each REO Property remaining
in REMIC I by the Terminator, the Terminator shall deliver to the Securities
Administrator for deposit in the Distribution Account not later than the
Business Day prior to the Distribution Date on which the final distribution
on
the Certificates an amount in immediately available funds equal to the
above-described Termination Price. The Securities Administrator shall remit
to
the Servicer, the Master Servicer, the Trustee, the Class A Certificate
Insurer and the Custodian from such funds deposited in the Distribution Account
(i) any amounts which the Servicer would be permitted to withdraw and retain
from the Collection Account pursuant to Section 3.09 as if such funds had
been
deposited therein (including all unpaid Servicing Fees, Master Servicing
Fees
and all outstanding P&I Advances and Servicing Advances) and (ii) any other
amounts otherwise payable by the Securities Administrator to the Master
Servicer, the Trustee, the Custodian, the Swap Provider, the Class A
Certificate Insurer and the Servicer from amounts on deposit in the Distribution
Account pursuant to the terms of this Agreement prior to making any final
distributions pursuant to Section 10.01(g) below. Upon certification to the
Trustee by the Securities Administrator of the making of such final deposit,
the
Trustee shall promptly release or cause to be released to the Terminator
the
Mortgage Files for the remaining Mortgage Loans, and Trustee shall execute
all
assignments, endorsements and other instruments delivered to it and necessary
to
effectuate such transfer.
190
(g) Upon
presentation of the Certificates by the Certificateholders on the final
Distribution Date, the Securities Administrator shall distribute to each
Certificateholder so presenting and surrendering its Certificates the amount
otherwise distributable on such Distribution Date in accordance with Section
5.01 in respect of the Certificates so presented and surrendered. Any funds
not
distributed to any Holder or Holders of Certificates being retired on such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust and
credited to the account of the appropriate non-tendering Holder or Holders.
If
any Certificates as to which notice has been given pursuant to this Section
10.01 shall not have been surrendered for cancellation within six months
after
the time specified in such notice, the Securities Administrator shall mail
a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to
the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and
of
contacting such Certificateholders shall be paid out of the assets remaining
in
the trust funds. If within one (1) year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall pay to the Depositor all such amounts, and all rights
of
non-tendering Certificateholders in or to such amounts shall thereupon cease.
No
interest shall accrue or be payable to any Certificateholder on any amount
held
in trust by the Securities Administrator as a result of such Certificateholder’s
failure to surrender its Certificate(s) on the final Distribution Date for
final
payment thereof in accordance with this Section 10.01. Any such amounts held
in
trust by the Securities Administrator shall be held uninvested in an Eligible
Account.
SECTION
10.02. Additional
Termination Requirements.
(a) In
the
event that the Terminator purchases all the Mortgage Loans and each REO Property
or the final payment on or other liquidation of the last Mortgage Loan or
REO
Property remaining in REMIC I pursuant to Section 10.01, the Trust Fund shall
be
terminated in accordance with the following additional
requirements:
(i) The
Securities Administrator shall specify the first day in the 90-day liquidation
period in a statement attached to each Trust REMIC’s final Tax Return pursuant
to Treasury regulation Section 1.860F-1 and shall satisfy all requirements
of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained by and at the
expense
of the Terminator;
(ii) During
such 90-day liquidation period and, at or prior to the time of making of
the
final payment on the Certificates, the Trustee shall sell all of the assets
of
REMIC I to the Terminator for cash; and
(iii) At
the
time of the making of the final payment on the Certificates, the Securities
Administrator shall distribute or credit, or cause to be distributed or
credited, to the Holders of the Residual Certificates all cash on hand in
the
Trust Fund (other than cash retained to meet claims), and the Trust Fund
shall
terminate at that time.
191
(b) At
the
expense of the Terminator (or, if the Trust Fund is being terminated as a
result
of the occurrence of the event described in clause (ii) of the first paragraph
of Section 10.01, at the expense of the Trust Fund), the Terminator shall
prepare or cause to be prepared the documentation required in connection
with
the adoption of a plan of liquidation of each Trust REMIC pursuant to this
Section 10.02.
(c) By
their
acceptance of Certificates, the Holders thereof hereby agree to authorize
the
Securities Administrator to specify the 90-day liquidation period for each
Trust
REMIC, which authorization shall be binding upon all successor
Certificateholders.
192
ARTICLE
XI
REMIC
PROVISIONS
SECTION
11.01. REMIC
Administration.
(a) The
Securities Administrator shall elect to treat each Trust REMIC as a REMIC
under
the Code and, if necessary, under applicable state law. Each such election
will
be made by the Securities Administrator on Form 1066 or other appropriate
federal tax or information return or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect
of
REMIC I, the REMIC I Regular Interests shall be designated as the “regular
interests” in REMIC I and the Class R-I Interest shall be designated as the
“residual interest” in REMIC I. For the purposes of the REMIC election in
respect of REMIC II, the REMIC II Regular Interests shall be designated as
the
“regular interests” in REMIC II and the Class R-II Interest shall be designated
as the “residual interest” in REMIC II. The Class A Certificates, the Mezzanine
Certificates, the Class P Certificates, Class IO Interest and the Class CE
Certificates (exclusive of any right to receive payments from or obligation
to
make payments to the Reserve Fund or the Supplemental Interest Trust) shall
be
designated as the “regular interests” in REMIC III and the Class R-III Interest
shall be designated as the “residual interest” in REMIC III. The Trustee shall
not permit the creation of any “interests” in each Trust REMIC (within the
meaning of Section 860G of the Code) other than the REMIC I Regular Interests,
REMIC II Regular Interests, Class IO Interest and the interests represented
by
the Certificates.
(b) The
Closing Date is hereby designated as the “Startup Day” of each Trust REMIC
within the meaning of Section 860G(a)(9) of the Code.
(c) The
Securities Administrator shall be reimbursed for any and all expenses relating
to any tax audit of the Trust Fund (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect
to
each Trust REMIC that involve the Internal Revenue Service or state tax
authorities), including the expense of obtaining any tax related Opinion
of
Counsel except as specified herein. The Securities Administrator, as agent
for
each Trust REMIC’s tax matters person shall (i) act on behalf of the Trust Fund
in relation to any tax matter or controversy involving any Trust REMIC and
(ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint
the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.
(d) The
Securities Administrator shall prepare and file and the Trustee shall sign
all
of the Tax Returns in respect of each REMIC created hereunder. The expenses
of
preparing and filing such returns shall be borne by the Securities Administrator
without any right of reimbursement therefor.
193
(e) The
Securities Administrator shall perform on behalf of each Trust REMIC all
reporting and other tax compliance duties that are the responsibility of
such
REMIC under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other
such
compliance guidance, the Securities Administrator shall provide (i) to any
Transferor of a Residual Certificate such information as is necessary for
the
application of any tax relating to the transfer of a Residual Certificate
to any
Person who is not a Permitted Transferee upon receipt of additional reasonable
compensation, (ii) to the Certificateholders such information or reports
as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service
the
name, title, address and telephone number of the person who will serve as
the
representative of each Trust REMIC. The Sponsor shall provide or cause to
be
provided to the Securities Administrator, within ten (10) days after the
Closing
Date, all information or data that the Securities Administrator reasonably
determines to be relevant for tax purposes as to the valuations and issue
prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) To
the
extent in the control of the Trustee or the Securities Administrator, each
such
Person (i) shall take such action and shall cause each REMIC created hereunder
to take such action as shall be necessary to create or maintain the status
thereof as a REMIC under the REMIC Provisions, (ii) shall not take any action,
cause the Trust Fund to take any action or fail to take (or fail to cause
to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (A) endanger the status of each Trust REMIC as a REMIC
or
(B) result in the imposition of a tax upon the Trust Fund (including but
not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section
860G(d)
of the Code) (either such event, an “Adverse REMIC Event”) unless such action or
inaction is permitted under this Agreement or the Trustee and the Securities
Administrator have received an Opinion of Counsel, addressed to the them
(at the
expense of the party seeking to take such action but in no event at the expense
of the Trustee or the Securities Administrator) to the effect that the
contemplated action will not, with respect to any Trust REMIC, endanger such
status or result in the imposition of such a tax, nor (iii) shall the Securities
Administrator take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event
could
occur with respect to such action; provided that the Securities Administrator
may conclusively rely on such Opinion of Counsel and shall incur no liability
for its action or failure to act in accordance with such Opinion of Counsel.
In
addition, prior to taking any action with respect to any Trust REMIC or the
respective assets of each, or causing any Trust REMIC to take any action,
which
is not contemplated under the terms of this Agreement, the Securities
Administrator will consult with the Trustee or its designee, in writing,
with
respect to whether such action could cause an Adverse REMIC Event to occur
with
respect to any Trust REMIC, and the Securities Administrator shall not take
any
such action or cause any Trust REMIC to take any such action as to which
the
Trustee has advised it in writing that an Adverse REMIC Event could occur.
The
Trustee may consult with counsel (and conclusively rely upon the advice of
such
counsel) to make such written advice, and the cost of same shall be borne
by the
party seeking to take the action not permitted by this Agreement, but in
no
event shall such cost be an expense of the Trustee.
194
(g) In
the
event that any tax is imposed on “prohibited transactions” of any REMIC created
hereunder as defined in Section 860F(a)(2) of the Code, on the “net income from
foreclosure property” of such REMIC as defined in Section 860G(c) of the Code,
on any contributions to any such REMIC after the Startup Day therefor pursuant
to Section 860G(d) of the Code, or any other tax is imposed by the Code or
any
applicable provisions of state or local tax laws, such tax shall be charged
(i)
to the Trustee pursuant to Section 11.03, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under this Article
XI,
(ii) to the Securities Administrator pursuant to Section 11.03, if such tax
arises out of or results from a breach by the Securities Administrator of
any of
its obligations under this Article XI, (iii) to the Master Servicer pursuant
to
Section 11.03, if such tax arises out of or results from a breach by the
Master
Servicer of any of its obligations under Article IV or under this Article
XI,
(iv) to the Servicer pursuant to Section 11.03, if such tax arises out of
or
results from a breach by the Servicer of any of its obligations under Article
III or under this Article XI, or (v) in all other cases, against amounts
on
deposit in the Distribution Account and shall be paid by withdrawal
therefrom.
(h) The
Securities Administrator shall, for federal income tax purposes, maintain
books
and records with respect to each Trust REMIC on a calendar year and on an
accrual basis.
(i) Following
the Startup Day, neither the Securities Administrator nor the Trustee shall
accept any contributions of assets to any Trust REMIC other than in connection
with any Qualified Substitute Mortgage Loan delivered in accordance with
Section
2.03 unless it shall have received an Opinion of Counsel to the effect that
the
inclusion of such assets in the Trust Fund will not cause the related REMIC
to
fail to qualify as a REMIC at any time that any Certificates are outstanding
or
subject such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(j) Neither
the Trustee nor the Securities Administrator shall knowingly enter into any
arrangement by which any Trust REMIC will receive a fee or other compensation
for services nor permit either REMIC to receive any income from assets other
than “qualified mortgages” as defined in Section 860G(a)(3) of the Code or
“permitted investments” as defined in Section 860G(a)(5) of the
Code.
(k) The
Securities Administrator shall apply for an employer identification number
with
the Internal Revenue Service via a Form SS-4 or other comparable method for
each
REMIC. In connection with the foregoing, the Securities Administrator shall
provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of Regular Interests in
each
REMIC as required by IRS Form 8811.
SECTION
11.02. Prohibited
Transactions and Activities.
None
of
the Depositor, the Servicer, the Securities Administrator, the Master Servicer
or the Trustee shall sell, dispose of or substitute for any of the Mortgage
Loans (except in connection with (i) the foreclosure of a Mortgage Loan,
including but not limited to, the acquisition or sale of a Mortgaged Property
acquired by deed in lieu of foreclosure, (ii) the bankruptcy of REMIC I,
(iii)
the termination of REMIC I pursuant to Article X of this Agreement, (iv)
a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II of this Agreement), nor acquire any
assets
for any Trust REMIC (other than REO Property acquired in respect of a defaulted
Mortgage Loan), nor sell or dispose of any investments in the Collection
Account
or the Distribution Account for gain, nor accept any contributions to any
Trust
REMIC after the Closing Date (other than a Qualified Substitute Mortgage
Loan
delivered in accordance with Section 2.03), unless it has received an Opinion
of
Counsel, addressed to the Trustee and the Securities Administrator (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee)
that
such sale, disposition, substitution, acquisition or contribution will not
(a)
affect adversely the status of any Trust REMIC as a REMIC or (b) cause any
Trust
REMIC to be subject to a tax on “prohibited transactions” or “contributions”
pursuant to the REMIC Provisions.
195
SECTION
11.03. Indemnification.
(a) The
Trustee agrees to be liable for any taxes and costs incurred by the Trust
Fund,
the Depositor, the Master Servicer, the Securities Administrator or the Servicer
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicer as a result of the Trustee’s failure to perform
its covenants set forth in this Article XI in accordance with the standard
of
care of the Trustee set forth in this Agreement.
(b) The
Servicer agrees to indemnify the Trust Fund, the Depositor, the Master Servicer,
the Securities Administrator and the Trustee for any taxes and costs including,
without limitation, any reasonable attorneys’ fees imposed on or incurred by the
Trust Fund, the Depositor, the Master Servicer, the Securities Administrator
or
the Trustee, as a result of the Servicer’s failure to perform its covenants set
forth in Article III in accordance with the standard of care of the Servicer
set
forth in this Agreement.
(c) The
Master Servicer agrees to indemnify the Trust Fund, the Depositor, the Servicer
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys’ fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicer or the Trustee, as a result of the Master Servicer’s
failure to perform its covenants set forth in Article IV in accordance with
the
standard of care of the Master Servicer set forth in this
Agreement.
(d) The
Securities Administrator agrees to be liable for any taxes and costs incurred
by
the Trust Fund, the Depositor, the Servicer or the Trustee including, without
limitation, any reasonable attorneys’ fees imposed on or incurred by the Trust
Fund, the Depositor, the Servicer or the Trustee as a result of the Securities
Administrator’s failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Securities Administrator set
forth
in this Agreement.
196
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
SECTION
12.01. Amendment.
This
Agreement may be amended from time to time by the Depositor, the Servicer,
the
Master Servicer, the Securities Administrator and the Trustee with the written
consent of the Class A Certificate Insurer but without the consent of any
of the Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct,
modify or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), (iii) to ensure compliance with Regulation
AB or (iv) to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement and that such action shall not, as evidenced by an Opinion
of
Counsel delivered to the Trustee, adversely affect in any material respect
the
interests of any Certificateholder without regard to the Policy; provided
that
any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter
from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates without regard to the Policy. No amendment shall be deemed to
adversely affect in any material respect the interests of any Certificateholder
who shall have consented thereto, and no Opinion of Counsel shall be required
to
address the effect of any such amendment on any such consenting
Certificateholder.
This
Agreement may also be amended from time to time by the Depositor, the Servicer,
the Master Servicer, the Securities Administrator and the Trustee with the
consent of the Class A Certificate Insurer (unless a Class A Certificate
Insurer
default under the Insurance Agreement has occurred, in which case no consent
shall be necessary) and the Holders of Certificates entitled to at least
66% of
the Voting Rights (subject to the last sentence of the definition of “Voting
Rights” set forth in this Agreement) 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 received on Mortgage Loans which
are
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 (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66% of the Voting Rights allocated to such Class, or
(iii)
modify the consents required by the immediately preceding clauses (i) and
(ii)
without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 12.01, Certificates
registered in the name of the Depositor or the Servicer or any Affiliate
thereof
shall be entitled to Voting Rights with respect to matters affecting such
Certificates. Without limiting the generality of the foregoing, any amendment
to
this Agreement required in connection with the compliance with or the
clarification of any reporting obligations described in Section 5.06 hereof
shall not require the consent of any Certificateholder and without the need
for
any Opinion of Counsel or Rating Agency confirmation.
197
Notwithstanding
any contrary provision of this Agreement, the Trustee shall not consent to
any
amendment to this Agreement unless it shall have first received an Opinion
of
Counsel to the effect that all conditions precedent to the execution of such
amendment have been satisfied, such amendment is permitted hereunder and
will
not result in the imposition of any tax on any Trust REMIC pursuant to the
REMIC
Provisions or cause any Trust REMIC to fail to qualify as a REMIC at any
time
that any Certificates are outstanding and that such amendment is authorized
or
permitted by this Agreement.
Promptly
after the execution of any such amendment the Trustee shall furnish a copy
of
such amendment to each Certificateholder.
It
shall
not be necessary for the consent of Certificateholders under this Section
12.01
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner
of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations
as
the Trustee may prescribe.
The
cost
of any Opinion of Counsel to be delivered pursuant to this Section 12.01
shall
be borne by the Person seeking the related amendment, but in no event shall
such
Opinion of Counsel be an expense of the Trustee.
The
Trustee may, but shall not be obligated to enter into any amendment pursuant
to
this Section that affects its rights, duties and immunities under this Agreement
or otherwise.
Notwithstanding
any of the other provisions of this Section 12.01, none of the parties to
this
Agreement shall enter into any amendment to this Agreement that could reasonably
be expected to have a material adverse effect on the interests of the Swap
Provider hereunder (excluding, for the avoidance of doubt, any amendment
to this
Agreement that is entered into solely for the purpose of appointing a successor
servicer, master servicer, securities administrator, trustee or other service
provider) without the prior written consent of the Swap Provider, which consent
shall not be unreasonably withheld.
SECTION
12.02. Recordation
of Agreement; Counterparts.
To
the
extent permitted by applicable law, 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 to be effected by the Depositor at the expense
of
the Certificateholders, but only upon direction of the Trustee accompanied
by an
Opinion of Counsel (which opinion shall not be at the expense of the Trustee)
to
the effect that such recordation materially and beneficially affects the
interests of the Certificateholders.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any
number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same
instrument.
198
SECTION
12.03. Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder’s legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund,
nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No
Certificateholder shall have any right to vote (except as expressly provided
for
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 any of the Certificates, be construed
so
as to constitute the Certificateholders from time to time as partners or
members
of an association; nor shall any Certificateholder be under any liability
to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No
Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law
upon
or under or with respect to this Agreement, unless such Holder previously
shall
have given to the Trustee a written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Certificates
entitled to at least 25% of the Voting Rights shall have made written request
upon 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 15 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 is understood and intended,
and 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 whatsoever by virtue of any provision
of this
Agreement to affect, disturb or prejudice the rights of the Holders of any
other
of such 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 equal, ratable and common benefit
of
all Certificateholders. For the protection and enforcement of the provisions
of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
SECTION
12.04. Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of
New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws without regard to conflicts of laws
principles thereof other than Section 5-1401 of the New York General Obligations
Law which shall govern.
199
SECTION
12.05. Notices.
All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when received if sent by facsimile, receipt
confirmed, if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service or delivered in any other manner
specified herein, to (a) in the case of the Depositor, ACE Securities Corp.,
AMACAR GROUP, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇) with
a copy
to Deutsche Bank Securities, Inc. ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention:
Legal Department (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address
or
telecopy number as may hereafter be furnished to the Servicer, the Master
Servicer, the Securities Administrator and the Trustee in writing by the
Depositor, (b) in the case of the Servicer, GMAC Mortgage, LLC, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: STACS 2007-1, or such other address
or
telecopy number as may hereafter be furnished to the Trustee, the Master
Servicer, the Securities Administrator and the Depositor in writing by GMAC
(c)
in the case of the Master Servicer and the Securities Administrator, ▇.▇.
▇▇▇
▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and for overnight delivery to ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: STACS 2007-1 (telecopy number:
(▇▇▇)
▇▇▇-▇▇▇▇), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Depositor and the Servicer in writing by the
Master Servicer or the Securities Administrator, (d) in the case of the Trustee,
at the Corporate Trust Office or such other address or telecopy number as
the
Trustee may hereafter be furnished to the Servicer, the Master Servicer,
the
Securities Administrator and the Depositor in writing by the Trustee,
(e) in the case of the Class A Certificate Insurer, XL Capital
Assurance Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Surveillance, (f) in the case of the Swap Provider, Bear ▇▇▇▇▇▇▇
Financial Products Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attn: DPC Manager and (g) in the case of the Sponsor,
SunTrust Asset Funding, LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: STACS 2007-1. Any notice required or permitted to be given to
a
Certificateholder shall be given by first class mail, postage prepaid, at
the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to
be
telecopied hereunder also shall be mailed to the appropriate party in the
manner
set forth above.
SECTION
12.06. Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
200
SECTION
12.07. Notice
to
Rating Agencies and the Class A Certificate Insurer.
The
Trustee shall use its best efforts promptly to provide notice to the Rating
Agencies, the Swap Provider and the Class A Certificate Insurer with
respect to each of the following of which a Responsible Officer has actual
knowledge:
1. Any
material change or amendment to this Agreement;
2. The
occurrence of any Servicer Event of Default or Master Servicer Event of Default
that has not been cured or waived;
3. The
resignation or termination of the Servicer, the Master Servicer or the
Trustee;
4. The
repurchase or substitution of Mortgage Loans pursuant to or as contemplated
by
Section 2.03;
5. The
final
payment to the Holders of any Class of Certificates; and
6. Any
change in the location of the Distribution Account.
In
addition, the Securities Administrator shall promptly make available to each
Rating Agency copies of each report to Certificateholders described in Section
5.02.
The
Servicer shall make available to each Rating Agency copies of the
following:
1. Each
annual statement of compliance described in Section 3.17 of this Agreement;
and
2. Each
assessment of compliance and attestation report described in
Section 3.18.
Any
such
notice pursuant to this Section 12.07 shall be in writing and shall be deemed
to
have been duly given if personally delivered at or mailed by first class
mail,
postage prepaid, or by express delivery service to Standard & Poor’s, a
division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇
▇▇▇▇▇; and to ▇▇▇▇▇’▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ or such other addresses as the Rating Agencies may designate in
writing to the parties hereto.
SECTION
12.08. Article
and Section References.
All
article and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
SECTION
12.09. Grant
of
Security Interest.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage
Loans
by the Depositor to the Trustee, on behalf of the Trust and for the benefit
of
the Class A Certificate Insurer and the Certificateholders, be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge
of
the Mortgage Loans to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the aforementioned intent of
the
parties, the Mortgage Loans are held to be property of the Depositor, then,
(a)
it is the express intent of the parties that such conveyance be deemed a
pledge
of the Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust
and for the benefit of the Class A Certificate Insurer and the
Certificateholders, to secure a debt or other obligation of the Depositor
and
(b)(1) this Agreement shall also be deemed to be a security agreement within
the
meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; (2) the conveyance provided for in
Section 2.01 shall be deemed to be a grant by the Depositor to the Trustee,
on
behalf of the Trust and for the benefit of the Class A Certificate Insurer
and the Certificateholders, of a security interest in all of the Depositor’s
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof
and
all proceeds of the conversion, voluntary or involuntary, of the foregoing
into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form
of
cash, instruments, securities or other property; (3) the obligations secured
by
such security agreement shall be deemed to be all of the Depositor’s obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage
Loans
and the Trust Fund; and (4) notifications to persons holding such property,
and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the
Trust
and for the benefit of the Class A Certificate Insurer and the
Certificateholders, a security interest in the Mortgage Loans and all other
property described in clause (2) of the preceding sentence, for the purpose
of
securing to the Trustee the performance by the Depositor of the obligations
described in clause (3) of the preceding sentence. Notwithstanding the
foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
to
be a true, absolute and unconditional sale of the Mortgage Loans and assets
constituting the Trust Fund by the Depositor to the Trustee, on behalf of
the
Trust and for the benefit of the Class A Certificate Insurer and the
Certificateholders.
201
SECTION
12.10. Survival
of Indemnification.
Any
and
all indemnities to be provided by any party to this Agreement shall survive
the
termination and resignation of any party hereto and the termination of this
Agreement.
SECTION
12.11. Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.17, 3.18,
3.20, 4.15, 4.16, 4.17, 4.18 and 5.06 of this Agreement is to facilitate
compliance by the Sponsor, the Master Servicer, the Securities Administrator
and
the Depositor with the provisions of Regulation AB promulgated by the Commission
under the Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be
amended from time to time and subject to clarification and interpretive advice
as may be issued by the staff of the Commission from time to time. Therefore,
each of the parties agrees that (a) the obligations of the parties hereunder
shall be interpreted in such a manner as to accomplish that purpose, (b)
the
parties’ obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed securities
markets, advice of counsel, or otherwise in respect of the requirements of
Regulation AB and (c) the parties shall comply with requests made by the
Master
Servicer, Securities Administrator, Sponsor or the Depositor for delivery
of
additional or different information as the Master Servicer, Securities
Administrator, Sponsor or the Depositor may determine in good faith is necessary
to comply with the provisions of Regulation AB.
202
SECTION
12.12. Indemnification.
Each
of
the Depositor, Master Servicer, Securities Administrator, Servicer and any
Servicing Function Participant engaged by such party, respectively, shall
indemnify and hold harmless (1) the Custodian, for any material misstatement
or
omissions in any Form 10-D or 10-K filing, or failure to file timely as required
under the 1934 Act other than any information, reports, or exhibits in such
filing that are provided by the Custodian pursuant to Section 4 of the Custodial
Agreement and (2) the Master Servicer, the Servicer, the Sponsor, the Securities
Administrator and the Depositor, respectively, and each of its directors,
officers, employees, agents, and affiliates from and against any and all
claims,
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon (a) any breach by such party of any of its obligations under hereunder,
including particularly its obligations to provide any assessment of compliance,
attestation report, annual statement of compliance or any information, data
or
materials required to be included in any 1934 Act report, (b) any material
misstatement or omission in any information, data or materials provided by
such
party (or, in the case of the Securities Administrator, the Servicer or Master
Servicer, any material misstatement or material omission in (i) any assessment
of compliance, attestation report or annual statement of compliance delivered
by
it, or by any Servicing Function Participant engaged by it, pursuant to this
Agreement, or (ii) any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure concerning the Master Servicer, the Servicer
or the Securities Administrator), or (c) the negligence, bad faith or willful
misconduct of such indemnifying party in connection with its performance
hereunder. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer, the Servicer, the Sponsor,
the Securities Administrator, the Custodian or the Depositor, as the case
may
be, then each such party agrees that it shall contribute to the amount paid
or
payable by the Master Servicer, the Servicer, the Sponsor, the Securities
Administrator, the Custodian or the Depositor, as applicable, as a result
of any
claims, losses, damages or liabilities incurred by such party in such proportion
as is appropriate to reflect the relative fault of the indemnified party
on the
one hand and the indemnifying party on the other. This indemnification shall
survive the termination of this Agreement or the termination of any party
to
this Agreement.
SECTION
12.13. Third
Party Beneficiaries.
Each
of
the Swap Provider and the Class A Certificate Insurer shall be express
third-party beneficiaries of this Agreement to the extent of its express
rights
to receive any payments under this Agreement or any other express rights
of the
Swap Provider or the Class A Certificate Insurer explicitly stated in this
Agreement, and shall have the right to enforce such rights under this Agreement
as if it were a party hereto.
203
The
Sponsor shall be an express third-party beneficiary of this Agreement to
the
extent of its express rights explicitly stated in this Agreement.
204
IN
WITNESS WHEREOF, the Depositor, the Servicer, the Master Servicer, the
Securities Administrator and the Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized, in each case
as
of the day and year first above written.
ACE
SECURITIES CORP.,
as
Depositor
By:
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
President
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Vice President
GMAC
MORTGAGE, LLC
as
Servicer
By:
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Senior Vice President
HSBC
BANK
USA, NATIONAL ASSOCIATION
not
in
its individual capacity but solely as Trustee
By:
/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Vice President
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
as
Master
Servicer and Securities Administrator
By:
/s/
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Assistant Vice President
Acknowledged
and Agreed:
SUNTRUST
ASSET FUNDING, LLC, the Sponsor
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
Officer
By:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
Officer
Acknowledged
and Agreed for purposes of Sections 7.08, 7.09 and 7.10:
▇▇▇▇▇▇▇
FIXED INCOME SERVICES INC.
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
President and General Counsel
Acknowledged
and Agreed for purposes of Section 12.12:
DEUTSCHE
BANK NATIONAL TRUST COMPANY
as
Custodian
By:
/s/
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Vice President
|
STATE
OF North Carolina
|
)
|
|
)
ss.:
|
|
COUNTY
OF Mecklenburg
|
)
|
On
the
11th day of May 2007, before me, a notary public in and for said State,
personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ known to me to be a Officer of ACE
Securities Corp., one of the entities 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 and affixed my official seal
the
day and year in this certificate first above written.
/s/
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary
Public
[Notarial
Seal] My
commission expires October 14, ▇▇▇▇
|
▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
)
|
|
)
ss.:
|
|
COUNTY
OF Mecklenburg
|
)
|
On
the
11th day of May 2007, before me, a notary public in and for said State,
personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇ known to me to be a Officer of ACE Securities
Corp., one of the entities 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 and affixed my official seal
the
day and year in this certificate first above written.
/s/
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary
Public
[Notarial
Seal] My
commission expires October 14,
2011
|
STATE
OF
|
)
|
|
)
ss.:
|
|
COUNTY
OF
|
)
|
On
the 15
day of May 2007, before me, a notary public in and for said State, personally
appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ known to me to be a Officer of GMAC Mortgage,
LLC,
one of the entities that executed the within instrument, and also known to
me to
be the person who executed it on behalf of said entity, and acknowledged
to me
that such entity executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
/s/
▇▇▇▇ ▇▇▇▇▇▇
Notary
Public
[Notarial
Seal] My
commission expires 6/12/2007
|
STATE
OF Maryland
|
)
|
|
)
ss.:
|
|
COUNTY
OF ▇▇▇▇▇▇
|
)
|
On
the
11th day of May 2007, before me, a notary public in and for said State,
personally appeared ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ known to me to be a Assistant Vice
President of ▇▇▇▇▇ Fargo Bank, National Association, one of the entities
that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association, and acknowledged
to
me that such national banking association executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notary
Public
[Notarial
Seal] My
commission expires January 7, 2009
|
STATE
OF
|
)
|
|
)
ss.:
|
|
COUNTY
OF
|
)
|
On
the 14
day of May 2007, before me, a notary public in and for said State, personally
appeared ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ known to me to be a Vice President of HSBC Bank
USA,
National Association, one of the entities that executed the within instrument,
and also known to me to be the person who executed it on behalf of said national
banking association, and acknowledged to me that such national banking
association executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the
day and year in this certificate first above written.
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary
Public
[Notarial
Seal] My
commission expires 10/16/2011
EXHIBIT
A-1
FORM
OF
CLASS A CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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”).
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
PRIOR
TO THE TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, ANY PERSON ACQUIRING
THIS
CERTIFICATE SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS IN SECTION 6.02(c)
OF THE AGREEMENT REFERRED TO HEREIN.
|
Series
2007-1, Class A
|
Aggregate
Certificate Principal Balance of the Class A Certificates as of the
Issue
Date: $_____________
|
|
|
Pass-Through
Rate: Variable
|
Denomination:
$____________
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: April 1, 2007
|
Master
Servicer: ▇▇▇▇▇ Fargo Bank, N.A.
|
|
|
First
Distribution Date: May 25, 2007
|
Trustee:
HSBC Bank USA, National Association
|
|
|
No.__
|
Issue
Date: May 15, 2007
|
|
|
CUSIP:________________
|
DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE
AS
THE DENOMINATION OF THIS CERTIFICATE.
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed rate, second
lien
mortgage loans (the “Mortgage Loans”) formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE SPONSOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
OR
INSTRUMENTALITY OF THE UNITED STATES.
This
certifies that ________________ is the registered owner of a Percentage Interest
(obtained by dividing the denomination of this Certificate by the aggregate
Certificate Principal Balance of the Class A Certificates as of the Issue Date)
in that certain beneficial ownership interest evidenced by all of the Class
A
Certificates in REMIC III created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the “Agreement”), among ACE Securities Corp., as
depositor (hereinafter called the “Depositor”, which term includes any successor
entity under the Agreement), ▇▇▇▇▇ Fargo Bank, National Association as master
servicer (the “Master Servicer”) and securities administrator (the “Securities
Administrator”), GMAC Mortgage, LLC as servicer (the “Servicer”) and HSBC Bank
USA, National Association as trustee (the “Trustee”), a summary of certain of
the pertinent provisions of which is set forth hereafter. 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.
A-1-2
Pursuant
to the terms of the Agreement, distributions 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 such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the Business
Day
immediately preceding such Distribution Date (the “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 the Holders of Class A Certificates
on such Distribution Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will be
made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A Certificates, or otherwise by check mailed
by
first class mail to the address of the Person entitled thereto, as such name
and
address shall appear on the Certificate Register. Notwithstanding the above,
the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the
Agreement.
The
Pass-Through Rate applicable to the calculation of interest payable with respect
to this Certificate on any Distribution Date shall be a rate per annum equal
to
the lesser of (i) One-Month LIBOR plus [_____]%, in the case of each
Distribution Date through and including the first Distribution Date on which
the
aggregate principal balance of the Mortgage Loans (and properties acquired
in
respect thereof) remaining in the Trust Fund as of the last day of the related
Due Period has been reduced to less than or equal to 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date, or One-Month
LIBOR plus [_____]%, in the case of any Distribution Date thereafter and (ii)
the applicable Net WAC Pass-Through Rate for such Distribution
Date.
This
Certificate is one of a duly authorized issue of Certificates designated as
Asset Backed Pass-Through Certificates of the Series specified on the face
hereof (herein called the “Certificates”) and representing a Percentage Interest
in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face
hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans and payments received pursuant to
the
Swap Agreement all as more specifically set forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement
of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.
A-1-3
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicer and
the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Servicer with the consent of the Class A Certificate Insurer (unless a
Class
A Certificate Insurer default under the Insurance Agreement has occurred, in
which case no consent shall be necessary) and the Holders of Certificates
entitled to at least 66% of the Voting Rights (subject to the last sentence
of
the definition of “Voting Rights” set forth 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 herefor 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, with the
consent of the Class A Certificate Insurer, but 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
upon
surrender of this Certificate for registration of transfer at the offices or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
Prior
to
the termination of the Supplemental Interest Trust, any transferee of this
Certificate shall be deemed to have made the representations in Section 6.02(e)
of the Agreement.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
A-1-4
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or the Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none of
the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of
any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Scheduled Principal Balance of
the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
A-1-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
May ___, 2007
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class A Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
|
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
|
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of a
like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
________________________________________________
|
.
|
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-2
FORM
OF
CLASS M-[1][2][3] CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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”).
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS
CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND] CLASS M-1
CERTIFICATES [AND] CLASS M-2 CERTIFICATES] TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
ANY
TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE REPRESENTATIONS
SET
FORTH IN SECTION 6.02(c) OF THE AGREEMENT REFERRED TO
HEREIN.
THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO AS DESCRIBED
IN
THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE
OF
THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL
BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
ADMINISTRATOR NAMED HEREIN.
|
Series
2007-1, Class M-[1][2][3]
|
Aggregate
Certificate Principal Balance of the Class M-[1][2][3] Certificates
as of
the Issue Date: $______________
|
|
|
Pass-Through
Rate: Variable
|
Denomination:
$______________
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: April 1, 2007
|
Master
Servicer: ▇▇▇▇▇ Fargo Bank, N.A.
|
|
|
First
Distribution Date: May 25, 2007
|
Trustee:
HSBC Bank USA, National Association
|
|
|
No.___
|
Issue
Date: May 15, 2007
|
|
|
CUSIP:_________________
|
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed rate, second
lien
mortgage loans (the “Mortgage Loans”) formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE SPONSOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
OR
INSTRUMENTALITY OF THE UNITED STATES.
This
certifies that _____________________ is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-[1][2][3] Certificates
as
of the Issue Date) in that certain beneficial ownership interest evidenced
by
all of the Class M-[1][2][3] Certificates in REMIC III created pursuant to
a
Pooling and Servicing Agreement, dated as specified above (the “Agreement”),
among ACE Securities Corp., as depositor (hereinafter called the “Depositor”,
which term includes any successor entity under the Agreement), ▇▇▇▇▇ Fargo
Bank,
National Association as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”), GMAC Mortgage, LLC as servicer
(the “Servicer”) and HSBC Bank USA, National Association as trustee (the
“Trustee”), a summary of certain of the pertinent provisions of which is set
forth hereafter. 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.
A-2-2
Pursuant
to the terms of the Agreement, distributions 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 such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the Business
Day
immediately preceding such Distribution Date (the “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 the Holders of Class M-[1][2][3]
Certificates on such Distribution Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will be
made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-[1][2][3] Certificates
the aggregate initial Certificate Principal Balance of which is in excess of
the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-[1][2][3] Certificates, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Securities Administrator of the pendency of such distribution
and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Securities Administrator for that purpose as provided in the
Agreement.
The
Pass-Through Rate applicable to the calculation of interest payable with respect
to this Certificate on any Distribution Date shall equal a rate per annum equal
to the lesser of (i) One-Month LIBOR plus [____]% , in the case of each
Distribution Date through and including the first Distribution Date on which
the
aggregate principal balance of the Mortgage Loans (and properties acquired
in
respect thereof) remaining in the Trust Fund as of the last day of the related
Due Period has been reduced to less than or equal to 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date, or One-Month
LIBOR plus [____]%, in the case of any Distribution Date thereafter and (ii)
the
applicable Net WAC Pass-Through Rate for such Distribution Date.
This
Certificate is one of a duly authorized issue of Certificates designated as
Asset Backed Pass-Through Certificates of the Series specified on the face
hereof (herein called the “Certificates”) and representing a Percentage Interest
in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face
hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans and payments received pursuant to
the
Swap Agreement, all as more specifically set forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement
of
advances made, or certain expenses incurred, with respect to the Mortgage
Loans.
A-2-3
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicer and
the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Servicer with the consent of the Class A Certificate Insurer (unless a
Class
A Certificate Insurer default under the Insurance Agreement has occurred, in
which case no consent shall be necessary) and the Holders of Certificates
entitled to at least 66% of the Voting Rights (subject to the last sentence
of
the definition of “Voting Rights” set forth 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 herefor 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, with the
consent of the Class A Certificate Insurer, but 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
upon
surrender of this Certificate for registration of transfer at the offices or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
Any
transferee of this Certificate shall be deemed to make the representations
set
forth in Section 6.02(c) of the Agreement.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or the Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none of
the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer nor any such agent shall be affected by notice to the
contrary.
A-2-4
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of
any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Scheduled Principal Balance of
the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assume any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator by manual signature, this Certificate shall not be entitled to
any
benefit under the Agreement or be valid for any purpose.
A-2-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
May ___, 2007
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class M-[1][2][3] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
|
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
|
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of a
like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________
|
.
|
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-2A
FORM
OF
CLASS M-4 CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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”).
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS
CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, CLASS M-1 CERTIFICATES,
CLASS M-2 CERTIFICATES, AND CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED
IN
THE AGREEMENT REFERRED TO HEREIN.
THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO AS DESCRIBED
IN
THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE
OF
THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL
BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
ADMINISTRATOR NAMED HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN
COMPLIANCE WITH THE ACT AND OTHER APPLICABLE LAWS OR (2) WITHIN THE UNITED
STATES TO “QUALIFIED INSTITUTIONAL BUYERS” WITHIN THE MEANING OF AND IN
COMPLIANCE WITH RULE 144A UNDER THE ACT (“RULE 144A”).
NO
TRANSFER OF THIS CERTIFICATE TO A PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE CODE, ANY
PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY SUCH PLAN OR ANY PERSON
USING “PLAN ASSETS” TO ACQUIRE THIS CERTIFICATE SHALL BE MADE EXCEPT IN
ACCORDANCE WITH SECTION 6.02(c) OF THE AGREEMENT REFERRED TO
HEREIN.
A-2A-2
|
Series
2007-1, Class M-4
|
Aggregate
Certificate Principal Balance of the Class M-4 Certificates as of
the
Issue Date: $______________
|
|
|
Pass-Through
Rate: Variable
|
Denomination:
$______________
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: April 1, 2007
|
Master
Servicer: ▇▇▇▇▇ Fargo Bank, N.A.
|
|
|
First
Distribution Date: May 25, 2007
|
Trustee:
HSBC Bank USA, National Association
|
|
|
No.___
|
Issue
Date: May 15, 2007
|
|
|
CUSIP:_________________
|
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed rate, second
lien
mortgage loans (the “Mortgage Loans”) formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE SERVICER, THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF
THE
UNITED STATES.
This
certifies that _____________________ is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-4 Certificates as of
the
Issue Date) in that certain beneficial ownership interest evidenced by of all
the Class M-4 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the “Agreement”), among ACE
Securities Corp. as depositor (hereinafter called the “Depositor”, which term
includes any successor entity under the Agreement), ▇▇▇▇▇ Fargo Bank, N.A.
as
master servicer (the “Master Servicer”) and securities administrator (the
“Securities Administrator”), GMAC Mortgage, LLC as servicer (the “Servicer”) and
HSBC Bank USA, National Association as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
A-2A-3
Pursuant
to the terms of the Agreement, distributions 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 such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the Business
Day
immediately preceding such Distribution Date (the “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 the Holders of Class M-4
Certificates on such Distribution Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will be
made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Securities Administrator in writing
at
least five (5) Business Days prior to the Record Date immediately prior to
such
Distribution Date and is the registered owner of Class M-4 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-4 Certificates, or otherwise by check mailed
by
first class mail to the address of the Person entitled thereto, as such name
and
address shall appear on the Certificate Register. Notwithstanding the above,
the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the
Agreement.
The
Pass-Through Rate applicable to the calculation of interest payable with respect
to this Certificate on any Distribution Date shall equal a rate per annum equal
to the lesser of (i) One-Month LIBOR plus [____]% , in the case of each
Distribution Date through and including the first Distribution Date on which
the
aggregate principal balance of the Mortgage Loans (and properties acquired
in
respect thereof) remaining in the Trust Fund as of the last day of the related
Due Period is reduced to less than or equal to 10% of the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date, or One-Month LIBOR plus
[____]%, in the case of any Distribution Date thereafter and (ii) the applicable
Net WAC Pass-Through Rate for such Distribution Date.
This
Certificate is one of a duly authorized issue of Certificates designated as
Asset Backed Pass-Through Certificate of the Series specified on the face hereof
(herein called the “Certificates”) and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans and payments received pursuant to
the
Swap Agreement, all as more specifically set forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement
of
advances made, or certain expenses incurred, with respect to the Mortgage
Loans.
A-2A-4
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicer and
the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Servicer with the consent of the Class A Certificate Insurer (unless a
Class
A Certificate Insurer default under the Insurance Agreement has occurred, in
which case no consent shall be necessary) and the Holders of Certificates
entitled to at least 66% of the Voting Rights (subject to the last sentence
of
the definition of “Voting Rights” set forth 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 herefor 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, with the
consent of the Class A Certificate Insurer, but 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
upon
surrender of this Certificate for registration of transfer at the offices or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Act, and an effective
registration or qualification under applicable state securities laws, or is
made
in a transaction that does not require such registration or qualification.
In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon
Rule
144A under the Act, written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder’s prospective transferee,
substantially in the forms attached to the Agreement as Exhibit B-1 and (ii)
in
all other cases, an Opinion of Counsel satisfactory to it that such transfer
may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee,
the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder
of
the Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator 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.
A-2A-5
No
transfer of this Certificate to a Plan subject to ERISA or Section 4975 of
the
Code, any Person acting, directly or indirectly, on behalf of any such Plan
or
any Person using “Plan Assets” to acquire this Certificate shall be made except
in accordance with Section 6.02(c) of the Agreement.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or the Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none of
the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of
any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Scheduled Principal Balance of
the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assume any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator by manual signature, this Certificate shall not be entitled to
any
benefit under the Agreement or be valid for any purpose.
A-2A-6
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class M-4 Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
|
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
|
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of a
like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________
|
.
|
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-3
FORM
OF
CLASS CE CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
THIS
CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE MEZZANINE
CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE
ACT AND OTHER APPLICABLE LAWS AND WITHIN THE UNITED STATES TO (A) “QUALIFIED
INSTITUTIONAL BUYERS” WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE 144A
UNDER THE ACT (“RULE 144A”) OR (B) TO INSTITUTIONAL INVESTORS THAT ARE
“ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
“REGULATION D” UNDER THE ACT.
NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE AGREEMENT AND
COMPLIES WITH SECTION 6.02(g) OF THE AGREEMENT REFERRED TO
HEREIN.
|
Series
2007-1, Class CE
|
Aggregate
Certificate Principal Balance of the Class CE Certificates as of
the Issue
Date: $_____________
|
|
|
Pass-Through
Rate: Variable
|
Denomination:
$_________________
|
|
|
Cut-off
Date and date of Pooling and Servicing Agreement: April 1,
2007
|
Master
Servicer: ▇▇▇▇▇ Fargo Bank, N.A.
|
|
|
First
Distribution Date: May 25, 2007
|
Trustee:
HSBC Bank USA, National Association
|
|
|
No.
__
|
Issue
Date: May 15, 2007
|
SUNTRUST
ACQUISITION CLOSED-END SECONDS TRUST, SERIES 2007-1
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed rate, second
lien
mortgage loans (the “Mortgage Loans”) formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE SPONSOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
OR
INSTRUMENTALITY OF THE UNITED STATES.
This
certifies that ________________ is the registered owner of a Percentage Interest
(obtained by dividing the denomination of this Certificate by the aggregate
Certificate Principal Balance of the Class CE Certificates as of the Issue
Date)
in that certain beneficial ownership interest evidenced by all of the Class
CE
Certificates in REMIC III created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the “Agreement”), among ACE Securities Corp., as
depositor (hereinafter called the “Depositor,” which term includes any successor
entity under the Agreement), ▇▇▇▇▇ Fargo Bank, National Association as master
servicer (the “Master Servicer”) and securities administrator (the “Securities
Administrator”), GMAC Mortgage, LLC as servicer (the “Servicer”) and HSBC Bank
USA, National Association as trustee (the “Trustee”), a summary of certain of
the pertinent provisions of which is set forth hereafter. 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.
Interest
on this Certificate will accrue during the month prior to the month in which
a
Distribution Date (as hereinafter defined) occurs on the Notional Amount (as
defined in the Agreement) hereof at a per annum rate equal to the applicable
Pass-Through Rate as set forth in the Agreement. Pursuant to the terms of the
Agreement, distributions 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 such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the “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 the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
A-3-2
All
distributions to the Holder of this Certificate under the Agreement will be
made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class CE Certificates, or otherwise by check mailed
by
first class mail to the address of the Person entitled thereto, as such name
and
address shall appear on the Certificate Register. Notwithstanding the above,
the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated as
Asset Backed Pass-Through Certificates of the Series specified on the face
hereof (herein called the “Certificates”) and representing a Percentage Interest
in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face
hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicer and
the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Servicer with the consent of the Class A Certificate Insurer (unless a
Class
A Certificate Insurer default under the Insurance Agreement has occurred, in
which case no consent shall be necessary) and the Holders of Certificates
entitled to at least 66% of the Voting Rights (subject to the last sentence
of
the definition of “Voting Rights” set forth 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 herefor 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, with the
consent of the Class A Certificate Insurer, but without the consent of the
Holders of any of the Certificates.
A-3-3
As
provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, (▇▇▇)
written certifications from the Holder of the Certificate desiring to effect
the
transfer, and from such Holder’s prospective transferee, substantially in the
forms attached to the Agreement as Exhibit B-1, (ii) if such transfer is
purportedly being made in reliance upon Rule 501(a) under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer and from such Holder’s prospective transferee, substantially in the
form attached to the Agreement as Exhibit B-2 and (iv) in all other cases,
an
Opinion of Counsel satisfactory to it that such transfer may be made without
such registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Trustee, the Master Servicer
or the Securities Administrator in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or
any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02(c) of the Agreement.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
the
same Class in authorized denominations 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 of Certificates,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
A-3-4
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or the Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none of
the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of
any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Scheduled Principal Balance of
the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assume any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
A-3-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
May ___, 2007
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class CE Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
|
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
|
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of a
like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________
|
.
|
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-4
FORM
OF
CLASS P CERTIFICATE
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT
CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
“CODE”).
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE
ACT AND OTHER APPLICABLE LAWS AND WITHIN THE UNITED STATES TO (A) “QUALIFIED
INSTITUTIONAL BUYERS” WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE 144A
UNDER THE ACT (“RULE 144A”) OR (B) TO INSTITUTIONAL INVESTORS THAT ARE
“ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
“REGULATION D” UNDER THE ACT.
NO
TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE AGREEMENT REFERRED
TO HEREIN.
|
Series
2007-1, Class P
|
Aggregate
Certificate Principal Balance of the Class P Certificates as of the
Issue
Date: $100.00
|
|
|
Cut-off
Date and date of Pooling and Servicing Agreement: April 1,
2007
|
Denomination:
$100.00
|
|
|
First
Distribution Date: May 25, 2007
|
Master
Servicer: ▇▇▇▇▇ Fargo Bank, N.A.
|
|
|
No.
__
|
Trustee:
HSBC Bank USA, National Association
|
|
|
Issue
Date: May 15, 2007
|
SUNTRUST
ACQUISITION CLOSED-END SECONDS TRUST, SERIES 2007-1
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed rate, second
lien
mortgage loans (the “Mortgage Loans”) formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE SPONSOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
OR
INSTRUMENTALITY OF THE UNITED STATES.
This
certifies that____________________ is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class P Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all
of
the Class P Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the “Agreement”), among ACE
Securities Corp., as depositor (hereinafter called the “Depositor”, which term
includes any successor entity under the Agreement), ▇▇▇▇▇ Fargo Bank, National
Association as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”), GMAC Mortgage, LLC as servicer
(the “Servicer”) and HSBC Bank USA, National Association as trustee (the
“Trustee”), a summary of certain of the pertinent provisions of which is set
forth hereafter. 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.
A-4-2
Pursuant
to the terms of the Agreement, distributions 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 such 25th
day (a
“Distribution Date”), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the last Business
Day of the calendar month immediately preceding the month in which the related
Distribution Date occurs (the “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 the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.
All
distributions to the Holder of this Certificate under the Agreement will be
made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class P Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, or otherwise by check mailed
by
first class mail to the address of the Person entitled thereto, as such name
and
address shall appear on the Certificate Register. Notwithstanding the above,
the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the
Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated as
Asset Backed Pass-Through Certificates of the Series specified on the face
hereof (herein called the “Certificates”) and representing a Percentage Interest
in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face
hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicer and
the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Servicer with the consent of the Class A Certificate Insurer (unless a
Class
A Certificate Insurer default under the Insurance Agreement has occurred, in
which case no consent shall be necessary) and the Holders of Certificates
entitled to at least 66% of the Voting Rights (subject to the last sentence
of
the definition of “Voting Rights” set forth 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 herefor 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, with the
consent of the Class A Certificate Insurer, but without the consent of the
Holders of any of the Certificates.
A-4-3
As
provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register
upon
surrender of this Certificate for registration of transfer at the offices or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder’s prospective transferee, substantially in the
forms attached to the Agreement as Exhibit B-1, (ii) if such transfer is
purportedly being made in reliance upon Rule 501(a) under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer and from such Holder’s prospective transferee, substantially in the
form attached to the Agreement as Exhibit B-2 and (iii) in all other cases,
an
Opinion of Counsel satisfactory to it that such transfer may be made without
such registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Trustee, the Master Servicer
or the Securities Administrator in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or
any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02(c) of the Agreement.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
the
same Class in authorized denominations 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 of Certificates,
but the Securities Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
A-4-4
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or the Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none of
the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of
any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Scheduled Principal Balance of
the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assume any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
A-4-5
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
May ___, 2007
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class P Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
|
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
|
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of a
like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________
|
.
|
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
A-5
FORM
OF
CLASS R CERTIFICATE
THIS
CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS THE SOLE “RESIDUAL INTEREST” IN EACH “REAL ESTATE
MORTGAGE INVESTMENT CONDUIT” (“REMIC”), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS
AMENDED (THE “CODE”).
ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO
HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD
OR
TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD
OR
TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT
AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.
NO
TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS
AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED IN SECTION 6.02(c) OF THE AGREEMENT REFERRED TO
HEREIN.
ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF
THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE SECURITIES
ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF
ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER
1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511
OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE
CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A “DISQUALIFIED ORGANIZATION”) OR (4) AN AGENT OF
A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE
THE
ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL
NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER
OF
THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO
THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 6.02(d) OF THE
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
CERTIFICATE.
|
Series
2007-1, Class R
|
Aggregate
Percentage Interest of the Class R Certificates as of the Issue Date:
100.00%
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date: April 1, 2007
|
Master
Servicer: ▇▇▇▇▇ Fargo Bank, N.A.
|
|
|
First
Distribution Date: May 25, 2007
|
Trustee:
HSBC Bank USA, National Association
|
|
|
No
__
|
Issue
Date: May 15, 2007
|
SUNTRUST
ACQUISITION CLOSED-END SECONDS TRUST, SERIES 2007-1
ASSET
BACKED PASS-THROUGH CERTIFICATE
evidencing
a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting
primarily of a pool of conventional one- to four-family, fixed rate, second
lien
mortgage loans (the “Mortgage Loans”) formed and sold by
ACE
SECURITIES CORP.
THIS
CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE SECURITIES
CORP., THE SPONSOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
OR
INSTRUMENTALITY OF THE UNITED STATES.
This
certifies that _______________ is the registered owner of a Percentage Interest
set forth above in that certain beneficial ownership interest evidenced by
all
of the Class R Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the “Agreement”), among ACE
Securities Corp., as depositor (hereinafter called the “Depositor”, which term
includes any successor entity under the Agreement), ▇▇▇▇▇ Fargo Bank, National
Association as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”), GMAC Mortgage, LLC as servicer
(the “Servicer”) and HSBC Bank USA, National Association as trustee (the
“Trustee”), a summary of certain of the pertinent provisions of which is set
forth hereafter. 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.
Pursuant
to the terms of the Agreement, distributions 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 (a “Distribution Date”), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the calendar month immediately
preceding the month in which the related Distribution Date occurs (the “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 the Holders
of
Class R Certificates on such Distribution Date pursuant to the
Agreement.
All
distributions to the Holder of this Certificate under the Agreement will be
made
or caused to be made by the Securities Administrator by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Securities Administrator in writing
at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency
of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.
This
Certificate is one of a duly authorized issue of Certificates designated as
Asset Backed Pass-Through Certificates of the Series specified on the face
hereof (herein called the “Certificates”) and representing the Percentage
Interest in the Class of Certificates specified on the face hereof.
The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from
the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The
Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor,
the
Master Servicer, the Trustee, the Securities Administrator, the Servicer and
the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Servicer with the consent of the Class A Certificate Insurer (unless a
Class
A Certificate Insurer default under the Insurance Agreement has occurred, in
which case no consent shall be necessary) and the Holders of Certificates
entitled to at least 66% of the Voting Rights (subject to the last sentence
of
the definition of “Voting Rights” set forth 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 herefor 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, with the
consent of the Class A Certificate Insurer, but 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
upon
surrender of this Certificate for registration of transfer at the offices or
agencies appointed by the Securities Administrator as provided in the Agreement,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or
transferees.
The
Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests 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 evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No
transfer of this Certificate shall be made unless the transfer is made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the “1933 Act”), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer
of
this Certificate is to be made without registration or qualification, the
Securities Administrator shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder’s prospective transferee, substantially in the
forms attached to the Agreement as Exhibit B-1, or (ii) if such transfer is
purportedly being made in reliance upon Rule 501(a) under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer and from such Holder’s prospective transferee, substantially in the
form attached to the Agreement as Exhibit B-2 and a transfer affidavit and
agreement substantially in the form of Exhibit B-3 to the Agreement and (iii)
in
all other cases, an Opinion of Counsel satisfactory to it that such transfer
may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee,
the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder
of
the Certificate desiring to effect the transfer and/or such Holder’s prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or
any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator 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.
No
transfer of this Certificate shall be made except in accordance with Section
6.02 of the Agreement.
Prior
to
registration of any transfer, sale or other disposition of this Certificate,
the
proposed transferee shall provide to the Securities Administrator (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as
representing the beneficial ownership of the residual interests in each of
REMIC
I, REMIC II and REMIC III, (B) it will include in its income a pro
rata
share of
the net income of the Trust Fund and that such income may be an “excess
inclusion,” as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects
to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall
be
deemed to be of no legal force or effect whatsoever and such Person shall not
be
deemed to be a Certificateholder for any purpose, including, but not limited
to,
the receipt of distributions in respect of this Certificate.
The
Holder of this Certificate, by its acceptance hereof, shall be deemed to have
consented to the provisions of Section 6.02 of the Agreement and to any
amendment of the Agreement deemed necessary by counsel of the Depositor to
ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause any portion of the
Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon any
REMIC.
No
service charge will be made for any such registration of transfer or exchange
of
Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection with any transfer or exchange of Certificates.
The
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer and any agent of the Depositor, the Master Servicer, the Trustee,
the
Securities Administrator or the Servicer may treat the Person in whose name
this
Certificate is registered as the owner hereof for all purposes, and none of
the
Depositor, the Master Servicer, the Trustee, the Securities Administrator,
the
Servicer nor any such agent shall be affected by notice to the
contrary.
The
obligations created by the Agreement and the Trust Fund created thereby shall
terminate upon payment to the Certificateholders of all amounts held by the
Securities Administrator and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of
any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Scheduled Principal Balance of
the
Mortgage Loans (and properties acquired in respect thereof) at the time of
purchase being less than or equal to 10% of the aggregate principal balance
of
the Mortgage Loans as of the Cut-off Date.
The
recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assume any responsibility
for their correctness.
Unless
the certificate of authentication hereon has been executed by the Securities
Administrator, by manual signature, this Certificate shall not be entitled
to
any benefit under the Agreement or be valid for any purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be
duly executed.
Dated:
May ___, 2007
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Officer
|
||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class R Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, N.A.
as
Securities Administrator
|
||
| |
|
|
| By: | ||
|
Authorized
Signatory
|
||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -
|
Custodian
(Cust)
(Minor)
under
Uniform Gifts
to
Minors Act
|
|
TEN
ENT -
|
as
tenants by the entireties
|
________________
(State)
|
|
|
JT
TEN -
|
as
joint tenants with right
if
survivorship and not as
tenants
in common
|
||
|
Additional
abbreviations may also be used though not in the above
list.
|
|||
ASSIGNMENT
|
FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
|
|
|
unto
|
|
(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a
Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer
of
such interest to assignee on the Certificate Register of the Trust
Fund.
I
(we)
further direct the Securities Administrator to issue a new Certificate of a
like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________
|
.
|
|
Dated:
|
|
|
Signature
by or on behalf of assignor
|
|
|
Signature
Guaranteed
|
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
|
|||||||
|
assignee
named above, or
|
|||||||
|
its
agent.
|
|||||||
EXHIBIT
B-1
FORM
OF
TRANSFEROR REPRESENTATION LETTER
[Date]
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust STACS 2007-1
|
Re:
|
SunTrust
Acquisition Closed-End Seconds Trust, Series 2007-1 Asset Backed
Pass-Through Certificates
[Class
M-4 Certificates][Class CE Certificates][Class P Certificates][Class
R
Certificates]
|
Ladies
and Gentlemen:
In
connection with the transfer by ______________________ (the “Transferor”) to
___________________ (the “Transferee”) of the captioned asset backed
pass-through certificates (the “Certificates”), the Transferor hereby certifies
as follows:
Neither
the Transferor nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred any Certificate, any interest in any
Certificate or any other similar security to any person in any manner, (b)
has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate
or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner,
(e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the “1933 Act”), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or
any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of April 1, 2007, among ACE
Securities Corp. as Depositor, ▇▇▇▇▇ Fargo Bank, N.A. as Master Servicer and
Securities Administrator, GMAC Mortgage, LLC as Servicer, and HSBC Bank USA,
National Association as Trustee (the “Pooling and Servicing Agreement”),
pursuant to which Pooling and Servicing Agreement the Certificates were
issued.
Capitalized
terms used but not defined herein shall have the meanings assigned thereto
in
the Pooling and Servicing Agreement.
|
Very
truly yours,
[Transferor]
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
B-1-2
FORM
OF
TRANSFEREE REPRESENTATION LETTER
[Date]
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust STACS 2007-1
|
Re:
|
SunTrust
Acquisition Closed-End Seconds Trust, Series 2007-1
Asset
Backed Pass-Through Certificates
[Class
M-4 Certificates][Class CE Certificates][Class P Certificates][Class
R
Certificates]
|
Ladies
and Gentlemen:
In
connection with the purchase from ______________________________ (the
“Transferor”) on the date hereof of the captioned asset backed pass-through
certificates (the “Certificates”), (the “Transferee”) hereby certifies as
follows:
1. The
Transferee is a “qualified institutional buyer” as that term is defined in Rule
144A (“Rule 144A”) under the Securities Act of 1933 (the “1933 Act”) and has
completed either of the forms of certification to that effect attached hereto
as
Annex 1 or Annex 2. The Transferee is aware that the sale to it is being made
in
reliance on Rule 144A. The Transferee is acquiring the Certificates for its
own
account or for the account of a qualified institutional buyer, and understands
that such Certificate 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 1933
Act.
2. The
Transferee has been furnished with all information regarding (a) the
Certificates and distributions thereon, (b) the nature, performance and
servicing of the Mortgage Loans, (c) the Pooling and Servicing Agreement
referred to below, and (d) any credit enhancement mechanism associated with
the
Certificates, that it has requested.
3. The
Transferee: (a) is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of
1986, as amended (the “Code”) (each, a “Plan”), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with “plan
assets” of any Plan within the meaning of the Department of Labor (“DOL”)
regulation at 29 C.F.R. § 2510.3-101 or (b) has provided the Securities
Administrator with an Opinion of Counsel on which the Trustee, the Depositor,
the Master Servicer, the Securities Administrator and the Servicer may rely,
acceptable to and in form and substance satisfactory to the Securities
Administrator to the effect that the purchase of Certificates is permissible
under applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trust Fund, the Trustee, the Depositor, the Master Servicer, the Securities
Administrator or the Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in the Pooling and Servicing Agreement.
B-1-3
In
addition, the Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee, the Securities Administrator, the
Master Servicer and the Servicer that the Transferee will not transfer such
Certificates to any Plan or person unless such Plan or person meets the
requirements set forth in paragraph 3 above.
All
capitalized terms used but not otherwise defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement, dated as
of
April 1, 2007, among ACE Securities Corp. as Depositor, ▇▇▇▇▇ Fargo Bank, N.A.
as Master Servicer and Securities Administrator, GMAC Mortgage, LLC as Servicer
and HSBC Bank USA, National Association as Trustee, pursuant to which the
Certificates were issued.
|
[TRANSFEREE]
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
▇-▇-▇
▇▇▇▇▇
▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇
QUALIFIED
INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For
Transferees Other Than Registered Investment Companies]
The
undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”) and ▇▇▇▇▇ Fargo Bank, N.A., as Securities Administrator, with
respect to the asset backed pass-through certificates (the “Certificates”)
described in the Transferee Certificate to which this certification relates
and
to which this certification is an Annex:
1. As
indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the entity purchasing the
Certificates (the “Transferee”).
2. In
connection with purchases by the Transferee, the Transferee is a “qualified
institutional buyer” as that term is defined in Rule 144A under the Securities
Act of 1933 (“Rule 144A”) because (i) the Transferee 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 Transferee’s most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in
the
category marked below.
|
·
|
Corporation,
etc.
The Transferee is a corporation (other than a bank, savings and loan
association or similar institution), Massachusetts or similar business
trust, partnership, or any organization described in Section 501(c)(3)
of
the Internal Revenue Code of 1986.
|
|
|
·
|
Bank.
The Transferee (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 Transferee (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.
|
| 1 |
Transferee
must own and/or invest on a discretionary basis at least $100,000,000
in
securities unless Transferee is a dealer, and, in that case, Transferee
must own and/or invest on a discretionary basis at least $10,000,000
in
securities.
|
B-1-5
|
·
|
Broker-dealer.
The Transferee is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
|
|
|
·
|
Insurance
Company.
The Transferee 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 Transferee 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 Transferee is an employee benefit plan within the meaning of
Title I
of the Employee Retirement Income Security Act of 1974, as
amended.
|
|
|
·
|
Investment
Advisor
The Transferee is an investment advisor registered under the Investment
Advisers Act of 1940.
|
3. The
term
“securities”
as
used
herein does
not include
(i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee,
if
the Transferee 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 Transferee, the Transferee used the cost of
such
securities to the Transferee and did not include any of the securities referred
to in the preceding paragraph. Further, in determining such aggregate amount,
the Transferee may have included securities owned by subsidiaries of the
Transferee, but only if such subsidiaries are consolidated with the Transferee
in its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Transferee’s direction. However, such securities were not included if
the Transferee is a majority-owned, consolidated subsidiary of another
enterprise and the Transferee is not itself a reporting company under the
Securities Exchange Act of 1934.
5. The
Transferee acknowledges that it is familiar with Rule 144A and understands
that
the Transferor 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 Transferee may be in reliance on Rule 144A.
|
___
|
___
|
Will
the Transferee be purchasing the Certificates
|
|
Yes
|
No
|
only
for the Transferee’s own account?
|
B-1-6
6. If
the
answer to the foregoing question is “no”, the Transferee agrees that, in
connection with any purchase of securities sold to the Transferee for the
account of a third party (including any separate account) in reliance on Rule
144A, the Transferee will only purchase for the account of a third party that
at
the time is a “qualified institutional buyer” within the meaning of Rule 144A.
In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of “qualified institutional buyer” set forth in Rule
144A.
7. The
Transferee 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 Transferee’s purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Transferee is a bank or savings and loan as provided above,
the
Transferee agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
Dated:
|
Print
Name of Transferee
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
▇-▇-▇
▇▇▇▇▇
▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇
QUALIFIED
INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For
Transferees That Are Registered Investment Companies]
The
undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”) and ▇▇▇▇▇ Fargo Bank, N.A., as Securities Administrator, with
respect to the asset backed pass-through certificates (the “Certificates”)
described in the Transferee Certificate to which this certification relates
and
to which this certification is an Annex:
1. As
indicated below, the undersigned is the President, Chief Financial Officer
or
Senior Vice President of the entity purchasing the Certificates (the
“Transferee”) or, if the Transferee is a “qualified institutional buyer” as that
term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”)
because the Transferee is part of a Family of Investment Companies (as defined
below), is such an officer of the investment adviser (the
“Adviser”).
2. In
connection with purchases by the Transferee, the Transferee is a “qualified
institutional buyer” as defined in Rule 144A because (i) the Transferee is an
investment company registered under the Investment Company Act of 1940, and
(ii)
as marked below, the Transferee alone, or the Transferee’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 Transferee’s most recent
fiscal year. For purposes of determining the amount of securities owned by
the
Transferee or the Transferee’s Family of Investment Companies, the cost of such
securities was used.
|
·
|
The
Transferee owned $________________________ in securities (other than
the
excluded securities referred to below) as of the end of the Transferee’s
most recent fiscal year (such amount being calculated in accordance
with
Rule 144A).
|
|
·
|
The
Transferee 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 Transferee’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
Transferee or are part of the Transferee’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.
B-1-8
5. The
Transferee is familiar with Rule 144A and understands that the parties to which
this certification is being made are relying and will continue to rely on the
statements made herein because one or more sales to the Transferee will be
in
reliance on Rule 144A. In addition, the Transferee will only purchase for the
Transferee’s own account.
6. The
undersigned will notify the parties to which this certification is made of
any
changes in the information and conclusions herein. Until such notice, the
Transferee’s purchase of the Certificates will constitute a reaffirmation of
this certification by the undersigned as of the date of such
purchase.
Dated:
|
Print
Name of Transferee or Advisor
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
| IF AN ADVISER: | ||
|
|
||
|
Print
Name of Transferee
|
||
B-1-9
FORM
OF
TRANSFEREE REPRESENTATION LETTER
The
undersigned hereby certifies on behalf of the purchaser named below (the
“Purchaser”) as follows:
1. I
am an
executive officer of the Purchaser.
2. The
Purchaser is a “qualified institutional buyer”, as defined in Rule 144A, (“Rule
144A”) under the Securities Act of 1933, as amended.
3. As
of the
date specified below (which is not earlier than the last day of the Purchaser’s
most recent fiscal year), the amount of “securities”, computed for purposes of
Rule 144A, owned and invested on a discretionary basis by the Purchaser was
in
excess of $100,000,000.
|
Name
of Purchaser
|
|||||
|
By:
(Signature)
|
|||||
|
Name
of Signatory
|
|||||
|
Title
|
|||||
|
Date
of this certificate
|
|||||
|
Date
of information provided in paragraph 3
|
|||||
B-1-10
EXHIBIT
B-2
FORM
OF
TRANSFEROR REPRESENTATION LETTER
____________,
20__
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust STACS 2007-1
|
Re:
|
SunTrust
Acquisition Closed-End Seconds Trust, Series 2007-1
Asset
Backed Pass-Through Certificates,
[Class
CE Certificates][Class P Certificates][Class R
Certificates]
|
Ladies
and Gentlemen:
In
connection with the transfer by ________________ (the “Transferor”) to
__________________________ (the “Transferee”) of the captioned asset backed
pass-through certificates (the “Certificates”), the Transferor hereby certifies
as follows:
Neither
the Seller nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred any Certificate, any interest in any
Certificate or any other similar security to any person in any manner, (b)
has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate
or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner,
or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the “Act’), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act, in
any
manner set forth in the foregoing sentence with respect to any Certificate.
The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement,
dated as of April 1, 2007, among ACE Securities Corp. as Depositor, ▇▇▇▇▇ Fargo
Bank, N.A. as Master Servicer and Securities Administrator, GMAC Mortgage,
LLC
as Servicer and HSBC Bank USA, National Association as Trustee, pursuant to
which the Certificates were issued.
|
Very
truly yours,
(Transferor)
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
FORM
OF
TRANSFEREE LETTER
_______________,
20__
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust STACS 2007-1
|
Re:
|
SunTrust
Acquisition Closed-End Seconds Trust, Series 2007-1
Asset
Backed Pass-Through Certificates,
[Class
CE Certificates][Class P Certificates][Class R
Certificates]
|
Ladies
and Gentlemen:
In
connection with the transfer by ______________________ (the “Transferor”) to
__________________________ (the “Transferee”) of the captioned asset backed
pass-through certificates (the “Certificates”), the Transferee hereby certifies
as follows:
1. The
Transferee understands that (a) the Certificates have not been and will not
be
registered or qualified under the Securities Act of 1933, as amended (the “Act”)
or any state securities law, (b) the ACE Securities Corp. (the “Depositor”) is
not required to so register or qualify the Certificates, (c) the Certificates
may be resold only if registered and qualified pursuant to the provisions of
the
Act or any state securities law, or if an exemption from such registration
and
qualification is available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e) the Certificates
will bear a legend to the foregoing effect.
2. The
Transferee is acquiring the Certificates for its own account for investment
only
and not with a view to or for sale in connection with any distribution thereof
in any manner that would violate the Act or any applicable state securities
laws.
3. The
Transferee is (a) a substantial, sophisticated institutional investor having
such knowledge and experience in financial and business matters, and, in
particular, in such matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of investment in
the
Certificates, (b) able to bear the economic risks of such an investment and
(c)
an “accredited investor” within the meaning of Rule 501(a) promulgated pursuant
to the Act.
4. The
Transferee has been furnished with, and has had an opportunity to review (a)
a
copy of the Pooling and Servicing Agreement, dated as of April 1, 2007, among
the Depositor, ▇▇▇▇▇ Fargo Bank, N.A. as Master Servicer and Securities
Administrator, GMAC Mortgage, LLC as Servicer and HSBC Bank USA, National
Association as Trustee and (b) such other information concerning the
Certificates, the Mortgage Loans and the Depositor as has been requested by
the
Transferee from the Depositor or the Transferor and is relevant to the
Transferee’s decision to purchase the Certificates. The Transferee has had any
questions arising from such review answered by the Depositor or the Transferor
to the satisfaction of the Transferee.
B-2-2
5. The
Transferee has not and will not nor has it authorized or will it authorize
any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security
to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest
in
any Certificate or any other similar security with any person in any manner,
(d)
make any general solicitation by means of general advertising or in any other
manner or (e) take any other action, that (as to any of (a) through (e) above)
would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the 1933
Act or any state securities law, or that would require registration or
qualification pursuant thereto. The Transferee will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions
of
the Pooling and Servicing Agreement.
6. The
Transferee: (a) is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of
1986, as amended (the “Code”) (each, a “Plan”), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with “plan
assets” of any Plan within the meaning of the Department of Labor (“DOL”)
regulation at 29 C.F.R. § 2510.3-101 or (b) has provided the Securities
Administrator with an Opinion of Counsel on which the Depositor, the Master
Servicer, the Securities Administrator, the Trustee and the Servicer may rely,
acceptable to and in form and substance satisfactory to the Securities
Administrator to the effect that the purchase of Certificates is permissible
under applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trust Fund, the Trustee, the Master Servicer, the Securities Administrator,
the
Depositor or the Servicer to any obligation or liability (including obligations
or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Pooling and Servicing Agreement.
In
addition, the Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee, the Securities Administrator, the
Master Servicer and the Servicer that the Transferee will not transfer such
Certificates to any Plan or person unless such Plan or person meets the
requirements set forth in paragraph 6 above.
|
Very
truly yours,
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
▇-▇-▇
▇▇▇▇▇▇▇
▇-▇
TRANSFER
AFFIDAVIT AND AGREEMENT
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
___________________________
being duly sworn, deposes, represents and warrants as follows:
|
1.
|
I
am a _____________________ of _______________________________ (the
“Owner”) a corporation duly organized and existing under the laws of
_________________________, the record owner of SunTrust Acquisition
Closed-End Seconds Trust, Series 2007-1 Asset Backed Pass-Through
Certificates, Class R Certificates (the “Class R Certificates”), on behalf
of whom I make this affidavit and agreement. Capitalized terms used
but
not defined herein have the respective meanings assigned thereto
in the
Pooling and Servicing Agreement, dated as of April 1, 2007, among
ACE
Securities Corp. as Depositor, ▇▇▇▇▇ Fargo Bank, N.A. as Master Servicer
and Securities Administrator, GMAC Mortgage, LLC as Servicer and
HSBC Bank
USA, National Association as Trustee, pursuant to which the Class
R
Certificates were issued.
|
|
2.
|
The
Owner (i) is and will be a “Permitted Transferee” as of
____________________. ____ and (ii) is acquiring the Class R Certificates
for its own account or for the account of another Owner from which
it has
received an affidavit in substantially the same form as this affidavit.
A
“Permitted Transferee” is any person other than a “disqualified
organization” or a possession of the United States. For this purpose, a
“disqualified organization” means the United States, any state or
political subdivision thereof, any agency or instrumentality of any
of the
foregoing (other than an instrumentality all of the activities of
which
are subject to tax and, except for the Federal Home Loan Mortgage
Corporation, a majority of whose board of directors is not selected
by any
such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government
or organization, any real electric or telephone cooperative, or any
organization (other than certain farmers’ cooperatives) that is generally
exempt from federal income tax unless such organization is subject
to the
tax on unrelated business taxable
income.
|
|
3.
|
The
Owner is aware (i) of the tax that would be imposed on transfers
of the
Class R Certificates to disqualified organizations under the Internal
Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after April 31, 1988; (ii) that such tax would be on
the
transferor or, if such transfer is through an agent (which person
includes
a broker, nominee or middleman) for a non-Permitted Transferee, on
the
agent; (iii) that the person otherwise liable for the tax shall be
relieved of liability for the tax if the transferee furnishes to
such
person an affidavit that the transferee is a Permitted Transferee
and, at
the time of transfer, such person does not have actual knowledge
that the
affidavit is false; and (iv) that each of the Class R Certificates
may be
a “noneconomic residual interest” within the meaning of proposed Treasury
regulations promulgated under 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 is to impede the assessment or collection
of
tax.
|
|
4.
|
The
Owner is aware of the tax imposed on a “pass-through entity” holding the
Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder
of an
interest in such entity. (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.)
|
|
5.
|
The
Owner is aware that the Securities Administrator will not register
the
transfer of any Class R Certificate unless the transferee, or the
transferee’s agent, delivers to the Securities Administrator, among other
things, an affidavit in substantially the same form as this affidavit.
The
Owner expressly agrees that it will not consummate any such transfer
if it
knows or believes that any of the representations contained in such
affidavit and agreement are false.
|
|
6.
|
The
Owner consents to any additional restrictions or arrangements that
shall
be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be
owned,
directly or indirectly, by an Owner that is a Permitted
Transferee.
|
|
7.
|
The
Owner’s taxpayer identification number is
________________.
|
|
8.
|
The
Owner has reviewed the restrictions set forth on the face of the
Class R
Certificates and the provisions of Section 6.02(d) of the Pooling
and
Servicing Agreement under which the Class R Certificates were issued
(in
particular, clauses (iii)(A) and (iii)(B) of Section 6.02(d) which
authorize the Securities Administrator to deliver payments to a person
other than the Owner and negotiate a mandatory sale by the Securities
Administrator in the event that the Owner holds such Certificate
in
violation of Section 6.02(d)); and that the Owner expressly agrees
to be
bound by and to comply with such restrictions and
provisions.
|
|
9.
|
The
Owner is not acquiring and will not transfer the Class R Certificates
in
order to impede the assessment or collection of any
tax.
|
|
10.
|
The
Owner anticipates that it will, so long as it holds the Class R
Certificates, have sufficient assets to pay any taxes owed by the
holder
of such Class R Certificates, and hereby represents to and for the
benefit
of the person from whom it acquired the Class R Certificates that
the
Owner intends to pay taxes associated with holding such Class R
Certificates as they become due, fully understanding that it may
incur tax
liabilities in excess of any cash flows generated by the Class R
Certificates.
|
B-3-2
|
11.
|
The
Owner has no present knowledge that it may become insolvent or subject
to
a bankruptcy proceeding for so long as it holds the Class R
Certificates.
|
|
12.
|
The
Owner has no present knowledge or expectation that it will be unable
to
pay any United States taxes owed by it so long as any of the Certificates
remain outstanding.
|
|
13.
|
The
Owner is not acquiring the Class R Certificates with the intent to
transfer the Class R Certificates to any person or entity that will
not
have sufficient assets to pay any taxes owed by the holder of such
Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain
outstanding.
|
|
14.
|
The
Owner will, in connection with any transfer that it makes of the
Class R
Certificates, obtain from its transferee the representations required
by
Section 6.02(d) of the Pooling and Servicing Agreement under which
the
Class R Certificate were issued and will not consummate any such
transfer
if it knows, or knows facts that should lead it to believe, that
any such
representations are false.
|
|
15.
|
The
Owner will, in connection with any transfer that it makes of the
Class R
Certificates, deliver to the Securities Administrator an affidavit,
which
represents and warrants that it is not transferring the Class R
Certificates to impede the assessment or collection of any tax and
that it
has no actual knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of the
Class R
Certificates; (ii) may become insolvent or subject to a bankruptcy
proceeding for so long as the Class R Certificates remains outstanding;
and (iii) is not a “Permitted
Transferee”.
|
|
16.
|
The
Owner is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in, or under the
laws of,
the United States or any political subdivision thereof, or an estate
or
trust whose income from sources without the United States may be
included
in gross income for United States federal income tax purposes regardless
of its connection with the conduct of a trade or business within
the
United States.
|
|
17.
|
The
Owner of the Class R Certificate, hereby agrees that in the event
that the
Trust Fund created by the Pooling and Servicing Agreement is terminated
pursuant to Section 10.01 thereof, the undersigned shall assign and
transfer to the Holders of the Class CE Certificates any amounts
in excess
of par received in connection with such termination. Accordingly,
in the
event of such termination, the Securities Administrator is hereby
authorized to withhold any such amounts in excess of par and to pay
such
amounts directly to the Holders of the Class CE Certificates. This
agreement shall bind and be enforceable against any successor, transferee
or assigned of the undersigned in the Class R Certificate. In connection
with any transfer of the Class R Certificate, the Owner shall obtain
an
agreement substantially similar to this clause from any subsequent
owner.
|
B-3-3
IN
WITNESS WHEREOF, the Owner has caused this instrument to be executed on its
behalf, pursuant to the authority of its Board of Directors, by its [Vice]
President, attested by its [Assistant] Secretary, this ____ day of
_________________, ____.
|
[OWNER]
|
||
| |
|
|
| By: | ||
|
Name:
Title:
[Vice] President
|
||
ATTEST:
|
By:
|
|
|
Name: |
|
|
Title:
[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 a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the
Owner.
Subscribed
and sworn before me this ______________ day of __________, ____.
|
Notary
Public
|
|
|
County
of
|
|
|
State
of
|
|
|
My
Commission expires:
|
B-3-4
FORM
OF
TRANSFEROR AFFIDAVIT
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
_________________________,
being duly sworn, deposes, represents and warrants as follows:
1. I
am
a ____________________
of _________________________ (the “Owner”), a corporation duly organized and
existing under the laws of _____________, on behalf of whom I make this
affidavit.
2. The
Owner
is not transferring the Class R Certificates (the “Residual Certificates”) to
impede the assessment or collection of any tax.
3. The
Owner
has no actual knowledge that the Person that is the proposed transferee (the
“Purchaser”) of the Residual Certificates: (i) has insufficient assets to pay
any taxes owed by such proposed transferee as holder of the Residual
Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding
for so long as the Residual Certificates remain outstanding and (iii) is not
a
Permitted Transferee.
4. The
Owner
understands that the Purchaser has delivered to the Securities Administrator
a
transfer affidavit and agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit B-3. The Owner does not know or believe that
any
representation contained therein is false.
5. At
the
time of transfer, the Owner has conducted a reasonable investigation of the
financial condition of the Purchaser as contemplated by Treasury Regulations
Section 1.860E-1(c)(4)(i) and, as a result of that investigation, the Owner
has
determined that the Purchaser has historically paid its debts as they became
due
and has found no significant evidence to indicate that the Purchaser will not
continue to pay its debts as they become due in the future. The Owner
understands that the transfer of a Residual Certificate may not be respected
for
United States income tax purposes (and the Owner may continue to be liable
for
United States income taxes associated therewith) unless the Owner has conducted
such an investigation.
6. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them
in
the Pooling and Servicing Agreement.
B-3-5
IN
WITNESS WHEREOF, the Owner has caused this instrument to be executed on its
behalf, pursuant to the authority of its Board of Directors, by its [Vice]
President, attested by its [Assistant] Secretary, this ____ day of
________________, ____.
|
[OWNER]
|
||
| |
|
|
| By: | ||
|
Name:
Title:
[Vice] President
|
||
ATTEST:
|
By:
|
|
|
Name:
|
|
|
Title:
[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 a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the
Owner.
Subscribed
and sworn before me this ______ day of _____________, ____.
|
Notary Public |
|
|
County
of
|
|
|
State
of
|
|
|
My
Commission expires:
|
EXHIBIT
C
BACK-UP
CERTIFICATION
Re: __________
(the “Trust”)
Asset
Backed Pass-Through Certificates, Series 2007-1
I,
[identify the certifying individual], certify to ACE Securities Corp. (the
“Depositor”), HSBC Bank USA, National Association (the “Trustee”) and ▇▇▇▇▇
Fargo Bank, National Association (the “Master Servicer”), and their respective
officers, directors and affiliates, and 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 Master Servicer 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
Master Servicer;
|
|
(4)
|
I
am responsible for reviewing the activities performed by the Servicer
as
servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except
as
disclosed in the Compliance Statement, the Servicing Assessment or
the
Attestation Report, the Servicer has fulfilled their 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
Master
Servicer. Any material instances of noncompliance described in such
reports have been disclosed to the Master Servicer. Any material
instance
of noncompliance with the Servicing Criteria has been disclosed in
such
reports.
|
Capitalized
terms used and not otherwise defined herein have the meanings assigned thereto
in the Pooling and Servicing Agreement (the “Agreement”), dated as of April 1,
2007, among ACE Securities Corp., GMAC Mortgage, LLC, ▇▇▇▇▇ Fargo Bank, National
Association and HSBC Bank USA, National Association.
|
Date:
|
|
|
[Signature] |
|
|
[Title] |
C-2
EXHIBIT
D
FORM
OF
POWER OF ATTORNEY
RECORDING
REQUESTED BY
AND
WHEN
RECORDED MAIL TO
|
GMAC
Mortgage, LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Attn:
_________________________
|
LIMITED
POWER OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that HSBC Bank USA, National Association, having its
principal place of business at ____________________, as Trustee (the “Trustee”)
pursuant to that Pooling and Servicing Agreement among ACE Securities Corp.
(the
“Depositor”), ▇▇▇▇▇ Fargo Bank, National Association, as Master Servicer and
Securities Administrator, GMAC Mortgage, LLC as Servicer (“Servicer”) and the
Trustee, dated as of April 1, 2007 (the “Pooling and Servicing Agreement”),
hereby constitutes and appoints the Servicer by and through the Servicer’s
officers, the Trustee’s true and lawful Attorney-in-Fact, in the Trustee’s name,
place and stead and for the Trustee’s benefit, in connection with all mortgage
loans serviced by the Servicer pursuant to the Pooling and Servicing Agreement
for the purpose of performing all acts and executing all documents in the name
of the Trustee as may be customarily and reasonably necessary and appropriate
to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the “Mortgages” and the “Deeds of Trust”,
respectively) and promissory notes secured thereby (the “Mortgage Notes”) for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing
Agreement.
This
appointment shall apply to the following enumerated transactions
only:
|
1.
|
The
modification or re-recording of a Mortgage or Deed of Trust, where
said
modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent
of the
parties thereto or to correct title errors discovered after such
title
insurance was issued and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed
of
Trust as insured.
|
|
2.
|
The
subordination of the lien of a Mortgage or Deed of Trust to an easement
in
favor of a public utility company of a government agency or unit
with
powers of eminent domain; this section shall include, without limitation,
the execution of partial satisfactions/releases, partial reconveyances
or
the execution or requests to trustees to accomplish
same.
|
|
3.
|
The
conveyance of the properties to the mortgage insurer, or the closing
of
the title to the property to be acquired as real estate owned, or
conveyance of title to real estate
owned.
|
| 4. |
The
completion of loan assumption
agreements.
|
|
5.
|
The
full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
|
|
6.
|
The
assignment of any Mortgage or Deed of Trust and the related Mortgage
Note,
in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
|
|
7.
|
The
full assignment of a Mortgage or Deed of Trust upon payment and discharge
of all sums secured thereby in conjunction with the refinancing thereof,
including, without limitation, the assignment of the related Mortgage
Note.
|
|
8.
|
With
respect to a Mortgage or Deed of Trust, the foreclosure, the taking
of a
deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following
acts:
|
|
a.
|
the
substitution of trustee(s) serving under a Deed of Trust, in accordance
with state law and the Deed of
Trust;
|
|
b.
|
the
preparation and issuance of statements of breach or
non-performance;
|
|
c.
|
the
preparation and filing of notices of default and/or notices of
sale;
|
|
d.
|
the
cancellation/rescission of notices of default and/or notices of
sale;
|
|
e.
|
the
taking of a deed in lieu of foreclosure;
and
|
|
f.
|
the
preparation and execution of such other documents and performance
of such
other actions as may be necessary under the terms of the Mortgage,
Deed of
Trust or state law to expeditiously complete said transactions in
paragraphs 8.a. through 8.e.,
above.
|
The
undersigned gives said Attorney-in-Fact full power and authority to execute
such
instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby
does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
D-2
Third
parties without actual notice may rely upon the exercise of the power granted
under this Limited Power of attorney; and may be satisfied that this Limited
Power of Attorney shall continue in full force and effect and has not been
revoked unless an instrument of revocation has been made in writing by the
undersigned.
IN
WITNESS WHEREOF, HSBC Bank USA, National Association as Trustee pursuant to
that
Pooling and Servicing Agreement among the Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, GMAC Mortgage, LLC and the Trustee, dated as of April 1, 2007
(SunTrust Acquisition Closed-End Seconds Trust, Series ▇▇▇▇-▇, ▇▇▇▇▇ Backed
Pass-Through Certificates), has caused its corporate seal to be hereto affixed
and these presents to be signed and acknowledged in its name and behalf by
____________ its duly elected and authorized Vice President this _________
day
of _________, 200__.
|
as Trustee for SunTrust Acquisition Closed-End Seconds Trust, Series ▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates |
||
| |
|
|
| By: | ||
|
|
||
|
STATE
OF _____________
|
|
COUNTY
OF ___________
|
On
_______________, 200__, before me, the undersigned, a Notary Public in and
for
said state, personally appeared ____________, Vice President of
____________________ as Trustee for SunTrust Acquisition Closed-End Seconds
Trust, Series 2007-1 Asset Backed Certificates, personally known to me to be
the
person whose name is subscribed to the within instrument and acknowledged to
me
that he/she executed that same in his/her authorized capacity, and that by
his/her signature on the instrument the entity upon behalf of which the person
acted and executed the instrument.
WITNESS
my hand and official seal.
(SEAL)
|
Notary
Public
|
|
|
My
Commission Expires
_________________
|
D-3
EXHIBIT
E
SERVICING
CRITERIA
Schedule
1122 (Pooling and Servicing Agreement)
Assessments
of Compliance and Attestation Reports Servicing Criteria2
|
Reg.
AB Item 1122(d) Servicing Criteria
|
|
Depositor
|
|
Seller
|
|
Servicer
|
|
Trustee
|
|
Custodian
|
|
Paying
Agent
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
(1) General
Servicing Considerations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) monitoring
performance or other triggers and events of default
|
X
|
X
|
X
|
|||||||||||||
|
(ii) monitoring
performance of vendors of activities outsourced
|
X
|
X
|
||||||||||||||
|
|
||||||||||||||||
|
(iii) maintenance
of back-up servicer for pool assets
|
||||||||||||||||
|
(iv) fidelity
bond and E&O policies in effect
|
X
|
X
|
||||||||||||||
|
(2) Cash
Collection and Administration
|
||||||||||||||||
|
(i) timing
of deposits to custodial account
|
X
|
X
|
X
|
X
|
||||||||||||
|
(ii) wire
transfers to investors by authorized personnel
|
X
|
X
|
X
|
|||||||||||||
|
(iii) advances
or guarantees made, reviewed and approved as required
|
X
|
X
|
||||||||||||||
|
(iv) accounts
maintained as required
|
X
|
X
|
X
|
X
|
||||||||||||
|
(v) accounts
at federally insured depository institutions
|
X
|
X
|
X
|
X
|
| * |
The
descriptions of the Item 1122(d) servicing criteria use key words
and
phrases and are not verbatim recitations of the servicing criteria.
Refer
to Regulation AB, Item 1122 for a full description of servicing
criteria.
|
E-2
|
Reg.
AB Item 1122(d) Servicing Criteria
|
|
Depositor
|
|
Seller
|
|
Servicer
|
|
Trustee
|
|
Custodian
|
|
Paying
Agent
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
(vi) unissued
checks safeguarded
|
X
|
X
|
X
|
|
(vii) monthly
reconciliations of accounts
|
X
|
X
|
X
|
X
|
||||||||||||
|
(3) Investor
Remittances and Reporting
|
||||||||||||||||
|
(i) investor
reports
|
X
|
X
|
X
|
|||||||||||||
|
(ii) remittances
|
X
|
X
|
X
|
|||||||||||||
|
(iii) proper
posting of distributions
|
X
|
X
|
X
|
|||||||||||||
|
(iv) reconciliation
of remittances and payment statements
|
X
|
X
|
X
|
X
|
||||||||||||
|
(4) Pool
Asset Administration
|
||||||||||||||||
|
(i) maintenance
of pool collateral
|
X
|
X
|
||||||||||||||
|
(ii) safeguarding
of pool assets/documents
|
X
|
X
|
||||||||||||||
|
(iii) additions,
removals and substitutions of pool assets
|
X
|
X
|
||||||||||||||
|
(iv) posting
and allocation of pool asset payments to pool assets
|
X
|
|||||||||||||||
|
(v) reconciliation
of servicer records
|
X
|
|||||||||||||||
|
(vi) modifications
or other changes to terms of pool assets
|
X
|
|||||||||||||||
|
(vii) loss
mitigation and recovery actions
|
X
|
|||||||||||||||
|
(viii)
records regarding collection efforts
|
X
|
E-3
|
Reg.
AB Item 1122(d) Servicing Criteria
|
|
Depositor
|
|
Seller
|
|
Servicer
|
|
Trustee
|
|
Custodian
|
|
Paying
Agent
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
(ix) adjustments
to variable interest rates on pool assets
|
X
|
|||||||||||||||
|
(x) matters
relating to funds held in trust for obligors
|
X
|
|||||||||||||||
|
(xi) payments
made on behalf of obligors (such as for taxes or
insurance)
|
X
|
|||||||||||||||
|
(xii) late
payment penalties with respect to payments made on behalf of obligors
|
X
|
|||||||||||||||
|
(xiii)
records with respect to payments made on behalf of
obligors
|
X
|
|||||||||||||||
|
(xiv) recognition
and recording of delinquencies, charge-offs and uncollectible
accounts
|
X
|
X
|
||||||||||||||
|
(xv) maintenance
of external credit enhancement or other support
|
X
|
E-4
EXHIBIT
F-1
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
|
EXECUTION
COPY
|
GMAC
MORTGAGE, LLC
Purchaser
and
SUNTRUST
ASSET FUNDING, LLC
Company
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
Dated
as of May 15, 2007
Fixed-Rate
Residential Mortgage Loans
TABLE
OF CONTENTS
|
ARTICLE
I DEFINITIONS
|
1
|
|
|
|
||
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS
|
10
|
|
|
|
||
|
Section
2.01.
|
Agreement
to Purchase; Purchase Price.
|
10
|
|
Section
2.02.
|
Books
and Records.
|
11
|
|
Section
2.03.
|
Delivery
of Documents.
|
11
|
|
Section
2.04.
|
Closing
Conditions.
|
12
|
|
Section
2.05.
|
Acceptance
of Mortgage Loans.
|
13
|
|
|
||
|
ARTICLE
III
REPRESENTATIONS AND WARRANTIES; REMEDIES AND BREACH
|
13
|
|
|
|
||
|
Section
3.01.
|
Company
Representations and Warranties.
|
13
|
|
Section
3.02.
|
Representations
and Warranties Regarding Individual Mortgage Loans.
|
13
|
|
Section
3.03.
|
Repurchase
and Other Remedies.
|
13
|
|
Section
3.04.
|
Repurchase
of Mortgage Loans With Early Payment Defaults.
|
15
|
|
|
||
|
ARTICLE
IV SECURITIZATIONS
|
16
|
|
|
|
||
|
Section
4.01.
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon
Reconstitution.
|
16
|
|
Section
4.02.
|
Regulation
AB Compliance.
|
16
|
|
|
||
|
ARTICLE
V GUARANTY
|
17
|
|
|
|
||
|
ARTICLE
VI MISCELLANEOUS PROVISIONS
|
17
|
|
|
|
||
|
Section
6.01.
|
Amendment.
|
17
|
|
Section
6.02.
|
Governing
Law; Waiver of Jury Trial.
|
17
|
|
Section
6.03.
|
Notices.
|
18
|
|
Section
6.04.
|
Severability
of Provisions.
|
19
|
|
Section
6.05.
|
Relationship
of Parties.
|
19
|
|
Section
6.06.
|
Successors
and Assigns.
|
19
|
|
Section
6.07.
|
Recordation
of Assignments of Mortgage.
|
19
|
|
Section
6.08.
|
Solicitation
of Mortgagor.
|
19
|
|
Section
6.09.
|
Further
Agreements.
|
20
|
|
Section
6.10.
|
Confidential
Information.
|
20
|
|
Section
6.11.
|
Equal
Opportunity.
|
21
|
|
Section
6.12.
|
Counterparts.
|
21
|
|
Section
6.13.
|
Exhibits.
|
21
|
|
Section
6.14.
|
General
Interpretive Principles.
|
21
|
|
Section
6.15.
|
Reproduction
of Documents.
|
22
|
|
Section
6.16.
|
Judicial
Interpretation.
|
22
|
|
Section
6.17.
|
Headings.
|
22
|
|
Section
6.18.
|
Intention
of the Company.
|
22
|
i
EXHIBITS
|
[Reserved]
|
|
|
Exhibit
B
|
Contents
of Each Mortgage File
|
|
Exhibit
C
|
Form
of Memorandum of Sale
|
|
Exhibit
D
|
Form
of Assignment, Assumption and Recognition Agreement
|
|
Exhibit
E
|
Underwriting
Guidelines
|
|
Exhibit
F
|
Representations
and Warranties of the Company
|
|
Exhibit
G
|
Representations
and Warranties Regarding Individual Mortgage Loans
|
|
Mortgage
Loan Schedule
|
|
|
Exhibit
I
|
Schedule
of Underlying Sellers and Underlying
Agreements
|
ii
This
is a
Mortgage Loan Purchase and Sale Agreement for fixed-rate residential second
lien
mortgage loans, dated and effective as of May 14, 2007 (the “Agreement”) and is
by and between GMAC Mortgage, LLC, a Delaware limited liability company, as
purchaser (the “Purchaser”), and SunTrust Asset Funding, LLC, a Delaware limited
liability company, as seller (the “Company”), as acknowledged and agreed to by
SunTrust Bank, a Georgia banking corporation (“SunTrust Bank”).
WITNESSETH
WHEREAS,
the Purchaser has agreed to purchase from the Company and the Company has agreed
to sell to the Purchaser certain second lien fixed-rate residential mortgage
loans set forth on the Mortgage Loan Schedule attached hereto as Exhibit
H
(the
“Mortgage Loans”), together with the servicing rights associated with the
Mortgage Loans;
WHEREAS,
the Company acquired the Mortgage Loans from the Underlying Sellers listed
on
Exhibit
I
pursuant
the related purchase agreements (the “Underlying Agreements”) listed on the same
Exhibit
I;
WHEREAS,
the Purchaser is currently servicing the Mortgage Loans on behalf of the Company
pursuant to a Servicing Agreement between the Purchaser and the
Company;
WHEREAS,
the Mortgage Loans will be sold by the Company and purchased by the Purchaser
servicing released (the “Mortgage Loan Package”) on the Closing Date as provided
herein;
WHEREAS,
each of the Mortgage Loans will be secured by a mortgage, deed of trust or
other
security instrument creating a second lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule which will be annexed
to the Memorandum of Sale (as defined herein) on the Closing Date;
and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of the
Mortgage Loans and the conveyance of the Mortgage Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for $10.00 and 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 context otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, procedures (including collection procedures)
that
comply with applicable federal, state and local law customarily employed and
exercised in servicing and administering mortgage loans and that are in
accordance with the accepted 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.
1
Agreement:
This
Mortgage Loan Purchase and Sale Agreement and all amendments hereof and
supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraisal:
A
written appraisal of a Mortgaged Property made by a Qualified Appraiser, which
appraisal must be written, in form and substance, to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac
standards, and satisfy the requirements of Title XI of the Financial
Institution, Reform, Recovery and Enforcement Act of 1989 and the regulations
promulgated thereunder, in effect as of the date of the appraisal.
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 and
provided, further to the extent reflected on the Mortgage Loan Schedule, that
in
the case of conforming Mortgage Loans approved through the ▇▇▇▇▇▇
Mae Desktop Underwriter (“DU”) which
have qualified for a property inspection waiver, such value shall be based
solely on the value established through DU.
Assignment,
Assumption and Recognition Agreement:
An
agreement substantially in the form of Exhibit
D
attached
hereto.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form (except for the name of the assignee and recording information),
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the sale of the Mortgage to the
Purchaser.
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 State of New York are authorized or obligated
by
law or executive order to be closed.
Class
A Certificate Insurer:
XL
Capital Assurance, Inc.
Closing
Date:
May 14,
2007.
Combined
Loan-to-Value Ratio or CLTV:
With
respect to any Mortgage Loan, the ratio of (i) the original loan amount of
the
Mortgage Loan at its origination (unless otherwise indicated) plus
the
amount of any related First Lien as of the date of origination of the Mortgage
Loan to (ii) the Appraised Value of the Mortgaged Property.
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.
2
Company:
SunTrust Asset Funding, LLC, or its successor in interest or assigns, or any
successor to the Company under this Agreement appointed as herein
provided.
Company
Specific Representations:
As
defined in Section 3.01.
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.
Consumer
Information:
Any
personally identifiable information in any form (written electronic or
otherwise) relating to a Mortgagor, including, but not limited to: a Mortgagor’s
name, address, telephone number, Mortgage Loan number, Mortgage Loan payment
history, delinquency status, insurance carrier or payment information, tax
amount or payment information; the fact that the Mortgagor has a relationship
with the Company or the originator of the related Mortgage Loan; and any other
non-public personally identifiable information.
Custodian:
The
custodian appointed by the Purchaser, or its successor in interest or assigns,
or any successor to the Custodian.
Cut-off
Date:
April
1, 2007.
DBRS:
DBRS,
Inc. and
any
successor or successors thereto.
Deleted
Mortgage Loan:
As
defined in Section 3.03.
DU:
▇▇▇▇▇▇
▇▇▇ Desktop Underwriter.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
▇▇▇▇▇▇
▇▇▇:
The
entity formally known as Federal National Mortgage Association (FNMA), or any
successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
First
Lien:
With
respect to each Mortgaged Property, the lien of the mortgage, deed of trust
or
other instrument securing a mortgage note which creates a first lien on such
Mortgaged Property.
▇▇▇▇▇▇▇
Mac:
The
entity formally known as the Federal Home Loan Mortgage Corporation (FHLMC),
or
any successor thereto.
GAAP:
Generally accepted accounting principles, consistently applied.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
3
Investor:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
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 (in whole or in part) of
the
Mortgage Loan.
Memorandum
of Sale:
With
respect to each Mortgage Loan and the Mortgage Loan Package, the memorandum
of
sale, substantially in the form of Exhibit
C
attached
hereto, confirming the sale by Company and the purchase by Purchaser of the
Mortgage Loans on the Closing Date.
MERS:
MERSCORP, Inc., its successors and assigns.
MERS
Designated Mortgage Loan:
A
Mortgage Loan for which (a) such action has been taken as is necessary to cause
MERS to be, the mortgagee of record, as nominee for the Company, in accordance
with MERS Procedures Manual and (b) the Company has designated or will designate
the Custodian or the Purchaser’s designee as the Investor on the MERS
System.
MERS
Procedures Manual:
The
MERS Procedures Manual, as it may be amended, supplemented or otherwise modified
from time to time.
MERS
Report:
The
report from the MERS System listing MERS Designated Mortgage Loans and other
information.
MERS
System:
MERS
mortgage electronic registry system, as more particularly described in the
MERS
Procedures Manual.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. and any successor or successors thereto.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a second lien on an unsubordinated estate in fee simple in real property
which secures the Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit B
annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note 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
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.
4
Mortgage
Loan Documents:
The
documents referred to in Exhibit
B
as items
1 through 9.
Mortgage
Loan Package:
The
pool of Mortgage Loans purchased on the Closing Date, as described in the
Mortgage Loan Schedule.
Mortgage
Loan Representations:
As
defined in Section 3.02.
Mortgage
Loan Schedule:
With
respect to the Mortgage Loan Package, the schedule of Mortgage Loans annexed
hereto as Exhibit
H
(and
delivered in electronic format to the Purchaser), such schedule setting forth
the data fields set forth in the Pooling and Servicing Agreement .
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
underlying real property securing repayment of a Mortgage Note, consisting
of a
fee simple parcel of real estate or a leasehold estate, the term of which is
equal to or longer than the term of the related Mortgage Note.
Mortgagor:
The
obligor on a Mortgage Note.
Negative
Amortization:
A
gradual increase in the mortgage debt that occurs when the monthly fixed
installment is not sufficient for full application to both principal and
interest. The interest shortage is added to the unpaid principal balance to
create “negative” amortization.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President, a Senior Vice President, a First Vice President, 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 Company
or an
Originator, and delivered to the Purchaser as required by this
Agreement.
Originator:
With
respect to any Mortgage Loan, the entity that (i) took the Mortgagor’s loan
application (ii) processed the Mortgagor’s loan application, or (iii) closed
and/or funded the Mortgagor’s Mortgage Loan.
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.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified Insurer,
as
required by this Agreement with respect to certain Mortgage Loans.
5
Pooling
and Servicing Agreement:
That
certain pooling and servicing agreement, dated as of April 1, 2007, by and
among
ACE Securities Corp., as depositor, Purchaser, as servicer, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer and securities administrator, and
HSBC
Bank USA, National Association, as trustee.
Prepayment
Premium:
Payments received on a Mortgage Loan as a result of a Principal Prepayment
thereon,
not
otherwise due thereon in respect of principal or interest, which are intended
to
be a disincentive to prepayment.
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 Premium thereon
and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the
month
of prepayment.
Purchase
Price:
The
price paid on a Closing Date by the Purchaser to the Company for the Mortgage
Loan Package, as set forth in the Memorandum of Sale.
Purchaser:
GMAC
Mortgage, LLC, or its successor in interest or any successor or assignee 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 Institution Reform,
Recovery, and Enforcement Act and the regulations promulgated thereunder, all
as
in effect on the date the Mortgage Loan was originated.
Qualified
Correspondent:
Any
Person from which the Seller purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Seller and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Seller, in accordance with underwriting guidelines designated by the Seller
(“Designated
Guidelines”)
or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the Seller within 180 days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same
type
as the Mortgage Loans for the Seller’s own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the time
such Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review
of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Seller.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business.
6
Qualified
Substitute Mortgage Loan:
A
mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms
of
this Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance, after application of all scheduled payments
of
principal and interest due during or prior to the month of substitution, not
in
excess of the Stated Principal Balance of the Deleted Mortgage Loan as of the
due date in the calendar month during which the substitution occurs, (ii) have
a
Mortgage Interest Rate not less than (and not more than one percentage point
in
excess of) the Mortgage Interest Rate of the Deleted Mortgage Loan, (iii) have
a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (iv) have the same due date as the
due
date on the Deleted Mortgage Loan, (v) have a Combined Loan-to-Value Ratio
as of
the date of substitution equal to or lower than the Combined Loan-to-Value
Ratio
of the Deleted Mortgage Loan as of such date, (vi) be secured by the same lien
priority on the related Mortgaged Property as the Deleted Mortgage Loan, (vii)
have a credit grade at least equal to the credit grading assigned on the Deleted
Mortgage Loan, (viii) be a “qualified mortgage” as defined in the REMIC
Provisions and (ix) conform to each Mortgage Loan Representation and each
Company Specific Representation. In the event that one or more mortgage loans
are substituted for one or more Deleted Mortgage Loans, the amounts described
in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall be determined
on the basis of weighted average Mortgage Rates, the terms described in clause
(iii) hereof shall be determined on the basis of weighted average remaining
term
to maturity, the Combined Loan-to-Value Ratios described in clause (v) hereof
shall be satisfied as to each such mortgage loan, the credit grades described
in
clause (vii) hereof shall be satisfied as to each such mortgage loan and, except
to the extent otherwise provided in this sentence, the representations and
warranties described in clause (ix) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may
be..
Rating
Agency:
Each of
DBRS, Moody’s and S&P, or any successor thereto.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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 (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.
Regulation
AB Compliance Addendum:
Certain
addendum attached to the Underlying Agreements.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
7
Remittance
Date:
The
18th
day (or
if such 18th
day is
not a Business Day, the first Business Day immediately preceding such
18th
day) of
any month.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure.
Repurchase
Price:
With
respect to any Mortgage Loan, (i) the unpaid principal balance of the Mortgage
Loan as of the date of repurchase, plus
(ii)
interest on such unpaid principal balance at the Mortgage Loan Interest Rate
from the date on which interest has last been paid and distributed to the
Purchaser to the last day of the month in which such repurchase occurs, less
amounts received or advanced in respect of such repurchased Mortgage Loan,
plus
(iii)
the amount of any unreimbursed Servicing Advances, plus
(iv)
actual and out-of-pocket costs and expenses incurred in the enforcement of
the
Company’s repurchase obligation hereunder plus,
(v)
with respect to any Mortgage Loan subject to a Securitization, any costs and
damages incurred by the related trust in connection with any violation by such
Mortgage Loan of any predatory or abusive lending law.
RESPA:
The
Real Estate Settlement Procedures Act, as amended.
Second
Lien:
With
respect to each Mortgaged Property, the lien of the mortgage, deed of trust
or
other instrument securing a Mortgage Note which creates a second lien on the
Mortgaged Property.
Second
Lien Mortgage Loan:
A
Mortgage Loan secured by the lien on the Mortgaged Property, subject to one
prior lien on such Mortgaged Property securing financing obtained by the related
Mortgagor.
S&P:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. and any successor or successors thereto.
Securities
Act of 1933 or the 1933 Act:
The
Securities Act of 1933, as amended.
Securitization:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly by the Purchaser to an issuing entity
in
connection with an issuance of publicly offered or privately placed, rated
or
unrated mortgage-backed securities or (2) an issuance of publicly offered or
privately placed, rated or unrated securities, the payments on which are
determined primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicemembers
Civil Relief Act:
The
Servicemembers Civil Relief Act of 2003.
Servicer:
GMAC
Mortgage, LLC, or its successor in interest or assigns, or any successor
servicer.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable attorneys’ 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 and (c) the management and liquidation of any REO
Property.
8
Servicing
File:
With
respect to each Mortgage Loan, the file held by the Servicer consisting of
originals or copies, which may be imaged copies, of all documents in the
Mortgage File which are not delivered to the Custodian and copies of the
Mortgage Loan Documents listed herein, the originals of which (or imaged copies
of the original mortgagee policy of title insurance and/or the irrevocable
binder or commitment to issue the same) are delivered to the Custodian pursuant
to Section 2.03.
Servicing
Rights:
With
respect to the Mortgage Loans identified on the Mortgage Loan Schedule, all
of
the Servicer’s right, title and interest in and to the servicing of such
Mortgage Loans, including all rights to receive or retain amounts in respect
of
servicing fees, late fees and similar payments (other than Prepayment Premiums),
reimbursement for any servicing and delinquency advances made by the Servicer,
or other expenses and costs, and investment earnings or other benefits from
positive account balances, together with all collection account balances, escrow
account balances, contract rights, incidental income and benefits to the extent
related to the servicing rights, and exclusive rights to possession and use
of
Servicing Files and records directly or indirectly related thereto, including,
without limitation, borrower lists, insurance policies and tax service
agreements.
Stated
Principal Balance:
As to
each Mortgage Loan and any date of determination, (i) the principal balance
of
such 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 Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
SunTrust
Bank:
SunTrust Bank or its successor in interest or assigns.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Seller that, with respect to providing information or
representing related to Item 1110(a) of Regulation AB, originated 10% or more
of
the Mortgage Loans, or, with respect to all other usage of “Third-Party
Originator”, originated 20% or more of the Mortgage Loans.
Underlying
Agreements:
Shall
have the meaning assigned to such term in the recitals to this Agreement.
Underlying
Seller:
The
loans sellers listed on Exhibit
I
from
whom the Company acquired the related Mortgage Loans pursuant to the Underlying
Agreements.
Underwriting
Guidelines:
The
underwriting guidelines of the Underlying Sellers with respect to Mortgage
Loans, attached as Exhibit
E
hereto.
9
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS
Section
2.01. Agreement
to Purchase; Purchase Price.
(a) Agreement
to Purchase.
In
exchange for the payment of the Purchase Price to the Company on the Closing
Date, the Company agrees to sell and the Purchaser agrees to purchase (without
recourse but subject to the terms of this Agreement) on a servicing released
basis, all the right, title and interest of the Company in and to the Mortgage
Loans, including the Servicing Rights relating to the Mortgage Loans, having
an
aggregate Stated Principal Balance as of the Cut-off Date in an amount as set
forth in the Memorandum of Sale. The Company shall deliver the Mortgage Loan
Schedule for the Mortgage Loan Package to the Purchaser at least three (3)
Business Days prior to the Closing Date.
(b) Purchase
Price.
The
Purchase Price for the Mortgage Loan Package shall be equal to the amount set
forth in the Memorandum of Sale. The payment of the Purchase Price shall be
made
to the account designated by the Company by wire transfer in immediately
available funds or to the location designated by the Purchaser with respect
to
the non-cash portion of the Purchase Price by 3:00 p.m. New York City time
on
the Closing Date.
With
respect to each Mortgage Loan, the Purchaser shall be entitled to (1) the
principal portion of all monthly payments due after the Cut-off Date, (2) all
other recoveries of principal collected on or after the Cut-off Date
(provided,
however,
that
the principal portion of all Monthly Payments due on or before the Cut-off
Date
and collected by the Servicer or any successor servicer after the Cut-off Date
shall belong to the Seller), and (3) all payments of interest at the Mortgage
Interest Rate on the Mortgage Loans (minus that portion of any such payment
which is allocable to the period prior to the Cut-off Date). The Stated
Principal Balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected, together with any unscheduled Principal Prepayments
collected prior to the Cut-off Date; provided,
however,
that
Monthly Payments for a Due Date due after the Cut-off Date shall not be applied
to the principal balance as of the Cut-off Date. Such monthly payments shall
be
the property of the Purchaser.
(c) Possession
of Mortgage Files and Servicing Files.
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. Complete Servicing Files for the Mortgage Loans shall
be delivered to the Purchaser or its designee on or before the Closing
Date.
10
Section
2.02. Books
and Records.
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 for the benefit of the Purchaser
as
owner of the Mortgage Loans. The sale of each Mortgage Loan shall be reflected
on the Company’s balance sheet and other financial statements, tax returns and
business records as a sale of assets by the Company.
Section
2.03. Delivery
of Documents.
The
Company will, with respect to each Mortgage Loan, deliver and release the
Mortgage Loan Documents to the Custodian at least five (5) Business Days prior
to the Closing Date. In addition, in connection with the assignment of any
MERS
Designated Mortgage Loan, the Company agrees that on or prior to each Closing
Date it will cause the MERS System to indicate that the related Mortgage Loans
have been assigned by the Company to the Purchaser in accordance with this
Agreement by entering in the MERS System the information required by the MERS
System to identify the Purchaser or its designee as owner of such Mortgage
Loans. The Company shall be responsible for recording the Assignments of
Mortgage, if necessary, in accordance with this Agreement.
The
Company shall be responsible for recording the Assignments of Mortgage, if
necessary, in accordance with this Agreement. All recording fees and other
costs
associated with the recording of Assignments of Mortgage and other relevant
documents to the Purchaser or its designee will be borne by the Company. For
Mortgage Loans not registered under the MERS System, if the Purchaser requests
that the Assignments of Mortgage be recorded, the Company shall cause such
Assignments of Mortgage which were delivered in blank to be completed and to
be
recorded. The Company shall be required to deliver such Assignments of Mortgage
for recording within thirty (30) days of the date on which the Company is
notified that recording will be required pursuant to this Section 2.03. The
Company shall furnish the Custodian with a copy of each Assignment of Mortgage
submitted for recording. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Company shall promptly
have
a substitute Assignment of Mortgage prepared or have such defect cured, as
the
case may be, and thereafter cause such Assignment of Mortgage to be duly
recorded.
Except
as
otherwise provided in this Section 2.03, upon discovery or receipt of notice
of
any materially defective Mortgage Loan Document or missing Mortgage Loan
Document (“Defective Document”), the Company shall have ninety (90) days to cure
such defect or deliver such missing document to the Custodian. If the Company
does not cure such defect or deliver such missing document within such time
period and such defect materially and adversely affects the value of the related
Mortgage Loan or the Purchaser’s interest in the related Mortgage Loan, the
Company shall either repurchase or substitute for such Mortgage Loan in
accordance with Section 3.03.
If
the
original or a copy certified by the appropriate recording office of any document
submitted for recordation to the appropriate public recording office is not
so
delivered to the Custodian
two-hundred
and seventy (270) days following the Closing Date, and if the Company does
not
cure such failure within sixty (60) days after receipt of written notification
of such failure from the Purchaser, the related Mortgage Loan shall, upon the
request of the Purchaser, be repurchased by the Company at a price and in the
manner specified in Section 3.03.
11
In
the
event the public recording office is delayed in returning any original document,
the Company shall deliver to the Custodian within two-hundred and seventy (270)
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. However, if the
Company cannot deliver such original or clerk-certified copy of any document
submitted for recordation to the appropriate public recording office within
the
specified time for any reason, within sixty (60) days after receipt of written
notification of such failure from the Purchaser, the Company shall repurchase
the related Mortgage Loan at a price and in the manner specified in Section
3.03.
Section
2.04. Closing
Conditions.
The
closing for the purchase and sale of the Mortgage Loan Package shall take place
on the Closing Date. 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 may agree.
The
closing for the Mortgage Loan Package shall be subject to the satisfaction
of
each of the following conditions:
(a) with
respect to the Purchaser’s obligations to close:
(i) the
Company shall have delivered to the Purchaser the Mortgage Loan Schedule and
an
electronic data file containing information on a loan-level basis;
(ii) all
of
the representations and warranties of the Company under this Agreement shall
be
true and correct as of the Closing Date (or, with respect to the Mortgage Loan
Representations, such other date specified therein) in all material respects;
(iii) the
Purchaser shall have received from the Custodian an initial certification with
respect to its receipt of the Mortgage Loan Documents for the Mortgage Loans;
(iv) all
other
terms and conditions of this Agreement to be satisfied by the Company shall
have
been complied with in all material respects; and
(v) the
Purchaser shall have received the original Memorandum of Sale, executed on
behalf of the Company;
12
(b) with
respect to the Company’s obligations to close:
(i) the
Company shall have received a copy of the initial certification of the Custodian
with respect to its receipt of the Mortgage Loan Documents for the Mortgage
Loans;
(ii) the
Company shall have received an original of the Memorandum of Sale, executed
on
behalf of the Purchaser; and
(iii) all
terms
and conditions of this Agreement to be satisfied by the Purchaser shall have
been materially complied with.
Upon
satisfaction of the foregoing conditions, the Purchaser shall pay to the Company
on the Closing Date the Purchase Price for the Mortgage Loan Package, including
accrued interest pursuant to Section 2.01 of this Agreement.
Section
2.05. Acceptance
of Mortgage Loans.
The
documents delivered pursuant to Section 2.03 hereof shall be reviewed by the
Purchaser or any assignee, transferee or designee of the Purchaser at any time
before or after the Closing Date (and with respect to each document permitted
to
be delivered after the Closing Date, within seven days of its delivery) to
ascertain that all required documents have been executed and received and that
such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES; REMEDIES AND BREACH
Section
3.01. Company
Representations and Warranties.
The
Company hereby makes the representations and warranties set forth in
Exhibit
F
hereto
to the Purchaser as of the date hereof and the Closing Date (collectively,
the
“Company Specific Representations”).
Section
3.02. Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby makes the representations and warranties
set forth in Exhibit
G
hereto
to the Purchaser as of the Closing Date (collectively, the “Mortgage Loan
Representations”).
Section
3.03. Repurchase
and Other Remedies.
It
is
understood and agreed that the Company Specific Representations and the Mortgage
Loan Representations 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 and shall not be impaired by any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination of or failure to examine any Mortgage File. Upon
discovery by either the Company, the Purchaser or the Servicer of any Defective
Document or a breach of any of the Mortgage Loan Representations that materially
and adversely affects the value of a Mortgage Loan or the interests of the
Purchaser (or that materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
Defective Document or a breach shall give prompt written notice to the other.
Any such breach or Defective Document that causes a Mortgage Loan not to be
a
“qualified mortgage” within the meaning of Section 860G(a)(3) of the Code shall
be deemed to materially and adversely affect the interests of the Purchaser.
13
Within
ninety (90) days of the earlier of either discovery by, or notice to, the
Company of any Defective Document or a breach of a representation or warranty
which materially and adversely affects the value of a Mortgage Loan or the
interest of the Purchaser therein, the Company shall use reasonable efforts
promptly to cure such breach in all material respects and, if such Defective
Document or breach cannot be cured, the Company shall repurchase such Mortgage
Loan at the Repurchase Price. However, if the breach or Defective Document
shall
involve a Mortgage Loan Representation and the Company discovers or receives
notice of any such breach within ninety (90) days of the Closing Date, the
Company shall, if the breach or Defective Document cannot be cured in all
material respects, at the Company’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 one hundred twenty
(120) days after the Closing Date. Notwithstanding any of the foregoing, if
a
breach or Defective Document would cause the Mortgage Loan to be other than
a
“qualified mortgage,” as defined in Section 860G(a)(3) of the Code, any such
repurchase or substitution must occur within ninety (90) days from the date
the
breach or Defective Document was discovered unless such breach is cured during
such period.
If
the
Company has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan within ninety (90) days after discovery or the written
notice of the foregoing breach or Defective Document. Any repurchase of a
Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
3.03
shall be accomplished by deposit to such account as the Purchaser shall identify
to the Company, of the amount of the Repurchase Price for distribution to the
Purchaser on the next scheduled Remittance Date, after deducting therefrom
any
amount received in respect of such repurchased Mortgage Loan or
Loans.
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. 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
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan
from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company shall be deemed to have
made
as to such Qualified Substitute Mortgage Loan each Mortgage Loan Representation
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. The Company shall deposit in such account as the Purchaser
shall identify to the Company, the Monthly Payment 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 the 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.
14
For
any
month in which the Company substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the amount (if any) by which
the
aggregate principal balance of all such Qualified Substitute Mortgage Loans
as
of the date of substitution is less than the aggregate unpaid principal balance
of all such Deleted Mortgage Loans (after application of the principal portion
of the Monthly Payments due in the month of substitution) (the “Substitution
Adjustment Amount”) shall be deposited into such account as the Purchaser shall
identify to the Company, by the Company on or before the Remittance Date in
the
month succeeding the calendar month during which the related Mortgage Loan
is
required to be purchased or replaced hereunder.
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
as
provided in this Section 3.03 constitute the sole remedies of the Purchaser
and
the Servicer respecting a breach of the Mortgage Loan
Representations.
If
the
representation made by the Company
in
Exhibit
G(qq)
is
breached, the Company shall not have the right or obligation to cure, substitute
or repurchase the affected Mortgage Loan but shall remit to the Purchaser the
amount of the Prepayment Premium indicated on the applicable part of the
Mortgage Loan Schedule to be due from the Mortgagor in the circumstances less
any amount collected and remitted to the Purchaser.
Any
cause
of action against the Company relating to or arising out of the breach of any
Company Specific Representation or Mortgage Loan Representation 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) failure 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.
Section
3.04. Repurchase
of Mortgage Loans With Early Payment Defaults.
The
Underlying Agreements provide that the Underlying Sellers shall repurchase
Mortgage Loans in the event of specified delinquencies occurring during a
specified period following the acquisition of the Mortgage Loans by the
Purchaser. The Company agrees to use commercially reasonable efforts to enforce
such obligations of the Underlying Sellers in the event such delinquencies
occur
after the sale of the Mortgage Loans to the Purchaser if the Purchaser provides
the Company with reasonable notice of such delinquencies.
15
ARTICLE
IV
SECURITIZATIONS
Section
4.01. Removal
of Mortgage Loans from Inclusion Under this Agreement Upon
Reconstitution.
The
Company shall cooperate with the Purchaser in connection with the
Securitization. In connection therewith the Company shall:
(a) make
all
representations and warranties made herein with respect to the Mortgage Loans
and the Company itself as of the Closing Date;
(b) execute
an Assignment, Assumption and Recognition Agreement;
(c) provide
as applicable such
additional Opinions of Counsel, letters from auditors, and certificates of
public officials or officers of the Company as are reasonably believed necessary
by the trustee, any Rating Agency or any credit enhancement provider, as the
case may be, in connection with Securitizations.
Section
4.02. Regulation
AB Compliance.
The
Underlying Agreements provide that the Underlying Sellers shall provide certain
information and perform certain other compliance with Regulation AB pursuant
to
the Regulation AB Compliance Addendum attached to each of the Underlying
Agreements. The Company agrees to use commercially reasonable efforts to enforce
such obligations of the Underlying Sellers provided the Purchaser provides
the
Company with reasonable notice of any request for information or compliance
with
such Regulation AB Compliance Addendum.
16
ARTICLE
V
GUARANTY
SunTrust
Bank agrees with the Purchaser for the sole and exclusive benefit of Purchaser
and its assignees to hereby absolutely, unconditionally and irrevocably
guarantee to the Purchaser, the full and prompt performance by the Company
of
any and all obligations of the Company under Section 3.03 of this Agreement.
SunTrust Bank agrees that its obligations pursuant to this Article V shall
be a
continuing, absolute and unconditional guarantee of the full and punctual
performance by the Company of its obligations under Section 3.03 of this
Agreement. It shall not be necessary for such claimant to first pursue any
remedy from or exhaust any proceedings against Company; provided,
however,
that
the Purchaser demand payment from the Company which payment is not made for
a
period of thirty (30) calendar days. This Article V shall continue to be
effective if the Company merges or consolidates with or into another entity,
loses its separate legal identity or ceases to exist.
ARTICLE
VI
MISCELLANEOUS
PROVISIONS
Section
6.01. Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Company and the Purchaser.
Section
6.02. Governing
Law; Waiver of Jury Trial.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (EXCLUDING THE CHOICE OF LAW PROVISIONS) AND 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.
17
Section
6.03. 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:
|
SunTrust
Asset Funding, LLC
Mail
Code
3950
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
with
a
copy to:
SunTrust
Banks, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Company in writing by the
Purchaser;
|
(ii)
|
if
to Purchaser:
|
GMAC
Mortgage, LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General Manager
or
such
other address as may hereafter be furnished to the Company in writing by the
Purchaser;
and
|
(iii)
|
if
to SunTrust Bank:
|
SunTrust
Bank
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Purchaser in writing by the
Company.
18
Section
6.04. 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
6.05. 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
6.06. Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the Company and
the
Purchaser and their respective successors and assigns. The Company may not
assign this Agreement without the consent of the Purchaser. The Purchaser shall
have the right, without the consent of the Company but subject to the limits
set
forth in Section 2.02 hereof, 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 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. In the event
the
Purchaser assigns this Agreement, and the assignee assumes any of the
Purchaser’s obligations hereunder, the Company acknowledges and agrees to look
solely to such assignee, and not the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability
to
the Company with respect thereto.
Section
6.07. 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 or advisable in
accordance with Acceptable Servicing Practices or under applicable law or is
requested by the Purchaser at its sole option in the case of Mortgage Loans
that
are not registered on MERS.
Section
6.08. Solicitation
of Mortgagor.
From
and
after the Closing Date, the Company agrees that it will not take any action
or
permit or cause any action to be taken by any of its agents or affiliates,
or by
any independent contractors or independent mortgage brokerage companies on
the
Company’s behalf, to personally, by telephone, mail, facsimile or electronic
mail, solicit any Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan. It is understood and agreed that promotions
undertaken by the Company or any of its affiliates which are directed to the
general public at large or which are not specifically directed toward the
Mortgagors under the Mortgage Loans, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio or
television advertisements shall not constitute solicitation under this Section,
nor is the Company prohibited from responding to unsolicited requests or
inquiries made by a Mortgagor or an agent of a Mortgagor. This subsection 6.09
shall not be deemed to preclude the Company or any of its agents or affiliates
from soliciting any Mortgagor for any other financial products or
services.
19
Section
6.09. 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
6.10. Confidential
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.
The
Purchaser and the Company agree they (i) shall comply with all applicable laws
and regulations regarding the privacy or security of Consumer Information,
(ii)
shall not collect, create, use, store, access, disclose or otherwise handle
Consumer Information in any manner inconsistent with any applicable laws or
regulations regarding the privacy or security of Consumer Information, (iii)
shall not disclose Consumer Information to any affiliated or non-affiliated
third party except to enforce or preserve its rights, as otherwise permitted
or
required by applicable law (or by regulatory authorities having jurisdiction
in
the premises), (iv) shall maintain appropriate administrative, technical and
physical safeguards to protect the security, confidentiality and integrity
of
Consumer Information, including maintaining security measures designed to meet
the Interagency Guidelines Establishing Standards for Safeguarding Consumer
Information published in final form on February 1, 2001, 66 Fed. Reg. 8616,
and
the rules promulgated thereunder and (v) shall promptly notify the other party
in writing upon becoming aware of any actual breach and of any suspected breach
of this section. The Company shall promptly provide the Purchaser’s regulators
information regarding such security measures upon the reasonable request of
the
Purchaser, which information shall include, but not be limited to, any SAS
70 or
similar independent audit reports, summaries of test results or equivalent
measures taken by the Company with respect to its security measures, as agreed
upon by the parties. Each party shall indemnify and defend the other party
against, and shall hold the other party harmless from, any cost, expense, loss,
claim or other liability that such other party may suffer as a result of or
in
connection with its failure to comply with or perform the obligations set forth
in this section. The restrictions set forth herein shall survive the termination
of this Agreement.
20
Section
6.11. Equal
Opportunity.
The
Purchaser and the Company represent that they are equal opportunity employers
and do not discriminate in employment of persons or awarding of subcontracts
because of a person’s race, sex, age, religion, national origin, veteran or
handicap status. The Company is aware of and fully informed of the Purchaser’s
responsibilities and agrees to the provisions under the following: (a) Executive
Order 11246, as amended or superseded in whole or in part, and as contained
in
Section 202 of said Executive Order as found at 41 C.F.R. § 60-1.4(a)(1-7);
(b) Section 503 of the Rehabilitation Act of 1973 as contained in 41 C.F.R.
§ 60-741.4; and (c) The Vietnam Era Veterans' Readjustment Assistance Act
of 1974 as contained in 41 C.F.R. § 60-250.4.
Section
6.12. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
Section
6.13. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
Section
6.14. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP;
(c) references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) 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;
(e) the
words
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
21
Section
6.15. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in
the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
6.16. Judicial
Interpretation.
Should
any provision of this Agreement require judicial interpretation, the parties
hereto agree that the court interpreting or construing the same shall not apply
a presumption that the terms hereof or thereof shall be more strictly construed
against one party by reason of the rule of construction that a document is
to be
more strictly construed against the party who itself or through its agents
prepared the same.
Section
6.17. Headings.
The
headings and captions of the articles, sections, subsections, paragraphs, and
subdivisions of this Agreement are for the convenience of reference only, are
not to be considered a part hereof and shall not limit or otherwise affect
any
of the terms hereof.
Section
6.18. Intention
of the Company.
The
Company intends that the conveyance of the Company’s right, title and interest
in and to the Mortgage Loans to the Purchaser shall constitute a sale and not
a
pledge of security for a loan. If such conveyance is deemed to be a pledge
of
security for a loan, however, the Company intends that the rights and
obligations of the parties to such loan shall be established pursuant to the
terms of this Agreement. The Company also intends and agrees that, in such
event, (i) the Company shall be deemed to have granted (and hereby does grant)
to the Purchaser and its assigns a first priority security interest in the
Company’s entire right, title and interest in and to the Mortgage Loans, all
principal and interest received or receivable with respect to the Mortgage
Loans, all amounts held from time to time in the accounts mentioned pursuant
to
this Agreement and all reinvestment earnings on such amounts, together with
all
of the Company’s right, title and interest in and to the proceeds of any title,
hazard or other insurance policies related to such Mortgage Loans and (ii)
this
Agreement shall constitute a security agreement under applicable law. All rights
and remedies of the Purchaser under this Agreement are distinct from, and
cumulative with, any other rights or remedies under this Agreement or afforded
by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.
22
[Intentionally
Blank - Next Page Signature Page]
23
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.
| GMAC MORTGAGE, LLC | SUNTRUST ASSET FUNDING, LLC | |
| Purchaser | Company | |
| By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |
|
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|
| Title: Director | Title: Officer |
Acknowledged
and Agreed:
|
SUNTRUST
BANK
|
||
|
By:
/s/
▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
Name:
▇▇▇▇
▇. ▇▇▇▇▇
|
||
| Title: Vice President |
EXHIBIT
A
[RESERVED]
Exhibit
A-1
EXHIBIT
B
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Sections 2.01, 2.02
and
2.03 of the Mortgage Loan Purchase and Sale Agreement to which this Exhibit
is
attached (the “Agreement”):
|
1.
|
The
original Mortgage Note endorsed “Pay to the order of _____________,
without recourse” and signed in the name of the Company by an authorized
officer (provided
that, 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 Underlying Seller while doing
business under another name, the signature must be in the following
form:
[Underlying Seller], formerly known as [previous name]”). The Mortgage
Note must contain all necessary intervening endorsements showing
a
complete chain of endorsement from the Originator (each such endorsement
being 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 a copy of the Mortgage Note together with a lost note
affadavit;
|
|
2.
|
The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
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3.
|
The
original Mortgage, with evidence of recording thereon, except as
follows.
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 or the
Underlying Seller 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.
|
Exhibit
B-1
|
4.
|
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, or, if the original of any such agreement
with evidence of recording thereon has not been returned by the public
recording office where such agreement has been delivered for recordation
or such agreement has been lost or such public recording office retains
the original recorded agreement, a photocopy of such agreement, certified
by the Company, the Underlying Seller or an agent to be a true and
correct
copy of the agreement delivered to the appropriate public recording
office
for recordation. The original recorded agreement or, in the case
of a
agreement where a public recording office retains the original recorded
agreement or in the case where an agreement is lost after recordation
in a
public recording office, a copy of such agreement certified by such
public
recording office to be a true and complete copy of the original recorded
agreement, will be promptly delivered to the Custodian upon receipt
thereof by the Company.
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5.
|
The
original Assignment of Mortgage, in blank, for each Mortgage Loan,
in form
and substance acceptable for recording (except for the insertion
of the
name of the assignee and recording information). If the Mortgage
Loan was
acquired by the Underlying Seller in a merger, the Assignment of
Mortgage
must be made by Underlying Seller, successor by merger to [name of
predecessor].” If the Mortgage Loan was acquired or originated by the
Underlying Seller while doing business under another name, the Assignment
of Mortgage must be made by Underlying Seller, formerly know as [previous
name].” Subject to the foregoing and where permitted under the applicable
laws of the jurisdiction wherein the Mortgaged property is located,
such
Assignments of Mortgage may be made by blanket assignments for Mortgage
Loans secured by the Mortgaged Properties located in the same county.
If
the related Mortgage has been recorded in the name of Mortgage Electronic
Registration Systems, Inc. (“MERS”) or its designee, no Assignment of
Mortgage will be required to be prepared or delivered and instead,
the
Underlying Seller shall take all actions as are necessary to cause
the
Purchaser or its designee to be shown as the owner of the related
Mortgage
Loan on the records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by
MERS.
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|
6.
|
For
any Mortgage Loan not recorded in the name of MERS, 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 or
the Underlying Seller 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 of Mortgage
or in the
case where an intervening Assignment of Mortgage is lost after recordation
in a public recording office, a copy of such intervening Assignment
of
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded intervening Assignment of
Mortgage.
|
Exhibit
B-2
|
7.
|
The
original mortgagee policy of title insurance or evidence of title,
which
may be in electronic form.
|
|
8.
|
Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
|
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9.
|
For
each Mortgage Loan which is secured by a residential long-term lease,
if
any, a copy of the lease with evidence of recording indicated thereon,
or,
if the lease is in the process of being recorded, a photocopy of
the
lease, certified by an officer of the respective prior owner of such
Mortgage Loan or by the applicable title insurance company,
closing/settlement/escrow agent or company or closing attorney to
be a
true and correct copy of the lease transmitted for
recordation.
|
With
respect to each Mortgage Loan, the Mortgage File shall include original or
imaged copies of each of the following items to the extent in the possession
of
the Company or in the possession of the Company’s agent(s):
|
10.
|
Original
hazard insurance policy and, if required by law, flood insurance
policy.
|
|
11.
|
Residential
loan application.
|
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12.
|
Mortgage
Loan closing statement.
|
|
13.
|
Verification
of employment and income, if
applicable.
|
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14.
|
Verification
of acceptable evidence of source and amount of down
payment.
|
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15.
|
Credit
report on the Mortgagor.
|
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16.
|
Residential
appraisal report.
|
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17.
|
Photograph
of the Mortgaged Property.
|
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18.
|
Survey
of the Mortgaged Property, if required by the title company or applicable
law.
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19.
|
If
available, a 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.
|
Exhibit
B-3
|
20.
|
All
required disclosure statements.
|
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21.
|
If
available, termite report, structural engineer’s report, water potability
and septic certification.
|
|
22.
|
Sales
contract, if applicable.
|
|
23.
|
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 file and which are required to
document the Mortgage Loan or to service the Mortgage
Loan.
|
|
24.
|
Amortization
schedule, if available.
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25.
|
Original
power of attorney, if applicable.
|
In
the
event of a delay by the public recording office in returning any recorded
document, the Company shall deliver to the Custodian, within 270 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 form the Purchaser, which consent shall not
be
unreasonably withheld.
Exhibit
B-4
EXHIBIT
C
FORM
OF
MEMORANDUM OF SALE
CLOSING
DATE: May 14, 2007
This
Memorandum of Sale (this “Memorandum”), dated as of May 14, 2007
(the “Closing Date”), confirms the sale by SunTrust Asset Funding, LLC (the
“Company”), to GMAC Mortgage, LLC (the “Purchaser”), and the purchase by the
Purchaser from the Company, of the second lien residential mortgage loans on
a
servicing released basis described on the Mortgage Loan Schedule attached hereto
as Schedule I (the “Mortgage Loans”), pursuant to the terms of the Mortgage Loan
Purchase and Sale Agreement (the “Mortgage Loan Purchase and Sale Agreement”),
dated as of May 14, 2007, and is by and between the Purchaser and the
Company.
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company does hereby bargain, sell, convey, assign and transfer
to Purchaser without recourse, except as provided in the Mortgage Loan Purchase
and Sale Agreement, and on a servicing released basis, all right, title and
interest of the Company in and to each of the Mortgage Loans, together with
all
documents maintained as part of the related Mortgage Files, all Mortgaged
Properties which secure any Mortgage Loan but are acquired by foreclosure,
deed
in lieu of foreclosure after the Cut-off Date or otherwise, all scheduled
payments of principal and interest on the Mortgage Loans after the Cut-off
Date,
and all proceeds of the foregoing, subject, however, to the rights of the
Company under the Mortgage Loan Purchase and Sale Agreement.
The
Mortgage Loans are to be sold in a whole loan format on a servicing released
basis. The Mortgage Loans have an aggregate Stated Principal Balance as of
April
1, 2007 (the “Cut-off Date”) of $[__________].
The
purchase price for the Mortgage Loans shall be equal to the proceeds from the
sale of the Offered Certificates to the Underwriters pursuant to, and as such
terms are defined in, that certain Pooling and Servicing Agreement dated April
1, 2007 entered into by the Purchaser, as servicer, ACE Securities Corp., as
depositor, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer and
securities administrator, and HSBC Bank USA, National Association, as trustee
(the “PSA”), plus 100% interests in the SunTrust Acquisition Closed-End Seconds
Trust, Series 2007-1 Class CE, Class P and Class R Certificates issued pursuant
to the PSA.
The
Company has delivered to the Custodian prior to the date hereof the documents
with respect to each Mortgage Loan required to be delivered under the Mortgage
Loan Purchase and Sale Agreement.
Capitalized
terms that are used herein but are not defined herein shall have the respective
meanings set forth in the Mortgage Loan Purchase and Sale
Agreement.
[Signatures
on following page]
Exhibit
C-1
IN
WITNESS WHEREOF, the parties hereto, by the hands of their duly authorized
officers, execute this Memorandum as of the Closing Date referred to
above.
| GMAC MORTGAGE, LLC | SUNTRUST ASSET FUNDING, LLC | |
| as Purchaser | as Company | |
| By: | By: | |
|
|
|
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|
Its:
|
Its:
|
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|
Exhibit
C-2
SCHEDULE
I
MORTGAGE
LOAN SCHEDULE
[Provided
Upon Request]
Exhibit
C-3
EXHIBIT
D
FORM
OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
[DATE
OF
ASSIGNMENT]
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT (this “AAR”) dated ___________________,
among _________________, a _________________ [ENTITY TYPE] having an office
at
_________________ (“Assignor”), _________________, having an office at
_________________ (“Assignee”) and SunTrust Assset Funding, LLC (the “Company”),
having an office at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and acknowledged
and agreed to by SunTrust Bank, a Georgia banking corporation (“SunTrust
Bank”):
WHEREAS,
on the date hereof, the Assignor is transferring all of its right, title and
interest in and to the Mortgage Loans (except for any right, title or interest
related to the Servicing Rights) to the Assignee on a servicing-retained basis;
and
WHEREAS,
on the date hereof, the Assignee is entering into a Pooling and Servicing
Agreement, dated as of [_________], by and among the Assignor, as servicer,
[_________], as depositor, [______________], as master servicer and securities
administrator and _________, as trustee (the “Trustee”), pursuant to which the
Mortgage Loans will be transferred to the Trustee.
NOW
THEREFORE, for and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. With
respect to the Mortgage Loans listed on Exhibit
A
hereto,
the Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as the Purchaser, in, to and under that certain
Mortgage Loan Purchase and Sale Agreement, (the “Mortgage
Loan Purchase and Sale Agreement”),
dated
as of May 14, 2007, and the Memorandum of Sale dated May 14, 2007 (together
with
the Mortgage Loan Purchase and Sale Agreement, the “Sale Agreement”) each by and
between GMAC Mortgage, LLC (the “Purchaser”) and the Company, and the Mortgage
Loans delivered thereunder by the Company to the Assignor. The
Assignor is not assigning to the Assignee, but instead is expressly reserving
for the Assignor’s exclusive right and benefit only, the following:
a. Any
of the
Servicing Rights relating to the Mortgage Loans, as the term “Servicing Rights”
is defined in the Sale Agreement and further described herein; and
b. All
rights
and benefits accorded the Assignor, as it relates to servicing or Servicing
Rights under the Sale Agreement.
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
Exhibit
D-1
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to the
Sale
Agreement
or the
Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Sale
Agreement
or the
Mortgage Loans. The Assignor has no knowledge of, and has not received notice
of, any waivers under or amendments or other modifications of, or assignments
of
rights or obligations under, the Sale
Agreement
or the
Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans 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 which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “Securities Act”) or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
Securities Act or require registration pursuant thereto.
3. That
the
Assignee warrants and represent to, and covenants with, the Assignor and the
Company that:
a. The
Assignee agrees to be bound, as the Purchaser, by all of the terms, covenants
and conditions of the Sale
Agreement
and the
Mortgage Loans, and from and after the date hereof, the Assignee assumes for
the
benefit of each of the Company and the Assignor all of the Assignor’s
obligations as Purchaser thereunder (except
for any obligations relating to the Servicing Rights);
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans is in excess
of
$250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to sell the Mortgage Loans by
means of any general advertising or general solicitation within the meaning
of
Rule 502(c) Regulation D, promulgated under the Securities Act;
e. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
Exhibit
D-2
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accepted a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest in
the
Mortgage Loans or any other similar security with, any person in any manner
which would constitute a distribution of the Mortgage Loans under the Securities
Act or which would render the disposition of the Mortgage Loans a violation
of
Section 5 of the Securities Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any person to act,
in
such manner with respect to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan (“Plan”) within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or a plan (“Plan”) within the meaning of section 4975(e)(1) of the
Internal Revenue Code of 1986 (“Code”), and the Assignee is not directly or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as trustee of, or with assets of, a Plan; or (2) the
Assignee’s purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Sale
Agreement
is:
[NAME
AND
ADDRESS OF ASSIGNEE]
Attention:
_____________________
Telephone:
____________________
Fax:
_________________________
The
Assignee’s wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Sale Agreement is:
For
the
account of [NAME OF ASSIGNEE]
A/C#:
_________________________
ABA#:
________________________
Attention:
______________________
Taxpayer
ID#: __________________
4. Accuracy
of the Sale Agreement.
The
Company and the Assignor represent and warrant to the Assignee that (i) attached
hereto as Exhibit
B
are
true, accurate and complete copies of the Sale Agreement and all amendments
and
modifications, if any, thereto, (ii) the Sale Agreement has not been amended
or
modified in any respect, except as set forth in this Agreement, and (iii) no
notice of termination has been given to the Company under the Sale Agreement.
Exhibit
D-3
5. Recognition
of Assignee.
From
and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans. It is the intention of the
Assignor, the Company and the Assignee that the Sale Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns.
6. Governing
Law.
THIS
AAR SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AND
THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW), EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL
LAW.
7. Counterparts.
This
AAR
may be executed simultaneously in any number of counterparts. Each such
counterpart shall be deemed an original and all such counterparts taken together
shall constitute one and the same instrument. Delivery of executed signature
pages by facsimile shall constitute delivery of originals for the purpose of
this AAR.
[Signatures
Follow]
Exhibit
D-4
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement be executed by their duly authorized officers as of the
date first above written.
| [NAME OF ASSIGNOR] | [NAME OF ASSIGNEE] | |
| By: | By: | |
|
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|
Its:
|
Its:
|
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|
|
SUNTRUST
ASSET FUNDING, LLC
Company
|
||
| By: | ||
|
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||
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Its:
|
||
|
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Acknowledged
and Agreed:
SUNTRUST
BANK
|
||
| By: | ||
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Title:
|
||
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Exhibit
D-5
EXHIBIT
A
to
the
Assignment, Assumption and Recognition Agreement
MORTGAGE
LOAN SCHEDULE
Exhibit
A-1
EXHIBIT
B
to
the
Assignment, Assumption and Recognition Agreement
EXECUTED
COPIES
OF
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
AND
MEMORANDUM OF SALE
Exhibit
B-7
EXHIBIT
E
UNDERWRITING
GUIDELINES
OF
LOAN
SELLERS
[Provided
Upon Request]
Exhibit
E-1
EXHIBIT
F
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Company
Specific Representations
The
Company hereby represents, warrants and covenants that, as of the Closing Date,
or as of such date specifically provided herein:
(a) Due
Organization and Authority:
The
Company is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its formation 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; the Company has the full corporate
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, subject to bankruptcy,
insolvency, moratorium and other principles of equity affecting the rights
of
creditors generally, whether considered in a proceeding at law or in equity;
and
all requisite corporate 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 acquiring
and selling mortgage 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 or provisions of the organizational documents of the Company
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 or will create or impose and
will not result in the creation or imposition of any lien, charge or encumbrance
(other than any created hereby in favor of the Purchaser and its assignees)
which would have a material adverse effect upon the Mortgage Loans or any
documents or instruments evidencing or securing the Mortgage Loans;
Exhibit
F-1
(d) Fair
Consideration:
The
consideration received by the Company upon the sale of the Mortgage Loans under
this Agreement shall constitute fair consideration and reasonably equivalent
value for the Mortgage Loans;
(e) Ability
to Perform; Solvency:
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;
(f) No
Litigation Pending:
There
is no action, suit, proceeding or investigation pending or, to its knowledge,
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;
(g) 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 consent, approval, authorization or order has
been obtained prior to the Closing Date;
(h) No
Untrue Information:
No
statement, report or other document furnished or to be furnished by or on behalf
of the Company pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits
to
state a material fact necessary to make the statements contained therein, in
light of the circumstances in which they were made, not misleading;
(i) Sale
Treatment:
The
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;
(j) 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 connection with the
sale of the Mortgage Loans;
(k) Purchase
and Sale:
Immediately prior to the sale of the Mortgage Loans to the Purchaser as herein
contemplated, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note, and, upon the payment
to
the Seller of the Purchase Price, in the event that the Seller retains or has
retained record title, the Seller shall retain such record title to each
Mortgage, each related Mortgage Note and the related Mortgage Files with respect
thereto in trust for the Purchaser as the owner thereof from and after the
date
hereof; and
(l) Selection
Process:
The
Mortgage Loans will be selected on such Closing Date from among the outstanding
fixed rate second lien one- to four-family mortgage loans in the Company’s
portfolio at such Closing Date as to which the representations and warranties
set forth in this Agreement could be made and such selection will not be made
in
a manner so as to affect adversely the interests of the Purchaser.
Exhibit
F-2
EXHIBIT
G
REPRESENTATIONS
AND WARRANTIES REGARDING
INDIVIDUAL
MORTGAGE LOANS
Mortgage
Loan Representations
The
Company hereby represents, warrants, and covenants with respect to the Mortgage
Loans that as of the Closing Date:
(a) Mortgage
Loans as Described:
The
information set forth in the Mortgage Loan Schedule annexed to the Memorandum
of
Sale and the information contained on the related electronic data file delivered
to the Purchaser is complete, true and correct in all material respects and
information provided to the Rating Agencies, including loan level detail, is
true and correct according to the rating agency requirements;
(b) Payments
Current:
All
payments required to be made prior 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) calendar days or more delinquent
since the origination of such Mortgage Loan;
(c) No
Outstanding Charges:
All
taxes, governmental assessments, insurance premiums, leasehold payments, ground
rents, 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 (i) payments in the nature of escrow
payments and (ii) 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 have not been impaired, waived, altered
or modified in any respect, except by a written instrument which has been
recorded, 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. No instrument of waiver, alteration or modification
has
been executed, and 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;
(e) No
Defenses:
The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the defense
of
usury, nor will the operation of any of the terms of the Mortgage Note or 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, and no Mortgagor was a debtor
in
any state or federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated;
Exhibit
G-1
(f) No
Satisfaction of Mortgage:
The
Mortgage has not been satisfied, canceled, subordinated (except with respect
to
the subordination of any Second Lien Mortgage Loan to the related First Lien)
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 (except with respect to the subordination of any Second Lien
Mortgage Loan to the related First Lien) or rescission;
(g) Validity
of Mortgage Documents:
The
Mortgage Note, the Mortgage and related documents are genuine, and each is
the
legal, valid and binding obligation of the Mortgagor enforceable in accordance
with its terms, subject to bankruptcy, insolvency, moratorium and other
principles of equity affecting the rights of creditors generally, whether
considered in the proceeding at law or in equity. 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;
(h) Note
as “Instrument”:
Each
Mortgage Note is comprised of one original promissory note and each such
promissory note constitutes an “instrument” for purposes of Section 9-102(a)(65)
of the Uniform Commercial Code in effect in the applicable
jurisdiction;
(i) No
Fraud:
No
fraud, error, omission, misrepresentation, negligence, or similar occurrence
with respect to a Mortgage Loan has taken place on the part of the Company
or
the Mortgagor, any appraiser, any builder or any developer or any other party
involved in the solicitation or origination of the Mortgage Loan or in the
application for any insurance in relation to such Mortgage Loan or in connection
with the sale of such Mortgage Loan to the Purchaser, and there are no
circumstances existing with respect to the Mortgage Loan which would permit
the
primary mortgage guaranty insurer to deny coverage under any insurance policy.
If a mortgage insurer fails to pay a claim submitted with respect to the related
Mortgage Loan as a result of the mortgage insurer successfully asserting a
defense based on fraud, then such failure to pay shall constitute a breach
of
this representation which materially and adversely affects the interests of
the
owner of the Mortgage Loan;
(j) Compliance
with Applicable Laws:
All
requirements of any applicable federal, state or local law including, without
limitation, all applicable predatory and abusive lending, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection
(including Uniform Consumer Credit Code laws), fair credit reporting, unfair
collection practices, equal credit opportunity or fair housing and disclosure
laws applicable to the solicitation, origination, servicing and collection
of
the Mortgage Loan have been complied with in all material respects, the
Mortgagor received all disclosure materials required by applicable law with
respect to the making of mortgage loans of the same type as the Mortgage Loan
and, if the Mortgage Loan is a refinanced Mortgage Loan, rescission materials
required by applicable laws, and the Company shall maintain in its possession,
available for the Purchaser’s inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements. 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;
Exhibit
G-2
(k) Location
and Type of Mortgaged Property:
The
Mortgaged Property is located in the state identified in the 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, an individual unit
in a
planned unit development, or a townhouse or, in the case of a Mortgage Loan
secured by Cooperative Shares, leases or occupancy agreements. None of the
Mortgaged Properties are manufactured homes, log homes, mobile homes or geodesic
domes. As of the respective appraisal date for each Mortgaged Property, no
portion of the Mortgaged Property was being used for commercial or mixed-use
purposes and, to the Company’s knowledge, since the date of such Appraisal, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, however, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance or household purposes. No Mortgage Loan finances builder inventory.
If the Mortgaged Property is a condominium unit or a planned unit development
(other than a de minimus planned unit development) such condominium or planned
unit development project meets ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac eligibility
requirements or is located in a condominium or planned unit development project
which has received ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac project approval and the
representations and warranties required by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac with
respect to such condominium or planned unit development have been made and
remain true and correct in all respects;
(l) Valid
Second Lien:
The
Mortgage is a valid, subsisting and enforceable second 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:
(i) the
lien
of current real property taxes and assessments not yet due and
payable;
(ii) 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;
(iii) other
matters to which like properties are commonly subject which do not individually
or in the aggregate, 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; and
Exhibit
G-3
(iv) the
First
Lien on 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 second lien and second priority security interest
on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser;
(m) Full
Disbursement of Proceeds:
The
proceeds of the Mortgage Loan have been fully disbursed or credited to or for
the account of the Mortgagor, and there is no requirement for future advances
thereunder and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. Any and all requirements as to completion of any on-site
or
off-site improvements and any and all requirements as to disbursements of escrow
funds for such improvements have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording
of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of
any
amounts paid or due under the Mortgage Note or Mortgage;
(n) 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 Mortgage Loan Schedule. The lien of the Mortgage securing
the
consolidated principal amount is expressly insured as having second 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;
(o) Ownership:
The
Company is a sole legal, beneficial and equitable owner of the Mortgage Note
and
the Mortgage. The Company has full right and authority under all governmental
and regulatory bodies having jurisdiction over the Company, subject to no
interest or participation of, or agreement with, any party, to transfer and
sell
the Mortgage Loan to the Purchaser pursuant to this Agreement free and clear
of
any encumbrance or right of others, equity, lien, pledge, charge, mortgage,
claim, participation interest or security interest of any nature (collectively,
a “Lien”); and immediately upon the transfers and assignments herein
contemplated, the Company shall have transferred and sold all of its right,
title and interest in and to each Mortgage Loan to the Purchaser and the
Purchaser will hold good, marketable and indefeasible title to, and be the
owner
of, each Mortgage Loan subject to no Lien;
(p) 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
legal interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or
otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (A) organized under the laws of such state, (B) qualified or
exempt from qualification to do business in such state, (C) federal savings
and
loan associations or national banks having principal offices in such state,
or
(D) not doing business in such state;
Exhibit
G-4
(q) CLTV:
No
Mortgage Loan has an CLTV at origination in excess of 100%.
(r) Title
Insurance:
Unless
the Mortgaged Property is located in the State of Iowa and an attorney’s
certificate and/or a certificate of title guaranty has been obtained, each
Mortgage Loan is covered by either an ALTA lender’s title insurance policy
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 (i), (ii), (iii) and (iv) of Paragraph (l) of this Exhibit G, or
a
last vested deed or title search showing the Mortgagor as the owner of the
Mortgaged Property. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. Where required by state law
or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of such lender’s title insurance policy. The Company, its successors and
assigns, are the sole insureds of such lender’s title insurance policy, and such
lender’s title insurance policy is valid and remains in full force and effect
and will be in full force and effect upon the consummation of the purchase
of
the Mortgage Loans as 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;
(s) No
Defaults:
Other
than payments due but not yet thirty (30) days or more delinquent, 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. With
respect to each Mortgage Loan, (i) any more senior mortgage on the related
Mortgaged Property is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such senior mortgage
or the related mortgage note, (iii) 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 thereunder, and (iv)
applicable law requires, the mortgagee under the Mortgage Loan to receive notice
of, and affords such mortgagee an opportunity to cure, any default by payment
in
full or otherwise under the prior mortgage;
(t) 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 with, the lien of the related Mortgage;
(u) Location
of Improvements; No Encroachments:
Except
as insured against by the title insurance policy referenced in Paragraph (r)
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;
Exhibit
G-5
(v) Payment
Terms:
Payments commenced no more than sixty (60) calendar days after the funds were
disbursed to the Mortgagor in connection with the Mortgage Loan. The Mortgage
Loans have an original term to maturity of not more than thirty (30) years,
with
interest payable in arrears on the date specified on the Mortgage Loan
Schedule;
(w) Balloon
Payments, Graduated Payments or Contingent Interests:
With
respect to any Mortgage Loan which is identified on the Mortgage Loan Schedule
as a Balloon Mortgage Loan, the Mortgage Note is payable in Monthly Payments
which is sufficient to amortize the remaining principal balance of the Balloon
Mortgage Loan. 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;
(x) 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 (other than under the Servicemembers Civil
Relief Act) 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;
(y) Occupancy
of the Mortgaged Property:
As of
the date of origination the Mortgaged Property was lawfully occupied under
applicable law;
(z) 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 (l) above;
(aa) 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;
(bb) Transfer
of Mortgage Loans:
With
respect to each Mortgage that is not recorded in the name of MERS or its
designee, the Assignment of Mortgage, upon the insertion of the name of MERS
as
assignee and recording information, is in recordable form and is acceptable
for
recording under the laws of the jurisdiction in which the related Mortgaged
Property is located;
(cc) Mortgaged
Property Undamaged:
The
Mortgaged Property (and with respect to a Cooperative Loan, the related
Cooperative Project and Cooperative Unit) is in good repair and undamaged by
waste, fire, earthquake or earth movement, windstorm, hurricane, flood, tornado,
mold 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;
Exhibit
G-6
(dd) Customary
Origination, Servicing and Collection Practices:
The
origination, collection and servicing practices used with respect to each
Mortgage Loan have been in all respects legal, proper, prudent and customary
in
the mortgage origination and servicing industry;
(ee) 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;
(ff) The
Appraisal:
With
the exception of Mortgage Files related to conforming Mortgage Loans approved
through DU which have qualified for a property inspection waiver, the Mortgage
File contains an Appraisal of the related Mortgaged Property signed prior to
the
approval of the Mortgage Loan application by a Qualified Appraiser and the
Appraisal and appraiser both satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, and Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as
in
effect on the date the Mortgage Loan was originated, to the extent required
in
the Underwriting Guidelines with respect to mortgage loans of the same type
as
the Mortgage Loan. If an automated valuation model (“AVM”) was used in lieu of a
full Appraisal, such AVM was completed in accordance with the applicable
Underwriting Guidelines;
(gg) Hazard
Insurance:
All
buildings on the Mortgaged Property are insured by an insurer acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and to prudent mortgage lending institutions, against
loss by fire and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are provided for in the ▇▇▇▇▇▇ Mae Guides
or ▇▇▇▇▇▇▇ Mac Guides, as applicable, pursuant to insurance policies conforming
to Accepted Practices, in an amount which is not less than the lesser of 100%
of
the insurable value of the Mortgaged Property (as established by the insurer)
or
the outstanding principal balance of the Mortgage Loan (plus,
with
respect to any Second Lien Mortgage Loan, the outstanding principal balance
of
the related first lien mortgage loan, if any), as long as it equals the minimum
amount (80% of the insurable value of the Mortgaged Property) required to
compensate for any damage or loss on a replacement cost basis. If the Mortgaged
Property is a condominium unit, it may be 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, then 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 requirements of ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac. Such flood insurance policy is in an amount representing coverage
not less than the least of (A) 100% of the replacement cost of the dwelling,
(B)
the unpaid principal balance of the Mortgage Loan (subject to a minimum of
80%
of the replacement cost of the structure) 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. Each such 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 purchase of the Mortgage Loans as 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;
Exhibit
G-7
(hh) No
Impairment of Insurance Coverage:
No
action, inaction, or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable hazard insurance policy, PMI Policy
or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Company or any designee
of the Company or any corporation or other entity which the Company or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ii) Servicemembers
Civil Relief Act:
The
Mortgagor has not notified the Company, and the Company has no knowledge of
any
relief requested by or allowed to the Mortgagor under the Servicemembers Civil
Relief Act, as amended, or any similar state or local laws;
(jj) No
Construction Loans:
No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged 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;
(kk) Underwriting:
Each
Mortgage Loan was underwritten in accordance with the applicable Underwriting
Guidelines or if eligible for sale to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, through the
DU,
which Underwriting Guidelines satisfy the standards of prudent mortgage lenders
of the same type of mortgage loans as the Mortgage Loans in the secondary
market;
(ll) Mortgage
Loan Documents:
The
Mortgage Note and the Mortgage and all other documents in the related Mortgage
File are on ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac uniform instruments or are on forms
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(mm) 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, to the best of
the
Company’s knowledge, following the date of origination of the Mortgage Loan, the
Mortgagor with respect to the Mortgage Loan was not a debtor in any state or
federal bankruptcy or insolvency proceeding, and the Mortgaged Property has
not
been subject to any bankruptcy or foreclosure proceedings;
(nn) Delivery
of Mortgage Files:
The
Mortgage Loan Documents for the Mortgage Loans have been delivered to the
Custodian, subject to the delivery requirements of this Agreement. The Company
is in possession of a complete Mortgage File for each Mortgage Loan, except
for
such documents the originals of which have been delivered to the Custodian,
and
all documents required to be included in the Mortgage File shall be complete,
executed as required and in compliance with applicable law. With respect to
each
Mortgage Loan for which a lost note affidavit has been delivered to the
Custodian in place of the original Mortgage Note, the related Mortgage Note
is
no longer in existence, and, if such Mortgage Loan is subsequently in default,
the enforcement of such Mortgage Loan or of the related Mortgage by or on behalf
of the Purchaser will not be affected by the absence of the original Mortgage
Note;
Exhibit
G-8
(oo) Interest
Calculation:
Interest on each Mortgage Loan is calculated on the basis of a three hundred
sixty (360) day year consisting of twelve (12) thirty (30) day months. No
Mortgage Loan provides for interest payable on a simple interest basis. No
Mortgage Loan provides for an increase in the related Mortgage Interest Rate
upon the occurrence of a default under the terms of the related Mortgage
Note;
(pp) No
Violation of Environmental Laws:
The
Mortgaged Property is free from any and all toxic or hazardous substances and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. There is no pending action or proceeding directly involving
any
Mortgaged Property of which the Company is aware in which compliance with any
environmental law, rule or regulation is an issue;
(qq) Prepayment
Premiums:
The
information set forth in the applicable part of the Mortgage Loan Schedule
relating to the existence of a Prepayment Premium
is
complete, true and correct in all material respects at the date or dates
respecting which such information is furnished and each Prepayment Premium
is
permissible and enforceable in accordance with its terms upon the mortgagor’s
full and voluntary principal prepayment under applicable law, except to the
extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors’ rights; (2) the collectability thereof may be limited due to
acceleration in connection with a foreclosure or other involuntary prepayment;
or (3) subsequent changes in applicable law may limit or prohibit enforceability
thereof under applicable law;
(rr) 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 ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac guidelines. In the event the Mortgagor is a trust, the trustee
of
such trust is a natural person and is a Mortgagor in his or her individual
capacity;
(ss) Texas
Mortgage Loans:
Each
Mortgage Loan originated in the state of Texas pursuant to Article XVI, Section
50(a)(6) of the Texas Constitution (a “Texas Refinance Loan”) has been
originated in compliance with the provisions of Article XVI, Section 50(a)(6)
of
the Texas Constitution, Texas Civil Statutes and the Texas Finance Code. With
respect to each Texas Refinance Loan that is a cash-out refinancing, the related
Mortgage Loan Documents state that the Mortgagor may prepay such Texas Refinance
Loan in whole or in part without incurring a Prepayment Charge;
(tt) Homeownership
and Equity Protection Act; No High Cost Loans:
No
Mortgage Loan is (a) covered by the Home Ownership and Equity Protection Act
of
1994 as amended (“HOEPA”), (b) a “high cost,” “threshold,” “covered,”
“predatory,” “abusive,” “high risk home” or similarly defined loan, including
refinance loans, under any other applicable law (or a similarly classified
loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), provided
that any
Mortgage Loan secured by a Mortgaged Property in Illinois characterized as
a
“threshold” loan shall not be a “high cost” loan unless it is characterized as
“predatory” under applicable local law; the Company has implemented and
conducted compliance procedures to determine if each Mortgage Loan is
“high-cost” home loan under any applicable federal, state or local law or (c) a
“High Cost Loan” or “Covered Loan,” as defined in the then current Standard
& Poor’s LEVELS®
Version
5.6 Glossary Revised, Appendix
E.
No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act effective November 27, 2003 or as defined in the New Mexico Home
Loan Protection Act effective January 1, 2004, as defined in the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass.▇▇▇. Laws
Ch. 183C) or as defined in the Indiana Home Loan Practices Act, effective
January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9) or a “high risk
home loan” under the Illinois High Risk Home Loan Act, effective as of January
1, 2004. Any breach of this representation shall be deemed to materially and
adversely affect the interests of the owner of the Mortgage Loan;
Exhibit
G-9
(uu) 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;
(vv) Adjustments:
All of
the terms of the related Mortgage Note pertaining to interest adjustments,
payment adjustments and adjustments of the outstanding principal balance, if
any, are enforceable and such adjustments on such Mortgage Loan have been made
properly and in accordance with the provisions of such Mortgage Loan, including
any required notices, and such adjustments do not and will not affect the
priority of the Mortgage lien;
(ww) Leaseholds:
If a
Mortgage Loan is secured by a leasehold estate, then (A) the Mortgagor is the
owner of a valid and subsisting leasehold interest under such ground lease;
(B)
such ground lease is in full force and effect, unmodified and not supplemented
by any writing or otherwise; (C) all rent, additional rent and other charges
reserved therein have been fully paid to the extent payable as of the related
Closing Date; (D) the Mortgagor enjoys the quiet and peaceful possession of
the
leasehold estate; (E) the Mortgagor is not in default under any of the terms
of
such ground lease, and there are no circumstances which, with the passage of
time or the giving of notice, or both, would result in a default under such
ground lease; (F) the lessor under such ground lease is not in default under
any
of the terms or provisions of such ground lease on the part of the lessor to
be
observed or performed; (G) the lessor under such ground lease has satisfied
any
repair or construction obligations due as of the related Closing Date pursuant
to the terms of such ground lease; (H) the execution, delivery and performance
of the Mortgage do not require the 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, such ground lease; (I) the term
of
such lease does not terminate earlier than five (5) years after the maturity
date of the Mortgage Note; (J) the ground lease is assignable or transferable;
(K) the ground lease does not provide for termination of the lease in the event
of lessee’s default without the mortgagee being entitled to receive written
notice of, and a reasonable opportunity to cure the default; (L) the ground
lease permits the mortgaging of the related Mortgaged Property; (M) the ground
lease protects the mortgagee’s interests in the event of a property
condemnation; and (N) the use of leasehold estates for residential properties
is
a widely accepted practice in the jurisdiction in which the Mortgaged Property
is located;
Exhibit
G-10
(xx) Compliance
with 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 no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC
Regulations;
(yy) Refinanced
Mortgage Loans:
No
Mortgage Loan is a refinanced subsidized mortgage loan that contains terms
more
favorable to the related Mortgagor;
(zz) Prepayment
Premiums:
Prepayment Premiums on the Mortgage Loans are applicable to prepayments
resulting from both refinancings and sales of the related Mortgaged Properties
and the terms of such Prepayment Premiums do not provide for a waiver or release
(i.e., “holidays”) during the term of the Prepayment Premium. No Mortgage Loan
provides for the payment of a Prepayment Premium beyond the three-year term
following the origination of the Mortgage Loan. With respect to any Mortgage
Loan that contains a provision permitting imposition of a Prepayment Premium:
(i) prior to the Mortgage Loan’s origination, the Mortgagor agreed to such
Prepayment Premium in exchange for a monetary benefit, including, but not
limited to, a rate or fee reduction, (ii) prior to the Mortgage Loan’s
origination, the Mortgagor was offered the choice of another mortgage product
that did not require payment of such a premium, (iii) the Prepayment Premium
is
disclosed to the Mortgagor in the loan documents pursuant to applicable state
and federal law, and (iv) notwithstanding any state or federal law to the
contrary, the Company shall not impose such Prepayment Premium in any instance
when the mortgage debt is accelerated as the result of the Mortgagor’s default
in making the Monthly Payments;
(aaa) Credit
Information:
As to
each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Company to the Purchaser,
the Company has full right and authority and is not precluded by the Fair Credit
Act or contract from furnishing such information to the Purchaser;
(bbb) No
Litigation Pending:
There
is no action, suit, proceeding or investigation pending, or to the Company’s
knowledge threatened, that is related to the Mortgage Loan and likely to affect
materially and adversely the servicing of such Mortgage Loan;
(ccc) No
Arbitration Provisions:
No
Mortgagor agreed to submit to arbitration to resolve any dispute arising out
of
or relating in any way to the related Mortgage Loan or the origination thereof;
and
(ddd) Down
Payment:
The
source of the down payment, if any, with respect to each Mortgage Loan has
been
fully verified by the Originator as and if required pursuant to the Underwriting
Guidelines.
(eee) Georgia
Mortgage Loans:
No
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act.
Exhibit
G-11
EXHIBIT
H
MORTGAGE
LOAN SCHEDULE
(attached)
Exhibit
H-1
EXHIBIT
I
SCHEDULE
OF UNDERLYING SELLERS AND UNDERLYING AGREEMENTS
|
Underlying
Seller
|
Underlying
Agreement related to Underlying Seller
|
|
|
American
Home Mortgage Corp.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
January 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, American Home Mortgage Corp., as Company, and American
Home
Mortgage Servicing, Inc., as Interim Servicer
|
|
|
New
Century Mortgage Corporation
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
December 1, 2006 by and among SunTrust Asset Funding, LLC, as
Purchaser, and New Century Mortgage Corporation, as
Company
|
|
|
Quicken
Loans Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
February 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and Quicken Loans Inc., as Company
|
|
|
People’s
Choice Home Loan, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
January 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and People’s Choice Home Loan, Inc., as
Company
|
|
|
Lancaster
Mortgage Bankers, LLC
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
February 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and Lancaster Mortgage Bankers, LLC, as
Company
|
|
|
Fidelity
& Trust Mortgage, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
January 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and Fidelity & Trust Mortgage, Inc., as
Company
|
|
|
DB
Structured Products, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
March 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and DB Structured Products, Inc., as
Company
|
Exhibit
I-1
|
(i)
Option One Mortgage Corporation, (ii) Option One Mortgage Capital
Corporation,
(iii)
Option One Owner Trust 2001-1A,
(iv)
Option One Owner Trust 2001-1B, (v) Option One Owner Trust 2001-2,
(vi) Option One Owner Trust 2002-3, (vii) Option One Owner Trust
2003-4, (viii) Option One Owner Trust 2003-5, (ix) Option One
Owner Trust 2005-6, (x) Option One Owner Trust 2005-7,
(xi) Option One Owner Trust 2005-8, and (xii) Option One Owner
Trust 2005-9
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
December 1, 2006 by and among SunTrust Asset Funding, LLC, as
Purchaser, Option One Mortgage Corporation, as Company and Seller,
Option
One Mortgage Capital Corporation, as Seller and Obligor, Option One
Owner
Trust 2001-1A, as Seller, Option One Owner Trust 2001-1B, as Seller,
Option One Owner Trust 2001-2, as Seller, Option One Owner Trust
2002-3,
as Seller, Option One Owner Trust 2003-4, as Seller, Option One Owner
Trust 2003-5, as Seller, Option One Owner Trust 2005-6, as Seller,
Option
One Owner Trust 2005-7, as Seller, Option One Owner Trust 2005-8,
as
Seller, and Option One Owner Trust 2005-9, as Seller
|
|
|
First
Financial Equities, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
March 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and First Financial Equities, Inc., as
Company
|
Addendum
I-2
EXHIBIT
F-2
ASSIGNMENT,
ASSUMPTION & RECOGNITION AGREEMENT
EXECUTION
COPY
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
May
15,
2007
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT (this “AAR”)
dated
May 15, 2007 (the “Closing
Date”)
by and
among GMAC Mortgage, LLC, a Delaware limited liability company having an office
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Assignor”),
ACE
Securities Corp., a Delaware corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Assignee”),
SunTrust Asset Funding, LLC (“Company”),
having an office at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇▇ Fargo Bank, National Association, a national banking association having
an
office at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Master
Servicer”)
and
acknowledged
and agreed to by SunTrust Bank, a Georgia banking corporation having
an
office at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“SunTrust
Bank”):
WHEREAS,
on the date hereof, Company is transferring all of its right, title and interest
in and to those certain mortgage loans listed on Exhibit
A
attached
hereto (the “Mortgage
Loans”)
to
Assignor on a servicing released basis pursuant to that certain Mortgage Loan
Purchase and Sale Agreement, dated as of May 14, 2007 (the “Purchase
Agreement”),
by
and between Assignor and Company;
WHEREAS,
on the date hereof, Assignor is transferring all of its right, title and
interest in and to the Mortgage Loans and under the Purchase Agreement, except
for any right, title or interest related to the Servicing Rights (as defined
below), to Assignee on a servicing-retained basis; and
WHEREAS,
on the date hereof, pursuant to that certain Pooling and Servicing Agreement,
dated as of April 1, 2007 (the “Pooling
and Servicing Agreement”),
by
and among Assignor, as servicer, Assignee, as depositor, Master Servicer, as
master servicer and securities administrator, and HSBC
Bank
USA, National Association, a national banking association having an office
at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Trustee”),
as
trustee of SunTrust Acquisition Closed-End Seconds Trust, Series 2007-1, a
New
York common law trust (the
“Trust”),
as
trustee, the Assignee is transferring all of its right, title and interest
in
and to the Mortgage Loans and under the Purchase Agreement and this AAR to
the
Trustee.
NOW
THEREFORE, for and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. Company
has sold, assigned, set over and otherwise conveyed all of its rights in, to
and
under the Mortgage Loans delivered under the Purchase Agreement to Assignor
on a
servicing released basis.
1
2. With
respect to the Mortgage Loans, Assignor hereby grants, transfers and assigns
to
Assignee all of the right, title and interest of Assignor, in, to and under
the
Purchase Agreement and the Mortgage Loans delivered thereunder by Company to
Assignor. Notwithstanding
anything to the contrary contained herein, Assignor is not assigning to
Assignee any
of
its right, title and interest in, to and under the Purchase Agreement with
respect to any other mortgage loan other than those set forth on Exhibit
A
and,
furthermore, Assignor is not assigning to Assignee,
but
instead is expressly reserving for Assignor’s exclusive right and benefit only,
the following:
a. Any
of the
Servicing Rights relating to the Mortgage Loans, as the term “Servicing
Rights”
is
defined in the Purchase Agreement and further described herein; and
b. All
rights
and benefits accorded Assignor, as it relates to servicing or Servicing Rights
under the Purchase Agreement.
3. Assignor
warrants and represents to, and covenants with, Assignee as of the Closing
Date
that:
a. Assignor
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its formation and has the full corporate power and authority
to
execute and deliver this Agreement and to perform in accordance herewith and
this Agreement evidences the valid, binding and enforceable obligation of the
Company, subject to bankruptcy, insolvency, moratorium and other principles
of
equity affecting the rights of creditors generally, whether considered in a
proceeding at law or in equity and all requisite corporate action has been
taken
by the Company to make this Agreement valid and binding upon the Company in
accordance with its terms;
b. Assignor
is the lawful owner of the Mortgage Loans with the full right to transfer the
Mortgage Loans free from any and all claims and encumbrances
whatsoever;
c. Assignor
has not received notice of, and has no knowledge of, any offsets, counterclaims
or other defenses available to Company with respect to the Purchase
Agreement
or the
Mortgage Loans;
d. Assignor
has not waived or agreed to any waiver under, or agreed to any amendment or
other modification of, the Purchase
Agreement
or the
Mortgage Loans. Assignor has no knowledge of, and has not received notice of,
any waivers under or amendments or other modifications of, or assignments of
rights or obligations under, the Purchase
Agreement
or the
Mortgage Loans; and
e. Neither
Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold
or otherwise disposed of the Mortgage Loans, any interest in the Mortgage Loans
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, any interest in
the
Mortgage Loans or any other similar security from, or otherwise approached
or
negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans 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 which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “Securities
Act”)
or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the Securities Act or require registration pursuant thereto.
2
f. Following
the transfer of servicing of the Mortgage Loans to Assignor, Assignor has
serviced the Mortgage Loans in accordance with the terms of the Servicing
Agreement, dated as of January 26, 2007 and as amended on March 20, 2007
(“Servicing
Agreement”)
by and
between Company and Assignor, the Assignor represents and warrants that it
has
taken no action nor omitted to take any required action the omission of which
would have the effect of impairing any mortgage insurance or guarantee on the
Mortgage Loans and that any information provided by it on or before the date
hereof to any of the parties hereto is true and correct. Effective as of the
Closing Date, Assignor shall service the Mortgage Loans pursuant to the Pooling
and Servicing Agreement and the Servicing Agreement shall no longer govern
the
servicing of the Mortgage Loans.
4. Company
and SunTrust Bank acknowledge that Master
Servicer,
pursuant to the Pooling and Servicing Agreement, will administer on behalf
of
the Trust the terms and conditions of the Purchase Agreement with respect to
the
Mortgage Loans. Master Servicer shall be authorized to enforce directly against
Company and SunTrust Bank any of the obligations of Company and SunTrust Bank
to
Assignor or its assignees provided for in the Purchase Agreement relating to
the
Mortgage Loans.
5. Regulation
AB Compliance by Company.
(a) The
Company represents and warrants to the Master Servicer, the Issuing Entity
and
the Assignee, as of the date of the Preliminary Prospectus Supplement, the
Prospectus Supplement and the Closing Date that: (i) there are no legal or
governmental proceedings pending (or known to be contemplated) against the
Company or any Third-Party Originator material to Certificateholders; and (ii)
there are no affiliations, relationships or transactions relating to the Company
or any Third-Party Originators with respect to the SunTrust Acquisition
Closed-End Seconds Trust, Series 2007-1 (the “Transaction”) and any party
thereto identified by the Assignee of a type described in Item 1119 of
Regulation AB, as set forth on Exhibit
C
attached
hereto, other than SunTrust Capital Markets, Inc.
(b) For
so
long as the Assignee is required to file Exchange Act Reports in respect of
the
Issuing Entity (which the parties hereto may assume shall be for the period
covering the calendar year following the Closing Date, unless otherwise notified
in writing by the Company), the Company, at its own expense, shall no later
than
five (5) calendar days after the related Distribution Date, notify the Assignee
in writing of (i) any known material legal or governmental proceedings pending
(or known to be contemplated) against the Company or any Third-Party Originator
material to Certificateholders and (ii) any affiliations or relationships of
the
type described that develop following the Closing Date between the Company
or
any Third-Party Originator and any of the parties specified in Exhibit
C
hereto
(and any other parties identified in writing by the Assignee) with respect
to
the Securitization other than SunTrust Capital Markets, Inc., and provide to
the
Assignee a description of such litigation, affiliations or
relationships.
3
(c) Within
5
calendar days after the related Distribution Date, the Company shall provide
to
the Securities Administrator and the Assignee, to the extent known by a
responsible officer thereof, in ▇▇▇▇▇-compatible form, or in such other form
as
otherwise agreed upon by the Securities Administrator and the Company, the
form
and substance of any information that is, as set forth on Exhibit
D
hereto,
required to be provided by the Company for inclusion on Form 10-D (“Additional
Form 10-D Disclosure”), together with an Additional Disclosure Notification in
the form of Exhibit
E
hereto
(an “Additional Disclosure Notification”).
(d) No
later
than the close of business New York City time on the 2nd Business Day after
the
occurrence of an event requiring disclosure on Form 8-K (each such event, a
“Reportable Event”), the Company shall provide to the Securities Administrator
and Assignee, to the extent known by a responsible officer thereof, in
▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and the Company, the form and substance of any Form
8-K
Disclosure Information applicable to it , as set forth on Exhibit
D hereto,
together with an Additional Disclosure Notification
(e) The
Company shall indemnify the Assignee and each Person (including, but not limited
to, the Master Servicer) responsible for the preparation, execution or filing
of
any report required to be filed with the United States Securities and Exchange
Commission (the “Commission”) with respect to the 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 the Transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person who controls
any
of such parties or the Assignee (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, agents and affiliates of each of
the
foregoing (each, an “Indemnified Party”), and shall hold each of them harmless
from and against any claims, 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, data, accountants’ letter or other
material provided under this Section 5 by or on behalf of the Company, or
provided under this Section 5 by or on behalf of any 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;
or
(ii) any
breach by the Company of its obligations under this Section 5, including any
failure by the Company or any Third-Party Originator to deliver any information,
report, certification, accountants’ letter or other material when and as
required under this Section 5; or
4
(iii) any
breach by the Company of a representation or warranty set forth in this
Section 5 or
in a
writing furnished pursuant to this Section 5 and made as of a date prior to
the
Closing Date, to the extent that such breach is not cured by the Closing Date,
or any breach by the Company of a representation or warranty in a writing
furnished pursuant to this Section 5 to the extent made as of a date subsequent
to the Closing Date.
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 clause (e)(ii) of this Section
5, the Company shall promptly reimburse the Master Servicer, the Assignee and
each Person responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to the 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 the 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 or any Third-Party Originator.
This
indemnification shall survive the termination of this AAR or the Purchase
Agreement or the termination of any party to this AAR or the Purchase
Agreement.
6. Assignor
hereby agrees that, in connection with respect to each Mortgage Loan for which
the related mortgage has been recorded in the name of MERS or its designee,
it
shall take all actions as are necessary to cause the Trustee, as trustee of
the
Trust pursuant to the Pooling and Servicing Agreement, to be shown as the owner
of such Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by
MERS.
5
7. Notices.
a. The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Purchase
Agreement
is:
ACE
Securities Corp.
AMACAR
Group
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇)
▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the parties hereto in writing
by
Assignee
With
a
copy to:
Deutsche
Bank Securities, Inc.
▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Legal Department
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
b. The
Assignor’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Purchase
Agreement
is:
GMAC
Mortgage, LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Executive Vice President of National Loan Administration
or
such
other address as may hereafter be furnished to the parties hereto in writing
by
Assignor
With
a
copy to:
GMAC
Mortgage, LLC
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
General Manager
With
a
copy to:
GMAC
Mortgage, LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General Counsel
6
c. The
Company’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Purchase
Agreement
is:
SunTrust
Asset Funding, LLC
Mail
Code
3950
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the parties hereto in writing
by
Company;
with
a
copy to:
SunTrust
Banks, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
8. Accuracy
of the Purchase Agreement.
Company
and Assignor represent and warrant to Assignee that (i) attached hereto as
Exhibit
B
are
true, accurate and complete copies of the Purchase Agreement and all amendments
and modifications, if any, thereto, (ii) the Purchase Agreement is in full
force
and effect and has not been amended or modified in any respect, except as set
forth in this Agreement, and (iii) no notice of termination has been given
to
Company under the Purchase Agreement.
9. Recognition
of Assignee.
From
and
after the date hereof, Company shall note the transfer of the Mortgage Loans
to
Assignee in its books and records, Company shall recognize the Assignee as
the
owner of the Mortgage Loans. It is the intention of Assignor, Company, SunTrust
Bank and Assignee that the Purchase Agreement shall be binding upon and inure
to
the benefit of Company and Assignee and their respective successors and
assigns.
10. Governing
Law.
THIS
AAR SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AND
THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW), EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL
LAW.
7
11. Counterparts.
This
AAR
may be executed simultaneously in any number of counterparts. Each such
counterpart shall be deemed an original and all such counterparts taken together
shall constitute one and the same instrument. Delivery of executed signature
pages by facsimile shall constitute delivery of originals for the purpose of
this AAR.
12. Intention
of Assignor and Assignee.
The
Assignor intends that the conveyance of the Assignor’s right, title and interest
in and to the Mortgage Loans to the Assignee shall constitute a sale and not
a
pledge of security for a loan. If the conveyance by the Assignor is deemed
to be
a pledge of security for a loan, however, the Assignor intends that the rights
and obligations of the parties to such loan shall be established pursuant to
the
terms of this Agreement. The Assignor intends and agrees that, in any such
event, (i) the Assignor shall be deemed to have granted (and hereby does grant)
to the Assignee and its assigns a first priority security interest in the
Assignor’s entire right, as applicable, title and interest in and to the
Mortgage Loans, all principal and interest received or receivable with respect
to the Mortgage Loans, all amounts held from time to time in the accounts
mentioned pursuant to this Agreement and all reinvestment earnings on such
amounts, together with all of the Assignor’s right, title and interest in and to
the proceeds of any title, hazard or other insurance policies related to such
Mortgage Loans and (ii) this Agreement shall constitute a security agreement
under applicable law. All rights and remedies of the Assignor under this
Agreement are distinct from, and cumulative with, any other rights or remedies
under this Agreement or afforded by law or equity and all such rights and
remedies may be exercised concurrently, independently or
successively.
13. Defined
Terms
Capitalized
terms used but not defined herein shall have the meanings set forth in the
Purchase Agreement.
8
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement be executed by their duly authorized officers as of the
date first above written.
|
GMAC
MORTGAGE, LLC
Assignor
|
ACE
SECURITIES CORP.
Assignee
|
|||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇
▇. ▇▇▇▇▇
|
|||
|
Its:
Director
|
Its:
Vice
President
|
|||
|
SUNTRUST
ASSET FUNDING, LLC
Company
|
▇▇▇▇▇
FARGO BANK,
NATIONAL
ASSOCIATION
|
|||
|
Master
Servicer
|
||||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
Name:
▇▇▇▇
▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|||
|
Its:
Director
|
Title:
Assistant
Vice President
|
|||
|
Acknowledged
and Agreed:
SUNTRUST
BANK
|
|
|||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | |||
|
Name:
▇▇▇▇
▇. ▇▇▇▇▇
|
|
|||
|
Title:
Vice
President
|
|
|||
9
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
[Provided
Upon Request]
1
EXHIBIT
B
EXECUTED
COPY
OF
PURCHASE
AGREEMENT
Exhibit
B-1
|
EXECUTION
COPY
|
GMAC
MORTGAGE, LLC
Purchaser
and
SUNTRUST
ASSET FUNDING, LLC
Company
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
Dated
as of May 15, 2007
Fixed-Rate
Residential Mortgage Loans
TABLE
OF CONTENTS
|
ARTICLE
I DEFINITIONS
|
1
|
|
|
|
||
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS
|
10
|
|
|
|
||
|
Section
2.01.
|
Agreement
to Purchase; Purchase Price.
|
10
|
|
Section
2.02.
|
Books
and Records.
|
11
|
|
Section
2.03.
|
Delivery
of Documents.
|
11
|
|
Section
2.04.
|
Closing
Conditions.
|
12
|
|
Section
2.05.
|
Acceptance
of Mortgage Loans.
|
13
|
|
|
||
|
ARTICLE
III
REPRESENTATIONS AND WARRANTIES; REMEDIES AND BREACH
|
13
|
|
|
|
||
|
Section
3.01.
|
Company
Representations and Warranties.
|
13
|
|
Section
3.02.
|
Representations
and Warranties Regarding Individual Mortgage Loans.
|
13
|
|
Section
3.03.
|
Repurchase
and Other Remedies.
|
13
|
|
Section
3.04.
|
Repurchase
of Mortgage Loans With Early Payment Defaults.
|
15
|
|
|
||
|
ARTICLE
IV SECURITIZATIONS
|
16
|
|
|
|
||
|
Section
4.01.
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon
Reconstitution.
|
16
|
|
Section
4.02.
|
Regulation
AB Compliance.
|
16
|
|
|
||
|
ARTICLE
V GUARANTY
|
17
|
|
|
|
||
|
ARTICLE
VI MISCELLANEOUS PROVISIONS
|
17
|
|
|
|
||
|
Section
6.01.
|
Amendment.
|
17
|
|
Section
6.02.
|
Governing
Law; Waiver of Jury Trial.
|
17
|
|
Section
6.03.
|
Notices.
|
18
|
|
Section
6.04.
|
Severability
of Provisions.
|
19
|
|
Section
6.05.
|
Relationship
of Parties.
|
19
|
|
Section
6.06.
|
Successors
and Assigns.
|
19
|
|
Section
6.07.
|
Recordation
of Assignments of Mortgage.
|
19
|
|
Section
6.08.
|
Solicitation
of Mortgagor.
|
19
|
|
Section
6.09.
|
Further
Agreements.
|
20
|
|
Section
6.10.
|
Confidential
Information.
|
20
|
|
Section
6.11.
|
Equal
Opportunity.
|
21
|
|
Section
6.12.
|
Counterparts.
|
21
|
|
Section
6.13.
|
Exhibits.
|
21
|
|
Section
6.14.
|
General
Interpretive Principles.
|
21
|
|
Section
6.15.
|
Reproduction
of Documents.
|
22
|
|
Section
6.16.
|
Judicial
Interpretation.
|
22
|
|
Section
6.17.
|
Headings.
|
22
|
|
Section
6.18.
|
Intention
of the Company.
|
22
|
i
EXHIBITS
|
[Reserved]
|
|
|
Exhibit
B
|
Contents
of Each Mortgage File
|
|
Exhibit
C
|
Form
of Memorandum of Sale
|
|
Exhibit
D
|
Form
of Assignment, Assumption and Recognition Agreement
|
|
Exhibit
E
|
Underwriting
Guidelines
|
|
Exhibit
F
|
Representations
and Warranties of the Company
|
|
Exhibit
G
|
Representations
and Warranties Regarding Individual Mortgage Loans
|
|
Mortgage
Loan Schedule
|
|
|
Exhibit
I
|
Schedule
of Underlying Sellers and Underlying
Agreements
|
ii
This
is a
Mortgage Loan Purchase and Sale Agreement for fixed-rate residential second
lien
mortgage loans, dated and effective as of May 14, 2007 (the “Agreement”) and is
by and between GMAC Mortgage, LLC, a Delaware limited liability company,
as
purchaser (the “Purchaser”), and SunTrust Asset Funding, LLC, a Delaware limited
liability company, as seller (the “Company”), as acknowledged and agreed to by
SunTrust Bank, a Georgia banking corporation (“SunTrust Bank”).
WITNESSETH
WHEREAS,
the Purchaser has agreed to purchase from the Company and the Company has
agreed
to sell to the Purchaser certain second lien fixed-rate residential mortgage
loans set forth on the Mortgage Loan Schedule attached hereto as Exhibit
H
(the
“Mortgage Loans”), together with the servicing rights associated with the
Mortgage Loans;
WHEREAS,
the Company acquired the Mortgage Loans from the Underlying Sellers listed
on
Exhibit
I
pursuant
the related purchase agreements (the “Underlying Agreements”) listed on the same
Exhibit
I;
WHEREAS,
the Purchaser is currently servicing the Mortgage Loans on behalf of the
Company
pursuant to a Servicing Agreement between the Purchaser and the
Company;
WHEREAS,
the Mortgage Loans will be sold by the Company and purchased by the Purchaser
servicing released (the “Mortgage Loan Package”) on the Closing Date as provided
herein;
WHEREAS,
each of the Mortgage Loans will be secured by a mortgage, deed of trust or
other
security instrument creating a second lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule which will be annexed
to the Memorandum of Sale (as defined herein) on the Closing Date;
and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of
the
Mortgage Loans and the conveyance of the Mortgage Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for $10.00 and 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 context otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, procedures (including collection procedures)
that
comply with applicable federal, state and local law customarily employed
and
exercised in servicing and administering mortgage loans and that are in
accordance with the accepted 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.
1
Agreement:
This
Mortgage Loan Purchase and Sale Agreement and all amendments hereof and
supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraisal:
A
written appraisal of a Mortgaged Property made by a Qualified Appraiser,
which
appraisal must be written, in form and substance, to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac
standards, and satisfy the requirements of Title XI of the Financial
Institution, Reform, Recovery and Enforcement Act of 1989 and the regulations
promulgated thereunder, in effect as of the date of the appraisal.
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 and
provided, further to the extent reflected on the Mortgage Loan Schedule,
that in
the case of conforming Mortgage Loans approved through the ▇▇▇▇▇▇
Mae Desktop Underwriter (“DU”) which
have qualified for a property inspection waiver, such value shall be based
solely on the value established through DU.
Assignment,
Assumption and Recognition Agreement:
An
agreement substantially in the form of Exhibit
D
attached
hereto.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form (except for the name of the assignee and recording information),
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the sale of the Mortgage to the
Purchaser.
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 State of New York are authorized or obligated
by
law or executive order to be closed.
Class
A Certificate Insurer:
XL
Capital Assurance, Inc.
Closing
Date:
May 14,
2007.
Combined
Loan-to-Value Ratio or CLTV:
With
respect to any Mortgage Loan, the ratio of (i) the original loan amount of
the
Mortgage Loan at its origination (unless otherwise indicated) plus
the
amount of any related First Lien as of the date of origination of the Mortgage
Loan to (ii) the Appraised Value of the Mortgaged Property.
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.
2
Company:
SunTrust Asset Funding, LLC, or its successor in interest or assigns, or
any
successor to the Company under this Agreement appointed as herein
provided.
Company
Specific Representations:
As
defined in Section 3.01.
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.
Consumer
Information:
Any
personally identifiable information in any form (written electronic or
otherwise) relating to a Mortgagor, including, but not limited to: a Mortgagor’s
name, address, telephone number, Mortgage Loan number, Mortgage Loan payment
history, delinquency status, insurance carrier or payment information, tax
amount or payment information; the fact that the Mortgagor has a relationship
with the Company or the originator of the related Mortgage Loan; and any
other
non-public personally identifiable information.
Custodian:
The
custodian appointed by the Purchaser, or its successor in interest or assigns,
or any successor to the Custodian.
Cut-off
Date:
April
1, 2007.
DBRS:
DBRS,
Inc. and
any
successor or successors thereto.
Deleted
Mortgage Loan:
As
defined in Section 3.03.
DU:
▇▇▇▇▇▇
▇▇▇ Desktop Underwriter.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
▇▇▇▇▇▇
▇▇▇:
The
entity formally known as Federal National Mortgage Association (FNMA), or
any
successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
First
Lien:
With
respect to each Mortgaged Property, the lien of the mortgage, deed of trust
or
other instrument securing a mortgage note which creates a first lien on such
Mortgaged Property.
▇▇▇▇▇▇▇
Mac:
The
entity formally known as the Federal Home Loan Mortgage Corporation (FHLMC),
or
any successor thereto.
GAAP:
Generally accepted accounting principles, consistently applied.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
3
Investor:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
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 (in whole or in part)
of the
Mortgage Loan.
Memorandum
of Sale:
With
respect to each Mortgage Loan and the Mortgage Loan Package, the memorandum
of
sale, substantially in the form of Exhibit
C
attached
hereto, confirming the sale by Company and the purchase by Purchaser of the
Mortgage Loans on the Closing Date.
MERS:
MERSCORP, Inc., its successors and assigns.
MERS
Designated Mortgage Loan:
A
Mortgage Loan for which (a) such action has been taken as is necessary to
cause
MERS to be, the mortgagee of record, as nominee for the Company, in accordance
with MERS Procedures Manual and (b) the Company has designated or will designate
the Custodian or the Purchaser’s designee as the Investor on the MERS
System.
MERS
Procedures Manual:
The
MERS Procedures Manual, as it may be amended, supplemented or otherwise modified
from time to time.
MERS
Report:
The
report from the MERS System listing MERS Designated Mortgage Loans and other
information.
MERS
System:
MERS
mortgage electronic registry system, as more particularly described in the
MERS
Procedures Manual.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. and any successor or successors thereto.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a second lien on an unsubordinated estate in fee simple in real property
which secures the Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit B
annexed
hereto, and any additional documents required to be added to the Mortgage
File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note 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
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.
4
Mortgage
Loan Documents:
The
documents referred to in Exhibit
B
as items
1 through 9.
Mortgage
Loan Package:
The
pool of Mortgage Loans purchased on the Closing Date, as described in the
Mortgage Loan Schedule.
Mortgage
Loan Representations:
As
defined in Section 3.02.
Mortgage
Loan Schedule:
With
respect to the Mortgage Loan Package, the schedule of Mortgage Loans annexed
hereto as Exhibit
H
(and
delivered in electronic format to the Purchaser), such schedule setting forth
the data fields set forth in the Pooling and Servicing Agreement .
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
underlying real property securing repayment of a Mortgage Note, consisting
of a
fee simple parcel of real estate or a leasehold estate, the term of which
is
equal to or longer than the term of the related Mortgage Note.
Mortgagor:
The
obligor on a Mortgage Note.
Negative
Amortization:
A
gradual increase in the mortgage debt that occurs when the monthly fixed
installment is not sufficient for full application to both principal and
interest. The interest shortage is added to the unpaid principal balance
to
create “negative” amortization.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President, a Senior Vice President, a First Vice President,
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 Company
or an
Originator, and delivered to the Purchaser as required by this
Agreement.
Originator:
With
respect to any Mortgage Loan, the entity that (i) took the Mortgagor’s loan
application (ii) processed the Mortgagor’s loan application, or (iii) closed
and/or funded the Mortgagor’s Mortgage Loan.
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.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified Insurer,
as
required by this Agreement with respect to certain Mortgage Loans.
5
Pooling
and Servicing Agreement:
That
certain pooling and servicing agreement, dated as of April 1, 2007, by and
among
ACE Securities Corp., as depositor, Purchaser, as servicer, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer and securities administrator, and
HSBC
Bank USA, National Association, as trustee.
Prepayment
Premium:
Payments received on a Mortgage Loan as a result of a Principal Prepayment
thereon,
not
otherwise due thereon in respect of principal or interest, which are intended
to
be a disincentive to prepayment.
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 Premium thereon
and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the
month
of prepayment.
Purchase
Price:
The
price paid on a Closing Date by the Purchaser to the Company for the Mortgage
Loan Package, as set forth in the Memorandum of Sale.
Purchaser:
GMAC
Mortgage, LLC, or its successor in interest or any successor or assignee
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 Institution Reform,
Recovery, and Enforcement Act and the regulations promulgated thereunder,
all as
in effect on the date the Mortgage Loan was originated.
Qualified
Correspondent:
Any
Person from which the Seller purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Seller and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Seller, in accordance with underwriting guidelines designated by the
Seller
(“Designated
Guidelines”)
or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i)
above
and were acquired by the Seller within 180 days after origination; (iii)
either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same
type
as the Mortgage Loans for the Seller’s own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the
time
such Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review
of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Seller.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business.
6
Qualified
Substitute Mortgage Loan:
A
mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms
of
this Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance, after application of all scheduled payments
of
principal and interest due during or prior to the month of substitution,
not in
excess of the Stated Principal Balance of the Deleted Mortgage Loan as of
the
due date in the calendar month during which the substitution occurs, (ii)
have a
Mortgage Interest Rate not less than (and not more than one percentage point
in
excess of) the Mortgage Interest Rate of the Deleted Mortgage Loan, (iii)
have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (iv) have the same due date as the
due
date on the Deleted Mortgage Loan, (v) have a Combined Loan-to-Value Ratio
as of
the date of substitution equal to or lower than the Combined Loan-to-Value
Ratio
of the Deleted Mortgage Loan as of such date, (vi) be secured by the same
lien
priority on the related Mortgaged Property as the Deleted Mortgage Loan,
(vii)
have a credit grade at least equal to the credit grading assigned on the
Deleted
Mortgage Loan, (viii) be a “qualified mortgage” as defined in the REMIC
Provisions and (ix) conform to each Mortgage Loan Representation and each
Company Specific Representation. In the event that one or more mortgage loans
are substituted for one or more Deleted Mortgage Loans, the amounts described
in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall be determined
on the basis of weighted average Mortgage Rates, the terms described in clause
(iii) hereof shall be determined on the basis of weighted average remaining
term
to maturity, the Combined Loan-to-Value Ratios described in clause (v) hereof
shall be satisfied as to each such mortgage loan, the credit grades described
in
clause (vii) hereof shall be satisfied as to each such mortgage loan and,
except
to the extent otherwise provided in this sentence, the representations and
warranties described in clause (ix) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may
be..
Rating
Agency:
Each of
DBRS, Moody’s and S&P, or any successor thereto.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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 (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.
Regulation
AB Compliance Addendum:
Certain
addendum attached to the Underlying Agreements.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the
Code,
and related provisions, and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
7
Remittance
Date:
The
18th
day (or
if such 18th
day is
not a Business Day, the first Business Day immediately preceding such
18th
day) of
any month.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure.
Repurchase
Price:
With
respect to any Mortgage Loan, (i) the unpaid principal balance of the Mortgage
Loan as of the date of repurchase, plus
(ii)
interest on such unpaid principal balance at the Mortgage Loan Interest Rate
from the date on which interest has last been paid and distributed to the
Purchaser to the last day of the month in which such repurchase occurs, less
amounts received or advanced in respect of such repurchased Mortgage Loan,
plus
(iii)
the amount of any unreimbursed Servicing Advances, plus
(iv)
actual and out-of-pocket costs and expenses incurred in the enforcement of
the
Company’s repurchase obligation hereunder plus,
(v)
with respect to any Mortgage Loan subject to a Securitization, any costs
and
damages incurred by the related trust in connection with any violation by
such
Mortgage Loan of any predatory or abusive lending law.
RESPA:
The
Real Estate Settlement Procedures Act, as amended.
Second
Lien:
With
respect to each Mortgaged Property, the lien of the mortgage, deed of trust
or
other instrument securing a Mortgage Note which creates a second lien on
the
Mortgaged Property.
Second
Lien Mortgage Loan:
A
Mortgage Loan secured by the lien on the Mortgaged Property, subject to one
prior lien on such Mortgaged Property securing financing obtained by the
related
Mortgagor.
S&P:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. and any successor or successors thereto.
Securities
Act of 1933 or the 1933 Act:
The
Securities Act of 1933, as amended.
Securitization:
Any
transaction involving either (1) a sale or other transfer of some or all
of the
Mortgage Loans directly or indirectly by the Purchaser to an issuing entity
in
connection with an issuance of publicly offered or privately placed, rated
or
unrated mortgage-backed securities or (2) an issuance of publicly offered
or
privately placed, rated or unrated securities, the payments on which are
determined primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicemembers
Civil Relief Act:
The
Servicemembers Civil Relief Act of 2003.
Servicer:
GMAC
Mortgage, LLC, or its successor in interest or assigns, or any successor
servicer.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable attorneys’ 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 and (c) the management and liquidation of any REO
Property.
8
Servicing
File:
With
respect to each Mortgage Loan, the file held by the Servicer consisting of
originals or copies, which may be imaged copies, of all documents in the
Mortgage File which are not delivered to the Custodian and copies of the
Mortgage Loan Documents listed herein, the originals of which (or imaged
copies
of the original mortgagee policy of title insurance and/or the irrevocable
binder or commitment to issue the same) are delivered to the Custodian pursuant
to Section 2.03.
Servicing
Rights:
With
respect to the Mortgage Loans identified on the Mortgage Loan Schedule, all
of
the Servicer’s right, title and interest in and to the servicing of such
Mortgage Loans, including all rights to receive or retain amounts in respect
of
servicing fees, late fees and similar payments (other than Prepayment Premiums),
reimbursement for any servicing and delinquency advances made by the Servicer,
or other expenses and costs, and investment earnings or other benefits from
positive account balances, together with all collection account balances,
escrow
account balances, contract rights, incidental income and benefits to the
extent
related to the servicing rights, and exclusive rights to possession and use
of
Servicing Files and records directly or indirectly related thereto, including,
without limitation, borrower lists, insurance policies and tax service
agreements.
Stated
Principal Balance:
As to
each Mortgage Loan and any date of determination, (i) the principal balance
of
such 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 Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
SunTrust
Bank:
SunTrust Bank or its successor in interest or assigns.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Seller that, with respect to providing information or
representing related to Item 1110(a) of Regulation AB, originated 10% or
more of
the Mortgage Loans, or, with respect to all other usage of “Third-Party
Originator”, originated 20% or more of the Mortgage Loans.
Underlying
Agreements:
Shall
have the meaning assigned to such term in the recitals to this Agreement.
Underlying
Seller:
The
loans sellers listed on Exhibit
I
from
whom the Company acquired the related Mortgage Loans pursuant to the Underlying
Agreements.
Underwriting
Guidelines:
The
underwriting guidelines of the Underlying Sellers with respect to Mortgage
Loans, attached as Exhibit
E
hereto.
9
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS
Section
2.01. Agreement
to Purchase; Purchase Price.
(a) Agreement
to Purchase.
In
exchange for the payment of the Purchase Price to the Company on the Closing
Date, the Company agrees to sell and the Purchaser agrees to purchase (without
recourse but subject to the terms of this Agreement) on a servicing released
basis, all the right, title and interest of the Company in and to the Mortgage
Loans, including the Servicing Rights relating to the Mortgage Loans, having
an
aggregate Stated Principal Balance as of the Cut-off Date in an amount as
set
forth in the Memorandum of Sale. The Company shall deliver the Mortgage Loan
Schedule for the Mortgage Loan Package to the Purchaser at least three (3)
Business Days prior to the Closing Date.
(b) Purchase
Price.
The
Purchase Price for the Mortgage Loan Package shall be equal to the amount
set
forth in the Memorandum of Sale. The payment of the Purchase Price shall
be made
to the account designated by the Company by wire transfer in immediately
available funds or to the location designated by the Purchaser with respect
to
the non-cash portion of the Purchase Price by 3:00 p.m. New York City time
on
the Closing Date.
With
respect to each Mortgage Loan, the Purchaser shall be entitled to (1) the
principal portion of all monthly payments due after the Cut-off Date, (2)
all
other recoveries of principal collected on or after the Cut-off Date
(provided,
however,
that
the principal portion of all Monthly Payments due on or before the Cut-off
Date
and collected by the Servicer or any successor servicer after the Cut-off
Date
shall belong to the Seller), and (3) all payments of interest at the Mortgage
Interest Rate on the Mortgage Loans (minus that portion of any such payment
which is allocable to the period prior to the Cut-off Date). The Stated
Principal Balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected, together with any unscheduled Principal Prepayments
collected prior to the Cut-off Date; provided,
however,
that
Monthly Payments for a Due Date due after the Cut-off Date shall not be applied
to the principal balance as of the Cut-off Date. Such monthly payments shall
be
the property of the Purchaser.
(c) Possession
of Mortgage Files and Servicing Files.
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. Complete Servicing Files for the Mortgage Loans
shall
be delivered to the Purchaser or its designee on or before the Closing
Date.
10
Section
2.02. Books
and Records.
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 for the benefit of the Purchaser
as
owner of the Mortgage Loans. The sale of each Mortgage Loan shall be reflected
on the Company’s balance sheet and other financial statements, tax returns and
business records as a sale of assets by the Company.
Section
2.03. Delivery
of Documents.
The
Company will, with respect to each Mortgage Loan, deliver and release the
Mortgage Loan Documents to the Custodian at least five (5) Business Days
prior
to the Closing Date. In addition, in connection with the assignment of any
MERS
Designated Mortgage Loan, the Company agrees that on or prior to each Closing
Date it will cause the MERS System to indicate that the related Mortgage
Loans
have been assigned by the Company to the Purchaser in accordance with this
Agreement by entering in the MERS System the information required by the
MERS
System to identify the Purchaser or its designee as owner of such Mortgage
Loans. The Company shall be responsible for recording the Assignments of
Mortgage, if necessary, in accordance with this Agreement.
The
Company shall be responsible for recording the Assignments of Mortgage, if
necessary, in accordance with this Agreement. All recording fees and other
costs
associated with the recording of Assignments of Mortgage and other relevant
documents to the Purchaser or its designee will be borne by the Company.
For
Mortgage Loans not registered under the MERS System, if the Purchaser requests
that the Assignments of Mortgage be recorded, the Company shall cause such
Assignments of Mortgage which were delivered in blank to be completed and
to be
recorded. The Company shall be required to deliver such Assignments of Mortgage
for recording within thirty (30) days of the date on which the Company is
notified that recording will be required pursuant to this Section 2.03. The
Company shall furnish the Custodian with a copy of each Assignment of Mortgage
submitted for recording. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Company shall promptly
have
a substitute Assignment of Mortgage prepared or have such defect cured, as
the
case may be, and thereafter cause such Assignment of Mortgage to be duly
recorded.
Except
as
otherwise provided in this Section 2.03, upon discovery or receipt of notice
of
any materially defective Mortgage Loan Document or missing Mortgage Loan
Document (“Defective Document”), the Company shall have ninety (90) days to cure
such defect or deliver such missing document to the Custodian. If the Company
does not cure such defect or deliver such missing document within such time
period and such defect materially and adversely affects the value of the
related
Mortgage Loan or the Purchaser’s interest in the related Mortgage Loan, the
Company shall either repurchase or substitute for such Mortgage Loan in
accordance with Section 3.03.
If
the
original or a copy certified by the appropriate recording office of any document
submitted for recordation to the appropriate public recording office is not
so
delivered to the Custodian
two-hundred
and seventy (270) days following the Closing Date, and if the Company does
not
cure such failure within sixty (60) days after receipt of written notification
of such failure from the Purchaser, the related Mortgage Loan shall, upon
the
request of the Purchaser, be repurchased by the Company at a price and in
the
manner specified in Section 3.03.
11
In
the
event the public recording office is delayed in returning any original document,
the Company shall deliver to the Custodian within two-hundred and seventy
(270)
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. However, if
the
Company cannot deliver such original or clerk-certified copy of any document
submitted for recordation to the appropriate public recording office within
the
specified time for any reason, within sixty (60) days after receipt of written
notification of such failure from the Purchaser, the Company shall repurchase
the related Mortgage Loan at a price and in the manner specified in Section
3.03.
Section
2.04. Closing
Conditions.
The
closing for the purchase and sale of the Mortgage Loan Package shall take
place
on the Closing Date. 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 may agree.
The
closing for the Mortgage Loan Package shall be subject to the satisfaction
of
each of the following conditions:
(a) with
respect to the Purchaser’s obligations to close:
(i) the
Company shall have delivered to the Purchaser the Mortgage Loan Schedule
and an
electronic data file containing information on a loan-level basis;
(ii) all
of
the representations and warranties of the Company under this Agreement shall
be
true and correct as of the Closing Date (or, with respect to the Mortgage
Loan
Representations, such other date specified therein) in all material respects;
(iii) the
Purchaser shall have received from the Custodian an initial certification
with
respect to its receipt of the Mortgage Loan Documents for the Mortgage Loans;
(iv) all
other
terms and conditions of this Agreement to be satisfied by the Company shall
have
been complied with in all material respects; and
(v) the
Purchaser shall have received the original Memorandum of Sale, executed on
behalf of the Company;
12
(b) with
respect to the Company’s obligations to close:
(i) the
Company shall have received a copy of the initial certification of the Custodian
with respect to its receipt of the Mortgage Loan Documents for the Mortgage
Loans;
(ii) the
Company shall have received an original of the Memorandum of Sale, executed
on
behalf of the Purchaser; and
(iii) all
terms
and conditions of this Agreement to be satisfied by the Purchaser shall have
been materially complied with.
Upon
satisfaction of the foregoing conditions, the Purchaser shall pay to the
Company
on the Closing Date the Purchase Price for the Mortgage Loan Package, including
accrued interest pursuant to Section 2.01 of this Agreement.
Section
2.05. Acceptance
of Mortgage Loans.
The
documents delivered pursuant to Section 2.03 hereof shall be reviewed by
the
Purchaser or any assignee, transferee or designee of the Purchaser at any
time
before or after the Closing Date (and with respect to each document permitted
to
be delivered after the Closing Date, within seven days of its delivery) to
ascertain that all required documents have been executed and received and
that
such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES; REMEDIES AND BREACH
Section
3.01. Company
Representations and Warranties.
The
Company hereby makes the representations and warranties set forth in
Exhibit
F
hereto
to the Purchaser as of the date hereof and the Closing Date (collectively,
the
“Company Specific Representations”).
Section
3.02. Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby makes the representations and warranties
set forth in Exhibit
G
hereto
to the Purchaser as of the Closing Date (collectively, the “Mortgage Loan
Representations”).
Section
3.03. Repurchase
and Other Remedies.
It
is
understood and agreed that the Company Specific Representations and the Mortgage
Loan Representations 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 and shall not be impaired by
any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination of or failure to examine any Mortgage File. Upon
discovery by either the Company, the Purchaser or the Servicer of any Defective
Document or a breach of any of the Mortgage Loan Representations that materially
and adversely affects the value of a Mortgage Loan or the interests of the
Purchaser (or that materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
Defective Document or a breach shall give prompt written notice to the other.
Any such breach or Defective Document that causes a Mortgage Loan not to
be a
“qualified mortgage” within the meaning of Section 860G(a)(3) of the Code shall
be deemed to materially and adversely affect the interests of the Purchaser.
13
Within
ninety (90) days of the earlier of either discovery by, or notice to, the
Company of any Defective Document or a breach of a representation or warranty
which materially and adversely affects the value of a Mortgage Loan or the
interest of the Purchaser therein, the Company shall use reasonable efforts
promptly to cure such breach in all material respects and, if such Defective
Document or breach cannot be cured, the Company shall repurchase such Mortgage
Loan at the Repurchase Price. However, if the breach or Defective Document
shall
involve a Mortgage Loan Representation and the Company discovers or receives
notice of any such breach within ninety (90) days of the Closing Date, the
Company shall, if the breach or Defective Document cannot be cured in all
material respects, at the Company’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 one hundred twenty
(120) days after the Closing Date. Notwithstanding any of the foregoing,
if a
breach or Defective Document would cause the Mortgage Loan to be other than
a
“qualified mortgage,” as defined in Section 860G(a)(3) of the Code, any such
repurchase or substitution must occur within ninety (90) days from the date
the
breach or Defective Document was discovered unless such breach is cured during
such period.
If
the
Company has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan within ninety (90) days after discovery or the written
notice of the foregoing breach or Defective Document. Any repurchase of a
Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
3.03
shall be accomplished by deposit to such account as the Purchaser shall identify
to the Company, of the amount of the Repurchase Price for distribution to
the
Purchaser on the next scheduled Remittance Date, after deducting therefrom
any
amount received in respect of such repurchased Mortgage Loan or
Loans.
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. 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
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage
Loan
from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the Mortgage Loan Schedule to reflect
the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company shall be deemed to have
made
as to such Qualified Substitute Mortgage Loan each Mortgage Loan Representation
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. The Company shall deposit in such account as the Purchaser
shall identify to the Company, the Monthly Payment 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 the 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.
14
For
any
month in which the Company substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the amount (if any) by which
the
aggregate principal balance of all such Qualified Substitute Mortgage Loans
as
of the date of substitution is less than the aggregate unpaid principal balance
of all such Deleted Mortgage Loans (after application of the principal portion
of the Monthly Payments due in the month of substitution) (the “Substitution
Adjustment Amount”) shall be deposited into such account as the Purchaser shall
identify to the Company, by the Company on or before the Remittance Date
in the
month succeeding the calendar month during which the related Mortgage Loan
is
required to be purchased or replaced hereunder.
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
as
provided in this Section 3.03 constitute the sole remedies of the Purchaser
and
the Servicer respecting a breach of the Mortgage Loan
Representations.
If
the
representation made by the Company
in
Exhibit
G(qq)
is
breached, the Company shall not have the right or obligation to cure, substitute
or repurchase the affected Mortgage Loan but shall remit to the Purchaser
the
amount of the Prepayment Premium indicated on the applicable part of the
Mortgage Loan Schedule to be due from the Mortgagor in the circumstances
less
any amount collected and remitted to the Purchaser.
Any
cause
of action against the Company relating to or arising out of the breach of
any
Company Specific Representation or Mortgage Loan Representation 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) failure 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.
Section
3.04. Repurchase
of Mortgage Loans With Early Payment Defaults.
The
Underlying Agreements provide that the Underlying Sellers shall repurchase
Mortgage Loans in the event of specified delinquencies occurring during a
specified period following the acquisition of the Mortgage Loans by the
Purchaser. The Company agrees to use commercially reasonable efforts to enforce
such obligations of the Underlying Sellers in the event such delinquencies
occur
after the sale of the Mortgage Loans to the Purchaser if the Purchaser provides
the Company with reasonable notice of such delinquencies.
15
ARTICLE
IV
SECURITIZATIONS
Section
4.01. Removal
of Mortgage Loans from Inclusion Under this Agreement Upon
Reconstitution.
The
Company shall cooperate with the Purchaser in connection with the
Securitization. In connection therewith the Company shall:
(a) make
all
representations and warranties made herein with respect to the Mortgage Loans
and the Company itself as of the Closing Date;
(b) execute
an Assignment, Assumption and Recognition Agreement;
(c) provide
as applicable such
additional Opinions of Counsel, letters from auditors, and certificates of
public officials or officers of the Company as are reasonably believed necessary
by the trustee, any Rating Agency or any credit enhancement provider, as
the
case may be, in connection with Securitizations.
Section
4.02. Regulation
AB Compliance.
The
Underlying Agreements provide that the Underlying Sellers shall provide certain
information and perform certain other compliance with Regulation AB pursuant
to
the Regulation AB Compliance Addendum attached to each of the Underlying
Agreements. The Company agrees to use commercially reasonable efforts to
enforce
such obligations of the Underlying Sellers provided the Purchaser provides
the
Company with reasonable notice of any request for information or compliance
with
such Regulation AB Compliance Addendum.
16
ARTICLE
V
GUARANTY
SunTrust
Bank agrees with the Purchaser for the sole and exclusive benefit of Purchaser
and its assignees to hereby absolutely, unconditionally and irrevocably
guarantee to the Purchaser, the full and prompt performance by the Company
of
any and all obligations of the Company under Section 3.03 of this Agreement.
SunTrust Bank agrees that its obligations pursuant to this Article V shall
be a
continuing, absolute and unconditional guarantee of the full and punctual
performance by the Company of its obligations under Section 3.03 of this
Agreement. It shall not be necessary for such claimant to first pursue any
remedy from or exhaust any proceedings against Company; provided,
however,
that
the Purchaser demand payment from the Company which payment is not made for
a
period of thirty (30) calendar days. This Article V shall continue to be
effective if the Company merges or consolidates with or into another entity,
loses its separate legal identity or ceases to exist.
ARTICLE
VI
MISCELLANEOUS
PROVISIONS
Section
6.01. Amendment.
This
Agreement may be amended from time to time by written agreement signed by
the
Company and the Purchaser.
Section
6.02. Governing
Law; Waiver of Jury Trial.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW
YORK (EXCLUDING THE CHOICE OF LAW PROVISIONS) AND 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.
17
Section
6.03. 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:
|
SunTrust
Asset Funding, LLC
Mail
Code
3950
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
with
a
copy to:
SunTrust
Banks, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Company in writing by
the
Purchaser;
|
(ii)
|
if
to Purchaser:
|
GMAC
Mortgage, LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General Manager
or
such
other address as may hereafter be furnished to the Company in writing by
the
Purchaser;
and
|
(iii)
|
if
to SunTrust Bank:
|
SunTrust
Bank
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company.
18
Section
6.04. 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
6.05. 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
6.06. Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the Company and
the
Purchaser and their respective successors and assigns. The Company may not
assign this Agreement without the consent of the Purchaser. The Purchaser
shall
have the right, without the consent of the Company but subject to the limits
set
forth in Section 2.02 hereof, 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 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. In the event
the
Purchaser assigns this Agreement, and the assignee assumes any of the
Purchaser’s obligations hereunder, the Company acknowledges and agrees to look
solely to such assignee, and not the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability
to
the Company with respect thereto.
Section
6.07. 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 or advisable in
accordance with Acceptable Servicing Practices or under applicable law or
is
requested by the Purchaser at its sole option in the case of Mortgage Loans
that
are not registered on MERS.
Section
6.08. Solicitation
of Mortgagor.
From
and
after the Closing Date, the Company agrees that it will not take any action
or
permit or cause any action to be taken by any of its agents or affiliates,
or by
any independent contractors or independent mortgage brokerage companies on
the
Company’s behalf, to personally, by telephone, mail, facsimile or electronic
mail, solicit any Mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan. It is understood and agreed that promotions
undertaken by the Company or any of its affiliates which are directed to
the
general public at large or which are not specifically directed toward the
Mortgagors under the Mortgage Loans, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio or
television advertisements shall not constitute solicitation under this Section,
nor is the Company prohibited from responding to unsolicited requests or
inquiries made by a Mortgagor or an agent of a Mortgagor. This subsection
6.09
shall not be deemed to preclude the Company or any of its agents or affiliates
from soliciting any Mortgagor for any other financial products or
services.
19
Section
6.09. 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
6.10. Confidential
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.
The
Purchaser and the Company agree they (i) shall comply with all applicable
laws
and regulations regarding the privacy or security of Consumer Information,
(ii)
shall not collect, create, use, store, access, disclose or otherwise handle
Consumer Information in any manner inconsistent with any applicable laws
or
regulations regarding the privacy or security of Consumer Information, (iii)
shall not disclose Consumer Information to any affiliated or non-affiliated
third party except to enforce or preserve its rights, as otherwise permitted
or
required by applicable law (or by regulatory authorities having jurisdiction
in
the premises), (iv) shall maintain appropriate administrative, technical
and
physical safeguards to protect the security, confidentiality and integrity
of
Consumer Information, including maintaining security measures designed to
meet
the Interagency Guidelines Establishing Standards for Safeguarding Consumer
Information published in final form on February 1, 2001, 66 Fed. Reg. 8616,
and
the rules promulgated thereunder and (v) shall promptly notify the other
party
in writing upon becoming aware of any actual breach and of any suspected
breach
of this section. The Company shall promptly provide the Purchaser’s regulators
information regarding such security measures upon the reasonable request
of the
Purchaser, which information shall include, but not be limited to, any SAS
70 or
similar independent audit reports, summaries of test results or equivalent
measures taken by the Company with respect to its security measures, as agreed
upon by the parties. Each party shall indemnify and defend the other party
against, and shall hold the other party harmless from, any cost, expense,
loss,
claim or other liability that such other party may suffer as a result of
or in
connection with its failure to comply with or perform the obligations set
forth
in this section. The restrictions set forth herein shall survive the termination
of this Agreement.
20
Section
6.11. Equal
Opportunity.
The
Purchaser and the Company represent that they are equal opportunity employers
and do not discriminate in employment of persons or awarding of subcontracts
because of a person’s race, sex, age, religion, national origin, veteran or
handicap status. The Company is aware of and fully informed of the Purchaser’s
responsibilities and agrees to the provisions under the following: (a) Executive
Order 11246, as amended or superseded in whole or in part, and as contained
in
Section 202 of said Executive Order as found at 41 C.F.R. § 60-1.4(a)(1-7);
(b) Section 503 of the Rehabilitation Act of 1973 as contained in 41 C.F.R.
§ 60-741.4; and (c) The Vietnam Era Veterans' Readjustment Assistance Act
of 1974 as contained in 41 C.F.R. § 60-250.4.
Section
6.12. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts
shall
constitute one and the same instrument.
Section
6.13. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement.
Section
6.14. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP;
(c) references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) 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;
(e) the
words
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
21
Section
6.15. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties
agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party
in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
6.16. Judicial
Interpretation.
Should
any provision of this Agreement require judicial interpretation, the parties
hereto agree that the court interpreting or construing the same shall not
apply
a presumption that the terms hereof or thereof shall be more strictly construed
against one party by reason of the rule of construction that a document is
to be
more strictly construed against the party who itself or through its agents
prepared the same.
Section
6.17. Headings.
The
headings and captions of the articles, sections, subsections, paragraphs,
and
subdivisions of this Agreement are for the convenience of reference only,
are
not to be considered a part hereof and shall not limit or otherwise affect
any
of the terms hereof.
Section
6.18. Intention
of the Company.
The
Company intends that the conveyance of the Company’s right, title and interest
in and to the Mortgage Loans to the Purchaser shall constitute a sale and
not a
pledge of security for a loan. If such conveyance is deemed to be a pledge
of
security for a loan, however, the Company intends that the rights and
obligations of the parties to such loan shall be established pursuant to
the
terms of this Agreement. The Company also intends and agrees that, in such
event, (i) the Company shall be deemed to have granted (and hereby does grant)
to the Purchaser and its assigns a first priority security interest in the
Company’s entire right, title and interest in and to the Mortgage Loans, all
principal and interest received or receivable with respect to the Mortgage
Loans, all amounts held from time to time in the accounts mentioned pursuant
to
this Agreement and all reinvestment earnings on such amounts, together with
all
of the Company’s right, title and interest in and to the proceeds of any title,
hazard or other insurance policies related to such Mortgage Loans and (ii)
this
Agreement shall constitute a security agreement under applicable law. All
rights
and remedies of the Purchaser under this Agreement are distinct from, and
cumulative with, any other rights or remedies under this Agreement or afforded
by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.
22
[Intentionally
Blank - Next Page Signature Page]
23
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.
| GMAC MORTGAGE, LLC | SUNTRUST ASSET FUNDING, LLC | |
| Purchaser | Company | |
| By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |
|
|
|
|
| Title: Director | Title: Officer |
Acknowledged
and Agreed:
|
SUNTRUST
BANK
|
||
|
By:
/s/
▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
Name:
▇▇▇▇
▇. ▇▇▇▇▇
|
||
| Title: Vice President |
EXHIBIT
A
[RESERVED]
Exhibit
A-1
EXHIBIT
B
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser
and
any prospective Purchaser, and which shall be retained by the Company in
the
Servicing File or delivered to the Custodian pursuant to Sections 2.01, 2.02
and
2.03 of the Mortgage Loan Purchase and Sale Agreement to which this Exhibit
is
attached (the “Agreement”):
|
1.
|
The
original Mortgage Note endorsed “Pay to the order of _____________,
without recourse” and signed in the name of the Company by an authorized
officer (provided
that, 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 Underlying Seller while
doing
business under another name, the signature must be in the following
form:
[Underlying Seller], formerly known as [previous name]”). The Mortgage
Note must contain all necessary intervening endorsements showing
a
complete chain of endorsement from the Originator (each such endorsement
being 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 a copy of the Mortgage Note together with a lost note
affadavit;
|
|
2.
|
The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
|
|
3.
|
The
original Mortgage, with evidence of recording thereon, except as
follows.
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 or the
Underlying Seller 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.
|
Exhibit
B-1
|
4.
|
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, or, if the original of any such
agreement
with evidence of recording thereon has not been returned by the
public
recording office where such agreement has been delivered for recordation
or such agreement has been lost or such public recording office
retains
the original recorded agreement, a photocopy of such agreement,
certified
by the Company, the Underlying Seller or an agent to be a true
and correct
copy of the agreement delivered to the appropriate public recording
office
for recordation. The original recorded agreement or, in the case
of a
agreement where a public recording office retains the original
recorded
agreement or in the case where an agreement is lost after recordation
in a
public recording office, a copy of such agreement certified by
such public
recording office to be a true and complete copy of the original
recorded
agreement, will be promptly delivered to the Custodian upon receipt
thereof by the Company.
|
|
5.
|
The
original Assignment of Mortgage, in blank, for each Mortgage Loan,
in form
and substance acceptable for recording (except for the insertion
of the
name of the assignee and recording information). If the Mortgage
Loan was
acquired by the Underlying Seller in a merger, the Assignment of
Mortgage
must be made by Underlying Seller, successor by merger to [name
of
predecessor].” If the Mortgage Loan was acquired or originated by the
Underlying Seller while doing business under another name, the
Assignment
of Mortgage must be made by Underlying Seller, formerly know as
[previous
name].” Subject to the foregoing and where permitted under the applicable
laws of the jurisdiction wherein the Mortgaged property is located,
such
Assignments of Mortgage may be made by blanket assignments for
Mortgage
Loans secured by the Mortgaged Properties located in the same county.
If
the related Mortgage has been recorded in the name of Mortgage
Electronic
Registration Systems, Inc. (“MERS”) or its designee, no Assignment of
Mortgage will be required to be prepared or delivered and instead,
the
Underlying Seller shall take all actions as are necessary to cause
the
Purchaser or its designee to be shown as the owner of the related
Mortgage
Loan on the records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by
MERS.
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6.
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For
any Mortgage Loan not recorded in the name of MERS, 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 or
the Underlying Seller 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 of Mortgage
or in the
case where an intervening Assignment of Mortgage is lost after
recordation
in a public recording office, a copy of such intervening Assignment
of
Mortgage certified by such public recording office to be a true
and
complete copy of the original recorded intervening Assignment of
Mortgage.
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Exhibit
B-2
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7.
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The
original mortgagee policy of title insurance or evidence of title,
which
may be in electronic form.
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8.
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Any
security agreement, chattel mortgage or equivalent executed in
connection
with the Mortgage.
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9.
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For
each Mortgage Loan which is secured by a residential long-term
lease, if
any, a copy of the lease with evidence of recording indicated thereon,
or,
if the lease is in the process of being recorded, a photocopy of
the
lease, certified by an officer of the respective prior owner of
such
Mortgage Loan or by the applicable title insurance company,
closing/settlement/escrow agent or company or closing attorney
to be a
true and correct copy of the lease transmitted for
recordation.
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With
respect to each Mortgage Loan, the Mortgage File shall include original or
imaged copies of each of the following items to the extent in the possession
of
the Company or in the possession of the Company’s agent(s):
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10.
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Original
hazard insurance policy and, if required by law, flood insurance
policy.
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11.
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Residential
loan application.
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12.
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Mortgage
Loan closing statement.
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13.
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Verification
of employment and income, if
applicable.
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14.
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Verification
of acceptable evidence of source and amount of down
payment.
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15.
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Credit
report on the Mortgagor.
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16.
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Residential
appraisal report.
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17.
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Photograph
of the Mortgaged Property.
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18.
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Survey
of the Mortgaged Property, if required by the title company or
applicable
law.
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19.
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If
available, a 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.
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Exhibit
B-3
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20.
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All
required disclosure statements.
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21.
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If
available, termite report, structural engineer’s report, water potability
and septic certification.
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22.
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Sales
contract, if applicable.
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23.
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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 file and which are required
to
document the Mortgage Loan or to service the Mortgage
Loan.
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24.
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Amortization
schedule, if available.
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25.
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Original
power of attorney, if applicable.
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In
the
event of a delay by the public recording office in returning any recorded
document, the Company shall deliver to the Custodian, within 270 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 form the Purchaser, which consent shall not
be
unreasonably withheld.
Exhibit
B-4
EXHIBIT
C
FORM
OF
MEMORANDUM OF SALE
CLOSING
DATE: May 14, 2007
This
Memorandum of Sale (this “Memorandum”), dated as of May 14, 2007
(the “Closing Date”), confirms the sale by SunTrust Asset Funding, LLC (the
“Company”), to GMAC Mortgage, LLC (the “Purchaser”), and the purchase by the
Purchaser from the Company, of the second lien residential mortgage loans
on a
servicing released basis described on the Mortgage Loan Schedule attached
hereto
as Schedule I (the “Mortgage Loans”), pursuant to the terms of the Mortgage Loan
Purchase and Sale Agreement (the “Mortgage Loan Purchase and Sale Agreement”),
dated as of May 14, 2007, and is by and between the Purchaser and the
Company.
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company does hereby bargain, sell, convey, assign and transfer
to Purchaser without recourse, except as provided in the Mortgage Loan Purchase
and Sale Agreement, and on a servicing released basis, all right, title and
interest of the Company in and to each of the Mortgage Loans, together with
all
documents maintained as part of the related Mortgage Files, all Mortgaged
Properties which secure any Mortgage Loan but are acquired by foreclosure,
deed
in lieu of foreclosure after the Cut-off Date or otherwise, all scheduled
payments of principal and interest on the Mortgage Loans after the Cut-off
Date,
and all proceeds of the foregoing, subject, however, to the rights of the
Company under the Mortgage Loan Purchase and Sale Agreement.
The
Mortgage Loans are to be sold in a whole loan format on a servicing released
basis. The Mortgage Loans have an aggregate Stated Principal Balance as of
April
1, 2007 (the “Cut-off Date”) of $[__________].
The
purchase price for the Mortgage Loans shall be equal to the proceeds from
the
sale of the Offered Certificates to the Underwriters pursuant to, and as
such
terms are defined in, that certain Pooling and Servicing Agreement dated
April
1, 2007 entered into by the Purchaser, as servicer, ACE Securities Corp.,
as
depositor, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer and
securities administrator, and HSBC Bank USA, National Association, as trustee
(the “PSA”), plus 100% interests in the SunTrust Acquisition Closed-End Seconds
Trust, Series 2007-1 Class CE, Class P and Class R Certificates issued pursuant
to the PSA.
The
Company has delivered to the Custodian prior to the date hereof the documents
with respect to each Mortgage Loan required to be delivered under the Mortgage
Loan Purchase and Sale Agreement.
Capitalized
terms that are used herein but are not defined herein shall have the respective
meanings set forth in the Mortgage Loan Purchase and Sale
Agreement.
[Signatures
on following page]
Exhibit
C-1
IN
WITNESS WHEREOF, the parties hereto, by the hands of their duly authorized
officers, execute this Memorandum as of the Closing Date referred to
above.
| GMAC MORTGAGE, LLC | SUNTRUST ASSET FUNDING, LLC | |
| as Purchaser | as Company | |
| By: | By: | |
|
|
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Its:
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Its:
|
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Exhibit
C-2
SCHEDULE
I
MORTGAGE
LOAN SCHEDULE
[Provided
Upon Request]
Exhibit
C-3
EXHIBIT
D
FORM
OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
[DATE
OF
ASSIGNMENT]
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT (this “AAR”) dated ___________________,
among _________________, a _________________ [ENTITY TYPE] having an office
at
_________________ (“Assignor”), _________________, having an office at
_________________ (“Assignee”) and SunTrust Assset Funding, LLC (the “Company”),
having an office at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and acknowledged
and agreed to by SunTrust Bank, a Georgia banking corporation (“SunTrust
Bank”):
WHEREAS,
on the date hereof, the Assignor is transferring all of its right, title
and
interest in and to the Mortgage Loans (except for any right, title or interest
related to the Servicing Rights) to the Assignee on a servicing-retained
basis;
and
WHEREAS,
on the date hereof, the Assignee is entering into a Pooling and Servicing
Agreement, dated as of [_________], by and among the Assignor, as servicer,
[_________], as depositor, [______________], as master servicer and securities
administrator and _________, as trustee (the “Trustee”), pursuant to which the
Mortgage Loans will be transferred to the Trustee.
NOW
THEREFORE, for and in consideration of the sum of one dollar ($1.00) and
other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. With
respect to the Mortgage Loans listed on Exhibit
A
hereto,
the Assignor hereby grants, transfers and assigns to Assignee all of the
right,
title and interest of Assignor, as the Purchaser, in, to and under that certain
Mortgage Loan Purchase and Sale Agreement, (the “Mortgage
Loan Purchase and Sale Agreement”),
dated
as of May 14, 2007, and the Memorandum of Sale dated May 14, 2007 (together
with
the Mortgage Loan Purchase and Sale Agreement, the “Sale Agreement”) each by and
between GMAC Mortgage, LLC (the “Purchaser”) and the Company, and the Mortgage
Loans delivered thereunder by the Company to the Assignor. The
Assignor is not assigning to the Assignee, but instead is expressly reserving
for the Assignor’s exclusive right and benefit only, the following:
a. Any
of the
Servicing Rights relating to the Mortgage Loans, as the term “Servicing Rights”
is defined in the Sale Agreement and further described herein; and
b. All
rights
and benefits accorded the Assignor, as it relates to servicing or Servicing
Rights under the Sale Agreement.
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
Exhibit
D-1
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to
the
Sale
Agreement
or the
Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Sale
Agreement
or the
Mortgage Loans. The Assignor has no knowledge of, and has not received notice
of, any waivers under or amendments or other modifications of, or assignments
of
rights or obligations under, the Sale
Agreement
or the
Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans 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 which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “Securities Act”) or which would
render the disposition of the Mortgage Loans a violation of Section 5 of
the
Securities Act or require registration pursuant thereto.
3. That
the
Assignee warrants and represent to, and covenants with, the Assignor and
the
Company that:
a. The
Assignee agrees to be bound, as the Purchaser, by all of the terms, covenants
and conditions of the Sale
Agreement
and the
Mortgage Loans, and from and after the date hereof, the Assignee assumes
for the
benefit of each of the Company and the Assignor all of the Assignor’s
obligations as Purchaser thereunder (except
for any obligations relating to the Servicing Rights);
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans is in excess
of
$250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to sell the Mortgage Loans
by
means of any general advertising or general solicitation within the meaning
of
Rule 502(c) Regulation D, promulgated under the Securities Act;
e. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
Exhibit
D-2
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accepted a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest
in the
Mortgage Loans or any other similar security with, any person in any manner
which would constitute a distribution of the Mortgage Loans under the Securities
Act or which would render the disposition of the Mortgage Loans a violation
of
Section 5 of the Securities Act or require registration pursuant thereto,
nor
will it act, nor has it authorized or will it authorize any person to act,
in
such manner with respect to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan (“Plan”) within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or a plan (“Plan”) within the meaning of section 4975(e)(1) of the
Internal Revenue Code of 1986 (“Code”), and the Assignee is not directly or
indirectly purchasing the Mortgage Loans on behalf of, investment manager
of, as
named fiduciary of, as trustee of, or with assets of, a Plan; or (2) the
Assignee’s purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Sale
Agreement
is:
[NAME
AND
ADDRESS OF ASSIGNEE]
Attention:
_____________________
Telephone:
____________________
Fax:
_________________________
The
Assignee’s wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Sale Agreement is:
For
the
account of [NAME OF ASSIGNEE]
A/C#:
_________________________
ABA#:
________________________
Attention:
______________________
Taxpayer
ID#: __________________
4. Accuracy
of the Sale Agreement.
The
Company and the Assignor represent and warrant to the Assignee that (i) attached
hereto as Exhibit
B
are
true, accurate and complete copies of the Sale Agreement and all amendments
and
modifications, if any, thereto, (ii) the Sale Agreement has not been amended
or
modified in any respect, except as set forth in this Agreement, and (iii)
no
notice of termination has been given to the Company under the Sale Agreement.
Exhibit
D-3
5. Recognition
of Assignee.
From
and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans. It is the intention of the
Assignor, the Company and the Assignee that the Sale Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns.
6. Governing
Law.
THIS
AAR SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AND
THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL
OBLIGATIONS LAW), EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL
LAW.
7. Counterparts.
This
AAR
may be executed simultaneously in any number of counterparts. Each such
counterpart shall be deemed an original and all such counterparts taken together
shall constitute one and the same instrument. Delivery of executed signature
pages by facsimile shall constitute delivery of originals for the purpose
of
this AAR.
[Signatures
Follow]
Exhibit
D-4
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement be executed by their duly authorized officers as of
the
date first above written.
| [NAME OF ASSIGNOR] | [NAME OF ASSIGNEE] | |
| By: | By: | |
|
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Its:
|
Its:
|
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SUNTRUST
ASSET FUNDING, LLC
Company
|
||
| By: | ||
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Its:
|
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Acknowledged
and Agreed:
SUNTRUST
BANK
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| By: | ||
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Title:
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Exhibit
D-5
EXHIBIT
A
to
the
Assignment, Assumption and Recognition Agreement
MORTGAGE
LOAN SCHEDULE
Exhibit
A-1
EXHIBIT
B
to
the
Assignment, Assumption and Recognition Agreement
EXECUTED
COPIES
OF
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
AND
MEMORANDUM OF SALE
Exhibit
B-7
EXHIBIT
E
UNDERWRITING
GUIDELINES
OF
LOAN
SELLERS
[Provided
Upon Request]
Exhibit
E-1
EXHIBIT
F
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Company
Specific Representations
The
Company hereby represents, warrants and covenants that, as of the Closing
Date,
or as of such date specifically provided herein:
(a) Due
Organization and Authority:
The
Company is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its formation 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; the Company has the full corporate
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, subject to bankruptcy,
insolvency, moratorium and other principles of equity affecting the rights
of
creditors generally, whether considered in a proceeding at law or in equity;
and
all requisite corporate 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 acquiring
and selling mortgage 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 or provisions of the organizational documents of the
Company
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 or will create or impose
and
will not result in the creation or imposition of any lien, charge or encumbrance
(other than any created hereby in favor of the Purchaser and its assignees)
which would have a material adverse effect upon the Mortgage Loans or any
documents or instruments evidencing or securing the Mortgage Loans;
Exhibit
F-1
(d) Fair
Consideration:
The
consideration received by the Company upon the sale of the Mortgage Loans
under
this Agreement shall constitute fair consideration and reasonably equivalent
value for the Mortgage Loans;
(e) Ability
to Perform; Solvency:
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;
(f) No
Litigation Pending:
There
is no action, suit, proceeding or investigation pending or, to its knowledge,
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;
(g) 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 consent, approval, authorization or order
has
been obtained prior to the Closing Date;
(h) No
Untrue Information:
No
statement, report or other document furnished or to be furnished by or on
behalf
of the Company pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits
to
state a material fact necessary to make the statements contained therein,
in
light of the circumstances in which they were made, not misleading;
(i) Sale
Treatment:
The
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;
(j) 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 connection with
the
sale of the Mortgage Loans;
(k) Purchase
and Sale:
Immediately prior to the sale of the Mortgage Loans to the Purchaser as herein
contemplated, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note, and, upon the payment
to
the Seller of the Purchase Price, in the event that the Seller retains or
has
retained record title, the Seller shall retain such record title to each
Mortgage, each related Mortgage Note and the related Mortgage Files with
respect
thereto in trust for the Purchaser as the owner thereof from and after the
date
hereof; and
(l) Selection
Process:
The
Mortgage Loans will be selected on such Closing Date from among the outstanding
fixed rate second lien one- to four-family mortgage loans in the Company’s
portfolio at such Closing Date as to which the representations and warranties
set forth in this Agreement could be made and such selection will not be
made in
a manner so as to affect adversely the interests of the Purchaser.
Exhibit
F-2
EXHIBIT
G
REPRESENTATIONS
AND WARRANTIES REGARDING
INDIVIDUAL
MORTGAGE LOANS
Mortgage
Loan Representations
The
Company hereby represents, warrants, and covenants with respect to the Mortgage
Loans that as of the Closing Date:
(a) Mortgage
Loans as Described:
The
information set forth in the Mortgage Loan Schedule annexed to the Memorandum
of
Sale and the information contained on the related electronic data file delivered
to the Purchaser is complete, true and correct in all material respects and
information provided to the Rating Agencies, including loan level detail,
is
true and correct according to the rating agency requirements;
(b) Payments
Current:
All
payments required to be made prior 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) calendar days or more delinquent
since the origination of such Mortgage Loan;
(c) No
Outstanding Charges:
All
taxes, governmental assessments, insurance premiums, leasehold payments,
ground
rents, 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 (i) payments in the nature of escrow
payments and (ii) 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 have not been impaired, waived, altered
or modified in any respect, except by a written instrument which has been
recorded, 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. No instrument of waiver, alteration or modification
has
been executed, and 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;
(e) No
Defenses:
The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the defense
of
usury, nor will the operation of any of the terms of the Mortgage Note or
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, and no Mortgagor was a debtor
in
any state or federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated;
Exhibit
G-1
(f) No
Satisfaction of Mortgage:
The
Mortgage has not been satisfied, canceled, subordinated (except with respect
to
the subordination of any Second Lien Mortgage Loan to the related First Lien)
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 (except with respect to the subordination of any Second Lien
Mortgage Loan to the related First Lien) or rescission;
(g) Validity
of Mortgage Documents:
The
Mortgage Note, the Mortgage and related documents are genuine, and each is
the
legal, valid and binding obligation of the Mortgagor enforceable in accordance
with its terms, subject to bankruptcy, insolvency, moratorium and other
principles of equity affecting the rights of creditors generally, whether
considered in the proceeding at law or in equity. 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;
(h) Note
as “Instrument”:
Each
Mortgage Note is comprised of one original promissory note and each such
promissory note constitutes an “instrument” for purposes of Section 9-102(a)(65)
of the Uniform Commercial Code in effect in the applicable
jurisdiction;
(i) No
Fraud:
No
fraud, error, omission, misrepresentation, negligence, or similar occurrence
with respect to a Mortgage Loan has taken place on the part of the Company
or
the Mortgagor, any appraiser, any builder or any developer or any other party
involved in the solicitation or origination of the Mortgage Loan or in the
application for any insurance in relation to such Mortgage Loan or in connection
with the sale of such Mortgage Loan to the Purchaser, and there are no
circumstances existing with respect to the Mortgage Loan which would permit
the
primary mortgage guaranty insurer to deny coverage under any insurance policy.
If a mortgage insurer fails to pay a claim submitted with respect to the
related
Mortgage Loan as a result of the mortgage insurer successfully asserting
a
defense based on fraud, then such failure to pay shall constitute a breach
of
this representation which materially and adversely affects the interests
of the
owner of the Mortgage Loan;
(j) Compliance
with Applicable Laws:
All
requirements of any applicable federal, state or local law including, without
limitation, all applicable predatory and abusive lending, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection
(including Uniform Consumer Credit Code laws), fair credit reporting, unfair
collection practices, equal credit opportunity or fair housing and disclosure
laws applicable to the solicitation, origination, servicing and collection
of
the Mortgage Loan have been complied with in all material respects, the
Mortgagor received all disclosure materials required by applicable law with
respect to the making of mortgage loans of the same type as the Mortgage
Loan
and, if the Mortgage Loan is a refinanced Mortgage Loan, rescission materials
required by applicable laws, and the Company shall maintain in its possession,
available for the Purchaser’s inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements. 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;
Exhibit
G-2
(k) Location
and Type of Mortgaged Property:
The
Mortgaged Property is located in the state identified in the 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, an individual unit
in a
planned unit development, or a townhouse or, in the case of a Mortgage Loan
secured by Cooperative Shares, leases or occupancy agreements. None of the
Mortgaged Properties are manufactured homes, log homes, mobile homes or geodesic
domes. As of the respective appraisal date for each Mortgaged Property, no
portion of the Mortgaged Property was being used for commercial or mixed-use
purposes and, to the Company’s knowledge, since the date of such Appraisal, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, however, that Mortgaged Properties which contain a home office
shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing
any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance or household purposes. No Mortgage Loan finances builder inventory.
If the Mortgaged Property is a condominium unit or a planned unit development
(other than a de minimus planned unit development) such condominium or planned
unit development project meets ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac eligibility
requirements or is located in a condominium or planned unit development project
which has received ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac project approval and the
representations and warranties required by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac with
respect to such condominium or planned unit development have been made and
remain true and correct in all respects;
(l) Valid
Second Lien:
The
Mortgage is a valid, subsisting and enforceable second 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:
(i) the
lien
of current real property taxes and assessments not yet due and
payable;
(ii) 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;
(iii) other
matters to which like properties are commonly subject which do not individually
or in the aggregate, 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; and
Exhibit
G-3
(iv) the
First
Lien on 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 second lien and second priority security interest
on
the property described therein and the Company has full right to sell and
assign
the same to the Purchaser;
(m) Full
Disbursement of Proceeds:
The
proceeds of the Mortgage Loan have been fully disbursed or credited to or
for
the account of the Mortgagor, and there is no requirement for future advances
thereunder and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds therefor
have
been complied with. Any and all requirements as to completion of any on-site
or
off-site improvements and any and all requirements as to disbursements of
escrow
funds for such improvements have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording
of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of
any
amounts paid or due under the Mortgage Note or Mortgage;
(n) 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 Mortgage Loan Schedule. The lien of the Mortgage securing
the
consolidated principal amount is expressly insured as having second 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;
(o) Ownership:
The
Company is a sole legal, beneficial and equitable owner of the Mortgage Note
and
the Mortgage. The Company has full right and authority under all governmental
and regulatory bodies having jurisdiction over the Company, subject to no
interest or participation of, or agreement with, any party, to transfer and
sell
the Mortgage Loan to the Purchaser pursuant to this Agreement free and clear
of
any encumbrance or right of others, equity, lien, pledge, charge, mortgage,
claim, participation interest or security interest of any nature (collectively,
a “Lien”); and immediately upon the transfers and assignments herein
contemplated, the Company shall have transferred and sold all of its right,
title and interest in and to each Mortgage Loan to the Purchaser and the
Purchaser will hold good, marketable and indefeasible title to, and be the
owner
of, each Mortgage Loan subject to no Lien;
(p) 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
legal interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or
otherwise, are (or, during the period in which they held and disposed of
such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (A) organized under the laws of such state, (B) qualified or
exempt from qualification to do business in such state, (C) federal savings
and
loan associations or national banks having principal offices in such state,
or
(D) not doing business in such state;
Exhibit
G-4
(q) CLTV:
No
Mortgage Loan has an CLTV at origination in excess of 100%.
(r) Title
Insurance:
Unless
the Mortgaged Property is located in the State of Iowa and an attorney’s
certificate and/or a certificate of title guaranty has been obtained, each
Mortgage Loan is covered by either an ALTA lender’s title insurance policy
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 (i), (ii), (iii) and (iv) of Paragraph (l) of this Exhibit G,
or a
last vested deed or title search showing the Mortgagor as the owner of the
Mortgaged Property. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon
the Mortgaged Property or any interest therein. Where required by state law
or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of such lender’s title insurance policy. The Company, its successors and
assigns, are the sole insureds of such lender’s title insurance policy, and such
lender’s title insurance policy is valid and remains in full force and effect
and will be in full force and effect upon the consummation of the purchase
of
the Mortgage Loans as 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;
(s) No
Defaults:
Other
than payments due but not yet thirty (30) days or more delinquent, 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. With
respect to each Mortgage Loan, (i) any more senior mortgage on the related
Mortgaged Property is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such senior mortgage
or the related mortgage note, (iii) 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 thereunder, and (iv)
applicable law requires, the mortgagee under the Mortgage Loan to receive
notice
of, and affords such mortgagee an opportunity to cure, any default by payment
in
full or otherwise under the prior mortgage;
(t) 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 with, the lien of the related Mortgage;
(u) Location
of Improvements; No Encroachments:
Except
as insured against by the title insurance policy referenced in Paragraph
(r)
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;
Exhibit
G-5
(v) Payment
Terms:
Payments commenced no more than sixty (60) calendar days after the funds
were
disbursed to the Mortgagor in connection with the Mortgage Loan. The Mortgage
Loans have an original term to maturity of not more than thirty (30) years,
with
interest payable in arrears on the date specified on the Mortgage Loan
Schedule;
(w) Balloon
Payments, Graduated Payments or Contingent Interests:
With
respect to any Mortgage Loan which is identified on the Mortgage Loan Schedule
as a Balloon Mortgage Loan, the Mortgage Note is payable in Monthly Payments
which is sufficient to amortize the remaining principal balance of the Balloon
Mortgage Loan. 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;
(x) 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 (other than under the Servicemembers Civil
Relief Act) 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;
(y) Occupancy
of the Mortgaged Property:
As of
the date of origination the Mortgaged Property was lawfully occupied under
applicable law;
(z) 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 (l) above;
(aa) 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;
(bb) Transfer
of Mortgage Loans:
With
respect to each Mortgage that is not recorded in the name of MERS or its
designee, the Assignment of Mortgage, upon the insertion of the name of MERS
as
assignee and recording information, is in recordable form and is acceptable
for
recording under the laws of the jurisdiction in which the related Mortgaged
Property is located;
(cc) Mortgaged
Property Undamaged:
The
Mortgaged Property (and with respect to a Cooperative Loan, the related
Cooperative Project and Cooperative Unit) is in good repair and undamaged
by
waste, fire, earthquake or earth movement, windstorm, hurricane, flood, tornado,
mold 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;
Exhibit
G-6
(dd) Customary
Origination, Servicing and Collection Practices:
The
origination, collection and servicing practices used with respect to each
Mortgage Loan have been in all respects legal, proper, prudent and customary
in
the mortgage origination and servicing industry;
(ee) 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;
(ff) The
Appraisal:
With
the exception of Mortgage Files related to conforming Mortgage Loans approved
through DU which have qualified for a property inspection waiver, the Mortgage
File contains an Appraisal of the related Mortgaged Property signed prior
to the
approval of the Mortgage Loan application by a Qualified Appraiser and the
Appraisal and appraiser both satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, and Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as
in
effect on the date the Mortgage Loan was originated, to the extent required
in
the Underwriting Guidelines with respect to mortgage loans of the same type
as
the Mortgage Loan. If an automated valuation model (“AVM”) was used in lieu of a
full Appraisal, such AVM was completed in accordance with the applicable
Underwriting Guidelines;
(gg) Hazard
Insurance:
All
buildings on the Mortgaged Property are insured by an insurer acceptable
to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and to prudent mortgage lending institutions, against
loss by fire and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are provided for in the ▇▇▇▇▇▇ Mae
Guides
or ▇▇▇▇▇▇▇ Mac Guides, as applicable, pursuant to insurance policies conforming
to Accepted Practices, in an amount which is not less than the lesser of
100% of
the insurable value of the Mortgaged Property (as established by the insurer)
or
the outstanding principal balance of the Mortgage Loan (plus,
with
respect to any Second Lien Mortgage Loan, the outstanding principal balance
of
the related first lien mortgage loan, if any), as long as it equals the minimum
amount (80% of the insurable value of the Mortgaged Property) required to
compensate for any damage or loss on a replacement cost basis. If the Mortgaged
Property is a condominium unit, it may be 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, then 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 requirements of ▇▇▇▇▇▇
Mae or
▇▇▇▇▇▇▇ Mac. Such flood insurance policy is in an amount representing coverage
not less than the least of (A) 100% of the replacement cost of the dwelling,
(B)
the unpaid principal balance of the Mortgage Loan (subject to a minimum of
80%
of the replacement cost of the structure) 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. Each such 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 purchase of the Mortgage Loans as 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;
Exhibit
G-7
(hh) No
Impairment of Insurance Coverage:
No
action, inaction, or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable hazard insurance policy, PMI Policy
or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee,
or
other compensation has been or will be received by the Company or any designee
of the Company or any corporation or other entity which the Company or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ii) Servicemembers
Civil Relief Act:
The
Mortgagor has not notified the Company, and the Company has no knowledge
of any
relief requested by or allowed to the Mortgagor under the Servicemembers
Civil
Relief Act, as amended, or any similar state or local laws;
(jj) No
Construction Loans:
No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged 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;
(kk) Underwriting:
Each
Mortgage Loan was underwritten in accordance with the applicable Underwriting
Guidelines or if eligible for sale to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, through
the DU,
which Underwriting Guidelines satisfy the standards of prudent mortgage lenders
of the same type of mortgage loans as the Mortgage Loans in the secondary
market;
(ll) Mortgage
Loan Documents:
The
Mortgage Note and the Mortgage and all other documents in the related Mortgage
File are on ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac uniform instruments or are on forms
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(mm) 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, to the best
of the
Company’s knowledge, following the date of origination of the Mortgage Loan, the
Mortgagor with respect to the Mortgage Loan was not a debtor in any state
or
federal bankruptcy or insolvency proceeding, and the Mortgaged Property has
not
been subject to any bankruptcy or foreclosure proceedings;
(nn) Delivery
of Mortgage Files:
The
Mortgage Loan Documents for the Mortgage Loans have been delivered to the
Custodian, subject to the delivery requirements of this Agreement. The Company
is in possession of a complete Mortgage File for each Mortgage Loan, except
for
such documents the originals of which have been delivered to the Custodian,
and
all documents required to be included in the Mortgage File shall be complete,
executed as required and in compliance with applicable law. With respect
to each
Mortgage Loan for which a lost note affidavit has been delivered to the
Custodian in place of the original Mortgage Note, the related Mortgage Note
is
no longer in existence, and, if such Mortgage Loan is subsequently in default,
the enforcement of such Mortgage Loan or of the related Mortgage by or on
behalf
of the Purchaser will not be affected by the absence of the original Mortgage
Note;
Exhibit
G-8
(oo) Interest
Calculation:
Interest on each Mortgage Loan is calculated on the basis of a three hundred
sixty (360) day year consisting of twelve (12) thirty (30) day months. No
Mortgage Loan provides for interest payable on a simple interest basis. No
Mortgage Loan provides for an increase in the related Mortgage Interest Rate
upon the occurrence of a default under the terms of the related Mortgage
Note;
(pp) No
Violation of Environmental Laws:
The
Mortgaged Property is free from any and all toxic or hazardous substances
and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. There is no pending action or proceeding directly involving
any
Mortgaged Property of which the Company is aware in which compliance with
any
environmental law, rule or regulation is an issue;
(qq) Prepayment
Premiums:
The
information set forth in the applicable part of the Mortgage Loan Schedule
relating to the existence of a Prepayment Premium
is
complete, true and correct in all material respects at the date or dates
respecting which such information is furnished and each Prepayment Premium
is
permissible and enforceable in accordance with its terms upon the mortgagor’s
full and voluntary principal prepayment under applicable law, except to the
extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors’ rights; (2) the collectability thereof may be limited due to
acceleration in connection with a foreclosure or other involuntary prepayment;
or (3) subsequent changes in applicable law may limit or prohibit enforceability
thereof under applicable law;
(rr) 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 ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac guidelines. In the event the Mortgagor is a trust, the trustee
of
such trust is a natural person and is a Mortgagor in his or her individual
capacity;
(ss) Texas
Mortgage Loans:
Each
Mortgage Loan originated in the state of Texas pursuant to Article XVI, Section
50(a)(6) of the Texas Constitution (a “Texas Refinance Loan”) has been
originated in compliance with the provisions of Article XVI, Section 50(a)(6)
of
the Texas Constitution, Texas Civil Statutes and the Texas Finance Code.
With
respect to each Texas Refinance Loan that is a cash-out refinancing, the
related
Mortgage Loan Documents state that the Mortgagor may prepay such Texas Refinance
Loan in whole or in part without incurring a Prepayment Charge;
(tt) Homeownership
and Equity Protection Act; No High Cost Loans:
No
Mortgage Loan is (a) covered by the Home Ownership and Equity Protection
Act of
1994 as amended (“HOEPA”), (b) a “high cost,” “threshold,” “covered,”
“predatory,” “abusive,” “high risk home” or similarly defined loan, including
refinance loans, under any other applicable law (or a similarly classified
loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), provided
that any
Mortgage Loan secured by a Mortgaged Property in Illinois characterized as
a
“threshold” loan shall not be a “high cost” loan unless it is characterized as
“predatory” under applicable local law; the Company has implemented and
conducted compliance procedures to determine if each Mortgage Loan is
“high-cost” home loan under any applicable federal, state or local law or (c) a
“High Cost Loan” or “Covered Loan,” as defined in the then current Standard
& Poor’s LEVELS®
Version
5.6 Glossary Revised, Appendix
E.
No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act effective November 27, 2003 or as defined in the New Mexico
Home
Loan Protection Act effective January 1, 2004, as defined in the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass.▇▇▇.
Laws
Ch. 183C) or as defined in the Indiana Home Loan Practices Act, effective
January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9) or a “high risk
home loan” under the Illinois High Risk Home Loan Act, effective as of January
1, 2004. Any breach of this representation shall be deemed to materially
and
adversely affect the interests of the owner of the Mortgage Loan;
Exhibit
G-9
(uu) 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;
(vv) Adjustments:
All of
the terms of the related Mortgage Note pertaining to interest adjustments,
payment adjustments and adjustments of the outstanding principal balance,
if
any, are enforceable and such adjustments on such Mortgage Loan have been
made
properly and in accordance with the provisions of such Mortgage Loan, including
any required notices, and such adjustments do not and will not affect the
priority of the Mortgage lien;
(ww) Leaseholds:
If a
Mortgage Loan is secured by a leasehold estate, then (A) the Mortgagor is
the
owner of a valid and subsisting leasehold interest under such ground lease;
(B)
such ground lease is in full force and effect, unmodified and not supplemented
by any writing or otherwise; (C) all rent, additional rent and other charges
reserved therein have been fully paid to the extent payable as of the related
Closing Date; (D) the Mortgagor enjoys the quiet and peaceful possession
of the
leasehold estate; (E) the Mortgagor is not in default under any of the terms
of
such ground lease, and there are no circumstances which, with the passage
of
time or the giving of notice, or both, would result in a default under such
ground lease; (F) the lessor under such ground lease is not in default under
any
of the terms or provisions of such ground lease on the part of the lessor
to be
observed or performed; (G) the lessor under such ground lease has satisfied
any
repair or construction obligations due as of the related Closing Date pursuant
to the terms of such ground lease; (H) the execution, delivery and performance
of the Mortgage do not require the 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, such ground lease; (I) the term
of
such lease does not terminate earlier than five (5) years after the maturity
date of the Mortgage Note; (J) the ground lease is assignable or transferable;
(K) the ground lease does not provide for termination of the lease in the
event
of lessee’s default without the mortgagee being entitled to receive written
notice of, and a reasonable opportunity to cure the default; (L) the ground
lease permits the mortgaging of the related Mortgaged Property; (M) the ground
lease protects the mortgagee’s interests in the event of a property
condemnation; and (N) the use of leasehold estates for residential properties
is
a widely accepted practice in the jurisdiction in which the Mortgaged Property
is located;
Exhibit
G-10
(xx) Compliance
with 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 no Mortgagor is subject to the provisions of such Executive Order or
the
OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC
Regulations;
(yy) Refinanced
Mortgage Loans:
No
Mortgage Loan is a refinanced subsidized mortgage loan that contains terms
more
favorable to the related Mortgagor;
(zz) Prepayment
Premiums:
Prepayment Premiums on the Mortgage Loans are applicable to prepayments
resulting from both refinancings and sales of the related Mortgaged Properties
and the terms of such Prepayment Premiums do not provide for a waiver or
release
(i.e., “holidays”) during the term of the Prepayment Premium. No Mortgage Loan
provides for the payment of a Prepayment Premium beyond the three-year term
following the origination of the Mortgage Loan. With respect to any Mortgage
Loan that contains a provision permitting imposition of a Prepayment Premium:
(i) prior to the Mortgage Loan’s origination, the Mortgagor agreed to such
Prepayment Premium in exchange for a monetary benefit, including, but not
limited to, a rate or fee reduction, (ii) prior to the Mortgage Loan’s
origination, the Mortgagor was offered the choice of another mortgage product
that did not require payment of such a premium, (iii) the Prepayment Premium
is
disclosed to the Mortgagor in the loan documents pursuant to applicable state
and federal law, and (iv) notwithstanding any state or federal law to the
contrary, the Company shall not impose such Prepayment Premium in any instance
when the mortgage debt is accelerated as the result of the Mortgagor’s default
in making the Monthly Payments;
(aaa) Credit
Information:
As to
each consumer report (as defined in the Fair Credit Reporting Act, Public
Law
91-508) or other credit information furnished by the Company to the Purchaser,
the Company has full right and authority and is not precluded by the Fair
Credit
Act or contract from furnishing such information to the Purchaser;
(bbb) No
Litigation Pending:
There
is no action, suit, proceeding or investigation pending, or to the Company’s
knowledge threatened, that is related to the Mortgage Loan and likely to
affect
materially and adversely the servicing of such Mortgage Loan;
(ccc) No
Arbitration Provisions:
No
Mortgagor agreed to submit to arbitration to resolve any dispute arising
out of
or relating in any way to the related Mortgage Loan or the origination thereof;
and
(ddd) Down
Payment:
The
source of the down payment, if any, with respect to each Mortgage Loan has
been
fully verified by the Originator as and if required pursuant to the Underwriting
Guidelines.
(eee) Georgia
Mortgage Loans:
No
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act.
Exhibit
G-11
EXHIBIT
H
MORTGAGE
LOAN SCHEDULE
(attached)
Exhibit
H-1
EXHIBIT
I
SCHEDULE
OF UNDERLYING SELLERS AND UNDERLYING AGREEMENTS
|
Underlying
Seller
|
Underlying
Agreement related to Underlying Seller
|
|
|
American
Home Mortgage Corp.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
January 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, American Home Mortgage Corp., as Company, and American
Home
Mortgage Servicing, Inc., as Interim Servicer
|
|
|
New
Century Mortgage Corporation
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
December 1, 2006 by and among SunTrust Asset Funding, LLC, as
Purchaser, and New Century Mortgage Corporation, as
Company
|
|
|
Quicken
Loans Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
February 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and Quicken Loans Inc., as Company
|
|
|
People’s
Choice Home Loan, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
January 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and People’s Choice Home Loan, Inc., as
Company
|
|
|
Lancaster
Mortgage Bankers, LLC
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
February 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and Lancaster Mortgage Bankers, LLC, as
Company
|
|
|
Fidelity
& Trust Mortgage, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
January 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and Fidelity & Trust Mortgage, Inc., as
Company
|
|
|
DB
Structured Products, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
March 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and DB Structured Products, Inc., as
Company
|
Exhibit
I-1
|
(i)
Option One Mortgage Corporation, (ii) Option One Mortgage Capital
Corporation,
(iii)
Option One Owner Trust 2001-1A,
(iv)
Option One Owner Trust 2001-1B, (v) Option One Owner Trust 2001-2,
(vi) Option One Owner Trust 2002-3, (vii) Option One Owner Trust
2003-4, (viii) Option One Owner Trust 2003-5, (ix) Option One
Owner Trust 2005-6, (x) Option One Owner Trust 2005-7,
(xi) Option One Owner Trust 2005-8, and (xii) Option One Owner
Trust 2005-9
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
December 1, 2006 by and among SunTrust Asset Funding, LLC, as
Purchaser, Option One Mortgage Corporation, as Company and Seller,
Option
One Mortgage Capital Corporation, as Seller and Obligor, Option
One Owner
Trust 2001-1A, as Seller, Option One Owner Trust 2001-1B, as Seller,
Option One Owner Trust 2001-2, as Seller, Option One Owner Trust
2002-3,
as Seller, Option One Owner Trust 2003-4, as Seller, Option One
Owner
Trust 2003-5, as Seller, Option One Owner Trust 2005-6, as Seller,
Option
One Owner Trust 2005-7, as Seller, Option One Owner Trust 2005-8,
as
Seller, and Option One Owner Trust 2005-9, as Seller
|
|
|
First
Financial Equities, Inc.
|
Mortgage
Loan Flow Purchase, Sale and Interim Servicing Agreement dated
March 1, 2007 by and among SunTrust Asset Funding, LLC, as
Purchaser, and First Financial Equities, Inc., as
Company
|
Addendum
I-2
EXHIBIT
C
TRANSACTION
PARTIES
(i) SunTrust
Asset Funding, LLC (the sponsor);
(ii) ACE
Securities Corp. (the depositor);
(iii) SunTrust
Acquisition Closed-End Seconds Trust, Series 2007-1 (the issuing
entity);
(iv) GMAC
Mortgage LLC (servicer);
(v) ▇▇▇▇▇
Fargo Bank, National Association (master servicer and securities administrator);
(vi) American
Home Mortgage Corp. (an originator);
(vii) New
Century Mortgage Corporation (an originator);
(viii) Bear
▇▇▇▇▇▇▇ Financial Products, Inc. (swap provider);
(ix) ▇▇▇▇▇▇▇
Fixed Income Services Inc. (credit risk manager);
(x) XL
Capital Assurance Inc. (certificate insurer);
(xi) Deutsche
Bank National Trust Company (custodian);
(xii) HSBC
Bank
USA, National Association (the trustee);
(xiii) SunTrust
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (lead underwriter), a division of SunTrust Capital Markets,
Inc.;
(xiv) Deutsche
Bank Securities (lead underwriter); and
(xv) Bear,
▇▇▇▇▇▇▇ & Co, Inc. (co-manager).
Exhibit
C-1
EXHIBIT
D
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant to
Section 5.06(a)(ii) of the Pooling and Servicing Agreement.
Under
Item 1 of Form 10-D: a) items marked “monthly statement” are required to be
included in the periodic Distribution Date statement under Section 5.02 of
the
Pooling and Servicing Agreement, provided by the Securities Administrator based
on information received from the Master Servicer; and b) items marked “Form 10-D
report” are required to be in the Form 10-D report but not the monthly
statement, provided by the party indicated. Information under all other Items
of
Form 10-D is to be included in the Form 10-D report.
|
Form
|
Item
|
Description
|
||||
|
10-D
|
||||||
|
1
|
Distribution
and Pool Performance Information
|
Sponsor
|
||||
|
Item
1121(a) –
Distribution and Pool Performance Information
|
||||||
|
(1)
Any applicable record dates, accrual dates, determination dates
for
calculating distributions and actual distribution dates for the
distribution period.
|
||||||
|
(2)
Cash flows received and the sources thereof for distributions,
fees and
expenses.
|
||||||
|
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
||||||
|
(i)
Fees or expenses accrued and paid, with an identification of the
general
purpose of such fees and the party receiving such fees or
expenses.
|
||||||
|
(ii)
Payments accrued or paid with respect to enhancement or other support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of
the general
purpose of such payments and the party receiving such
payments.
|
||||||
|
(iii)
Principal, interest and other distributions accrued and paid on
the
asset-backed securities by type and by class or series and any
principal
or interest shortfalls or carryovers.
|
||||||
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
||||||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
Exhibit
D-1
|
Form
|
Item
|
Description
|
||||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
||||||
|
(6)
Beginning and ending balances of transaction accounts, such as
reserve
accounts, and material account activity during the period.
|
||||||
|
(7)
Any amounts drawn on any credit enhancement or other support identified
in
Item 1114 of Regulation AB, as applicable, and the amount of coverage
remaining under any such enhancement, if known and
applicable.
|
||||||
|
(8)
Number and amount of pool assets at the beginning and ending of
each
period, and updated pool composition information, such as weighted
average
coupon, weighted average remaining term, pool factors and prepayment
amounts.
|
||||||
|
(9)
Delinquency and loss information for the period.
|
||||||
|
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
||||||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of funds
advanced and the general source of funds for
reimbursements.
|
||||||
|
(11)
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.
|
||||||
|
(12)
Material breaches of pool asset representations or warranties or
transaction covenants.
|
X
|
|||||
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger and
whether
the trigger was met.
|
||||||
|
(14)
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 or revolving
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.
|
X
|
|||||
|
Disclose
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.
|
X
|
|||||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
Exhibit
D-2
|
Form
|
Item
|
Description
|
||||
|
2
|
Legal
Proceedings
|
|||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
||||||
|
Sponsor
(Seller)
|
X
|
|||||
|
Depositor
|
||||||
|
Trustee
|
||||||
|
Issuing
entity
|
||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
||||||
|
Securities
Administrator
|
||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
||||||
|
Custodian
|
||||||
|
3
|
Sales
of Securities and Use of Proceeds
|
|||||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or
issuing
entity, as applicable, 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.
|
X
|
|||||
|
4
|
Defaults
Upon Senior Securities
|
|||||
|
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)
|
||||||
|
5
|
Submission
of Matters to a Vote of Security Holders
|
|||||
|
Information
from Item 4 of Part II of Form 10-Q
|
||||||
|
6
|
Significant
Obligors of Pool Assets
|
|||||
|
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.
|
||||||
|
7
|
Significant
Enhancement Provider Information
|
|||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
|
||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||
|
Requesting
required financial information or effecting incorporation by
reference
|
||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information*
|
||||||
|
Determining
current maximum probable exposure
|
X
|
|||||
|
Determining
current significance percentage
|
X
|
|||||
|
Requesting
required financial information or effecting incorporation by
reference
|
Exhibit
D-3
|
Form
|
Item
|
Description
|
||||
|
*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.
|
||||||
|
8
|
Other
Information
|
|||||
|
Disclose
any information required to be reported on Form 8-K during the
period
covered by the Form 10-D but not reported
|
||||||
|
9
|
Exhibits
|
|||||
|
Distribution
report
|
||||||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
||||||
|
8-K
|
||||||
|
1.01
|
Entry
into a 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
|
X
(if Master Servicer, Securities Administrator and Trustee not a
party)
|
|||||
|
1.02
|
Termination
of a Material Definitive Agreement
|
X
(if Master Servicer, Securities Administrator and Trustee not a
party)
|
||||
|
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.
|
||||||
|
1.03
|
Bankruptcy
or Receivership
|
|||||
|
Disclosure
is required regarding the bankruptcy or receivership, if known
to the
Sponsor, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicer, other
Servicer
servicing 20% or more of pool assets at time of report, other material
servicers, Certificate Administrator, Trustee, significant obligor,
credit
enhancer (10% or more), derivatives counterparty,
Custodian
|
X
|
|||||
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
Exhibit
D-4
|
Form
|
Item
|
Description
|
||||
|
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 statement
|
||||||
|
3.03
|
Material
Modification to Rights of Security Holders
|
|||||
|
Disclosure
is required of any material modification to documents defining
the rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
X
(if Master Servicer, Securities Administrator and Trustee not a
party)
|
|||||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|||||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
||||||
|
5.06
|
Change
in Shell Company Status
|
|||||
|
[Not
applicable to ABS issuers]
|
||||||
|
6.01
|
ABS
Informational and Computational Material
|
|||||
|
[Not
included in reports to be filed under Section 3.18]
|
||||||
|
6.02
|
Change
of Servicer or 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, certificate
administrator or trustee.
|
||||||
|
Reg
AB disclosure about any new servicer (from entity appointing new
servicer)
or trustee (from Depositor) is also required.
|
||||||
|
6.03
|
Change
in Credit Enhancement or Other External Support
|
|||||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as derivatives.
|
X
|
|||||
|
Reg
AB disclosure about any new enhancement provider is also
required.
|
X
|
|||||
|
6.04
|
Failure
to Make a Required Distribution
|
|||||
|
6.05
|
Securities
Act Updating Disclosure
|
|||||
|
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.
|
X
|
|||||
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
X
|
|||||
|
7.01
|
Regulation
FD Disclosure
|
X
|
Exhibit
D-5
|
Form
|
Item
|
Description
|
||||
|
8.01
|
Other
Events
|
|||||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the Sponsor deems of importance to security
holders.
|
X
|
|||||
|
9.01
|
Financial
Statements and Exhibits
|
|||||
|
10-K
|
||||||
|
9B
|
Other
Information
|
|||||
|
Disclose
any information required to be reported on Form 8-K during the
fourth
quarter covered by the Form 10-K but not reported
|
||||||
|
15
|
Exhibits
and Financial Statement Schedules
|
|||||
|
Item
1112(b) - Significant
Obligor Financial Information
|
X
|
|||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
|
X
|
|||||
|
Determining
applicable disclosure threshold
|
X
|
|||||
|
Requesting
required financial information or effecting incorporation by
reference
|
||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information
|
||||||
|
Determining
current maximum probable exposure
|
X
|
|||||
|
Determining
current significance percentage
|
X
|
|||||
|
Requesting
required financial information or effecting incorporation by
reference
|
||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
|
||||||
|
Sponsor
(Seller)
|
X
|
|||||
|
Depositor
|
||||||
|
Trustee
|
||||||
|
Issuing
entity
|
||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
||||||
|
Securities
Administrator
|
||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||
|
Custodian
|
||||||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
||||||
|
Sponsor
(Seller)
|
X
|
|||||
|
Depositor
|
||||||
|
Trustee
|
||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
||||||
|
Securities
Administrator
|
||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
Exhibit
D-6
|
Form
|
|
Item
|
Description
|
|||
|
Custodian
|
||||||
|
Credit
Enhancer/Support Provider
|
X
(to the extent provided to the Sponsor)
|
|||||
|
Significant
Obligor
|
||||||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
||||||
|
Item
1123 - Servicer Compliance Statement
|
Exhibit
D-7
EXHIBIT
E
ADDITIONAL
DISCLOSURE NOTIFICATION
**SENT
VIA FAX TO [_XXX)XXX-XXXX] AND VIA EMAIL TO [_________________] AND VIA
OVERNIGHT MAIL TO THE ADDRESS IMMEDIATELY BELOW:
▇▇▇▇▇
Fargo Bank, N.A. as Securities Administrator
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn:
Corporate Trust Services - STACS 2007-1 – SEC REPORT
PROCESSING
ACE
Securities Corp.
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇)
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RE:
**
Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies
and Gentlemen:
In
accordance with Section [__] of the Pooling and Servicing Agreement, dated
as of [________] [__], 2007 among [_____________], as [______], [_____________],
as [______], [_____________], as [______] and [_____________], as [______],
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: [_________________].
Exhibit
E-1
|
[NAME
OF PARTY],
as
[role]
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
Exhibit
E-2
EXHIBIT
G
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant to
Section 5.06(a)(ii).
Under
Item 1 of Form 10-D: a) items marked “monthly statement” are required to be
included in the periodic Distribution Date statement under Section 5.02,
provided by the Securities Administrator based on information received from
the
Master Servicer; and b) items marked “Form 10-D report” are required to be in
the Form 10-D report but not the monthly statement, provided by the party
indicated. Information under all other Items of Form 10-D is to be included
in
the Form 10-D report.
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
10-D
|
Must
be filed within 15 days of the distribution date for the asset-backed
securities.
|
|||||||||||||||||
|
1
|
Distribution
and Pool Performance Information
|
|||||||||||||||||
|
Item
1121(a) - Distribution and Pool Performance
Information
|
||||||||||||||||||
|
(1)
Any applicable record dates, accrual dates, determination dates
for
calculating distributions and actual distribution dates for the
distribution period.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(2)
Cash flows received and the sources thereof for distributions,
fees and
expenses.
|
X
(monthly
statement)
|
|||||||||||||||||
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
(3)
Calculated amounts and distribution of the flow of funds for
the period
itemized by type and priority of payment, including:
|
X
(monthly
statement)
|
|||||||||||||||||
|
(i)
Fees or expenses accrued and paid, with an identification of
the general
purpose of such fees and the party receiving such fees or
expenses.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(ii)
Payments accrued or paid with respect to enhancement or other
support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of
the general
purpose of such payments and the party receiving such
payments.
|
X
(monthly
statement)
|
G-2
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
(iii)
Principal, interest and other distributions accrued and paid
on the
asset-backed securities by type and by class or series and any
principal
or interest shortfalls or carryovers.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
X
(monthly
statement)
|
G-3
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
(6)
Beginning and ending balances of transaction accounts, such as
reserve
accounts, and material account activity during the period.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(7)
Any amounts drawn on any credit enhancement or other support
identified in
Item 1114 of Regulation AB, as applicable, and the amount of
coverage
remaining under any such enhancement, if known and
applicable.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(8)
Number and amount of pool assets at the beginning and ending
of each
period, and updated pool composition information, such as weighted
average
coupon, weighted average remaining term, pool factors and prepayment
amounts.
|
X
(monthly
statement)
|
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
||||||||||||||||
|
(9)
Delinquency and loss information for the period.
|
X
|
X
|
X
(monthly
statement)
|
|||||||||||||||
|
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
X
|
G-4
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of
funds
advanced and the general source of funds for
reimbursements.
|
X
|
X
|
X
(monthly
statement)
|
|||||||||||||||
|
(11)
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.
|
X
|
X
|
X
(monthly
statement)
|
|||||||||||||||
|
(12)
Material breaches of pool asset representations or warranties
or
transaction covenants.
|
X
|
X
|
X
|
G-5
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger
and whether
the trigger was met.
|
X
(monthly
statement)
|
|||||||||||||||||
|
(14)
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 or revolving
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.
|
X
|
X
|
X
|
X
|
G-6
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Disclose
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.
|
X
|
|||||||||||||||||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
▇/▇
|
▇/▇
|
▇/▇
|
▇/▇
|
▇/▇
|
▇/▇
|
▇/▇
|
|||||||||||
|
2
|
Legal
Proceedings
|
|||||||||||||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders,
including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||||||||||
|
Sponsor
(Seller)
|
X
|
G-7
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Depositor
|
X
|
|||||||||||||||||
|
Trustee
|
X
|
|||||||||||||||||
|
Issuing
entity
|
X
|
|||||||||||||||||
|
Master
Servicer, affiliated Servicers, other Servicer servicing 20%
or more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||||||||
|
Securities
Administrator
|
X
|
|||||||||||||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||||||||||||||
|
Custodian
|
X
|
|||||||||||||||||
|
3
|
Sales
of Securities and Use of Proceeds
|
|||||||||||||||||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or
issuing
entity, that are backed by the same asset pool or are otherwise
issued by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing
information
can be omitted if securities were not registered.
|
X
|
G-8
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
4
|
Defaults
Upon Senior Securities
|
|||||||||||||||||
|
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)
|
X
|
X
|
G-9
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
5
|
Submission
of Matters to a Vote of Security Holders
|
|||||||||||||||||
|
Information
from Item 4 of Part II of Form 10-Q
|
X
|
X
|
||||||||||||||||
|
6
|
Significant
Obligors of Pool Assets
|
|||||||||||||||||
|
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.
|
||||||||||||||||||
|
7
|
Significant
Enhancement Provider Information
|
|||||||||||||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
|
||||||||||||||||||
|
Determining
applicable disclosure threshold
|
X
|
X
|
G-10
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information*
|
||||||||||||||||||
|
Determining
current maximum probable exposure
|
X
|
|||||||||||||||||
|
Determining
current significance percentage
|
X
|
X
|
||||||||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||||||||
|
*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.
|
||||||||||||||||||
|
8
|
Other
Information
|
|||||||||||||||||
|
Disclose
any information required to be reported on Form 8-K during the
period
covered by the Form 10-D but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
below.
|
|||||||||||||||||
G-11
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
9
|
Exhibits
|
|||||||||||||||||
|
Distribution
report
|
X
|
|||||||||||||||||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
X
|
|||||||||||||||||
|
8-K
|
Must
be filed within four business days of an event reportable on
Form
8-K.
|
|||||||||||||||||
|
1.01
|
Entry
into a 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
|
X
|
X
|
X
(if Master Servicer is not a party)
|
X
(if Master Servicer and Securities Administrator are not
parties)
|
X
(if Master Servicer, Securities Administrator and Trustee are
not
parties)
|
|||||||||||||
G-12
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
1.02
|
Termination
of a Material Definitive Agreement
|
X
|
X
|
X(if
Master Servicer is not a party)
|
X
(if Master Servicer and Securities Administrator are not
parties)
|
X
(if Master Servicer, Securities Administrator and Trustee are
not
parties)
|
||||||||||||
|
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.
|
||||||||||||||||||
|
1.03
|
Bankruptcy
or Receivership
|
|||||||||||||||||
|
Disclosure
is required regarding the bankruptcy or receivership, if known
to the
Master Servicer, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicers, other
Servicer
servicing 20% or more of pool assets at time of report, other
material
servicers, Certificate Administrator, Trustee, significant obligor,
credit
enhancer (10% or more), derivatives counterparty,
Custodian
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
G-13
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
|||||||||||||||||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are
disclosed
in the monthly statement
|
X
|
X
|
G-14
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
3.03
|
Material
Modification to Rights of Security Holders
|
|||||||||||||||||
|
Disclosure
is required of any material modification to documents defining
the rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
X
|
X
|
X
|
X
(if Master Servicer, Securities Administrator and Trustee are
not
parties)
|
||||||||||||||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|||||||||||||||||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
X
|
X
|
G-15
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
5.06
|
Change
in Shell Company Status
|
|||||||||||||||||
|
[Not
applicable to ABS issuers]
|
X
|
|||||||||||||||||
|
6.01
|
ABS
Informational and Computational Material
|
|||||||||||||||||
|
[Not
included in reports to be filed under Section 3.18]
|
X
|
|||||||||||||||||
|
6.02
|
Change
of Servicer or 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, certificate
administrator or trustee.
|
X
|
X
|
X
|
X
|
X
|
G-16
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Reg
AB disclosure about any new servicer (from entity appointing
new servicer)
or trustee (from Depositor) is also required.
|
X
|
X
|
X
|
|||||||||||||||
|
6.03
|
Change
in Credit Enhancement or Other External Support
|
|||||||||||||||||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as
derivatives.
|
X
|
X
|
X
|
|||||||||||||||
|
Reg
AB disclosure about any new enhancement provider is also
required.
|
X
|
|||||||||||||||||
|
6.04
|
Failure
to Make a Required Distribution
|
X
|
X
|
|||||||||||||||
|
6.05
|
Securities
Act Updating Disclosure
|
|||||||||||||||||
|
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.
|
X
|
G-17
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
X
|
|||||||||||||||||
|
7.01
|
Regulation
FD Disclosure
|
X
|
X
|
X
|
X
|
X
|
X
|
|||||||||||
|
8.01
|
Other
Events
|
|||||||||||||||||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the Sponsor deems of importance to security
holders.
|
X
|
|||||||||||||||||
|
9.01
|
Financial
Statements and Exhibits
|
The
Responsible Party applicable to reportable event.
|
||||||||||||||||
|
10-K
|
Must
be filed within 90 days of the fiscal year end for the
registrant.
|
|||||||||||||||||
|
9B
|
Other
Information
|
|||||||||||||||||
|
Disclose
any information required to be reported on Form 8-K during the
fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Party for the applicable Form 8-K as indicated
above.
|
|||||||||||||||||
G-18
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
15
|
Exhibits
and Financial Statement Schedules
|
|||||||||||||||||
|
Item
1112(b) - Significant
Obligor Financial Information
|
X
|
X
|
||||||||||||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
|
X
|
|||||||||||||||||
|
Determining
applicable disclosure threshold
|
X
|
X
|
||||||||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information
|
||||||||||||||||||
|
Determining
current maximum probable exposure
|
X
|
G-19
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Determining
current significance percentage
|
X
|
X
|
||||||||||||||||
|
Requesting
required financial information or effecting incorporation by
reference
|
X
|
|||||||||||||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders,
including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||||||||||
|
Depositor
|
X
|
|||||||||||||||||
|
Trustee
|
X
|
|||||||||||||||||
|
Issuing
entity
|
X
|
|||||||||||||||||
|
Master
Servicer, affiliated Servicers, other Servicer servicing 20%
or more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||||||||
|
Securities
Administrator
|
X
|
G-20
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||||||||||||||
|
Custodian
|
X
|
|||||||||||||||||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
||||||||||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||||||||||
|
Depositor
|
X
|
|||||||||||||||||
|
Trustee
|
X (with
respect to 1119(a) affiliations only)
|
|||||||||||||||||
|
Master
Servicer, affiliated Servicers, other Servicer servicing 20%
or more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||||||||||
|
Securities
Administrator
|
X
|
|||||||||||||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
X
|
G-21
|
Form
|
|
Item
|
|
Description
|
|
Servicer
|
|
Master
Servicer
|
|
Securities
Administrator
|
|
Custodian
|
|
Trustee
|
|
Depositor
|
|
Sponsor
|
|
Custodian
|
X (with
respect to affiliations only)
|
|||||||||||||||||
|
Credit
Enhancer/Support Provider
|
X
|
X (to
the extent provided to the Sponsor)
|
||||||||||||||||
|
Significant
Obligor
|
X
|
|||||||||||||||||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
X
|
X
|
X
|
X
|
||||||||||||||
|
Item
1123 - Servicer Compliance Statement
|
X
|
X
|
G-22
EXHIBIT
H
ADDITIONAL
DISCLOSURE NOTIFICATION
**SEND
VIA FAX TO [XXX-XXX-XXXX] AND VIA EMAIL TO [_______________] AND VIA OVERNIGHT
MAIL TO THE ADDRESS IMMEDIATELY BELOW
▇▇▇▇▇
Fargo Bank, N.A. as [Securities Administrator]
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn:
Corporate Trust Services - STACS 2007-1 - SEC REPORT PROCESSING
ACE
Securities Corp.
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn:
STACS 2007-1
RE:
**Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies
and Gentlemen:
In
accordance with Section [__] of the Pooling and Servicing Agreement,
dated
as
of April 1, 2007 (the “Pooling and Servicing Agreement”), among ACE Securities
Corp., as depositor, GMAC Mortgage, LLC, as servicer, ▇▇▇▇▇ Fargo, National
Association, as master servicer and as securities administrator, and HSBC Bank
USA, National Association, 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
I
SWAP
AGREEMENT
BEAR
▇▇▇▇▇▇▇ FINANCIAL PRODUCTS INC.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
|
DATE:
|
May
15, 2007
|
|
|
TO:
|
HSBC
Bank USA, National Association, not in its individual capacity,
but solely
as Supplemental Interest Trust Trustee on behalf of the Supplemental
Interest Trust with respect to the SunTrust Acquisition Closed-End
Seconds
Trust, Series ▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through
Certificates
|
|
|
ATTENTION:
|
CTLA-Structured
Finance/STACS 2007-1
|
|
|
TELEPHONE:
|
▇▇▇-▇▇▇-▇▇▇▇
|
|
|
FACSIMILE:
|
▇▇▇-▇▇▇-▇▇▇▇
|
|
|
FROM:
|
Derivatives
Documentation
|
|
|
TELEPHONE:
|
▇▇▇-▇▇▇-▇▇▇▇
|
|
|
FACSIMILE:
|
▇▇▇-▇▇▇-▇▇▇▇
|
|
|
SUBJECT:
|
Fixed
Income Derivatives Confirmation and Agreement
|
|
|
REFERENCE
NUMBER:
|
FXNSC9506
|
The
purpose of this long-form confirmation (“Confirmation”)
is to
confirm the terms and conditions of the current Transaction entered into
on the
Trade Date specified below (the “Transaction”)
between
Bear ▇▇▇▇▇▇▇ Financial Products Inc. (“Party
A”) and
HSBC
Bank USA, National Association, not in its individual capacity, but solely
as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates (“Party
B”).
Reference is hereby made to the Pooling and Servicing Agreement, dated as
of
April 1, 2007, among ACE Securities Corp. as Depositor (“Depositor”), HSBC Bank
USA, National Association as Trustee (the “Trustee”), GMAC Mortgage, LLC as
Servicer (the “Servicer”) and ▇▇▇▇▇ Fargo Bank, N.A. as Master Servicer and
Securities Administrator (the “Master Servicer” and Securities Administrator”)
(the “Pooling
and Servicing 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.
This
Confirmation constitutes a “Confirmation”
and also
constitutes a “Schedule”
as
referred to in the ISDA Master Agreement, and Paragraph 13 of a Credit Support
Annex to the Schedule.
|
1.
|
This
Confirmation 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. In the
event of
any inconsistency among any of the following documents, the relevant
document first listed shall govern: (i) this Confirmation, exclusive
of
the provisions set forth in Item 3 hereof and Annex A hereto; (ii)
the
provisions set forth in Item 3 hereof, which are incorporated by
reference
into the Schedule; (iii) the Credit Support Annex; (iv) the Definitions;
and (v) the ISDA Master Agreement.
|
Each
reference herein to a “Section” (unless specifically referencing the Pooling and
Servicing 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 provisions herein deemed
incorporated in a 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.
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
2 of
27
| 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:
|
April
27, 2007
|
|
|
Effective
Date:
|
May
14, 2007
|
|
|
Termination
Date:
|
September
25, 2011, subject to adjustment in accordance with the Business
Day
Convention; provided, however, that for the purpose of determining
the
final Fixed Rate Payer Period End Date, Termination Date shall
be subject
to No Adjustment.
|
|
|
Fixed
Amount:
|
||
|
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 May 25, 2007 and ending on the Termination Date, with
No
Adjustment.
|
|
|
Fixed
Rate Payer
|
||
|
Payment
Date:
|
Early
Payment shall be applicable. One Business Day prior to each Fixed
Rate
Payer Period End Date.
|
|
|
Fixed
Rate:
|
5.06500%
|
|
|
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 May 25, 2007 and ending on the Termination Date, subject
to
adjustment in accordance with the Business Day
Convention.
|
|
|
Floating
Rate Payer
|
||
|
Payment
Dates:
|
Early
Payment shall be applicable. One Business Day prior to each Floating
Rate
Payer Period End Date.
|
|
|
Floating
Rate for initial
|
||
|
Calculation
Period:
|
To
be determined using Linear Interpolation by reference to a Designated
Maturity of 1 week and a Designated Maturity of 1
month.
|
|
|
Floating
Rate Option:
|
USD-LIBOR-BBA
|
|
|
Designated
Maturity:
|
One
month
|
|
|
Floating
Rate Day
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely
as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
3
of
27
|
Count
Fraction:
|
Actual/360
|
|
|
Reset
Dates:
|
The
first day of each Calculation Period.
|
|
|
Compounding:
|
Inapplicable
|
|
|
Business
Days:
|
New
York
|
|
|
Business
Day
|
||
|
Convention:
|
Following
|
|
|
Party
A
|
|
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; provided, however, that notwithstanding anything to the
contrary
in Section 5(a)(i) or 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 not constitute an Event of
Default
under Section 5(a)(i) unless (A) a Required Ratings Downgrade Event
has
occurred and been continuing for 30 or more Local Business Days
and (B)
such failure is not remedied on or before the third Local Business
Day
after notice of such failure is given to Party
A.
|
|
(ii)
|
The
“Breach
of Agreement”
provisions of Section 5(a)(ii) will apply to Party A and will not
apply to
Party B.
|
|
(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); 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 Required Ratings Downgrade Event has occurred
and
been continuing for 30 or more Local Business Days and (B) such
failure is
not remedied on or before the third Local Business Day after notice
of
such failure is given to Party A.
|
|
(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 apply to Party A and will not
apply to
Party B.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
4
of
27
|
(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.
“Threshold
Amount” means USD 100,000,000.
|
(vii)
|
The
“Bankruptcy”
provisions of Section 5(a)(vii) will apply to Party A and will
apply to
Party B except that the provisions of Section 5(a)(vii)(2), (6)
(to the
extent that such provisions refer to any appointment contemplated
or
effected by the Pooling and Servicing Agreement or any appointment
to
which Party B has not become subject), (7) and (9) will not apply
to Party
B; provided that, with respect to Party B only, Section 5(a)(vii)(4)
is
hereby amended by adding after the words “against it” the words
“(excluding any proceeding or petition instituted or presented by
Party A
or its Affiliates)”, and Section 5(a)(vii)(8) is hereby amended by
deleting the words “to (7) inclusive” and inserting lieu thereof “, (3),
(4) as amended, (5), (6) as amended, or
(7)”.
|
|
(viii)
|
The
“Merger
Without Assumption”
provisions of Section 5(a)(viii) will apply to Party A and will
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)
|
The
Second Method will apply.
|
|
(ii)
|
Market
Quotation will apply, provided, however, that, if Party A is the
Defaulting Party or the sole Affected Party, the following provisions
will
apply:
|
|
(A)
|
Section
6(e) is hereby amended by inserting on the first line thereof the
words
“or is effectively designated” after “If an Early Termination Date
occurs”;
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
5
of
27
|
(B)
|
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, and a party making the
determination, an amount determined on the basis of one or more Firm Offers
from
Reference Market-makers that are Eligible Replacements. Each Firm Offer will
be
(1) 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 (2) 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 are to be included.
The
party making the determination (or its agent) will request each Reference
Market-maker that is an Eligible Replacement to provide its Firm Offer to
the
extent reasonably practicable as of the same day and time (without regard
to
different time zones) on or as soon as reasonably practicable after the
designation or occurrence of the relevant Early Termination Date. The day
and
time as of which those Firm Offers are to be provided (the “bid time”) will be
selected in good faith by the party obliged to make a determination under
Section 6(e), and, if each party is so obliged, after consultation with the
other. If at least one Firm Offer from an Approved Replacement (which, if
accepted, would determine the Market Quotation) is provided at the bid time,
the
Market Quotation will be the Firm Offer (among such Firm Offers as specified
in
clause (C) below) actually accepted by Party B no later than the Business
Day
immediately preceding the Early Termination Date. If no Firm Offer from an
Approved Replacement (which, if accepted, would determine the Market Quotation)
is provided at the bid time, it will be deemed that the Market Quotation
in
respect of such Terminated Transaction or group of Transactions cannot be
determined.
|
(C)
|
If
more than one Firm Offer from an Approved Replacement (which, if
accepted,
would determine the Market Quotation) is provided at
the bid time,
Party B shall accept the Firm Offer (among such Firm Offers) which
would
require either (x) the lowest payment by Party B to the Reference
Market-maker, to the extent Party B would be required to make a
payment to
the Reference Market-maker or (y) the highest payment from the
Reference
Market-maker to Party B, to the extent the Reference Market-maker
would be
required to make a payment to Party B. If only one Firm Offer from
an
Approved Replacement (which, if accepted, would determine the Market
Quotation) is provided at the bid time, Party B shall accept such
Firm
Offer.
|
|
(D)
|
If
Party B requests Party A in writing to obtain Market Quotations,
Party A
shall use its reasonable efforts to do so.
|
|
(E)
|
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-off against any amount payable
by
Party B under the immediately preceding clause (I).”
| (g) |
“Termination
Currency”
means USD.
|
| (h) |
Additional
Termination Events.
Additional Termination Events will apply as provided in Part 5(c).
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
6
of
27
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):
|
It
is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made
by it to the other party under this Agreement.
In
making
this representation, it may rely on:
|
(1)
|
the
accuracy of any representations made by the other party pursuant
to
Section 3(f) of this Agreement;
|
|
(2)
|
the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii)
of
this Agreement and the accuracy and effectiveness of any document
provided
by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of
this
Agreement; and
|
|
(3)
|
the
satisfaction of the agreement of the other party contained in Section
4(d)
of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the
other party
does not deliver a form or document under Section 4(a)(iii) by
reason of
material prejudice to its legal or commercial
position.
|
| (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):
|
Party
A
is a corporation organized under the laws of the State of Delaware and its
U.S.
taxpayer identification number is ▇▇-▇▇▇▇▇▇▇.
| (B) |
Party
B makes the following
representation(s):
|
None.
|
(b)
|
Tax
Provisions.
|
|
(i)
|
Gross
Up.
Section 2(d)(i)(4) shall not apply to Party B as X, such that Party
B
shall not be required to pay any additional amounts referred to
therein.
|
|
(ii)
|
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 (including any Tax imposed in relation to a
Credit
Support Document or in relation to any payment thereunder) 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.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
7
of
27
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 to deliver document
|
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
||
|
Party
A
|
An
original properly completed and executed United States Internal
Revenue
Service Form W-9 (or any successor thereto) with respect to any
payments
received or to be received by Party A that eliminates U.S. federal
withholding and backup withholding Tax on payments to Party A under
this
Agreement.
|
(i)
upon execution of this Agreement, (ii) on or before the first payment
date
under this Agreement, including any Credit Support Document, (iii)
promptly upon the reasonable demand by Party B, (iv) prior to the
expiration or obsolescence of any previously delivered form, and
(v)
promptly upon the information on any such previously delivered
form
becoming inaccurate or incorrect.
|
||
|
Party
B
|
(i)
Upon execution of this Agreement, an original properly completed
and
executed United States Internal Revenue Service Form W-9 (or any
successor
thereto) with respect to any payments received or to be received
by the
initial beneficial owner of payments to Party B that eliminates
U.S.
federal withholding and backup withholding Tax on payments to Party
B
under this Agreement, and (ii) thereafter, the appropriate tax
certification form (i.e., IRS Form W-9 or IRS Form ▇-▇▇▇▇, ▇-▇▇▇▇,
▇-▇▇▇▇
or W-8ECI, as applicable (or any successor form thereto)) with
respect to
any payments received or to be received by the beneficial owner
of
payments to Party B under this Agreement from time to time.
|
(i)
upon execution of this Agreement, (ii) on or before the first payment
date
under this Agreement, including any Credit Support Document, (iii)
in the
case of a tax certification form other than a Form W-9, before
December 31
of each third succeeding calendar year, (iv) promptly upon the
reasonable
demand by Party B, (v) prior to the expiration or obsolescence
of any
previously delivered form, and (vi) promptly upon the information
on any
such previously delivered form becoming inaccurate or
incorrect.
|
| (b) |
For
the purpose of Section 4(a)(ii), other documents to be delivered
are:
|
|
Party
required to deliver document
|
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
Covered
by
Section
3(d) Representation
|
|||
|
Party
A and
Party
B
|
Any
documents required by the receiving party to evidence the 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
|
Upon
the execution and delivery of this Agreement
|
Yes
|
|||
|
Party
A and
Party
B
|
A
certificate of an authorized officer of the party, 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
|
Upon
the execution and delivery of this Agreement
|
Yes
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
8
of
27
|
Party
required to deliver document
|
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
Covered
by
Section
3(d) Representation
|
|||
|
Party
A
|
Annual
Report of Party A containing consolidated financial statements
certified
by independent certified public accountants and prepared in accordance
with generally accepted accounting principles in the country in
which
Party A is organized
|
Upon
request by Party B
|
Yes
|
|||
|
Party
A
|
Quarterly
Financial Statements of Party A containing unaudited, consolidated
financial statements of Party A’s fiscal quarter prepared in accordance
with generally accepted accounting principles in the country in
which
Party A is organized
|
Upon
request by Party B
|
Yes
|
|||
|
Party
A and
Party
B
|
An
opinion of counsel of such party regarding the enforceability of
this
Agreement in a form reasonably satisfactory to the other
party.
|
Upon
the execution and delivery of this Agreement
|
No
|
|||
|
Party
B
|
An
executed copy of the Pooling and Servicing Agreement
|
Promptly
upon filing of such agreement with the U.S. Securities and Exchange
Commission
|
No
|
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:
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
||
|
Attention:
|
DPC
Manager
|
||
|
Facsimile:
|
(▇▇▇)
▇▇▇-▇▇▇▇
|
||
|
with
a copy to:
|
|||
|
Address:
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
||
|
Attention:
|
Derivative
Operations 7th Floor
|
||
|
Facsimile:
|
(▇▇▇)
▇▇▇-▇▇▇▇
|
||
|
(For
all purposes)
|
|||
Address
for notices or communications to Party B:
|
HSBC
Bank USA, National Association, CTLA-Structured Finance, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
||
|
Attention:
|
▇▇▇▇▇
▇▇▇
|
|
|
Facsimile:
|
▇▇▇-▇▇▇-▇▇▇▇
|
|
|
Phone:
|
▇▇▇-▇▇▇-▇▇▇▇
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
9
of
27
|
With
a copy to:
|
||
|
▇▇▇▇▇
Fargo Bank, N.A.
|
||
|
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
|
||
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
||
|
Attention:
Client Service Manager STACS 2007-1
|
||
|
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; neither
Party A nor Party B has any Offices other than as set forth in
the Notices
Section.
|
|
(d)
|
Multibranch
Party.
For the purpose of Section 10(c) of this
Agreement:
|
Party
A
is not a Multibranch Party.
|
Party
B is not a Multibranch Party.
|
|
(e)
|
Calculation
Agent.
The Calculation Agent is Party A; provided that, if an Event of
Default
shall have occurred and be continuing, Party B shall have the right
to
designate a third-party Reference Market-maker as the Calculation
Agent.
|
| (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.
|
|
(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, 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.
The parties agree that subparagraph (ii) of Section 2(c) will apply
to
each Transaction hereunder.
|
|
(j)
|
Affiliate.
“Affiliate”
shall have the meaning set forth in Section 12 of this Agreement;
provided
that Party A and Party B shall be deemed to have no Affiliates
for
purposes of this Agreement, including for purposes of Section
6(b)(ii).
|
Part
5. Others
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 Pooling and Servicing
Agreement.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
10
of
27
| (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)
|
[Reserved.]
|
|
(iii)
|
[Reserved.]
|
|
(iv)
|
Representations.
Section 3 is hereby amended by adding at the end thereof the following
subsection (g):
|
|
“(g)
|
Relationship
Between Parties.
|
|
(1)
|
Nonreliance.
(i) It is not relying on any statement or representation of the
other
party regarding the Transaction (whether written or oral), other
than the
representations expressly made in this Agreement or the Confirmation
in
respect of that Transaction, (ii) it has consulted with its own
legal,
regulatory, tax, business, investment, financial and accounting
advisors
to the extent it has deemed necessary, and it has made its own
investment,
hedging and trading decisions based upon its own judgment and upon
any
advice from such advisors as it has deemed necessary and not upon
any view
expressed by the other party, (iii) it is not relying on any communication
(written or oral) of the other party as investment advice or as
a
recommendation to enter into this Transaction; it being understood
that
information and explanations related to the terms and conditions
of this
Transaction shall not be considered investment advice or a recommendation
to enter into this Transaction, and (iv) it has not received from
the
other party any assurance or guaranty as to the expected results
of this
Transaction.
|
|
(2)
|
Evaluation
and Understanding. (i) It has the capacity to evaluate (internally
or
through independent professional advice) the Transaction and has
made its
own decision to enter into the Transaction and (ii) it understands
the
terms, conditions and risks of the Transaction and is willing and
able to
accept those terms and conditions and to assume those risks, financially
and otherwise.
|
|
(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 an agent, fiduciary
or
advisor for it in respect of the Transaction.
|
|
(5)
|
Eligible
Contract Participant. It is an “eligible swap participant” as such term is
defined in, Section 35.1(b)(2) of the regulations (17 C.F.R. 35)
promulgated under, and an “eligible contract participant” as defined in
Section 1(a)(12) of the Commodity Exchange Act, as
amended.”
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
11
of
27
|
(v)
|
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) deleting the last paragraph thereof and inserting the
following
in lieu thereof:
|
“Notwithstanding
anything to the contrary in Section 7 (as amended herein) and Part 5(f),
any
transfer by Party A under this Section 6(b)(ii) shall not require the consent
of
Party B for such transfer if the following conditions are
satisfied:
|
(1)
|
the
transferee (the “Section 6 Transferee”) is an Eligible
Replacement;
|
|
(2)
|
if
the Section 6 Transferee is domiciled in a different country or
political
subdivision thereof from both Party A and Party B, such transfer
satisfies
the Rating Agency Condition;
|
|
(3)
|
the
Section 6 Transferee will not, as a result of such transfer, be
required
on the next succeeding Scheduled Payment Date to withhold or deduct
on
account of any Tax (except in respect of default interest) amounts
in
excess of that which Party A would, on the next succeeding Scheduled
Payment Date have been required to so withhold or deduct unless
the
Section 6 Transferee would be required to make additional payments
pursuant to Section 2(d)(i)(4) corresponding to such excess;
|
|
(4)
|
a
Termination Event or Event of Default does not occur as a result
of such
transfer; and
|
|
(5)
|
the
Section 6 Transferee confirms in writing that it will accept all
of the
interests and obligations in and under this Agreement which are
to be
transferred to it in accordance with the terms of this
provision.”
|
|
(vi)
|
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 1 and inserting “.” in lieu thereof, and (iii)
deleting the final paragraph
thereof.
|
|
(vii)
|
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)
|
S&P
First Level Downgrade.
If
an S&P Approved Ratings Downgrade Event has occurred and is continuing
and Party A fails to take any action described under Part (5)(d)(i)(1),
within the time period specified therein, then an Additional Termination
Event shall have occurred with respect to Party A, Party A shall
be the
sole Affected Party with respect to such Additional Termination
Event and
all Transactions hereunder shall be Affected
Transaction.
|
|
(ii)
|
DBRS
First Level Downgrade.
If
an DBRS Approved Ratings Downgrade Event has occurred and is continuing
and Party A fails to take any action described under Part (5)(d)(i)(1),
within the time period specified therein, then an Additional Termination
Event shall have occurred with respect to Party A, Party A shall
be the
sole Affected Party with respect to such Additional Termination
Event and
all Transactions hereunder shall be Affected
Transaction.
|
|
(iii)
|
▇▇▇▇▇’▇
First Rating Trigger Collateral.
If
(A) it is not the case that a ▇▇▇▇▇’▇ Second Trigger Ratings Event has
occurred and been continuing for 30 or more Local Business Days
and (B)
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,
then
an Additional Termination Event shall have occurred with respect
to Party
A, Party A shall be the sole Affected Party with respect to such
Additional Termination Event and all Transactions hereunder shall
be
Affected Transactions.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
12
of
27
|
(iv)
|
S&P
Second Level Downgrade.
If
an S&P Required Ratings Downgrade Event has occurred and is continuing
and Party A fails to take any action described under Part (5)(d)(i)(2)
within the time period specified therein, then an Additional Termination
Event shall have occurred with respect to Party A, Party A shall
be the
sole Affected Party with respect to such Additional Termination
Event and
all Transactions hereunder shall be Affected
Transaction.
|
|
(v)
|
DBRS
Second Level Downgrade.
If
an DBRS Required Ratings Downgrade Event has occurred and is continuing
and Party A fails to take any action described under Part (5)(d)(i)(2)
within the time period specified therein, then an Additional Termination
Event shall have occurred with respect to Party A, Party A shall
be the
sole Affected Party with respect to such Additional Termination
Event and
all Transactions hereunder shall be Affected
Transaction.
|
|
(vi)
|
▇▇▇▇▇’▇
Second Rating Trigger Replacement.
If
(A) a ▇▇▇▇▇’▇ Second Trigger Ratings Event has occurred and been
continuing for 30 or more Local Business Days and (B) (i) at least
one
Eligible Replacement has made a Firm Offer to be the transferee
of all of
Party A’s rights and obligations under this Agreement (and such Firm Offer
remains an offer that will become legally binding upon such Eligible
Replacement upon acceptance by the offeree) and/or (ii) an Eligible
Guarantor has made a Firm Offer to provide an Eligible Guarantee
(and such
Firm Offer remains an offer that will become legally binding upon
such
Eligible Guarantor immediately upon acceptance by the offeree),
then an
Additional Termination Event shall have occurred with respect to
Party A,
Party A shall be the sole Affected Party with respect to such Additional
Termination Event and all Transactions hereunder shall be Affected
Transactions.
|
|
(vii)
|
Amendment
of the Pooling and Servicing Agreement.
If, without the prior written consent of Party A where such consent
is
required under the Pooling and Servicing Agreement (such consent
not to be
unreasonably withheld, delayed or conditioned), an amendment is
made to
the Pooling and Servicing Agreement which amendment could reasonably
be
expected to have a material adverse effect on the interests of
Party A
under this Agreement, an Additional Termination Event shall have
occurred
with respect to Party B, Party B shall be the sole Affected Party
with
respect to such Additional Termination Event and all Transactions
hereunder shall be Affected Transactions.
|
|
(viii)
|
[Reserved].
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
13
of
27
|
(ix)
|
Optional
Termination of Securitization.
An
Additional Termination Event shall occur upon the notice to
Certificateholders of an Optional Termination becoming unrescindable
in
accordance with Article X of the Pooling and Servicing Agreement
(such
notice, the “Optional
Termination Notice”).
With respect to such Additional Termination Event: (A) Party B
shall be
the sole Affected Party; (B) notwithstanding anything to the contrary
in
Section 6(b)(iv) or Section 6(c)(i), the final Distribution Date
specified
in the Optional Termination Notice is hereby designated as the
Early
Termination Date for this Additional Termination Event in respect
of all
Affected Transactions; (C) Section 2(a)(iii)(2) shall not be applicable
to
any Affected Transaction in connection with the Early Termination
Date
resulting from this Additional Termination Event; notwithstanding
anything
to the contrary in Section 6(c)(ii), payments and deliveries under
Section
2(a)(i) or Section 2(e) in respect of the Terminated Transactions
resulting from this Additional Termination Event will be required
to be
made through and including the Early Termination Date designated
as a
result of this Additional Termination Event; provided, for the
avoidance
of doubt, that any such payments or deliveries that are made on
or prior
to such Early Termination Date will not be treated as Unpaid Amounts
in
determining the amount payable in respect of such Early Termination
Date;
(D) notwithstanding anything to the contrary in Section 6(d)(i),
(I) if,
no later than 4:00 pm New York City time on the day that is four
Business
Days prior to the final Distribution Date specified in the Optional
Termination Notice, the Securities Administrator requests the amount
of
the Estimated Swap Termination Payment, Party A shall provide to
the
Securities Administrator in writing (which may be done in electronic
format) the amount of the Estimated Swap Termination Payment no
later than
2:00 pm New York City time on the following Business Day and (II)
if the
Securities Administrator provides written notice (which may be
done in
electronic format) to Party A no later than two Business Days prior
to the
final Distribution Date specified in the Optional Termination Notice
that
all requirements of the Optional Termination have been met, then
Party A
shall, no later than one Business Day prior to the final Distribution
Date
specified in the Optional Termination Notice, make the calculations
contemplated by Section 6(e) (as amended herein) and provide to
the
Securities Administrator in writing (which may be done in electronic
format) the amount payable by either Party B or Party A in respect
of the
related Early Termination Date in connection with this Additional
Termination Event; provided, however, that the amount payable by
Party B,
if any, in respect of the related Early Termination Date shall
be the
lesser of (x) the amount calculated to be due by Party B pursuant
to
Section 6(e) and (y) the Estimated Swap Termination Payment; and
(E)
notwithstanding anything to the contrary in this Agreement, any
amount due
from Party B to Party A in respect of this Additional Termination
Event
will be payable on the final Distribution Date specified in the
Optional
Termination Notice and any amount due from Party A to Party B in
respect
of this Additional Termination Event will be payable one Business
Day
prior to the final Distribution Date specified in the Optional
Termination
Notice.
|
The
Securities Administrator shall be an express third party beneficiary of this
Agreement as if a party hereto to the extent of the Securities Administrator’s
rights specified herein.
|
(x)
|
Failure
to Pay Class A Certificates.
If the Class A Certificate Insurer is unable to pay, or fails or
admits in
writing its inability to pay on any Distribution Date, any Insured
Amount
with respect to the Class A Certificates upon a draw on and as
required
under the Class A Certificate Insurance Policy, then an Additional
Termination Event shall have occurred with respect to Party B,
Party B
shall be the sole Affected Party and all Transactions hereunder
shall be
Affected Transactions.
|
|
(d)
|
Rating
Agency Downgrade.
|
| (i) |
S&P
Downgrade:
|
|
(1)
|
In
the event that an S&P Approved Ratings Downgrade Event occurs and is
continuing, then within 30 days after such rating downgrade, Party
A
shall, subject to the Rating Agency Condition with respect to S&P, at
its own expense, either (i) procure a Permitted Transfer, (ii)
obtain an
Eligible Guarantee or (iii) post collateral in accordance with
the Credit
Support Annex.
|
|
(2)
|
In
the event that an S&P Required Ratings Downgrade Event occurs and is
continuing, then within 10 Local Business Days after such rating
withdrawal or downgrade, Party A shall, subject to the Rating Agency
Condition with respect to S&P, at its own expense, procure either (i)
a Permitted Transfer or (ii) an Eligible
Guarantee.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
14
of
27
| (ii) |
DBRS
Downgrade:
|
|
(1)
|
In
the event that an DBRS Approved Ratings Downgrade Event occurs
and is
continuing, then within 30 days after such rating downgrade, Party
A
shall, subject to the Rating Agency Condition with respect to DBRS,
at its
own expense, either (i) procure a Permitted Transfer, (ii) obtain
an
Eligible Guarantee or (iii) post collateral in accordance with
the Credit
Support Annex.
|
|
(2)
|
In
the event that a DBRS Required Ratings Downgrade Event occurs and
is
continuing, then within 10 Local Business Days after such rating
withdrawal or downgrade, Party A shall, subject to the Rating Agency
Condition with respect to DBRS, at its own expense, procure either
(i) a
Permitted Transfer or (ii) an Eligible
Guarantee.
|
| (iii) |
Moody’s
Downgrade.
|
|
(1)
|
In
the event that a Moody’s Second Trigger Ratings Event occurs and is
continuing, Party A shall, as soon as reasonably practicable thereafter,
at its own expense and using commercially reasonable efforts, either
(i)
procure a Permitted Transfer or (ii) obtain an Eligible Guarantee.
|
|
(e)
|
Item
1115 Agreement.
Party A and Party B hereby agree that the terms of the Item 1115
Agreement, dated as of May 15, 2007 (the “Item 1115 Agreement”), among
SunTrust Asset Funding, LLC (the “Sponsor”), ACE Securities Corp. (the
“Depositor”) and Bear ▇▇▇▇▇▇▇ Financial Products Inc. (the “Derivative
Provider”), shall be incorporated by reference into this Agreement and
Party B shall be an express third party beneficiary of the Item
1115
Agreement. A copy of the Item 1115 Agreement is annexed hereto
at Annex
B.
|
|
(f)
|
Transfers.
|
(i) Section
7
is hereby amended to read in its entirety as follows:
“Except
with respect to a Permitted Transfer pursuant to Section 6(b)(ii), Part 5(d),
Part 5(b)(v) or the succeeding sentence, 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 unless (a) the prior written consent
of
the other party is obtained and (b) the Rating Agency Condition has been
satisfied with respect to S&P and DBRS. At any time at which no Relevant
Entity has credit ratings at least equal to the Approved Ratings Threshold,
Party A may make a Permitted 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.
|
|
(g)
|
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
Supplemental Interest Trust and the proceeds thereof, in accordance
with
the priority of payments and other terms of the Pooling and Servicing
Agreement and that Party A will not have any recourse to any of
the
directors, officers, agents, 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 Supplemental Interest
Trust and
the proceeds thereof, should be insufficient to satisfy all claims
outstanding and following the realization of the Supplemental Interest
Trust and the proceeds thereof, any claims against or obligations
of Party
B under this Agreement or any other confirmation thereunder still
outstanding shall be extinguished and thereafter not revive. Neither
the
Supplemental Interest Trust Trustee or the Securities Administrator
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
Supplemental Interest Trust from the Trust created pursuant to
the Pooling
and Servicing Agreement. This provision will survive the termination
of
this Agreement.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
15
of
27
|
(h)
|
Timing
of Payments
by Party B upon Early Termination.
Notwithstanding anything to the contrary in Section 6(d)(ii), to
the
extent that all or a portion (in either case, the “Unfunded Amount”) of
any amount that is calculated as being due in respect of any Early
Termination Date under Section 6(e) from Party B to Party A will
be paid
by Party B from amounts other than any upfront payment paid to
Party B by
an Eligible Replacement that has entered a Replacement Transaction
with
Party B, then such Unfunded Amount shall be due on the next subsequent
Distribution Date following the date on which the payment would
have been
payable as determined in accordance with Section 6(d)(ii), and
on any
subsequent Distribution Dates until paid in full (or if such Early
Termination Date is the final Distribution Date, on such final
Distribution Date); provided, however, that if the date on which
the
payment would have been payable as determined in accordance with
Section
6(d)(ii) is a Distribution Date, such payment will be payable on
such
Distribution Date.
|
|
(i)
|
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 Swap Rating Agency has been given prior written notice of
such
designation or transfer.
|
|
(j)
|
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.”.
|
|
(k)
|
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 Swap 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
DBRS.
|
|
(l)
|
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 Swap Rating Agency notice of such event or condition;
provided that failure to provide notice of such event or condition
pursuant to this Part 5(l) shall not constitute an Event of Default
or a
Termination Event.
|
| (m) |
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 Supplemental Interest Trust, or the trust formed pursuant
to the
Pooling and Servicing 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. This
provision will survive the termination of this Agreement.
|
|
(n)
|
Supplemental
Interest Trust Trustee Liability Limitations.
It
is expressly understood and agreed by the parties hereto that (a)
this
Agreement is executed by HSBC Bank USA, National Association (“HSBC”) not
in its individual capacity, but solely as Supplemental Interest
Trust
Trustee under the Pooling and Servicing Agreement in the exercise
of the
powers and authority conferred and invested in it thereunder; (b)
HSBC has
been directed pursuant to the Pooling and Servicing Agreement to
enter
into this Agreement and HSBC and the Securities Administrator have
been
directed to perform its obligations hereunder; (c) each of the
representations, undertakings and agreements herein made on behalf
of the
Supplemental Interest Trust is made and intended not as personal
representations of HSBC or the Securities Administrator but is
made and
intended for the purpose of binding only the Supplemental Interest
Trust
Trustee; and (d) under no circumstances shall HSBC
or the Securities Administrator 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.
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
16
of
27
|
(o)
|
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.
|
(p)
|
Agent
for Party B. Party
A acknowledges that Party B has appointed the Supplemental Interest
Trust
Trustee and the Securities Administrator as its agents under the
Pooling
and Servicing Agreement to carry out certain functions on behalf
of Party
B, and that the Supplemental Interest Trust Trustee and the Securities
Administrator shall be entitled to give notices and to perform
and satisfy
the obligations of Party B hereunder on behalf of Party
B.
|
|
(q)
|
[Reserved]
|
|
(r)
|
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.
|
|
(s)
|
Waiver
of Jury Trial.
Each party waives any right it may have to a trial by jury in respect
of
any suit, action or proceeding relating to this Agreement or any
Credit
Support Document.
|
|
(t)
|
Form
of ISDA Master Agreement. Party
A and Party B hereby agree that the text of the body of the ISDA
Master
Agreement is intended to be the printed form of the ISDA Master
Agreement
(Multicurrency -
Crossborder) as published and copyrighted in 1992 by the International
Swaps and Derivatives Association,
Inc.
|
|
(u)
|
Payment
Instructions.
Party A hereby agrees that, unless notified in writing by Party
B of other
payment instructions, any and all amounts payable by Party A to
Party B
under this Agreement shall be paid to the account specified in
Item 4 of
this Confirmation, below.
|
|
(v)
|
Capacity.
Party A represents to Party B on the date on which Party A enters
into
this Agreement
that it is entering into the Agreement and the Transaction as principal
and not as agent of any person. The Supplemental Interest Trust
Trustee
represents to Party A on the date on which Party
B enters
into this Agreement the Supplemental Interest Trust Trustee is
executing
the Agreement not in its individual capacity, but solely as Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest
Trust.
|
|
(w)
|
Substantial
financial transactions.
Each party hereto is hereby advised and acknowledges as of the
date hereof
that the other party has engaged in (or refrained from engaging
in)
substantial financial transactions and has taken (or refrained
from
taking) other material actions in reliance upon the entry by the
parties
into the Transaction being entered into on the terms and conditions
set
forth herein and in the Pooling and Servicing Agreement relating
to such
Transaction, as applicable. This paragraph shall be deemed repeated
on the
trade date of each Transaction.
|
|
(x)
|
[Reserved].
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
17
of
27
|
(y)
|
[Reserved].
|
| (z) |
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, DBRS Approved Ratings Threshold
and the Moody’s First Trigger 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 (as determined by Party B in its sole discretion, acting
in a
commercially reasonable manner) if such entity were a Transferee, as defined
in
the definition of Permitted Transfer.
“DBRS”
means
Dominion Bond Rating Service, or any successor thereto.
“DBRS
Approved Ratings Downgrade Event”
means
that no Relevant Entity has credit ratings at least equal to the DBRS Approved
Ratings Threshold.
“DBRS
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
DBRS of “AA(low)” and a short-term unsecured and unsubordinated debt rating from
DBRS of “R-1(middle)”.
“DBRS
Required Ratings Downgrade Event”
means
that no Relevant Entity has credit rating at least equal to the DBRS Required
Ratings Threshold.
“DBRS
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 DBRS of
“BBB”.
“Eligible
Guarantee”
means an
unconditional and irrevocable guarantee of all present and future payment
obligations and obligations to post collateral of Party A or an Eligible
Replacement to Party B under this Agreement that is provided by an Eligible
Guarantor as principal debtor rather than surety and that 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 DBRS.
“Eligible
Guarantor”
means
an
entity that (A) has credit ratings from S&P at least equal to the S&P
Approved Ratings Threshold, (B) has credit ratings from DBRS at lease equal
to
the DBRS Approved Ratings Threshold and (C) has credit ratings from Moody’s at
least equal to the Moody’s Second Trigger Ratings Threshold, provided, for the
avoidance of doubt, that an Eligible Guarantee of an Eligible Guarantor with
credit ratings below the Moody’s First Trigger Ratings Threshold will not cause
a Collateral Event (as defined in the Credit Support Annex) not to occur
or
continue with respect to Moody’s.
“Eligible
Replacement”
means an
entity (A) (i) (a) that has credit ratings from S&P at least equal to the
S&P Approved Ratings Threshold, (B) has credit ratings from DBRS at lease
equal to the DBRS Approved Ratings Threshold and (C) has credit ratings from
Moody’s at least equal to the Moody’s Second Trigger Ratings Threshold,
provided, for the avoidance of doubt, that an Eligible Replacement with credit
ratings below the Moody’s First Trigger Ratings Threshold will not cause a
Collateral Event (as defined in the Credit Support Annex) not to occur or
continue with respect to Moody’s, or (ii) the present and future obligations
(for the avoidance of doubt, not limited to payment obligations) of which
entity
to Party B under this Agreement are guaranteed pursuant to an Eligible Guarantee
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
18
of
27
“Estimated
Swap Termination Payment”
means,
with respect to an Early Termination Date, an amount determined by Party
A in
good faith and in a commercially reasonable manner as the maximum payment
that
could be owed by Party B to Party A in respect of such Early Termination
Date
pursuant to Section 6(e), taking into account then current market
conditions.
“Firm
Offer”
means
(A) with respect to an Eligible Replacement, a quotation from such 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, and (B) with respect to an Eligible Guarantor, an offer by such Eligible
Guarantor to provide an Eligible Guarantee that will become legally binding
upon
such Eligible Guarantor upon acceptance by the offeree.
“Moody’s”
means
▇▇▇▇▇’▇ Investors Service, Inc., or any successor thereto.
“Moody’s
First Trigger Ratings Event” means
that no
Relevant Entity has credit ratings from Moody’s at least equal to the Moody’s
First Trigger Ratings Threshold.
“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 Ratings 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 pursuant to Section 6(b)(ii), Part 5(d),
Part
5(b)(v), the Item 1115 Agreement, or the second sentence of Section 7 (as
amended herein) 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; (b) Party A and the Transferee are
both
“dealers in notional principal contracts” within the meaning of Treasury
regulations section 1.1001-4 (in each case as certified by such entity);
(c) 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); (d) an Event
of
Default or Termination Event would not occur as a result of such transfer;
(e)
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; (f) Party B shall have determined,
in
its sole discretion, acting in a commercially reasonable manner, that 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; (g) 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); (h) either (A) Moody’s has been given
prior written notice of such transfer and the Rating Agency Condition is
satisfied with respect to S&P and DBRS or (B) each Swap Rating Agency has
been given prior written notice of such transfer and such transfer is in
connection with the assignment and assumption of this Agreement without
modification of its terms, other than party names, dates relevant to the
effective date of such transfer, tax representations (provided that the
representations in Part 2(a)(i) are not modified) and any other representations
regarding the status of the substitute counterparty of the type included
in Part
5(b)(iv), Part 5(v)(i)(2) or Part 5(v)(ii), notice information and account
details; and (i) such transfer otherwise complies with the terms of the Pooling
and Servicing Agreement.
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
19
of
27
“Rating
Agency Condition”
means,
with respect to any particular proposed act or omission to act hereunder
and
each Swap Rating Agency specified in connection with such proposed act or
omission, that the party acting or failing to act must consult with each
of the
specified Swap Rating Agencies and receive from each such Swap Rating Agency
a
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 Transaction, as determined by Party B in its sole discretion,
acting
in a commercially reasonable manner.
“Required
Ratings Downgrade Event”
means
that no Relevant Entity has credit ratings at least equal to the Required
Ratings Threshold. For purposes of determining whether a Required Ratings
Downgrade Event has occurred, each Relevant Entity shall provide its credit
ratings to Party B in writing, upon request of Party B.
“Required
Ratings Threshold” means
each of the S&P Required Ratings Threshold , the DBRS Required Ratings
Threshold, and the Moody’s Second Trigger Ratings Threshold.
“S&P”
means
Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or any successor thereto.
“S&P
Approved Ratings Downgrade Event”
means
that no Relevant Entity has credit ratings at least equal to the S&P
Approved Ratings Threshold.
“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
from
S&P of “A-1”, 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 from S&P of
“A+”.
“S&P
Required Ratings Downgrade Event”
means
that no Relevant Entity has credit ratings at least equal to the S&P
Required Ratings Threshold.
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
20
of
27
“S&P
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
or
counterparty rating from S&P of “BBB-”.
“Swap
Rating Agencies”
means,
with respect to any date of determination, each of S&P and DBRS and ▇▇▇▇▇’▇,
to the extent that each such rating agency is then providing a rating for any
of
the SunTrust Acquisition Closed-End Seconds Trust, Series ▇▇▇▇-▇, ▇▇▇▇▇ Backed
Pass-Through Certificates (the “Certificates”)
[Remainder
of this page intentionally left blank.]
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
21
of
27
| 4. |
Account
Details and Settlement Information:
|
Payments
to Party A:
Citibank,
N.A., New York
ABA
Number: ▇▇▇-▇▇▇▇-▇▇, for the account of Bear, ▇▇▇▇▇▇▇ Securities
Corp.
Account
Number: 0925-3186, for further credit to Bear ▇▇▇▇▇▇▇ Financial Products
Inc.
Sub-account
Number: 102-04654-1-3
Attention:
Derivatives Department
Payments
to Party B:
▇▇▇▇▇
Fargo Bank, NA
ABA
#
▇▇▇▇▇▇▇▇▇
Account
Name: SAS Clearing Account #▇▇▇▇▇▇▇▇▇▇
FFC:
▇▇▇▇▇▇▇▇, STACS 2007-1 Supplemental Interest Account
NEITHER
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF THE BEAR
▇▇▇▇▇▇▇ COMPANIES INC. OTHER THAN PARTY A IS AN OBLIGOR OR A CREDIT SUPPORT
PROVIDER ON THIS AGREEMENT.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
Party
B
hereby agrees to check this Confirmation and to confirm that the foregoing
correctly sets forth the terms of the Transaction by signing in the space
provided below and returning to Party A a facsimile of the fully-executed
Confirmation to ▇▇▇-▇▇▇-▇▇▇▇. For inquiries regarding U.S. Transactions, please
contact Derivatives Documentation by telephone at ▇▇▇-▇▇▇-▇▇▇▇. For all other
inquiries please contact Derivatives Documentation by telephone at
▇▇▇-▇-▇▇▇-▇▇▇▇. Originals will be provided for your execution upon your
request.
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
22
of
27
We
are
very pleased to have executed this Transaction with you and we look forward
to
completing other transactions with you in the near future.
Very
truly yours,
| BEAR ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS INC. | ||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||||
|
Title:
Authorized Signatory
|
||||
Party
B,
acting through its duly authorized signatory, hereby agrees to, accepts and
confirms the terms of the foregoing as of the date hereof.
| HSBC BANK USA, NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS SUPPLEMENTAL INTEREST TRUST TRUSTEE ON BEHALF OF THE SUPPLEMENTAL INTEREST TRUST WITH RESPECT TO THE SUNTRUST ACQUISITION CLOSED-END SECONDS TRUST, SERIES ▇▇▇▇-▇, ▇▇▇▇▇ BACKED PASS-THROUGH CERTIFICATES | ||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇ | |||
|
Name:
▇▇▇▇▇ ▇▇▇
|
||||
|
Title:
Vice President
|
||||
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
23
of
27
SCHEDULE
I
(where
for
the purposes of (i) determining Floating Amounts, all such dates subject to
adjustment in accordance with the Following Business Day Convention and (ii)
determining Fixed Amounts, all such dates subject to No Adjustment.)
|
From
and including
|
To
but excluding
|
Notional
Amount
(USD)
|
||
|
Effective
Date
|
05/25/2007
|
335,803,000.00
|
||
|
05/25/2007
|
06/25/2007
|
327,818,269.15
|
||
|
06/25/2007
|
07/25/2007
|
319,139,157.37
|
||
|
07/25/2007
|
08/25/2007
|
309,802,003.79
|
||
|
08/25/2007
|
09/25/2007
|
299,848,197.13
|
||
|
09/25/2007
|
10/25/2007
|
289,323,965.95
|
||
|
10/25/2007
|
11/25/2007
|
278,280,108.26
|
||
|
11/25/2007
|
12/25/2007
|
266,771,660.14
|
||
|
12/25/2007
|
01/25/2008
|
254,858,168.73
|
||
|
01/25/2008
|
02/25/2008
|
243,446,975.51
|
||
|
02/25/2008
|
03/25/2008
|
232,545,772.45
|
||
|
03/25/2008
|
04/25/2008
|
222,131,800.07
|
||
|
04/25/2008
|
05/25/2008
|
212,183,313.47
|
||
|
05/25/2008
|
06/25/2008
|
202,679,537.02
|
||
|
06/25/2008
|
07/25/2008
|
193,600,621.36
|
||
|
07/25/2008
|
08/25/2008
|
184,927,601.97
|
||
|
08/25/2008
|
09/25/2008
|
176,642,359.89
|
||
|
09/25/2008
|
10/25/2008
|
168,727,583.98
|
||
|
10/25/2008
|
11/25/2008
|
161,166,734.99
|
||
|
11/25/2008
|
12/25/2008
|
153,944,011.13
|
||
|
12/25/2008
|
01/25/2009
|
147,044,315.24
|
||
|
01/25/2009
|
02/25/2009
|
140,453,223.41
|
||
|
02/25/2009
|
03/25/2009
|
134,156,954.99
|
||
|
03/25/2009
|
04/25/2009
|
128,142,343.88
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
24
of
27
|
04/25/2009
|
05/25/2009
|
122,396,811.22
|
||
|
05/25/2009
|
06/25/2009
|
116,908,339.18
|
||
|
06/25/2009
|
07/25/2009
|
111,665,445.98
|
||
|
07/25/2009
|
08/25/2009
|
106,657,162.00
|
||
|
08/25/2009
|
09/25/2009
|
101,873,006.96
|
||
|
09/25/2009
|
10/25/2009
|
97,302,968.13
|
||
|
10/25/2009
|
11/25/2009
|
92,937,479.45
|
||
|
11/25/2009
|
12/25/2009
|
88,767,401.66
|
||
|
12/25/2009
|
01/25/2010
|
84,784,003.30
|
||
|
01/25/2010
|
02/25/2010
|
80,978,942.46
|
||
|
02/25/2010
|
03/25/2010
|
77,344,249.50
|
||
|
03/25/2010
|
04/25/2010
|
73,872,310.40
|
||
|
04/25/2010
|
05/25/2010
|
70,555,850.96
|
||
|
05/25/2010
|
06/25/2010
|
67,387,921.58
|
||
|
06/25/2010
|
07/25/2010
|
64,361,882.86
|
||
|
07/25/2010
|
08/25/2010
|
61,471,391.74
|
||
|
08/25/2010
|
09/25/2010
|
58,710,388.28
|
||
|
09/25/2010
|
10/25/2010
|
56,073,083.07
|
||
|
10/25/2010
|
11/25/2010
|
53,553,945.13
|
||
|
11/25/2010
|
12/25/2010
|
51,147,690.41
|
||
|
12/25/2010
|
01/25/2011
|
48,849,270.79
|
||
|
01/25/2011
|
02/25/2011
|
46,653,863.50
|
||
|
02/25/2011
|
03/25/2011
|
44,556,861.17
|
||
|
03/25/2011
|
04/25/2011
|
42,553,862.16
|
||
|
04/25/2011
|
05/25/2011
|
40,640,661.35
|
||
|
05/25/2011
|
06/25/2011
|
38,813,241.45
|
||
|
06/25/2011
|
07/25/2011
|
37,067,764.62
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
25
of
27
|
07/25/2011
|
08/25/2011
|
35,400,564.38
|
||
|
08/25/2011
|
Termination
Date
|
33,808,138.07
|
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
26
of
27
Annex
A
Paragraph
13 of the Credit Support Annex
Reference
Number: FXNSC9506
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates
May
14,
2007
Page
27
of
27
Annex
B
Item
1115 Agreement
ANNEX
A
ISDA®
CREDIT
SUPPORT ANNEX
to
the
Schedule to the
ISDA
Master Agreement
dated
as
of May 14, 2007 between
Bear
▇▇▇▇▇▇▇ Financial Products Inc. (hereinafter referred to as “Party
A”
or
“Pledgor”)
and
HSBC
Bank
USA, National Association, not in its individual capacity, but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust
with respect to the SunTrust Acquisition Closed-End Seconds Trust, Series
▇▇▇▇-▇, ▇▇▇▇▇ Backed Pass-Through Certificates (hereinafter referred to as
“Party
B” or
“Secured
Party”)
For
the
avoidance of doubt, and notwithstanding anything to the contrary that may be
contained in the Agreement, this Credit Support Annex shall relate solely to
the
Transaction documented in the Confirmation dated May 14, 2007, between Party
A
and Party B, Reference Number FXNSC9506
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) as amended (I) by deleting
the
words “upon a demand made by the Secured Party on or promptly following
a
Valuation Date” and inserting in lieu thereof the words “not later than
the close of business on each Valuation Date” and (II) by deleting in its
entirety 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.” and inserting in lieu thereof
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/DBRS Credit Support Amount for such
Valuation Date exceeds (b) the S&P/DBRS Value as of such Valuation
Date of all Posted Credit Support held by the Secured Party,
|
|
(2)
|
the
amount by which (a) the ▇▇▇▇▇’▇ First Trigger Credit Support Amount for
such Valuation Date exceeds (b) the ▇▇▇▇▇’▇ First Trigger Value as of such
Valuation Date of all Posted Credit Support held by the Secured Party,
and
|
|
(3)
|
the
amount by which (a) the ▇▇▇▇▇’▇ Second Trigger Credit Support Amount for
such Valuation Date exceeds (b) the ▇▇▇▇▇’▇ Second Trigger 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) as amended by deleting
in its
entirety the sentence beginning “Unless otherwise specified in Paragraph
13” and ending “(ii) the Credit Support Amount.” and inserting in lieu
thereof 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/DBRS Value as of such Valuation Date of
all Posted Credit Support held by the Secured Party exceeds (b) the
S&P/DBRS Credit Support Amount for such Valuation Date,
|
|
(2)
|
the
amount by which (a) the ▇▇▇▇▇’▇ First Trigger Value as of such Valuation
Date of all Posted Credit Support held by the Secured Party exceeds
(b)
the ▇▇▇▇▇’▇ First Trigger Credit Support Amount for such Valuation Date,
and
|
|
(3)
|
the
amount by which (a) the ▇▇▇▇▇’▇ Second Trigger Value as of such Valuation
Date of all Posted Credit Support held by the Secured Party exceeds
(b)
the ▇▇▇▇▇’▇ Second Trigger 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/DBRS
Credit Support Amount, the ▇▇▇▇▇’▇ First Trigger Credit Support Amount, or
the ▇▇▇▇▇’▇ Second Trigger 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.
|
The
items
set forth on the schedule of Eligible Collateral attached as Schedule A hereto
will qualify as “Eligible
Collateral”
(for
the avoidance of doubt, all Eligible Collateral described in (D) and (E) of
column one of the Collateral Schedule to be denominated in USD).
|
(iii)
|
Other
Eligible Support.
|
The
following items will qualify as “Other
Eligible Support”
for the
party specified:
Not
applicable.
|
(iv)
|
Threshold.
|
|
(A)
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“Independent
Amount”
means zero with respect to Party A and Party
B.
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(B)
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“Threshold”
means, with respect to Party A and any Valuation Date, zero if (i)
a
Collateral Event has occurred and has been continuing (x) for at
least 30
days or (y) since this Annex was executed or (ii) a Required Ratings
Downgrade Event has occurred and is continuing; otherwise,
infinity.
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“Threshold”
means, with respect to Party B and any Valuation Date,
infinity.
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(C)
|
“Minimum
Transfer Amount” means
USD 100,000 with respect to Party A and Party B; provided, however,
that
if the aggregate Certificate Principal Balance of the Certificates
and the
aggregate principal balance of the Notes rated by S&P/DBRS is at the
time of any transfer less than USD 50,000,000, the “Minimum
Transfer Amount”
shall be USD 50,000.
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(D)
|
Rounding:
The Delivery Amount will be rounded up to the nearest integral multiple
of
USD 10,000. The Return Amount will be rounded down to the nearest
integral
multiple of USD 10,000.
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(c)
|
Valuation
and Timing.
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(i)
|
“Valuation
Agent”
means Party A; provided that, if an Event of Default shall have occurred
and be continuing, Party B shall have the right to designate a third-party
Reference Market-maker as the Calculation
Agent.
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(ii)
|
“Valuation
Date” means
each Local Business Day on which any of the S&P/DBRS Credit Support
Amount, the ▇▇▇▇▇’▇ First Trigger Credit Support Amount or the ▇▇▇▇▇’▇
Second Trigger Credit Support Amount is greater than
zero.
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(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. The Valuation Agent
will
notify each party (or the other party, if the Valuation Agent is
a party)
of its calculations not later than the Notification Time on the applicable
Valuation Date (or in the case of Paragraph 6(d), the Local Business
Day
following the day on which such relevant calculations are
performed).”
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(iv)
|
“Notification
Time” means
11:00 a.m., New York time, on a Local Business Day.
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(v)
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External
Calculations.
At
any time at which Party A (or, to the extent applicable, its Credit
Support Provider) does not have a long-term unsubordinated and unsecured
debt rating of at least “BBB+” from S&P/DBRS, the Valuation Agent
shall (at its own expense) obtain external calculations of Party
B’s
Exposure from at least two Reference Market-makers on the last Local
Business Day of each calendar month. Any determination of the S&P/DBRS
Credit Support Amount shall be based on the greatest of Party B’s Exposure
determined by the Valuation Agent and such Reference Market-makers.
Such
external calculation may not be obtained from the same Reference
Market-maker more than four times in any 12-month
period.
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(vi)
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Notice
to S&P/DBRS.
At
any time at which Party A (or, to the extent applicable, its Credit
Support Provider) does not have a long-term unsubordinated and unsecured
debt rating of at least “BBB+” from S&P/DBRS, the Valuation Agent
shall provide to S&P/DBRS not later than the Notification Time on the
Local Business Day following each Valuation Date its calculations
of Party
B’s Exposure and the S&P/DBRS Value of any Eligible Credit Support or
Posted Credit Support for that Valuation Date. The Valuation Agent
shall
also provide to S&P/DBRS any external marks of Party B’s
Exposure.
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(d)
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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): With respect
to
Party A and Party B: None.
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(e)
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Substitution.
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(i)
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“Substitution
Date”
has the meaning specified in Paragraph
4(d)(ii).
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(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.
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(f)
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Dispute
Resolution.
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(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.
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(ii)
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Value.
Notwithstanding anything to the contrary in Paragraph 12, for the
purpose
of Paragraphs 5(i)(C) and 5(ii), the S&P/DBRS Value, ▇▇▇▇▇’▇ First
Trigger Value, and ▇▇▇▇▇’▇ Second Trigger Value, on any date, of Eligible
Collateral other than Cash will be calculated as follows:
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For
Eligible Collateral in the form of securities listed in Paragraph 13(b)(ii):
the
product of (1)(x) the bid-side quotation 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 arithmetic mean of the bid-side quotations for such
securities quoted at the Valuation Time by any three principal market makers
for
such securities selected by the Valuation Agent, provided that if only two
bid-side quotations are obtained, then the arithmetic mean of such two bid-side
quotations will be used, and if only one bid-side quotation is obtained, such
quotation shall be used, 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.
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(iii)
|
Alternative.
The provisions of Paragraph 5 will
apply.
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(g)
|
Holding
and Using Posted
Collateral.
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(i)
|
Eligibility
to Hold Posted Collateral; Custodians. Party
B (or its Custodian) will be entitled to hold Posted Collateral pursuant
to Paragraph 6(b), provided that the following conditions applicable
to it
are satisfied:
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|
(1)
|
it
is not a Defaulting Party.
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(2)
|
Posted
Collateral consisting of Cash or certificated securities that cannot
be
paid or delivered by book-entry may be held only in any state of
the
United States which has adopted the Uniform Commercial
Code.
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(3)
|
in
the case of any Custodian for Party B, such Custodian (or, to the
extent
applicable, its parent company or credit support provider) shall
then have
a short-term unsecured and unsubordinated debt rating from S&P/DBRS of
at least “A-1”.
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Initially,
the Custodian
for
Party B is: the Securities Administrator.
|
(ii)
|
Use
of Posted Collateral.
The provisions of Paragraph 6(c)(i) will not apply to Party B, but
the
provisions of 6(c)(ii) will apply to Party
B.
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(h)
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Distributions
and Interest Amount.
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(i)
|
Interest
Rate.
The “Interest
Rate”
will be the actual interest rate earned on Posted Collateral in the
form
of Cash that is held by Party B or its Custodian. Posted Collateral
in the
form of Cash shall be invested in such overnight (or redeemable within
two
Local Business Days of demand) Permitted Investments rated at least
(x)
AAAm or AAAm-G by S&P/DBRS and (y) Prime-1 by ▇▇▇▇▇’▇ or Aaa by
▇▇▇▇▇’▇, as directed by Party A. Gains and losses incurred in respect of
any investment of Posted Collateral in the form of Cash in
Permitted Investments as
directed by Party A shall be for the account of Party
A.
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|
(ii)
|
Amendment
of Paragraph 6(d)(i) - Distributions.
Clause (d)(i) of Paragraph 6 shall be amended and restated to read
in its
entirety as follows:
|
“(i)
Distributions. Subject to Paragraph 4(a), if Party B receives Distributions
on a
Local Business Day, it will Transfer to Party A not later than the following
Local Business Day any Distributions it receives to the extent that a Delivery
Amount would not be created or increased by that Transfer, as calculated by
the
Valuation Agent (and the date of calculation will be deemed to be a Valuation
Date for this purpose). ”
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(iii)
|
Amendment
of Paragraph 6(d)(ii) - Interest Amount.
Clause (d)(ii) of Paragraph 6 shall be amended and restated to read
in its
entirety as follows:
|
“(ii)
Interest
Amount.
In lieu
of any interest, dividends or other amounts paid with respect to Posted
Collateral in the form of Cash (all of which may be retained by the Secured
Party), the Secured Party will Transfer to the Pledgor on the 20th day of each
calendar month (or if such day is not a Local Business Day, the next Local
Business Day) the Interest Amount. Any Interest Amount or portion thereof not
Transferred pursuant to this Paragraph will constitute Posted Collateral in
the
form of Cash and will be subject to the security interest granted under
Paragraph 2. For purposes of calculating the Interest Amount the amount of
interest calculated for each day of the interest period shall be compounded
monthly.” Secured Party shall not be obligated to transfer any Interest Amount
unless and until it has received such amount.
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(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 means:
not
applicable.
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(ii)
|
“Transfer”
with respect to Other Eligible Support and Other Posted Support means:
not
applicable.
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|
(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, at the address specified pursuant to the Notices Section of this
Agreement.
If
to
Party B, at the address specified pursuant to the Notices Section of this
Agreement.
If
to
Party B’s Custodian: at the address designated in writing from time to
time.
|
(l)
|
Address
for Transfers.
Each Transfer hereunder shall be made to the address specified below
or to
an address specified in writing from time to time by the party to
which
such Transfer will be made.
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PartyA
account
details for holding collateral:
Citibank,
N.A., New York
ABA
Number: ▇▇▇-▇▇▇▇-▇▇, for the account of Bear, ▇▇▇▇▇▇▇ Securities
Corp.
Account
Number: 0925-3186, for further credit to Bear ▇▇▇▇▇▇▇ Financial Products
Inc.
Sub-account
Number: 102-04654-1-3
Attention:
Derivatives Department
Party
B’s
Custodian account details for holding collateral:
▇▇▇▇▇
Fargo Bank, NA
ABA
#
▇▇▇▇▇▇▇▇▇
Account
Name: SAS Clearing Account #▇▇▇▇▇▇▇▇▇▇
FFC:
▇▇▇▇▇▇▇▇, STACS 2007-1 Swap Collateral Account
|
(m)
|
Other
Provisions.
|
|
(i)
|
Collateral
Account.
Party B shall open and maintain a segregated account, which shall
be an
Eligible Account, and hold, record and identify all Posted Collateral
in
such segregated account.
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|
(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.
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|
(iii)
|
Calculation
of Value.
Paragraph 4(c) is hereby amended by deleting the word “Value” and
inserting in lieu thereof “S&P/DBRS Value, ▇▇▇▇▇’▇ First Trigger
Value, ▇▇▇▇▇’▇ Second Trigger Value”. Paragraph 4(d)(ii) is hereby amended
by (A) deleting the words “a Value” and inserting in lieu thereof “an
S&P/DBRS Value, ▇▇▇▇▇’▇ First Trigger Value, and ▇▇▇▇▇’▇ Second
Trigger Value” and (B) deleting the words “the Value” and inserting in
lieu thereof “S&P/DBRS Value, ▇▇▇▇▇’▇ First Trigger Value, and ▇▇▇▇▇’▇
Second Trigger Value”. Paragraph 5 (flush language) is hereby amended by
deleting the word “Value” and inserting in lieu thereof “S&P/DBRS
Value, ▇▇▇▇▇’▇ First Trigger Value, or ▇▇▇▇▇’▇ Second Trigger Value”.
Paragraph 5(i) (flush language) is hereby amended by deleting the
word
“Value” and inserting in lieu thereof “S&P/DBRS Value, ▇▇▇▇▇’▇ First
Trigger Value, and ▇▇▇▇▇’▇ Second Trigger 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/DBRS Value, ▇▇▇▇▇’▇ First Trigger
Value, or ▇▇▇▇▇’▇ Second Trigger 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/DBRS Value,
▇▇▇▇▇’▇ First Trigger Value, or ▇▇▇▇▇’▇ Second Trigger Value” and (2)
deleting the second instance of the words “the Value” and inserting in
lieu thereof “such disputed S&P/DBRS Value, ▇▇▇▇▇’▇ First Trigger
Value, or ▇▇▇▇▇’▇ Second Trigger 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/DBRS Value, ▇▇▇▇▇’▇ First
Trigger Value, and ▇▇▇▇▇’▇ Second Trigger 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.
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